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[2010] ZALCCT 24
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Oasis Group Holdings (Pty) Ltd v Bardien (C968/2010) [2010] ZALCCT 24 (1 November 2010)
Reportable
Of
interest to other judges
IN
THE LABOUR COURT OF SOUTH AFRICA
HELD
AT CAPE TOWN
C
ase
No: C 968 / 2010
In
the matter between:
OASIS
GROUP HOLDINGS (PTY) LTD
Applicant
and
EBRAHIM
BARDIEN
Respondent
JUDGMENT
STEENKAMP
J:
Introduction
[1]
This is an urgent application heard on
Sunday 31 October 2010. The applicant seeks an interim order
declaring that the respondent’s
employment with it will not
terminate at midnight tonight (ie the end of October 2010) and that
his absence from work during his
notice period be excluded from the
computation of that notice period. In effect, the applicant seeks an
order that the contract
of employment is suspended while the
respondent is incapable of performing his duties due to illness.
[2]
Given the urgency of the matter and the
nature of the relief sought, I will only give brief reasons for the
order.
Background facts
[3]
The respondent is a chartered accountant
employed by the applicant. In terms of his contract of employment,
either party may terminate
it on three calendar months’ notice.
The contract also provides for 30 days’ sick leave during each
cycle of 36 months
of employment.
[4]
The respondent resigned on 30 July 2010 and
asked that his notice period be waived “…as my health
has deteriorated
substantially over the last few weeks.” On the
same day, he submitted a medical certificate diagnosing “depression
and anxiety.” Since then, and throughout the notice period of
three months, he has not returned to work, submitting a series
of
medical certificates declaring him unfit to do so.
[5]
Before
his resignation, the respondent was confronted with allegations that
he had advised one of the applicant’s clients
to bond her house
and to invest the capital in volatile investments. When the market
crashed, she lost hundreds of thousands of
Rands.
[1]
It is important to note that the applicant is a financial services
provider in terms of the Financial Advisory and Intermediate
Services
Act
[2]
(“the FAIS Act”)
and the respondent is a financial adviser. The respondent admitted
his wrongdoing in an affidavit
on 16 July 2010.
[3]
[6]
In his contract of employment, the
respondent acknowledged that a copy of the Financial Services Board
Notice 91 of 2003 was part
of the contract and that he had read and
understood it. That notice sets out the requirements of the Financial
Services Board (FSB)
relating to the “fit and proper
requirements for Financial Service Providers”.
[7]
Applicant
contends that it is obliged by law to take steps and to hold a
disciplinary enquiry into the respondent’s conduct;
and, if
necessary, to make disclosures to the FSB. The FAIS Act
[4]
provides that a Financial Services Provider must be satisfied that
its representatives are competent to act and comply with the
“fit
and proper” requirements of the Act; and take steps to ensure
that its representatives comply with the applicable
codes of conduct
and applicable laws. In the event of debarment of a representative,
the FAIS Act provides that a provider (such
as the applicant) must
immediately take steps to ensure that the debarment does not
prejudice the interests of clients and that
any unconcluded business
of the representative is properly concluded. It is for these reasons
that it seeks the respondent’s
return to work once he is well
enough to do so.
The relief sought
[8]
Applicant seeks an order dispensing with
the rules relating to time and manner of service and disposing of the
matter as one of
urgency.
[9]
It then seeks a rule
nisi
calling upon the respondents to show cause on the return day why an
order should not be granted in these terms:
9.1
Respondent’s employment with
applicant will not terminate at the end of October 2010 and to the
extent that the respondent
has been absent from the workplace in the
period during which he was required to serve out his notice (‘the
period of absence’),
such period of absence shall be excluded
from the computation of the three month notice period stipulated by
the applicant’s
contract of employment for the valid
termination of his employment relationship with applicant by reason
of resignation;
9.2
Respondent’s termination of his
employment contract will only take effect after he has tendered to
perform service for a period
of three months;
9.3
Respondent is ordered to return to work by
no later than 1 December 2010 unless he – in the professional
opinion of [psychiatrist]
Dr Teggin – is psychologically
incapable of resuming employment on that date.
Urgency
[10]
Despite Mr
Rautenbach
’s
protestations to the contrary, and despite the inconvenience of
having to convene the court on a Sunday, I am satisfied
that the
matter is urgent.
[11]
It is clear from the papers that the
applicant has endeavoured throughout the period of three months to
accommodate the respondent’s
illness in the hope that he would
recover sufficiently to return to work and face a disciplinary
hearing without the need to litigate.
It is only on 28 October that
the respondent agreed to see a second psychiatrist, at the
applicant’s insistence, the applicant
having called into
question the assessments of the respondent’s psychiatrist.
[12]
The three month notice period runs out
tonight. Having failed to come to a resolution, I accept that the
applicant had little option
but to approach the court on an urgent
basis to assert what it believes to be its rights.
The applicable legal
principles
[13]
The
requirements for urgent interim relief are by now clear. It was
summarised by Corbett J
[5]
in
LF
Boshoff Investments (Pty) Ltd v Cape Town Municipality
[6]
and
followed in numerous cases since then. These are:
13.1
That the right which is the subject matter
of the main action and which [the applicant] seeks to protect by
means of interim relief
is clear or, if not clear, is
prima
facie
established, though open to some
doubt;
13.2
That, if the right is only
prima
facie
established, there is a
well-grounded apprehension of irreparable harm to the applicant if
the interim relief is not granted and
he ultimately succeeds in
establishing his right;
13.3
That the balance of convenience favours the
granting of interim relief; and
13.4
That the applicant has no other
satisfactory remedy.
[14]
The
balance of convenience only becomes relevant when a
prima
facie
ground for an interdict has been established.
[7]
[15]
The applicant asserts its obligation to
hold a disciplinary inquiry – and thus to prevent the
respondent from leaving its
employ until he physically returns to
work and that has been done – because of its obligations under
the FAIS Act.
[16]
Section 14 of the FAIS Act places an
obligation on financial services providers to ensure that their
representatives are fit and
proper when they render financial
services on behalf of the providers. If a representative does not
comply with the fit and proper
requirements referred to in paragraphs
(a) and (b) in section 8(1) of the FAIS Act read with the
Determination of Fit and Proper
Requirements for Financial Services
Providers and Representatives, the provider must debar such person
from rendering any further
financial services and remove such
debarred representatives from the register of representatives that
the provider must maintain
in terms of section 13(3) of the FAIS Act.
[17]
The Registrar of Financial Services
Providers has determined that the required notifications referred to
in section 13(3)(a) of
the FAIS Act must be submitted to the
Registrar in writing in a format conforming to a prescribed form.
That form contains the
following provision:
Attach all relevant
documentation including, but not limited to-
(i) evidence and
information supporting the reasons for debarment;
(ii) a copy of the
service contract or mandate between FSP and debarred
representative;
(iii) transcript of
disciplinary hearing; and
(iv)
forensic/investigation report (if any).
[18]
In order to hold a disciplinary hearing,
the applicant submits, the respondent has to return to work and face
the music. This he
has avoided over the past three months by
maintaining that he suffers from depression and anxiety.
[19]
Thus, the application – and the
question of a
prima facie
right - is essentially based on a central legal contention, that is,
where an employee has given notice to terminate the contract
of
employment, the notice period is suspended for as long as he is
unable to tender his services due to illness.
[20]
Under
the common law, the position was clear. The servant must tender his
services and if he cannot, due to illness, the employer
(or “master”,
in the parlance of the day) need not pay him. In
Boyd
v Stuttaford & Co
[8]
Innes
J said
[9]
:
“
I
come to the conclusion, therefore, that by our common law a servant
or other employee cannot claim to be paid for a period during
which
he was prevented by ill-health from rendering service to his master.”
[21]
But
that rather harsh operation of the law has been ameliorated by the
statutory provisions of the Basic Conditions of Employment
Act.
[10]
That Act now provides for a statutory regime of paid sick leave; and
the contract of employment between the parties in this case
mirrors
it. In other words, up to a maximum of 30 days in a cycle of 36
months, and provided the employee has provided the employer
with a
valid medical certificate, he is entitled to be paid. And contrary to
the applicant’s submission that highly-paid
employees (ie those
earning more than the prescribed threshold) like the respondent are
not covered by the provisions of the BCEA,
the sections dealing with
termination, notice periods and leave pay fall in chapters three and
five of the BCEA, that cover all
employees working more than 24 hours
per month for an employer.
[22]
Section 37(5) of the BCEA reads as follows:
“
Notice
of termination of a contract of employment given by an employer must
–
(a)
not be given during any period of leave to
which the employee is entitled in terms of Chapter Three; and
(b)
not
run concurrently with any period of leave to which the employee is
entitled in terms of Chapter Three,
except
sick leave
”.
[11]
[23]
It appears, therefore, that an employer may
not give notice of termination to an employee who is on sick leave;
but that notice
may
run
during a period of sick leave.
[24]
What if it is not the employer, but the
employee who gives notice of termination, and then wishes to take
sick leave (provided,
of course, that it is legitimate)?
[25]
One of the foremost commentators –
and indeed, one of the drafters – of the BCEA interprets this
provision as follows:
“
Therefore,
an employer may not give notice to an employee who is on sick leave;
however, the employee taking sick leave does not
interrupt the notice
period.”
[12]
[26]
It seems to me, then, that the respondent
was entitled to take sick leave during his notice period. The
question of the validity
of the medical certificates he submitted is
not before me in these proceedings. Once he had exhausted his
entitlement to paid sick
leave, there is no obligation on the
applicant to continue paying him his salary. But I do not agree that
his contract of employment
is suspended and has the effect that it
should be extended beyond the termination date of 31 October 2010.
[27]
The
High Court has, in the past, ordered specific performance of
employment contracts in exceptional circumstances.
[13]
But in those cases, the court was not faced with a position where the
employee was incapable, because of illness, of fulfilling
his
contractual duties by physically tendering his services during the
notice period. I do not interpret those cases to hold that
the
contract of employment is suspended for the duration of the
employee’s illness during the notice period.
[28]
It would have been preferable for the
applicant to have convened a disciplinary hearing while his contract
of employment was extant
and for the respondent to have attended it.
But the absence of such a hearing does not preclude the applicant
from continuing with
its investigation and fulfilling its duties
under the FAIS Act. It cannot, in my view, extend the contract of
employment beyond
its termination date where the employee has given
the requisite notice in terms of the contract. He has, on the face of
the medical
certificates provided, not refused to tender his
services, but has been unable to do so due to illness.
conclusion
[29]
The applicant has not, in my view, made out
a case for the urgent relief sought. Both parties have asked for
costs to follow the
result. I see no reason in law or fairness to
deviate from that request.
[30]
The application is dismissed with costs.
_______________________
ANTON
STEENKAMP
JUDGE
OF THE LABOUR COURT
CAPE
TOWN
Date
of hearing:
31 October 2010
Date
of judgment:
1
November 2010
For
the applicants:
Adv Colin Kahanovitz SC
Instructed
by:
Ebrahims Inc
For
the respondent:
Adv
Frans Rautenbach
Instructed
by:
Cheadle Thompson
& Haysom
[1]
At
least one other instance of similar alleged misconduct has since
come to light.
[2]
Act
37 of 2002
[3]
He
subsequently claimed that he did so under duress. I need not decide
on that issue for the purposes of this application.
[4]
Sections
13 and 14
[5]
as
he then was
[6]
1969
(2) SA 256 (C) 267 A-F
[7]
see
eg
SA
Motor Racing Co Lth & ors v Peri-Urban Areas Health Board
1955 (1) SA 334 (T) 339 A-H.
[8]
1910
AD 100
[9]
at
120
[10]
Act
75 of 1997 (the BCEA).
[11]
My
underlining
[12]
Paul
Benjamin, “
Basic Conditions of Employment Act 75 of 1997
:
Commentary” in Thompson & Benjamin
South
African Labour Law
BB1-26.
[13]
Santos
Professional Football Club (Pty) Ltd v Igesund & another
2003
(5) SA 67
(C); (2002) 23
ILJ
2001
(C );
Nationwide
Airlines (Pty) Ltd v Roediger & another
(2006)
27
ILJ
1469
(W).