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[2011] ZALCJHB 19
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Joubert v Legal Aid South Africa (JS240/2010) [2011] ZALCJHB 19; (2011) 32 ILJ 1921 (LC) (16 March 2011)
Reportable
Delivered160311
IN THE LABOUR COURT OF
SOUTH AFRICA
HELD AT BRAAMFONTEIN
CASE NO JS 240/2010
In
the matter between:
DK
JOUBERT
…...........................................................................................
APPLICANT
and
LEGAL
AID SOUTH AFRICA
…..............................................................
RESPONDENT
JUDGMENT
___________________________________________________________________
VAN
NIEKERK J
Introduction
[1] The applicant was
employed by the respondent until his retirement in August 2009. The
applicant contends that in terms of his
employment contract, the
respondent is obliged to pay him a post-retirement medical aid
benefit (PRMAB), in the form of a contribution
to his medical aid
subscriptions, and that it is in breach of this obligation. The
applicant seeks an order to the effect that
the respondent is obliged
to pay his monthly PRMAB and that of his spouse upon his death. He
further seeks repayment of the PRMAB
that he has since his retirement
funded from his own pocket. The applicant’s claim is premised
on the fact that persons who
retire from the public service and who
were employed on the same salary scale as the applicant, and their
surviving spouses, receive
a PRMAB.
[2] The respondent denies
that it is liable to the applicant. It has pleaded that the terms and
conditions of employment in the
public service applied to the
applicant only to the extent that it was practically possible for the
respondent to adopt any term
and condition applicable in the public
sector as a term and condition of employment of its employees, that
the term and condition
was specifically adopted by the respondent as
part of its employees’ terms and conditions of employment, and
that any adoption
of such terms was approved by the Minister of
Justice in consultation with the Minister of Finance in terms of s 8
of the Legal
Aid Act, 22 of 1969, (the LAA). In relation to the
PRMAB, the respondent contends that none of these conditions have
been satisfied.
[3] The applicant has
pleaded an estoppel in reply and in the alternative, should the court
find that the defence pleaded by the
respondent is sound. The
estoppel is founded on the averment that the respondent represented
to the applicant that PRMAB formed
part of his terms and conditions
of employment, and that the necessary approval had been obtained from
the Minister of Justice,
in consultation with the Minister of
Finance.
[4] After the applicant
gave evidence, the respondent applied for absolution from the
instance. The application was argued on the
basis of an agreement
between the parties that the court is entitled to assume that the
applicant has proven that public sector
employees on the applicant’s
salary scale are entitled to a PRMAB. Should the application for
absolution fail, it was further
agreed that this issue remains in
dispute in the main proceedings, and represents the only matter upon
which the applicant will
present further evidence before closing his
case.
The applicable
principles: absolution from the instance
[5] In
Minister
of Safety and Security v Madisha & others
(2009)
30
ILJ
591
(LC), this court recently affirmed its power to grant absolution from
the instance in appropriate circumstances. The test is
whether at the
close of a plaintiff’s case, there is evidence upon which a
court, applying its mind reasonably to that evidence,
could or might
find for the plaintiff (see
Claude Neon
Lights (Pty) Ltd v Daniel
1976 (4) SA
403
(A)). In
Claude Neon
,
the court formulated the test as follows:
When absolution from
the instance is sought at the close of the plaintiff’s case,
the test to be applied is not whether the
evidence led by the
plaintiff establishes what would finally be required to be
established, but whether there is evidence upon
which a Court,
applying its mind reasonably to such evidence, could or might (not
should or ought to) find for the plaintiff (Gascoyne
v Paul and
Hunter
1917 TPD 170
at 173, Ruto Flour Mills (Pty) Ltd v Adelson (2)
1958 (4) SA 307
(T).
The Supreme Court of
Appeal approved this approach in
Gordon Lloyd Page &
Associates v Rivera & another
2001 (1) SA 88
(SCA) at 92 H,
where Harms JA added:
This implies that a
plaintiff has to make out a
prima facie
case – in the
sense that there is evidence relating to all the elements of the
claim – to survive absolution because
without such evidence no
court could find for the plaintiff…The test has from time to
time been formulated in different
terms, especially it has been said
that the court must consider whether there is "evidence upon
which a reasonable man might
find for the plaintiff"… –
a test which had its origins in jury trials when the "reasonable
man" was
a reasonable member of the jury… Such a
formulation tends to cloud the issue. The court ought not to be
concerned with what
someone else might think; it should rather be
concerned with its own judgment and not that of another "reasonable"
person
or court. Having said this, absolution at the end of a
plaintiff's case, in the ordinary course of events, will nevertheless
be
granted sparingly but when the occasion arises, a court should
order it in the interests of justice.
More recently, in
De
Klerk v ABSA Bank Ltd & others
[2003] 1 All SA 651
(SCA), the
Supreme Court of Appeal affirmed the application of the approach
adopted in
Gordon Lloyd Page
(at paragraph [10] of the
judgment).
The statutory context
[6] The respondent is
established by s 2 of the LAA, as a body corporate with separate
legal personality. The respondent’s
statutory mandate is to
“render or make available legal aid to indigent persons and to
provide legal representation at State
expense as contemplated in the
Constitution..." (see s 3). Section 8 of the LAA is of
particular significance in these proceedings.
That section provides
as follows:
The board
[defined
in s 1 to mean ‘the Legal Aid Board’]
may, with the
consent or in accordance with the general instructions of the
Minister
[of Justice]
acting in consultation with the Minister
of Finance, appoint on such conditions and at such remuneration as
may be approved by the
Minister so acting, officers or agents to
assist it in the performance of its functions.
[7] It is clear from this
formulation that the LAA does not render the respondent’s
employees members of the public service.
It is also not disputed that
there is no provision in the Act to the effect that the respondent’s
employees are employed
on terms equivalent to those that apply in the
public service. The respondent appoints its own staff and determines
their terms
and conditions of employment, subject to the approval of
the Minister of Justice, who in exercising a discretion as to whether
or not to extend approval to any conditions of employment proposed by
the respondent must act in consultation with the Minister
of Finance.
[8] When s 8 is applied
to a dispute such as the present, it seems to me that any party
seeking to prove a term of employment contract
must necessarily
establish compliance with the provisions of section 8. In other
words, it is incumbent on the applicant in the
present circumstances
to show that the respondent has adopted a resolution establishing a
term or condition of employment that
affords a right to a PRMAB, that
the Minister of Justice has approved the payment of a PRMAB as a term
and condition of employment
and that in doing so, he or she acted in
consultation with the Minister of Finance.
The evidence
[9] Only the applicant
gave evidence. He was employed by the respondent from 1975 to 1981,
and again from 1994 to August 2009, when
he retired. The applicant
became a member of the Bestmed medical aid scheme, and he remains a
continuation member of that scheme.
With effect from November 2002,
the respondent contributed a monthly amount of R1014.00 toward the
applicant’s medical aid
subscriptions; the same amount was
contributed at the time of the applicant’s retirement in August
2009, when the payments
ceased.
[10] The letter of
appointment governing the latter period of the applicant’s
employment, signed on 8 April 1994, contains
an annexure which
records
inter alia
the following:
DIENSVOORWARDES: Die
diensvoorwardes van toepassing op beamptes/werknemers van die
Staatsdiens is
mutatis mutandis
van toepassing op die pos.
Verdere besonderhede kan van die Direkteur van die Regshulpraad
verkry word.
The applicant testified
that these words reflected what he was told by a Mr Pretorius when he
was interviewed in 1994 – that
the respondent operated on the
basis that its conditions of employment were
mutatis mutandis
those that applied in the public sector, and that he had agreed
to be employed on those terms.
[11] The applicant’s
evidence was that his understanding of the term ‘
mutatis
mutandis’
in his letter of appointment is that as an
employee of the respondent, his terms and conditions of employment
were a replica of
those applicable to an employee of the public
service engaged at the same level. His entitlement to the PRMAB was
confirmed in
a number of other respects. First, he referred to a
memorandum from the Secretary of Finance to the Secretary of Justice
dated
1 October 1971, recording approval from the Minister of Finance
inter alia
for the following:
(c) Die toepassing van
die diensvoorwaardes wat in die Staatdiens op staatsamptenare van
toepassing is,
mutatis mutandis
op beamptes en
werknemers van die Regshulpraad.
.
The applicant also
referred to the terms of the respondent's Human Resources Policy and
Procedure Manual, especially that of 2005,
which was placed on the
respondent's intranet. Paragraph 1 of the manual records the
following:
Application of
Public Service terms and conditions of employment
While the Legal Aid
Board is not a Government Department, it is currently operating on
conditions of employment as stipulated for
the Public Service, by the
Public Service Act, 1994 (Proclamation 103/1994).
I should mention that the
same policy document contains a definition of “Public Service
Act”, in which matters are cast
in less unequivocal terms:
The Public Service
Act, a proclamation of 1994. The Public Service Act regulates
personnel matters in the public service (meaning
employees employed
in national and provincial government), and whilst not directly
applicable to the Legal Aid Board, the Legal
Aid Board's personnel
practices remain closely aligned to the practices applicable in the
public service.
[12] In so far as the
respondent had recorded, in 2009, in a document that represented a
consolidation of terms and conditions of
employment, that only the
salary scales applicable to the public service had from time to time
been applied to the respondent’s
employees, and that employees
who retired from the respondent’s employ were not entitled to
‘continued subsidisation
of any medical aid scheme’, the
applicant testified that he had never agreed to any such variation to
his terms and conditions
of employment, nor had he mandated any
person to reach an agreement to this effect on his behalf. He
regarded the respondent as
obliged to continue payment of the PRMAB
after his retirement date in August 2009. This position had been
communicated to the respondent
during 2009 as part of a series of
comments submitted in response to the draft document reflecting the
consolidated terms and conditions
of employment.
[13] In
cross-examination, it was put applicant that in effect, the terms and
conditions of employment in the public service did
not represent a
default position, in the sense that all of the terms and conditions
applicable to employees in the public sector
applied to the
respondent’s employees on an unconditional basis. A tabulated
comparison of conditions of employment applicable
to the public
service and the respondent respectively was put to the applicant. The
table clearly records conditions of employment
that apply in the
public sector but not in respect of the respondent, and
vice
versa.
The differences are particularly apparent in relation to
various allowances payable to public sector employees, but not to
employees
of the respondent. The applicant conceded the existence of
these differences.
[14] The analysis of the
differentials in public sector terms and conditions and those that
pertain to the respondent shows, on
a conspectus, is that there was
no automatic adoption by the respondent of the public sector terms
and conditions of employment.
This much was conceded by the applicant
in cross-examination. Rather, each proposal for the adoption of the
new term derived from
public service conditions of employment was
deliberated on by the respondent’s board, and a decision taken
whether or not
to include it is one of the respondent’s terms
and conditions of employment. Decisions were taken on the basis of
whether
or not the adoption by the respondent of the proposal
concerned was practically possible. The adoption of this criterion
was also
conceded by the applicant in cross-examination.
[15] An analysis of
minutes and other relevant documentation shows a number of instances
with the respondent chose not to adopt
a condition applicable in the
public sector. The application of the respondent's approach in
relation to the issue of PRMAB can
be illustrated by reference to the
minutes of meetings of the respondent’s board held on 17 March
1978 and 15 September 1978,
during the applicants first period of
employment with the respondent. At the 17 March meeting, the board
considered a request to
the effect that the respondent pay the
subscriptions to the respondent’s’ medical aid scheme
(SOMS), payable by the
widows of the respondent’s employees who
had died while in service. The request was specifically motivated on
the basis of
the
mutatis mutandis
principle – the
payment of widow’s medical aid subscriptions was a term and
condition of employees in the public sector,
albeit that it was the
medical scheme rather than the employer that carried the cost of the
benefit. It was resolved that the respondent
should seek ministerial
approval to establish a similar term and condition of employment,
more particularly, that the respondent
should meet the cost of
widows’ medical aid subscriptions to SOMS. The minutes of the
meeting of 15 September 1978 record
that the board took note of a
decision by the Treasury to refuse the request to meet the cost of
the subscriptions concerned from
the respondent’s funds.
[16] What these minutes
establish is that the
mutatis mutandis
principle did not
automatically render the PRMAB a term and condition of employment of
the respondent’s employees. On the
contrary, the matter was
raised as the result of a request motivated with specific reference
to the
mutatis mutandis
clause. The request would not have
been necessary had the benefit already been applicable to the
respondent’s employees by
reason of the
mutatis mutandis
clause. But the request was considered and the respondent’s
board decided to adopt a term and condition which would have
the
effect of paying a PRMAB to widows of deceased employees. The
decision was however expressly made subject to ministerial approval.
That approval was not forthcoming, and it is common cause that since
then, the matter is never been revisited by the respondent.
[17] The applicant
conceded that the term of the contract for which he contends, i.e. an
obligation by the respondent pay a PRMAB,
did not meet the four
applicable criteria that must be present before such a term could be
proven. In particular, there was never
an unconditional decision by
the respondent to adopt a term and condition in terms of s 8 that
would entitle its employees to a
PRMAB, the term was never approved
by the Minister of Justice, nor did the Minister of Justice consult
with the Minister of Finance
in granting such approval. Given that
concession, it is not necessary for me to consider the other grounds
on which the applicant
relied to sustain his general belief that the
terms of his contract were a replica of public service conditions of
employment,
or his belief that he was entitled to a PRMAB. In so far
as it is relevant, I would observe in passing that evidence of the
applicant’s
subjective understanding of the position stands to
be ignored for the purposes of the interpretation of the contract
(see
KPMG Chartered Accountants (SA) v Securefin & another
2009 (4) SA 399
(SCA),
Coopers and Lybrand v Bryant
[1995] ZASCA 64
;
1995
(3) SA 761
(AD)). Had the applicant applied that part of the clause
in his letter of appointment that referred him to the director for
further
details, the position as contained in the minutes would have
been explained to him. There is no evidence to suggest that any such
enquiry was ever put to the director regarding any right to a PRMAB
pursuant to that clause.
[18] Turning next to the
case based on estoppel, the primary defence raised by the respondent
is based on the principle that in
law, a statutory body cannot be
bound by estoppel to act beyond its powers. This is a
well-established rule. In
Hauptfleisch v Caledon Divisional
Council
1963 (4) SA 53
at 57 D-E, Corbett AJ (as he then was)
said the following:
Finally, it should be
observed that it is also a good affirmative answer to the case of
estoppel by representation that the allowance
of the estoppel must
result in a legality and thus a statutory body cannot be stopped from
denying an act which is ultra vires.
There are two further
authorities that are of more direct application to the present
dispute, applying as they do to a statutory
body and a duly
constituted pension fund respectively. In
Strydom v Die Land-en
LAndboubank van Suid Afrika
1972 (1) SA 801
(A), Botha JA said:
Versuim om ‘n
statutere liggaam, soos die Landbank, om voorskrifte na the kom wat
die Wetgewer vir die geldigheid van ‘n
bepaalde handeling van
daardie statutere liggaam voorgeskryf het, kan nie deur estoppel
aangesuiwer word nie, want dit sou aan
‘n handeling wat ultra
vires is regsgeldigheid verleen. Spencer Bower, Estoppel by
Representation, 2de uitg., stel dieselfde
beginsel, soos deur die
Engelse Howe toegepas, soos volg op bl. 132 –
“
Nor
can the lack of such essential formalities as the consent of a
Minister of the Crown the making of a contract under seal all
other
particular formalities prescribed by statute, be remedied by
estoppel, when the statute has made within the necessary conditions
of entry into the transaction."
Waar ‘n
handeling van ‘n statutere liggaam, soos die Landbank, ultra
vires is, hetsy omdat hy sy verlende bevoeghede
the buite gegaan het,
hetsy omdat hy in gebreke gebly het om voorskrifte na the kom wat die
Wetgewer vir die regsgeldigheid van
daardie handeling voorgeskryf
het, het hy in regte glad nie gehandel nie. ..’n Handeling van
‘n statutere liggaam wat
in regte geen bestaan het omdat dit
ultra vires daardie statutere liggaam is, kan klaarblyklik nie deur
estoppel tot ‘n geldige
of wesenlik afdwingbare handeling
verhef word nie.
Similarly, in
Abrahamse
v Connock’s Pension Fund
1963 (2) SA 76
(W), the court held
that the plaintiff, who had been dismissed as an employee of the
company and who had claimed from the defendant,
the company's pension
fund, the balance of an amount due to him under the defendant’s
constitution, could not claim that
the defendant was estopped from
denying that he was a member of the fund because it had at all
relevant times represented to him
that he was a member by allowing
the company to deduct monthly contributions from his remuneration,
which contributions had been
accepted by the defendant. The court
held that:
... ( A) corporation
like defendant cannot be estopped from denying that it has entered
into a contract which it was ultra vires
for it to make, and it
cannot be bound by estoppel to do anything beyond its legal capacity…
Referring to
Rhyl
Urban District Council v Rhyl Amusements Ltd
1959 (1) WLR 465
,
the court noted the rationale for the rule – if a plea of
estoppel could prevail as an answer to a claim that something
done by
a statutory body was
ultra vires
would reduce the
ultra
vires
doctrine to a nullity. The court proceeded to grant
absolution from the instance. (See further
Eastern Cape Provincial
Government & others v Ontractprops (Pty) Ltd
2001 (4) SA 142
(SCA),
City of Tshwane Metropolitan Municipality v RPM Bricks
(Pty) Ltd
[2007] SCA 28 (RSA) at paragraph [13] of the judgment,
Rabie and Sonnekus
Estoppel in South Africa
(Butterworths,
from p. 179, Visser & Potgieter
Estoppel: Cases and Materials
(
Butterworths, 1994) at p 122-123.)
[19] The effect of the
estoppel for which the applicant contends is that the respondent must
be held to a term and condition of
employment which has never been
adopted by the respondent, nor approved by the Minister of Justice
acting in consultation with
the Minister of Finance, in accordance
with the provisions of section 8 of the Act. Ms Lancaster, who
appeared for the applicant,
contended that the payment of the PRMAB
was approved on the
mutatis mutandis
principle, and that the
act in question was thus not
ultra
vires. There is no merit in
this submission. It is common cause that the minutes show that there
was no decision by the respondent
to adopt a PRMAB, and that the
respondent has never secured the approval of the Minister of Justice,
acting in consultation with
the Minister of Finance, for the
introduction of a PRMAB. The effect of the estoppel for which the
applicant contends is that the
respondent must be held by estoppel to
a term and condition of employment which manifestly does not meet the
requirements of s
8 of the LAA.
[20] In summary: the
applicant has failed to adduce such evidence that at this stage, this
court could reasonably find that it was
a term of his contract of
employment that he be paid a PRMAB. In so far as the applicant
contends that the respondent is estopped
from denying a
representation made to the applicant that a PRMAB formed part of his
terms and conditions of employment, the respondent
cannot in law be
estopped from denying an act which is
ultra vires.
It follows
that the application for absolution from the instance should succeed.
[21] In relation to
costs, the respondent seeks an order for costs, including the costs
of two counsel. Section 162 of the Labour
Relations Act empowers this
court to make an order for the payment of costs, according to the
requirements of the law and fairness.
The factors that the court is
entitled to take into account in deciding whether or not to order the
payment of costs include the
conduct of the parties both in
proceeding with or defending the matter before the court, and during
the proceedings. In the present
matter, it was not disputed that the
applicant is a pensioner, and that he is in dire financial straits.
The applicant retired,
by agreement with the respondent, prior to the
normal retirement age. A number of annuities purchased by the
applicant in anticipation
of retirement at the normal retirement age
are not yet payable. Without PRMAB, the applicant’s undisputed
evidence is that
he finds it difficult to make ends meet. I fully
appreciate that an applicant's financial position is not in itself
factor that
is determinative of whether or not a costs order should
be made, but insofar as this court is obliged to take into account
considerations
of fairness in the exercise of its discretion, it
seems to me that in the present circumstances, the difficult
financial position
in which the applicant finds itself is relevant
factor. I also accept, and this was not challenged during the course
of the proceedings,
that the applicant was
bona fide
in
referring this dispute for determination. Although the applicant
manifested a blinkered approach, and while it might legitimately
be
contended that it was for the applicant timeously to enquire about
and to ensure the application or otherwise of public sector
conditions in this respect, he did not act vexatiously or frivolously
in initiating this litigation, and was misguided at most
when he
decided to pursue his claim after an inspection of the minutes of all
of the respondent’s board meetings was tendered.
In these
circumstances, in my view, it is not appropriate to make any order as
to costs
I accordingly make the
following order:
Absolution from the
instance is granted.
There is no order as to
costs.
ANDRE VAN NIEKERK
JUDGE OF THE LABOUR
COURT
Date of hearing: 7 and 8
March 2011
Date of ruling: 16 March
2011
Appearances
For the applicant: Ms S
Lancaster, McRoberts Inc
For the respondent: Adv A
Dodson, with Adv N Fourie, instructed by Bowman Gilfillan Inc.
11