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[2015] ZALCJHB 279
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Somi v Old Mutual Africa Holdings (Pty) Ltd (J2828/14) [2015] ZALCJHB 279; (2015) 36 ILJ 2370 (LC) (3 July 2015)
THE LABOUR COURT
OF SOUTH AFRICA, JOHANNESBURG
JUDGMENT
Case no:
J2828/14
Reportable
In the matter between:
SIPHOKAZI
SOMI
Applicant
and
OLD MUTUAL AFRICA HOLDINGS (PTY)
LTD
Respondent
Heard:
11 March 2015
Delivered:
3
July 2015
Summary: Application for
specific performance. Breach of contract the employer failing to
issue a month’s notice prior
to the termination of employment
contract. The employer failing to hold a performance enquiry prior to
dismissal contrary to the
requirements of the employment contract.
The discretion of the Court to make an order of specific performance.
JUDGMENT
MOLAHLEHI, J
Introduction
[1]
Initially
this matter came before this Court on an urgent basis. The first
hearing of the matter was on 26 November 2014. The matter
was then
postponed on three occasions, the final hearing being on 11 March
2015.The applicant withdrew her urgent application after
some debate
regarding the issue of urgency. The withdrawal was in essence a
removal of the matter from the urgent roll. The Court
then directed
that the matter be placed on the opposed motion roll with the
direction that the Registrar should prioritise the
enrolment thereof.
The urgency having fallen away the matter had to be considered in the
ordinary cause and thus had to be placed
on the waiting list of
matters to be set down for hearing. This means the matter would have
received a date for a hearing next
year, between March and June 2016.
[2]
The
matter was granted a preferential date not because it was still
urgent but for the simple reason that I had already read the
file and
therefore placing it on the waiting list for enrolment on the general
roll would have meant duplication of work for another
Judge to read
and prepare for the matter..
[3]
The
applicant seeks an order in the following terms:
‘
2.1
Declaring the Applicant’s dismissal on 12
th
November 2014 without notice and without such dismissal having been
preceded by a performance enquiry, to be unlawful and invalid
or null
and void and for want of compliance with the contract of employment
between the parties;
2.2
ORDERING AND DIRECTING the Respondent to reinstate the Applicant to
her position as the Marketing Executive
forthwith and to allow her to
tender her services and perform her duties in terms of the contract
of employment with effect from
Thursday, 27
th
November
2014;
2.3
INTERDICTING AND DIRECTING the Respondent from engaging in any
conduct or omission whatsoever which
unlawfully interferes with,
obstructs and/or prevents the Applicant from complying with her
obligations in terms of your contract
of employment;
2.4
Directing the Respondent to pay the Applicant’s cost for this
application calculated that the
scheme is between an attorney and own
client.’
[4]
The
essence of the applicant’s case as will appear later in this
judgment is that her employment contract was unlawfully terminated
by
the respondent without notice and also before the completion of her
performance enquiry. Put in another way the applicant’s
case is
that the respondent breached the employment contract in that she was
not issued with the notice of termination and also
that there was no
basis to terminate the employment contract. As it appears from the
prayers above, the applicant is seeking both
a declaratory and
specific performance order.
[5]
The
relief which the applicant seeks is final in nature. It follows
therefore, that in order to succeed the applicant has to satisfy
the
requirements of a declaratory and interdictory relief. More
importantly, in this regard the applicant has to show that she
has a
clear right to the relief sought and that has to be done by showing
that the termination of the employment contract was unlawful
or
invalid.
[6]
It
should be noted that whilst the employment contract does incorporate
the principles envisaged in the Labour Relations Act (“the
LRA”),
[1]
the
cause of action as formulated in the applicant’s papers is not
based on the unfair dismissal concept but rather on breach
of that
contract. It is also apparent from the applicant’s papers that
she did not accept the alleged breach of the contract
but rather
seeks to hold the respondent to it and thus have it enforce the
provisions of the contract.
[7]
It
should also be pointed out that some of the background facts set out
below are not relevant to the determination of the applicant’s
claim. This will become apparent later in the judgment.
Background Facts
[8]
The
case of the applicant is that she attended a performance management
meeting with her immediate supervisor, Mr Madzinga on 19
February
2014. The outcome of the meeting according to her was that there was
an agreement regarding her performance scoring. She
further states
that her score was later changed by Mr Madzinga, with the motive of
reflecting her as an inconsistent performer.
[9]
The
applicant further states that she was invited to a meeting on 05 May
2014, by Mr Padayachee, the acting HR manager where she
was informed
that there has been a restructuring of the division and that her
position has been down-graded. She was told to either
accept the
down-grading or leave the organisation.
[10]
She
was later called to another meeting with Mr Madzinga on 13 May 2014,
where she was told that the other option available to her
was to
remain in the organisation but that she would then be performance
managed by him.
[11]
Another
meeting was held on 26 May 2014 where, according to the applicant she
was told by Mr Madzinga that the leadership of the
respondent had
lost confidence in her and therefore preferred that she should leave.
[12]
On
29 May 2014, the applicant transmitted an email to Mr Madzinga,
wherein she expressed her concern that it appeared that her
employment would be terminated at the meeting to be held the
following day.
[13]
At
the meeting held on 29 May 2014, Mr Madzinga in the presence of Mr
Padayachee accused the applicant of having failed to execute
her
duties in terms of the required standards and that the respondent has
lost confidence in her abilities in that regard. He then
proposed
that the applicant should consider either being placed under
performance management or concluding a mutual separation.
[14]
A
performance enquiry was subsequently convened on 11 August 2014.
Strangely this inquiry, it would appear, was conducted in an
adversarial manner similar to what happen in a Court. After a
short-cross examination by the applicant’s attorney Mr Lebea,
Mr Madzinga requested a short adjournment; for purposes of locating
certain documents. The enquiry was then postponed to the week
of 3
November 2014, because Mr Madzinga delayed in reverting to the
proceedings after the postponement. Similar to Court proceedings
the
matter was postponed again, it would appear this time due to the
unavailability of Mr Lebea.
[15]
On
12 November 2014, the respondent addressed a letter to the applicant
indicating amongst other things that:
‘
I
note that you rejected several attempts to reach a mutually agreed
separation, and also declined our offer of external mediation.
Due
to your attorney’s error a postponement of the November 2 day
session was requested at the last moment, which would have
in all
likelihood delayed the conclusion of this matter into Q1/2015-same 9
months after it started.
OMAH
requires a fully functioning Marketing Executive able to work at the
right level of complexity as it moves into 2015 with this
role being
key to the success of the business plans and African expansion
strategy.
As
Chief Operating Officer I have a duty and responsibility to balance
the interest of the business, its customers and shareholders
with
those of an employee.
To
avoid the untenable situation OMAH now finds itself in I have decide
to:
·
Stop
the current Incapacity: Loss of confidence Enquiry, and instead to
·
Terminate
your Employment on the basis of Incapacity, with immediate effect
Our
HR Executive, Sipho Gumbi will facilitate your departure this morning
and attend to payments due to you. He can also assist
with arranging
counselling via ICAS if that will assist you.
You
obviously have the right to refer your termination to the CCMA within
its time limit should you so choose’.
[16]
It
is common cause that the parties signed an employment contract during
January 2012. The relevant clauses for the purposes of
this judgement
are clause 21.1 to 21.4 of the employment contract which read:
‘
21.
Termination
21.1
This contract of employment may be
terminated as follows:
21.1.1
By either party providing one month’s notice to this effect, in
writing, to the
other party, subject to clause 22.3. Where such
notice is provided:
21.1.1.1
The employer may, at its sole discretion, elect whether the employee
should work during this period of notice.
Notwithstanding this, the
employer shall pay the employee for the months’ notice
irrespective of whether the employer has
required him/her to work or
not.
21.1.1.2
Should the employee give notice in terms of clause 22.1.1 and request
that the employer waive the notice period,
the employer may exercise
its discretion in this regard. Should the employer agree to such
waiver, the employee shall be paid only
up to and including his/her
last day of work.
21.1.2
…
21.1.3
By the employer on the basis of the grounds regarded as valid in the
Labour
Relations Act Number 66 of 1995, with or without the notice
period as set out in clause
21.1.4
For any other lawful and fair reasons.
21.2
Without limiting the provisions of clause 22.1 above (inclusive of
clauses to 22.1.4) the employer
may, at any time during the currency
of the contract of employment:
21.2.1
Summarily terminate this contract should the employee be guilty of
misconduct which would entitle the Company in law and/or
equity to
summarily dismiss him/her;
21.2.2
Terminate this contact with notice should the employee not meet the
employer’s required performance standard;
21.2.3
Terminate this contact with notice on the basis of the employee’s
incapacity on the basis of ill health or injury.
21.2.4
Terminate this contract on the basis of the employer’s and/or
the Group’s operational requirement;
21.2.5
Terminate this contract with or without notice on the basis of “FAIS”
requirements as set out in
clause 15, or a breach in terms of clause
16 of this contract (the Financial Intelligence Centre Act);
21.2.6
Terminate this contact summarily where the employee has
committed a material breach of contract and/or for reasons
recognised
and accepted in law and equity as justifying summary termination of
employment.
21.4
Notwithstanding the provisions of clauses 21.3, 22.3.1, 22.3.1
and 22.3.3 the employer may summarily terminate the contract
for the
reasons set out in clauses 21.1 and 21.2 above’.
[17]
The
other relevant clauses of the contract for the purposes of this
judgement are clauses 12.2 and 12.3 of the contract which read
as
follows:
‘
12.2 The
employee agrees to be bound by and observe such policies, standards
and procedures as referred to in clause 13.1 which
policies may be
held in electronic form or otherwise.
12.3 By accepting employment
with Old Mutual the employee accepts Old Mutual’s Code of
Conduct, comprising all Old Mutual’s
policies and guidelines,
some of which are highlighted in the Addendum to this
document’.
[18]
The
issue of poor work performance which is central to the applicant’s
claim of unlawful termination of the employment contract
is dealt
with by the policy on Incapacity-Poor Work Performance. The relevant
part of the policy for the purposes of this judgement
is found under
the heading Performance Enquiry which reads as follows:
‘
A
performance enquiry must be held prior to an employee being dismissed
or receiving a final written warning for poor performance.
It is
noted that an employee may not be dismissed for poor performance in
the absence of either a current written or final written
warning.
There are two exceptions to this general rule: (sic) when a pattern
of poor performance – improvement – poor
performance can
be demonstrated and probationary employees’.
[19]
It
was contended on behalf of the respondent that there is nowhere in
papers where the applicant seeks to compel the respondent
to complete
the performance enquiry nor does she seek notice before the
termination decision.
[20]
The
respondent further argued that the applicant could not complain about
breach of contract in relation to the notice pay because
she was
ultimately paid in that regard. It was also argued on behalf of the
respondent that the applicant has an alternative remedy
in the form
of unfair dismissal claim. The other point made in relation to this
is that, the applicant has disguised the unfair
dismissal claim with
a breach of contract.
Evaluation
[21]
It
is clear in my view that the cause of action in the present matter is
based on breach of contract and accordingly conferring
the power on
this Court to entertain the matter in terms of section 77(3) of the
Basic Conditions of Employment Act (“the
BCEA”).
[2]
[22]
It
is well-established that the remedy of specific performance in the
case of an alleged contractual breach of the employment contract
is a
separate remedy from the unfair dismissal remedy provided for in the
LRA. The right not to be unlawfully dismissed in terms
of the common
law remained even after the introduction of the unfair dismissal
concept by the LRA.
[23]
In
Fedlife
Assurance v Welfraardt,
[3]
the
court held that:
‘
[13]
The clear purpose of the legislature when it introduced a remedy
against unfair dismissal
in 1979 was to supplement the common law
rights of an employee whose employment might be lawfully terminated
at the will of the
employer (whether upon notice or summarily for
breach). It was to provide an additional right to an employee whose
employment might
be terminated lawfully but in circumstances that
were nevertheless unfair’.
[4]
[24]
It
is well-established in law that an employee whose contract of
employment has been unlawfully terminated by the employer has an
election to either accept the breach of contract and sue for damages
or enforce the contract. The remedy in the case where the
employee
enforces the contract in the face of a breach would generally be
specific performance.
[25]
In
terms of s 77A (e) of the BCEA, the Court has the power to order
specific performance.
[5]
It
has generally been accepted that exercising that power, the Court has
a discretion whether to grant or refuse an order for specific
performance. In this regard, the Court in
Santos
Professional Football Club (Pty) Ltd v Igesund and Another,
[6]
found
that the “practical consideration” which the Court
a
quo
applied was not the test to apply in the exercise of the discretion
of granting or refusing specific performance. The approach
to adopt
according to the Court is that:
‘…
courts
should be slow and cautious in not enforcing contracts. They should,
in specific performance situations, only refused performance
where a
recognised hardship to the defaulting party is proved’.
[26]
As
indicated earlier, the respondent contends that the applicant should
be denied the relief of specific performance, because she
has an
alternative remedy in the form of unfair dismissal and that she could
obtain it through the CCMA. I do not agree and accordingly
align
myself with the approach adopted by Van Niekerk J in
Ngobeni
v National Youth Development Agency,
[7]
where
the Learned Judge held that:
‘
[21]
In so far as the remaining requirements relevant to the relief sought
are concerned, there is no alternative remedy that is
adequate in the
circumstances. Ngubeni has no right to pursue a contractual claim in
the CCMA, and the law does not oblige him
to have recourse only to
any remedies that he might have under the LRA. Equally, he is fully
entitled to seek specific performance
of his contract, and is not
obliged to cancel the agreement and claim damages. The balance of
convenience dictates that the order
sought should be granted - there
is little inconvenience to the NYDA should it continue with and
complete the disciplinary hearing;
the result may well be the same.
For Ngubeni, the effect of the NYDA's decision to terminate his
employment at this stage is to
deprive him of his employment and
livelihood. Similarly, I am satisfied that Ngubeni will suffer
irreparable harm should the application
not be granted. He stands to
suffer financially, and the high public profile of this matter (it is
not specifically denied that
much of the raising of this profile has
been at the instance of the NYDA) has ensured that Ngubeni has been
branded as corrupt
and dishonest, with little prospect of alternative
employment.’
[27]
In
Ramabulana
v Pilansberg Platinum Mines
,
soon to be reported judgement under case number J808/13, Whitcher J,
in dealing with the power of the Court to grant specific
performance
in terms of s 77A (e) of the BCEA held that:
‘
A
conspectus of case law shows that where an employee has been
dismissed the employee, in a contractual dispute, is not obliged
to
cancel the agreement and claim damages but is entitled to claim
specific performance subject to the court’s discretion
to
refuse to grant such an order. Specific performance is a primary and
not a supplementary remedy. Courts in general should be
slow and
cautious in not enforcing contracts. Specific performance should be
refused only where it would be inequitable in all
the circumstances
or where, from a change of circumstances or otherwise, it would be
“unconscientious” to enforce a
contract specifically.
Each case must be judged in light of its own circumstances. The right
of an applicant to specific performance
of a contract, where the
respondent is in a position to do so, is thus beyond doubt. The
court’s discretion not to provide
this relief is exercised with
reference to the facts as they exist when performance is claimed and
not as they were when the contract
was concluded’.
[28]
In
my view there is no doubt that the respondent in terminating the
employment contract of the applicant in the manner it did failed
to
comply with its obligations as set out in the employment contract for
the reasons set out below
.
[29]
In
the first instance, the respondent had an obligation in terms of
clause 21.1.1 of the employment contract to issue the applicant
with
one month’s written notice of the intention to terminate the
contract. It cannot be disputed from the reading of the
letter of
termination that the respondent failed to comply with the provisions
of this clause and accordingly was in breach of
the contract.
[30]
The
respondent’s contention that it did subsequently pay the notice
pay is not sustainable in the context where the applicant
is claiming
specific performance and not damages. The defence would probably have
been sustainable had the applicant been claiming
damages for the
notice period. It is also apparent from the reading of clause 21.1.1
that the issue of notice payment arises “Where
such notice is
provided. In other words the payment of notice in terms of the
employment contract arise only once the notice has
been issued. There
is no-where in the contract where it is stated that failure to issue
the notice of termination can be remedied
by payment.
[31]
The
provisions of clause 21.1.1 of the employment contract are very
clear. The respondent had to give the applicant one month’s
notice in writing. The letter of termination issued by the respondent
terminated the applicant’s employment with immediate
effect. In
my view, the applicant is on this basis alone entitled to an order
prayed for in the notice of motion.
[32]
It
is also apparent from the letter of termination that the respondent
terminated the contract of employment on the basis of clause
21.2.2
of the employment contract. In this regard, the respondent terminated
the employment contract on the basis of the alleged
failure to meet
the required standard of performance by the applicant.
[33]
It
has not been disputed that the respondent’s policies, including
the IR Policy and Procedure on Incapacity and Poor Work
Performance
have been incorporated into the applicant’s employment contract
in terms of clause 12 of the employment contract.
[34]
In
terms of the IR policy, the respondent was required to conduct an
enquiry before dismissing the applicant on the ground of poor
work
performance. It is common cause that the respondent stopped the
incapacity inquiry before it could be completed. This in essence
means that no enquiry was held prior to the termination of the
employment contract of the applicant. It also means that the
applicant’s
employment contract was terminated in breach of the
provisions of the employment contract read with the IR policy.
[35]
The
respondent contended in the alternative that it was entitled to
terminate the applicant’s employment contract under the
provisions of clause 21.4 of the employment contract which provides
that, “the employer can summarily terminate the contract…”
In my view, this defence cannot be sustained with regard to the facts
of this case. As should appear from the above discussion
the dominant
and clear reason for the termination of the applicant’s
contract which was done without notice, was on the basis
of her poor
work performance. It needs to be emphasised that this could only have
been done by affording her the right to a hearing
before the
dismissal.
[36]
Whilst
it cannot be denied that there are disputes of facts in relation to
the issue of the alleged poor work performance, those
facts are not
material to the determination of the real and genuine dispute between
the parties.
[8]
The
real dispute between the parties in this matter is whether the
respondent unlawfully terminated the applicant’s employment
contract. On the facts as set out on the papers this court is
accordingly able to resolve the question of whether or not the
respondent
had repudiated the applicant’s employment contract
by terminating it without firstly issuing her with a written notice
and
secondly by not affording her a proper and a full hearing prior
to the termination of her employment.
[37]
In
light of the above discussion I am of the view that the applicant has
made out a case for the relief of specific performance.
It should be
pointed out that in upholding the prayer for specific performance
account, has been taken of the fact that there is
no evidence on the
papers to suggest that there has objectively been a breakdown in
trust relationship between the parties and
also that specific
performance would cause hardship on the respondent.
[38]
The
last issue for determination has to do with costs. The issue of costs
is governed by the provisions of s 162 of the LRA which
requires that
consideration should be given to both the law and fairness when
determining whether or not an order as to costs should
be made.
[39]
In
law, the withdrawal of the urgent application by the applicant should
mean that the applicant has been unsuccessful and thus
liable for
costs. In considering the aspect of fairness as provided for in s 162
of the LRA, it is my view that whilst the applicant
may have failed
in relation to urgency, the claim itself was not without merit. It
would therefore not be fair to allow cost for
the result in that
regard and also the fact that the applicant is an individual who may
in future be discouraged from asserting
her right if costs were to be
granted. It is therefore my view that each party is to pay its own
costs in relation to the urgent
application.
[40]
In
relation to the hearing of the matter on 11 March 2015, there seems
to be no reason why costs should not follow the results.
Order
[41]
In
the premises, the following order is made:
1.
The
termination of the employment of the applicant by the respondent on
12 November 2014 is unlawful.
2.
The
termination of the employment of the applicant by the respondent is
set aside, and the respondent is ordered to reinstate the
applicant
retrospective to the date of the unlawful termination.
3.
The
respondent is ordered to pay the applicant’s salary and
benefits from 12 November 2014 to the date of the reinstatement
which
is with immediate effect.
4.
Each
party is to pay its own costs in relation to the urgent application.
5.
The
respondent is to pay the applicant’s the costs of the hearing
of the matter on 11 March 2015.
________________
Molahlehi, J
Judge of the Labour
Court of South Africa
Appearances:
For the Applicant:
Adv. R. Venter
Instructed by:
Lebea Attorneys
For the Respondent:
Adv. F Malan
Instructed
by:
Bowman Gilfillan
[1]
Act
number 66 of 1995.
[2]
Act
number 75 of 1997.
[3]
2002
(1) SA 49
(SCA).
[4]
This
approach was confirmed by the Constitutional Court in the case
Ngqukumba
v Minister of Safety and Security and Others
2014 (7) BCLR 788
(CC). In that case the Constitutional Court states
at footnote 30 of the judgment that the principle in Fedlife
Assurance is
in consonant with the provisions of s 39(3) of the
Constitution which reads: The Bill of Rights does not deny the
existence of
any other rights or freedoms that are recognised or
conferred by common law, customary law or legislation, to the extent
that
they are consistent with the Bill. In the same footnote the
Court quoted with approval what was said in
Dhanabakium
v
Subramanian and Another
1943
AD 160
at
167 where it was held:
“
As
was stated in
R
v Morris
1 CCR 95 in a passage quoted with approval by Solomon J in
Johannesburg
Municipality v Cohen’s Trustees
1909
TS 811
at
823:
‘
It
is a sound rule to construe a statute in conformity with the common
law rather than against it, except where and so far as
the statute
is plainly intended to alter the common law.”
[5]
Section
77A (e) of the BCEA reads as follows: "Subject to the
provisions of this Act, the Labour court may make any appropriate
order, including an order – (e) making a determination that it
considers reasonable on any matter concerning a contract
of
employment in terms of section 77 (3), which determination may
include an order for specific performance, and award of damages
or
an award of compensation." Asian
[6]
(2002)
23
ILJ
2001 (C) at 2014 H-I.
[7]
(2014)
35
ILJ
1356 (LC).
[8]
The
approach to adopt when dealing with dispute of facts in motion
proceedings is set out in
Plascon-Evans
Paints Ltd v Van Riebeeck Paints (Pty) Ltd
(
Plascon-Evans
)
[1984] ZASCA 51
; ,
1984
(3) SA 623
(A) at 634H-I. See also
Whitman
t/a JA Construction v Headfour (Pty) Ltd
[2008] ZASCA 6
;
2008 (3) SA 371
at 375 where the Court in dealing with the same
issue held: “
A
real, genuine and
bona
fide
dispute of fact can exist only where the court is satisfied that the
party who purports to raise the dispute has in his affidavit
seriously and unambiguously addressed the fact said to be disputed”
.
Of course in
Buffalo
Freight Systems (Pty) Ltd v Castleigh Trading (Pty) Ltd and Another
2011
(1) SA 8
(SCA) continued against deciding probabilities in the face
of conflicting facts appearing in affidavits.