About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Johannesburg Labour Court, Johannesburg
SAFLII
>>
Databases
>>
South Africa: Johannesburg Labour Court, Johannesburg
>>
2014
>>
[2014] ZALCJHB 218
|
|
Van Rooyen v Rainbow Farms (Pty) Ltd (JR2090/12) [2014] ZALCJHB 218 (20 June 2014)
REPUBLIC
OF SOUTH AFRICA
THE
LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG)
JUDGMENT
NOT
REPORTABLE
CASE
NO. JR2090/12
In
the matter between:
CUAN
VAN ROOYEN
Applicant
and
RAINBOW
FARMS (PTY) LTD
Respondent
Heard:
10 JANUARY 2014
Delivered:
20 June 2014
Summary:
Application in terms of section 158(1)(c) for a settlement agreement
to be made order of the court. Claim
of breach of mutually terminated
contract of employment not ground for cancellation of settlement
agreement already concluded by
the parties.
JUDGMENT
BALOYI
AJ
Introduction
[1]
In this application, the Applicant is primarily seeking an order
making a settlement agreement an order of the court together
with
ancillary relief and/or in the alternative judicial cancellation of
the settlement agreement coupled with claim for damages.
The
settlement agreement in question came into existence as outcome of
successful negotiations during retrenchment consultations
between the
parties. The application is opposed.
Background
facts
[2]
Facts of this matter are by large common cause. The Applicant was the
Respondent’s Key Account Manager until when his
employment was
terminated following conclusion of retrenchment and settlement
agreement (settlement agreement) on 10 February 2012.
The salient
points of the agreement were amongst others that;
Extensive consultations
did take place between the parties in the light of the Respondent’s
restructuring process.
The Applicant was offered
a retrenchment package which he accepted. The amount was in the sum
of R367 244-08 made up of severance
pay of R259 885-74, notice pay of
R45 025-25 and R62 333-09 in respect of leave pay.
The Applicant’s
employment was to terminate by consent on 31 March 2012.
The Applicant was not
required to report for duty for the month of March 2012.
The settlement payment
was to be in full and final settlement of all claims the Applicant
might have arising out of termination
of employment contract, delict
etc.
Any alteration, variation
or deletion would not be binding unless reduced to writing and signed
by all parties to the agreement.
[3]
The Applicant approached the court after the Respondent had expressed
its intention not to pay the severance pay. The Respondent
honoured
part of the agreement by paying out the notice pay and leave pay. In
essence the relief sought by the Applicant is aimed
at recovering the
severance pay of R259 885-74 which the Respondent refused to pay. The
Respondent’s refusal to pay is premised
on cancellation of the
settlement agreement on reasons that the Applicant committed a breach
of employment contract. Failure to
disclose certain issues material
to the conclusion of the agreement is the reason for Respondent’s
resistance. In other words,
had the Respondent been aware of the
Applicant’s material non disclosures, it would not have
concluded the settlement agreement.
[4]
The Respondent communicated the cancellation of settlement agreement
by way of correspondence and the Applicant also replied
thereto.
Copies of such correspondence formed part of this application. What
is apparent from the correspondence is that the Applicant
allowed
some discounts to one of its clients, Pick ‘n Pay which
discounts were not authorized, meaning that the Applicant
had
committed misconduct leading a financial loss of R1 279 581-60.
Breach of contract of employment as the Respondent’s
correspondence suggested is rested on the Applicant’s taking up
of new employment with a different company before the expiry
of
notice period without obtaining permission from the Respondent. The
Respondent intimated that the severance pay had to be offset
from the
amount of the said financial losses.
[5]
Before this Court, the Respondent’s challenge to the
Applicant’s case is centered around cancellation of settlement
agreement because of Applicant’s misconduct which led to
financial loss of R1 279 581-60. This is also seen from its claim
of
full amount which the Respondent said to have lost resultant from the
Applicant’s conduct. The action for recovery of
such losses
instituted by the Respondent was at the time of arguing of this
matter pending before the North Gauteng High Court.
[6]
Since there is no longer a settlement agreement between the parties
according to the Respondent by virtue of its cancellation,
the
Applicant would thus not be entitled to the relief sought. In short
the cancellation created Applicant’s indebtedness
to the
Respondent, which indebtedness is subject of litigation in the North
Gauteng High Court. On the other hand the Applicant
is seeking an
order as prayed for to enable him to enforce on the indebtedness
created in terms of the settlement agreement.
Evaluation
[7]
Certainly a number of questions are raised in this matter. It is
worth mentioning that after the dispute had escalated to litigation
and/or at least after involvement of attorneys, the issues of offset
and Applicant’s employment elsewhere during notice period
did
not from part of the Respondent’s case. This seems to be a wise
selection of issues to be placed before the court. It
is not in
dispute that the parties entered into a valid settlement agreement
that was preceeded by retrenchment processes which
took place in
terms of the law, Labour Relations Act and Basic Conditions of
Employment Act being on the forefront. Since the existence
of
settlement agreement is not in dispute and that it has not been
complied with, it is therefore of paramount importance to scrutinize
the reasons why it should not be made an order of the court. The only
notable issue pleaded by the Respondent is that the settlement
agreement was cancelled due to the Applicant’s misconduct which
was discovered after the signing of the agreement.
[8]
It appears to this court that the Applicant filed this application on
the understanding that the reasons for the Respondent’s
refusal
were based on the offset of the loss against the monies due to him
and the Applicant’s breach of contract of employment
by taking
up employment elsewhere during notice period. This understanding can
clearly be drawn from the correspondence addressed
to the Applicant
by the Respondent on 22 and 28 March 2012. The Respondent
emphasized cancellation of the settlement agreement
which
cancellation was conveyed in the aforesaid letters. Before this
Court, it appears that the Respondent only aligned itself
with
contents of the letters in so far as they convey cancellation of the
settlement agreement.
[9]
In the
Respondent’s heads of argument, the Applicant was attacked for
bringing irrelevant material into this application.
In the
circumstances, I am unable to find the reason why the Applicant
should be faulted for bringing issues based on the Respondent’s
own initiated reasons for cancellation of the settlement agreement.
These issues are relevant and I agree with the Applicant’s
submissions that offset cannot find application in this matter in the
light of those elements set out in
Fatti’s
Engineering Co (Pty) Ltd v Vendick Spares (Pty) Ltd
[1]
.
The facts of this matter as they stand do not suggest that parties
were mutually indebted to each other with both debts liquidated
and
fully due.
[10]
Furthermore,
acceptance of new employment during the notice period where the
Applicant was exempted from reporting for duty has
been clearly dealt
with the
Lottering
and Others v Stellenbosch Municipality
[2]
.
The Respondent’s direction that it did not require the services
of the Applicant’s services during notice period is
without
hesitation a waiver and had to live with it.
[11]
What follows from the facts of this case as placed before me there
was no evidence to suggest that the Applicant breached the
terms of
the settlement agreement in question. The settlement agreement came
as a result of retrenchment consultation within the
prescripts of the
law. The process was initiated by the Respondent. I have not been
afforded with content of the retrenchment discussions
leading to the
conclusion of a settlement agreement. This should have probably
assisted in ascertaining whether during such consultations
there was
a platform for which the Applicant was required to discharge a duty
to disclose relevant material information and the
Applicant elected
not to. Consequently a cancellation of settlement agreement based on
breach of contract of employment which was
no longer in existence due
to mutual termination cannot be sustained.
[12]
The Respondent made leave and notice payments to the Applicant. These
payments were part of the settlement agreement. This
definitely
points that the Respondent made some form of selective compliance. If
indeed misconduct was the issue, payment of notice
pay should have
also been withheld.
[13]
The Respondent did not claim the notice pay from the Applicant in its
action in the North Gauteng High Court. The Respondent
in its own
correspondence pointed that the amount of indebtedness would be set
off from the monies due to the Applicant. This is
indicative of the
fact that the Respondent was from the onset fully aware of its
obligations towards the Applicant in terms of
the settlement. In
conclusion, I have not found any reason why the settlement agreement
should not be made an order of the court.
The determination on
whether the Applicant is indebted to the Respondent is in the capable
hands of the North Gauteng High Court
and has no bearing in making
the settlement agreement an order of the court. The Applicant has
demonstrated the existence of the
agreement and that the Respondent
had not complied with it. The Applicant’s claim stands to
succeed on the main prayers.
Regarding costs, I did not find any
reason why costs should not follow the order. There is no longer any
relationship to be maintained
between the parties
Order
[14]
In the premises the following order is made;
14.1
The retrenchment and settlement agreement is made an order of the
court in terms of
section 158(1)(c)
of the
Labour Relations Act 66 of
1995
.
14.2
The Respondent is ordered to pay R259 885-74 to Applicant within 14
days of receipt of this order plus interest
at the rate of 15.5% per
annum calculated from 31 March 2012 to the date of final payment.
14.3
The Respondent is ordered to pay the Applicant’s costs.
_________________________
Baloyi AJ
Acting
Judge of the Labour Court of South Africa
APPEARANCES:
For
the Applicant:
Advocate HJA
Boswel
Instructed
by:
Daan Beukes Attorneys
For
the Respondent Mr
G.M Kirby-Hirst of Magregor
Erasmus Attorneys
[1]
1962 (1) SA 736 (T).
[2]
[2010] 12 BLLR 1306
(LC).