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[2014] ZALCCT 24
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Volschenk v Pragma Africa (Pty) Ltd (C414/13) [2014] ZALCCT 24; [2014] 11 BLLR 1146 (LC); (2015) 36 ILJ 494 (LC) (27 May 2014)
REPUBLIC
OF SOUTH AFRICA
REPORTABLE
OF
INTEREST TO OTHER JUDGES
THE LABOUR COURT
OF SOUTH AFRICA, CAPE TOWN
JUDGMENT
CASE
NO: C 414/13
IN
THE MATTER BETWEEN:
LOUIS
VOLSCHENK
APPLICANT
AND
PRAGMA AFRICA
(PTY) LTD
RESPONDENT
HEARD
:
23 MAY 2014
DELIVERED:
27 MAY 2014
SUMMARY:
EXCEPTIONS UPHELD. BCEA S 77 – CONTRACTUAL CLAIMS ARISING FROM
ALLEGED CONSTRUCTIVE DISMISSAL.
JUDGMENT
STEENKAMP
J
Introduction
[1]
The respondent, Pragma Africa (Pty) Ltd,
raises five exceptions against a statement of claim delivered by the
applicant, Louis Volschenk.
[2]
Volschenk
resigned from the company on two months’ notice, although he
was employed on a contract requiring one month’s
notice. Yet he
claims constructive dismissal. He did not refer a dispute the
Commission for Conciliation, Mediation and Arbitration
(CCMA) in
terms of s 186(1)(e) of the Labour Relations Act
[1]
,
as one might expect. Instead, he referred a contractual claim to this
Court, apparently in terms of s 77(3) of the Basic Conditions
of
Employment Act
[2]
, relying on
breach of contract.
[3]
Volschenk relies on five contractual
damages claims :
3.1
Commission payable;
3.2
Leave pay;
3.3
Future loss of earnings;
3.4
Performance bonus; and
3.5
Shares in an employees’ share unit
scheme.
[4]
Pragma has raised five exceptions. It
claims that the applicant’s statement of case does not set out
a cause of action for
his various claims.
Background
facts
[5]
Volschenk was employed in terms of an
indefinite contract of employment providing for termination on one
month’s notice. He
fell out with management. In terms of his
statement of claim, around September 2012, he “initiated
discussions with the respondent
regarding the termination of his
employment, due primarily to [its] inconsistent application of the
commission policy, and the
refusal of the respondent to comply with
the terms and conditions of the policy”. On 5 October 2012 he
sent the company an
email “indicating that the employment
relationship had broken down”. On 12 October he suggested that
his services be
terminated for operational requirements and that he
be paid a severance package of two weeks’ remuneration per
completed
year of service, i.e. double the minimum prescribed by s 41
of the BCEA. The company refused as no valid reason for such a
termination
existed. According to the statement of claim, the
company’s Tait later indicated to Volschenk that the employment
relationship
was beyond repair:
“
Under
the circumstances, the applicant regarded the respondent’s
conduct as a material breach of the contract of employment
and the
terms and conditions of employment. The applicant accordingly, in
light of the material breach, elected to terminate the
contract of
employment, and issued the respondent with a letter of resignation
dated 29 October 2012.”
[6]
Volschenk
left on 31 December 2012.He referred the damages claim based on
breach of contract to this Court on 24 June 2013.
[3]
This
history of the matter before this Court
[7]
On 5 July 2013, the company notified the
applicant that it intended to raise an exception that his statement
of claim is vague and
embarrassing and does not disclose a cause of
action. It afforded him 15 days to remove the cause of complaint. He
did not do so.
[8]
On 13 November 2013 the company’s
attorneys delivered a notice of exception to the applicant’s
attorneys. It raised
five exceptions. The applicant did not respond.
[9]
It
was only seven months after the company had notified the applicant
that it intended to raise an exception, and when the exception
was
set down for hearing on 20 February 2014, that the applicant –
on 12 February 2014 – delivered a notice of intention
to amend
his statement of claim.
[4]
[10]
The respondent objected to the intended
amendment on 19 February 2014. On 20 February 2014, when the
exception was due to be heard
before Rabkin-Naicker J, it was removed
from the roll “subject to respondent’s right to raise and
argue all the exceptions
in its present application at a later stage
to the extent not addressed by the applicant’s proposed
amendment to its [
sic
]
statement of case.” He was ordered to pay the company’s
wasted costs.
[11]
At the time when this exception was heard
on 23 May 2014, the applicant had not applied for an amendment to his
statement of claim.
The
law relating to exceptions
[12]
As
Mr
Rautenbach
for the company pointed out, this Court recently considered the way
in which exceptions are to be dealt with in
De
Klerk v Cape Union Mart International (Pty) Ltd
:
[5]
“
The
rules of the Labour Court do not specifically provide for exceptions.
However, it is now trite that exceptions may be raised
under rule 11
of this Court read with rule 23 of the Uniform Rules of the High
Court.
[6]
In dealing with
exceptions to a statement of claim, the Court will have regard to the
principles developed in the High Court.
[7]
An
exception is a legal objection intended to address a defect inherent
in the other party’s pleadings. Two categories of
exceptions
are generally recognised in this regard, namely:
Where
the pleading is vague and embarrassing; and
Where
the pleading lacks averments which are necessary to sustain an action
or defence.
Thus,
where a litigant is faced with a pleading that is vague and
embarrassing or that lacks averments to sustain an action or defence,
the litigant is entitled to take an exception to have the action or
defence dismissed even before the merits of the matter are
considered
in evidence.
[8]
”
Evaluation
[13]
Rule 6(b) requires the applicant to set out
in the statement of claim:
“
(i)
a clear and concise statement of the material facts, in
chronological order, on which the party relies, which statement must
be sufficiently particular to enable any opposing party to reply to
the document;
(iii)
a clear and concise statement of the legal issues that arise from the
material facts, which statement must be sufficiently
particular to
enable any opposing party to reply to the document;”.
[14]
This means that the applicant must set out
all legally relevant facts to make out a case disclosing a cause of
action. It must be
sufficiently clear so that the respondent knows
what case it has to answer.
[15]
The respondent in this case claims that the
applicant has not done so, despite the numerous opportunities and
long time he has had
to do so. I shall consider each of the
exceptions raised.
Exception
1: leave pay
[16]
The applicant says that he terminated the
contract of employment because of an alleged breach by the company.
He then simply states
that, “as a consequence of the above”,
he suffered damages. As one of the five legs to the damages claim, he
claims
outstanding leave pay of R74 981, 00. He does not state
whether this alleged to be due under the BCEA, his contract of
employment,
or some other source. He does not explain how it is
calculated. And in any event, if leave pay is due, it would arise
from a claim
for specific performance and not damage arising from an
alleged breach of contract.
[17]
Mr
Taylor
blithely states in his heads of
argument:
“
It
is submitted that nothing turns on the word or label ‘damages’.
Applicant’s leave pay id either owing to him
or it isn’t.
The words damages, losses and compensation are interchangeable.”
[18]
That submission is simply wrong in law.
Section 195 of the LRA makes it clear that a claim for compensation
cannot be equated to
a damages claim:
“
195.Compensation
is in addition to any other amount.—An order or award of
compensation made in terms of this Chapter is in
addition to, and not
a substitute for, any other amount to which the employee is entitled
in terms of any law, collective agreement
or contract of employment.”
[19]
This claim does not disclose a cause of
action. The exception is upheld.
Exception
2: future loss of earnings
[20]
This claim conflates a contractual claim
for damages with a claim for compensation arising from an allegedly
unfair constructive
dismissal. Volschenk claims “future loss of
earnings” for 12 months. He does not explain what that period
is based
on. His contract was an indefinite one with a notice period
of one month. It was not a fixed term contract with an unexpired
portion
of 12 months.
[21]
Under
this heading, Mr
Taylor
again
conflates damages with compensation. He goes further to argue that
“the appropriate amount of compensation to be paid
to the
applicant is a matter for the trial court’s discretion subject
to the limits enunciated in s 194 of the LRA”.
That appears to
be his source for the claim of 12 months’ remuneration. But
that is a claim arising from compensation for
unfair dismissal under
the dispute resolution system of the LRA; it is not a claim for
damages under the common law, on which the
applicant seeks to rely in
this case. Had he wanted to rely on a claim for unfair constructive
dismissal and hence compensation
under ss 186(1)(e) and 194 of the
LRA, he could have done so; but then this Court would not have had
jurisdiction. Had he elected
to refer such a claim, he had to refer
it to conciliation and, if necessary, arbitration at the CCMA.
[9]
He did not.
[22]
What
remains, as set out in the applicant’s statement of claim, is a
contractual claim for damages. That could be no more
than his
remuneration for one month’s notice under the contract of
employment.
[10]
In fact, he
served and was paid for two months’ notice. He suffered no
contractual damages.
[23]
The
measure of damages where the employer has committed a material breach
that entitles the employee to cancel the contract –
as opposed
to a claim for compensation for unfair dismissal in terms of the LRA
– was set out as follows in
Myers
v Abrahamson:
[11]
“
The
measure of damages accorded such employee is, both in our law and in
the English law, the actual loss suffered by him represented
by the
sum due to him for the unexpired period of the contract less any sum
he earned or could reasonably have earned during such
latter period
in similar employment”.
[24]
That
decision was quoted with approval by the then Appellate Division in
Stewart
Wrightson v Thorpe
[12]
:
“
As
in other contracts, this [the repudiation of the contract of
employment] did not
per se
end
the contract, but served only to vest the [employee] with an election
either to stand by the contract or to terminate it.”
[25]
In
the case of a periodical contract which is concluded from month to
month, as opposed to a fixed term contract, the measure of
damages is
the remainder of the period of the contract.
[13]
In this case, the notice period was one month. Volschenk served and
was paid for two months. He suffered no damages. This exception
must
be upheld and the claim dismissed.
[26]
As
an aside, it is difficult to see how Volschenk would succeed in a
claim for constructive dismissal, whether at common law or
under s
186 of the LRA, in circumstances where he continued to work for the
employer for another two months after he had claimed
that the
employer had breached his contract of employment or made his
continued employment intolerable. Two days before this exception
was
heard, Simler J handed down judgment in the UK Employment Appeal
Tribunal in
Cockram
v Air Products PLC.
[14]
In that case, the employee claimed constructive dismissal but had
given seven months’ notice. Simler J referred to the concept
of
affirmation. She held that, at common law, an employee wishing to
resign and successfully claim constructive dismissal would
have to
resign without notice:
[15]
“
To
do otherwise would be to affirm that part of the contract covered by
the period of notice, whilst disaffirming the rest in the
sense of
accepting the employer’s repudiatory contract as entitling the
employee to bring the contract to an immediate end.”
Exception
3: Calculation of the claim
[27]
Quite apart from the fact that Volschenk
has not suffered any damages arising from the alleged breach of
contract and based on future
loss of earnings, he has in any event
not quantified that alleged loss. He does not set out how and why he
claims 12 months’
remuneration. As discussed above, this
damages claim cannot be equated to a claim for compensation under s
194 of the LRA, which
is capped at 12 months’ remuneration. He
makes out no case for these alleged damages. The exception must be
upheld and the
claim fails on this basis as well.
Exception
4: Performance bonus
[28]
Once again, Volschenk does not set out any
facts on which he bases his claim for a performance bonus. It is
impossible for the company
to assess on what basis he claims such a
bonus, whether he would have been entitled to it, and how it is
calculated. The exception
is upheld.
Exception
5: Shares
[29]
Volschenk lastly claims dividends under the
company’s employee share unit scheme. But he sets out no basis
why these alleged
damages flow from the company’s alleged
breach of his employment contract. Nor does he explain how it is
quantified. This
exception is also upheld.
Conclusion
[30]
All five exceptions are upheld. The
question remains whether the applicant’s claims should be
dismissed.
[31]
In
some cases where exceptions have been upheld, the Court has
nevertheless given the applicant a further opportunity to amend his
or her statement of claim.
[16]
[32]
But in this case the applicant has had more
than enough time and more than one opportunity to remove the cause of
complaint. He
did not respond to the initial invitation to do so in
July 2013. And even after he eventually delivered a notice of his
intention
to amend the statement of claim shortly before the
exception was first set down for hearing in February 2014, he did not
deliver
an application to amend. There is no reason why the company
should be further prejudiced and be forced to incur further costs in
order to grant Volschenk yet another indulgence.
[33]
In law and fairness, Volschenk should bear
the company’s costs. He paid no heed to the company’s
invitation to him to
remove the cause of complaint, and even after
his legal representatives appeared in court on 20 February, they took
no further
steps to deliver an application to amend his defective
statement of claim, not even when the exception was heard three
months later.
Volschenk was legally represented throughout. Both
parties were represented by counsel in this hearing. He is not
uneducated or
indigent. He earned a substantial salary. The company
is entitled to its costs.
Order
[34]
I therefore order that:
34.1
The excipient’s exceptions are
upheld.
34.2
The applicant’s claims are dismissed.
34.3
The applicant, Volschenk, is ordered to pay
the costs of the respondent, Pragma, including the costs of counsel.
_________________________________
Anton Steenkamp
Judge
of the Labour Court of South Africa
APPEARANCES
APPLICANT:
Graham
Taylor
Instructed
by Dixon attorneys.
RESPONDENT
(EXCIPIENT):
Frans
Rautenbach
Instructed
by Maserumule Inc.
[1]
Act 66 of 1995 (the LRA).
[2]
Act 75 of 1997 (the BCEA).
[3]
It was apparently served on the company on 21 June 2013.
[4]
It appears that the applicant served the notice on the respondent’s
attorneys on 5 February 2014. But ‘deliver’
is defined
in the rules to mean ‘serve on other parties and file with the
registrar’. It was only filed on 12 February
2014.
[5]
(2012) 33
ILJ
2887
(LC) paras [18] – [19]. See also
Harmse
v City of Cape Town
(2003) 24
ILJ
1130 (LC) paras [6] – [10].
[6]
Charlton
v Parliament of the RSA
[2007]
10 BLLR 943
(LC). (This principle was not overturned on appeal by
the subsequent judgments of the LAC and the SCA).
[7]
Eagleton
& ors v You Asked Services (Pty) Ltd
[2008]
11 BLLR 1040
(LC) para [15].
[8]
Davidson
& ors v Wingprop (Pty) Ltd
[2010]
4 BLLR 396
(LC) para [25].
[9]
Cf
South
African Maritime Safety Authority v McKenzie
2010
(3) SA 601
(SCA) paras [21] – [23];
Fedlife
Assurance Ltd v Wolfaardt
2002 (1) SA 49
(SCA) paras [16] – [21].
[10]
Cf
Spruyt
v De Lange
1903 TS 277:
“”[T]he engagement was an ordinary monthly
one. The [employee] was therefore entitled to a month’s
notice.”
And as Wessels J held in
Crawford
v Tommy
1906 CPD 843
at 847: “[T]he appellant was entitled to give the
respondent notice to quit on the 20
th
of the month, making himself thereby responsible to the respondent
for a month’s wages in lieu of earlier notice”.
[11]
1952 (3) SA 121 (C) 127.
[12]
1977 (2) SA 943 (A) 952.
[13]
Bulmer
v Woollens Ltd (in liquidation)
1926
CPD 459
at 467;
[14]
UKEAT/0038/14/LA, unreported, 21 May 2014.
[15]
Para 13.
[16]
Cf
Bomoyi
Gaba v National Prosecuting Authority
C 473/2005, 12 November 2012, unreported.