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[2015] ZALCPE 21
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Dodds v MEC Dept Health, Eastern Cape Province and Others (PS11/2013) [2015] ZALCPE 21 (24 March 2015)
REPUBLIC OF SOUTH
AFRICA
THE LABOUR COURT OF
SOUTH AFRICA, PORT ELIZABETH
JUDGMENT
Case no: PS11/2013
DATE: 24 MARCH 2015
Not Reportable
In the matter between:
HC
DODDS
................................................................................................................................
Applicant
And
MEC DEPT HEALTH, EASTERN CAPE
PROVINCE And OTHERS
.......................
Respondents
Heard: 10 & 11 March 2015
Delivered: 24 March 2015
Summary:
Employment contract,
authority to enter into in the public service.
Collective agreement entered into in
terms of
section 197
of the
Labour Relations Act, no. 66 of 1995
.
Validity and interpretation of. Principles re-stated.
JUDGMENT
EUIJEN, AJ
Introduction:
[1] This is an application, founded in
contract, in which the applicant, Mrs Dodds, claims payment of her
remuneration due to her
for services rendered as a ‘sessional’
or part-time pharmacist at the former SAWAS Memorial Hospital in
Jansenville,
Eastern Cape, together with associated leave pay and a
travel allowance. Save for the leave pay, the period for which Mrs
Dodds
claims her remuneration and travel allowance is 1 April 2011 to
31 March 2012.
[2] The claim is founded on a written
fixed-term employment contract for the period in question, signed by
Mrs Dodds and Dr Nyushman,
who was then the clinic manager at the
hospital, on 9 April 2011.
[3] The first and second respondents
(“the Department”), for its part, denies the authority of
Dr Nyushman to enter
into any contracts on its behalf and
consequently, denies any liability to Mrs Dodds at all. After Mrs
Dodds had completed her
evidence in chief, Ms Laher, who appeared on
behalf of the Department, moved for an amendment to the statement of
defence, to include
reliance, in the alternative to the denial of
authority to enter into the employment contract, on a collective
agreement entered
into between the third respondent (SAWAS Memorial
Hospital), the Department and the majority trade union NEHAWU, which
regulated
the transfer of employees from the employ of the hospital
to the Department, with effect from 1 April 2011 (“the transfer
agreement”).
[4] Mr Grobler, who appeared on behalf,
of the applicant, did not oppose the amendment, which was accordingly
granted. Although
Mr Grobler did not seek a postponement or any
consequent amendment to the applicant’s pleadings, he did
nevertheless made
it clear that the applicant regarded the agreement
as incomplete, in that no annexure 2 was provided, which is referred
to in the
agreement itself; it is unsigned by the trade union NEHAWU;
and that the 96 hours reflected as Mrs Dodds’ monthly total
hours
in annexure “1” to the agreement was incorrect and
had been inserted for reasons which are contained in a letter dated
April 2012, which was handed in as exhibit “B”, the
transfer agreement itself becoming exhibit “A”. As
I
understood, Mr Grobler contended that if I had regard to the
collective agreement, annexure “1” should be rectified
to
reflect Mrs Dodds’ rate calculated at 48 hours per month.
[5] The parties also reached agreement
during the course of the proceedings that the total number of hours
that Mrs Dodds had actually
worked for the year in question at the
hospital and upon which her salary claim is based, amounted to 533 25
hours. In addition,
the parties were agreed that the amount received
by Mrs Dodds during that period from the Department amounted to R 34
007-24.
Evidence
[6] Mrs Dodds gave evidence in support
of her case and told a simple and straight-forward story. She is a
qualified pharmacist,
having graduated in 1980. She joined the third
respondent hospital (“the hospital”) during July 2005 as
a “session”
or part-time pharmacist. She was never given
a written contract of employment; her terms and conditions of
employment were verbally
agreed with the then chief medical officer,
Dr Nyushman, on behalf of the hospital’s board. At all times
thereafter, until
1 April 2011, she was paid an hourly rate for her
services, which were limited to 48 hours per month; together with
paid leave
at the rate of 1 hour of paid leave for every 17 hours
worked; and a travel allowance.
[7] It is common cause that at the
beginning of April 2011, the hospital was taken over by the
Department. Mrs Dodds testified that
she was aware of the impending
takeover, but was assured that this would be on exactly the same
terms and conditions which had
prevailed before.
[8] The terms and conditions which
prevailed at the time of the Department’s takeover of the
hospital were that Mrs Dodds
was paid a rate of R274. 76 per hour;
she received a travel allowance of R4.50 per kilometre; and leave pay
remained at the rate
of one hour’s paid leave for every 17
hours worked. In addition she was entitled to claim 1 hour’s
remuneration per
trip from her home to the hospital and back again.
These are the terms and conditions that are indeed recorded in the
disputed
employment contract signed between Dr Nyushman and Mrs Dodds
on 9 April 2011, save that remuneration for travelling time is not
expressly mentioned in the employment contract.
[9] During cross examination, it was
put to Mrs Dodds that Dr Nyushman clearly had no authority to
conclude any binding agreement
on behalf of the Department and that
the agreement remained unsigned by the hospital cluster manager in
the space provided for
such signature. She replied that she had
nobody else to deal with at the hospital. As far as the collective
agreement itself is
concerned, save as stated earlier, that Mrs Dodds
admitted that she was aware of the take-over and was assured that
this would
be on the same terms and conditions of employment, she was
not otherwise involved in its negotiation or any consultative process
and had no personal knowledge of its contents.
[10] There is an instance where Mrs
Dodds did raise her grievance regarding the continued non-payment of
her previously paid travel
allowance, during the course of her
employment, with the Department directly. The event is only
significant because in the course
of that interaction, the Department
acknowledged the obligation to compensate Mrs Dodds for her travel
expenses, but attempted
to negotiate an alternative means of doing
so. In the event the alternative proposal was not implemented.
[11] It was put to Mrs Dodds that she
was in fact offered and accepted a rate half of that which she
claims, based on the number
of hours contained on annexure “1”
to the transfer agreement, exhibit “A”. This she denied
and stated that
had that been the case, she would not have renewed
her contract. She explained that her hours were doubled on annexure
“1”
to the transfer agreement, so that the Department
would be unaware that she was paid at a higher rate than other
sessional pharmacists.
If one however, divides her annual budgeted
salary on annexure “1” by the 48 hours she actually
worked, then the rate
was as per her claim. This version is borne out
by the memorandum signed by Dr Nyushman and addressed to the
Department, dated
3 June 2011, exhibit “B”.
[12] The only witness to testify for
the department was Dr Nyushman. He confirmed the existence of the
employment contract and his
signature upon it, but stated that it was
clearly incomplete as it is not signed by the district manager hence
it was not properly
concluded. He also confirmed the existence of the
transfer agreement and that he signed as a witness to that agreement.
He further
confirmed that NEHAWU had agreed to and abided by the
terms of the agreement, although not signed by that trade union. He
also
said that NEHAWU is the majority union at the hospital. Apart
from that, he contradicted himself on virtually every material
respect
between giving evidence in chief and cross examination.
[13] In his evidence in chief, Dr
Nyushman was adamant that he had no authority to enter into any
contracts with anyone, even during
his time as chief medical officer,
with the hospital board. Yet, as he confirmed in cross examination,
he has previously deposed
to an affidavit to the exact opposite
effect. He also stated in chief that Mrs Dodds’ actual working
hours were closer to
96 than 48, but was forced to concede that, in
fact, they were always, give or take a few hours, not above 48. He
vacillated about
the purpose of the collective agreement. In chief he
said that the purpose was to comply with section 197 of the Labour
Relations
Act, no. 66 of 1995, (the LRA) and preserve the status quo
as far as employees’ salaries are concerned. In
cross-examination,
after conceding that the status quo was that Mrs
Dodds received a travel allowance, he stated that this did not apply
to her travel
allowance, since the Department had not agreed to it
and it did not appear on annexure “1”. He also stated
that he
signed exhibit “B” ‘under pressure’
from Mrs Dodds, although he did not state that this rendered it
incorrect
in any way, or that this ‘pressure’ was of the
unlawful variety.
[14] Overall, Dr Nyushman presents as a
weak individual who is unsuited to a managerial position. He is
prepared to agree with and
appease whoever the protagonist is with
whom he is dealing at the moment. The numerous contradictions in his
evidence already referred
to makes it unreliable, save where
supported by documentary or other acceptable evidence.
The Employment Contract
[15] The applicant bears the onus of
proving the employment contract, including that it was entered into
with someone who has actual
authority to do so. There is no
allegation of ostensible authority relied on in this case. On the
face of it, that contract is
incomplete and not authorised by the
person who should do so, namely the hospital cluster manager. Dr
Nyushman’s evidence,
insofar as it is of assistance on this
point, does not establish that he had any authority to bind the
Department; rather the reverse,
notwithstanding the content of his
earlier affidavit.
[16] In my judgment, Dr Nyushman’s
authority, or lack of it, is not the real issue. It is clear on the
evidence, including
the transfer agreement that the Department
intended to take over all the staff of the hospital on their existing
terms and conditions,
at least for one year. In Mrs Dodds’
case, those terms are recorded in her disputed employment contract.
In other words,
even if one ignores the written employment contract,
then there would be a tacit employment contract between the parties
on exactly
the same terms.
[17] The absence of the cluster
manager’s signature on the contract therefor, in my judgment,
is a mere formality, which does
not detract from the validity of the
recorded agreement between the parties. The written employment
contract represents exactly
what the Department committed itself to
when it took over the staff of the hospital. I accordingly conclude
that the written employment
contract has been proved as governing the
employment relationship in this matter.
[18] This conclusion renders it
necessary to consider the respondent’s alternative plea based
on the collective agreement.
Collective Agreement
[19] The first issue to consider about
the transfer agreement is whether the fact that it is unsigned by the
majority union, NEHAWU,
renders it invalid. This Court has previously
held that it is not a requirement for purposes of the LRA that a
collective agreement
must be signed by the parties. (Diamond and
Others v Daimler Chrysler SA (Pty) Ltd and Another
[2007] 3 BLLR 197
(LC)). It is sufficient for the enforcement of the agreement that the
Court is satisfied that the parties had reached an “agreement
in principle”. (SA Post Office Ltd v CWU and Others
[2010] 1
BLLR 84
(LC)).
[20] Mr Grobler submitted that these
decisions were recently over-ruled by the Labour Appeal Court,
although he could not refer
me to the citation. It appears that the
case which Mr Grobler had in mind is SA Local Government Association
v Independent Municipal
& Allied Trade Union and Others (2014) 35
ILJ 2811 (LAC). That case did not consider, let alone over-rule, the
cases in this
Court to which I have already referred to. It decided,
on the facts of that case that the practice of the parties to the
collective
agreement concluded at the Local Government Bargaining
Council was not to consider collective agreements concluded in that
forum
as binding unless signed, although, in line with the LRA, this
is not a requirement of the bargaining council’s constitution.
(paras 38 – 39 & 41).
[21] In the present matter, there is no
such evidence. On the contrary the evidence is that despite not
signing the agreement, NEHAWU
has not challenged, but rather abided
by and respected its terms, as have all the other parties, save it
would appear, in the present
case of Mrs Dodds. I accordingly
conclude that the transfer agreement, on the evidence before me, is a
valid and binding collective
agreement.
[22] The next issue is whether the
agreement, properly construed or rectified, maintains the status quo,
at least for a year, or
whether it contains new terms and conditions,
reflected in annexure “1”, which regulate the period of
Mrs Dodds’
claim and in particular her rate of pay for the
agreed hours worked.
[23] It is well established that in
interpreting any written document, the primary source is the language
contained in the document
itself, read in its entirety. If on that
reading, the meaning is clear and unambiguous, no extrinsic evidence
is permissible to
contradict such meaning. In cases of uncertainty or
ambiguity, one attempts to ascertain the intention of the author(s)
of the
instrument, taking account of the purpose of the agreement as
a whole. In undertaking this task, one may have regard for the nature
of the problem that was sought to be addressed. In so doing, one may
also examine the surrounding circumstances leading up to and
surrounding the conclusion of the agreement. (Firestone SA (Pty) Ltd
v Gentiruco AG
1977 (4) SA 298
(A) at 304 D-H; Administrator Cape v
Ntshwaqela and Others
1990 (1) SA 705
(A) at 715 F-I; ABSA Bank Ltd
t/a Volkskas Bank v Page and Another
2002 (1) SA 617
(SCA) at para 7;
Engelbrecht and Another NNO v Senwes Ltd
2007 (3) SA 29
(SCA) at
32-33).
[24] Respondent’s counsel
contended that the agreement should be interpreted at face value and
that because Mrs Dodds’
monthly hours were reflected in
annexure “1” as being 96, that her rate of pay was
effectively halved from that based
on a 48 hour month, her annual
salary being common cause between the parties. This, she submitted,
was the clear import of clause
4.2, which reads as follows:
‘On the effective date, the
employees who are listed in annexure “1” hereto which
reflects also each employee’s
salary and salary scale and rank,
notch, allowances, bonuses, hourly tariffs and rates will be
transferred to the Province on the
terms and conditions as agreed
between the Province and the parties to this agreement’.
[25] In my judgement, read as a whole,
the clear import of the transfer agreement was that the Department
would comply fully with
its obligations in terms of section 197 of
the LRA. This is stated in terms in clause 2 of the transfer
agreement, as well as in
clause 8.2, which reads as follows:
“A transitional period of 12
months from 1 April 2011 to 31 March 2012 the salary levels and
notches, housing allowance, medical
aid and uniform allowance which
were applicable to the employees of the SAWAS Memorial hospital shall
continue to be in force after
the effective date.”
[26] Read in context, annexure “1”
which clause 4.2 incorporates, is intended to do no more than provide
the actual
facts and figures applicable to each transferred employee.
It is a mechanical exercise. It is not intended to constitute any
form
of adjustment to existing terms and conditions; indeed the
clause which I have cited above makes this plain.
[27] In the circumstances, the transfer
agreement stands to be rectified as contended by Mr Grobler, in that
Mrs Dodds’ monthly
hours as reflected on annexure “1”
to the transfer agreement should be corrected from 96 to 48. That
this follows from
what I have said above, which appears from
paragraph 42 of the Labour Appeal Court’s judgement in the
SALGA v IMATU case
cited earlier:
‘A party is entitled to
rectification of a written agreement which, through common mistake or
mistake in transcription which
the other party deliberately caused or
knew about, incorrectly records the agreement which they intended to
express in the written
agreement…’.
[28] This is exactly what happened in
this case. As Mrs Dodds testified and Dr Nyushman finally conceded,
and as is borne out by
the terms of exhibit “B”, Mrs
Dodds’ rate was always intended to remain at R274.76. The
doubling of her monthly
hours from 48 to 96 on annexure “1”
was an attempt to disguise this, without changing the annual budgeted
amount.
[29] Hence, Mrs Dodds is entitled to
claim her salary, travelling allowance and leave pay, from April 2011
to March 2012, both in
terms of her employment contract and the
transfer agreement. The only difference between the two relates to
Mrs Dodds’s claim
for arrear leave pay, prior to April 2011.
This cannot be sustained on the pleaded case contained in the
statement case, since
the only cause of action relied on there is the
fixed term contract, which only commences on 1 April 2011. It can
conceivably be
sustained in terms of clause 8.3 read with clause 10.1
of the transfer agreement, which envisages a 9 month transitional
period,
during which the leave records of the third respondent
hospital would be updated by the hospital, presumably so that these
amounts
would be paid by the Department by 1 January 2012.
[30] Since there was no formal
amendment of the applicant’s pleadings by Mr Grobler, I cannot
consider the claim for arrear
leave, as it has not been properly
raised in these proceedings. In the light of my findings about the
transfer agreement set out
above, however, I urge the Department
nonetheless to pay this claim, if this is indeed how clauses 8.3 read
with 10.1 were applied
to the other transferred employees listed on
annexure “1”.
Conclusion
[31] It follows from all the reasons
which I have set out above, that Mrs Dodds is entitled to be paid for
the 533, 25 agreed hours
which she worked between April 2011 March
2012 at her previous rate of R274.76 per hour = R146 515-77, less the
R34 007-24 agreed
payments received which leaves an amount of R112
508-53. In addition, she is entitled to leave pay for the same period
of 533,25
/ 17 X R 274,76 = R8618-58; and travel expenses calculated
at a rate of R4,50 per kilometre which total R64583-37. She is not
entitled,
in these proceedings, to be paid for her travelling time as
this is not mentioned in the employment contract; nor her arrear
leave
since this also does not arise out of the pleaded employment
contract.
[32] As stated earlier, Mrs Dodds is
entitled to all of these amounts, both in terms of her employment
contract and the transfer
agreement. Indeed, in terms of the transfer
agreement, she may well be entitled to the arrear leave pay too. Why
the Department
has seen fit to oppose this action instead of settling
what it clearly owes Mrs Dodds and has done for over three years, is
difficult
to comprehend. The Department’s defence has been
entirely opportunistic in seizing on the unsigned employment contract
(in
part) and the 96 hours in annexure “1” to the
transfer agreement and at odds with what is clearly stated in both
agreements
and exhibit “B”. Not only is this
unconscionable and unprincipled, it is also not conducive to
attracting professional
services to provincial hospitals,
particularly in the rural areas. No-one’s interests are served
with this approach, including
those of the Department. In these
circumstances, I am disposed to award costs against the Department on
an attorney and client
scale. However, as only party and party costs
were sought on Mrs Dodds’ behalf, I shall refrain from doing
so.
Order
[33] I make the following order:
[34] The first and second respondents,
jointly and severally, the one paying the other to be absolved, are
ordered to pay the applicant
the following amounts:
a. R112 508-53 being her outstanding
salary due in terms of her employment contract.
b. Leave pay in the amount of R8
618-58.
c. Travel allowance in the amount of
R64 583-37.
d. Interest on the aforesaid amounts at
the rate of 15,5% per annum from 1 April 2012 until 31 July 2014
inclusive; and at the rate
of 9% per annum from 1 August 2014 to date
of payment.
e. The applicant’s costs of this
application.
Euijen AJ
Acting Judge of the Labour Court of
South Africa
APPEARANCES:
For the Applicant: Mr M Grobler
Instructed by: Kirchmanns Inc
For the Respondent: Ms Laher
Instructed by: State Attorney