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[2016] ZALCJHB 63
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Harris v Ocean Traders International (Pty) Ltd (JS710/13) [2016] ZALCJHB 63 (23 February 2016)

Of
interest to other judges
THE
LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
JUDGMENT
C
ase
no: JS 710/13
In the
matter between:
KEITH HARRIS
Applicant
and
OCEAN TRADERS INTERNATIONAL
(PTY) LTD
Respondent
Heard
:
2, 3, 4 November 2015
Delivered
:
23 February 2016
Summary:
(Alleged automatically unfair dismissal -
s 187(1)(f) – dismissal on account of age – dispute as to
applicable
retirement age – agreed retirement age 65 –
compensation – damages under Employment Equity Act)
JUDGMENT
LAGRANGE
J
Introduction
[1]
The applicant in this matter was required
to retire at the end of December 2012 when he turned 63 years of age.
He contended that
his agreed retirement age was 65 and that forcing
him to retire for that age amounted to an automatically unfair
dismissal in terms
of section 187(1)(f) of the Labour Relations Act,
66 of 1995 (‘the LRA’). He claims compensation of two
years’
remuneration and damages in the same amount under the
Employment Equity Act 55 of 1998 (‘the EEA’).
[2]
The applicant maintains that the retirement
age of 65 was agreed between himself and Mr B Nathan (‘Nathan’),
the founder
of the respondent and former co-owner of the business
with his spouse since 1994. The respondent maintains that there was
no agreed
retirement age but originally the normal retirement age in
terms of the firm’s policy was 60 and then changed to 63 when
Imperial Holdings became the holding company of the respondent, in
terms of Imperial’s policy. Mr H Theart (‘Theart’)

gave evidence for the employer. During the course of Harris’s
employment, the respondent was sold twice, once to CIC Holdings
in
2007 and again to Imperial Logistics and operating company of
Imperial Holdings in 2010.
Central
factual issues arising from the evidence
[3]
The applicant was employed on 1 April 1998.
At the time the business was run on a relatively informal basis and
was a very family
orientated one.
[4]
Nathan said that when he interviewed the
applicant, he explained that the firm had no pension policy but that
he could work until
he was 65. He referred the applicant to an Old
Mutual broker, Mr B Adams, to obtain advice on a pension plan. The
applicant said
he had enjoyed a substantial pension at his former
employer, Metro, and had asked about pension provisions at the
respondent and
was advised he must take out a policy, but could not
remember if retirement age was discussed at the interview. No mention
was
made of his retirement age in his letter of appointment. However,
the applicant said that he had discussed his pension fund with
Nathan
and Adams at a meeting in the firm’s boardroom and that is when
his retirement had been discussed and a policy entered
into with a
retirement age of 65. Harris understood that OTI’s policy at
that stage was that, 65 was the retirement age.
Subsequent to that,
at a birthday party, Nathan had asked him if he intended to work
until he was 65 and he confirmed that he would.
[5]
Aside from the letter from Nathan, the
other document referred to by the applicant was a copy of the Annual
Rate and Fee Review
Report of the OTI Old Mutual Death and Disability
group scheme policy drawn up in 2011, which stipulated a “Normal
Retirement
Age” of 65. Harris agreed it was not a retirement
plan but simply a company insurance scheme to cover staff who
travelled.
Theart agreed that his understanding was that the cover
provided in the policy would end when a person stopped working and
that
the insured age limit should have changed to 60 when CIC
Holdings took over.
[6]
Harris agreed that he was aware that when
CIC and subsequently Imperial Logistics took over, the company policy
on retirement age
changed to 60 and 63 years of age, respectively,
but he never agreed to accept the changes.
[7]
The unsigned contract of his appointment as
manager of the East African operation of the respondent from 1 July
2007 contained clauses
dealing with his position, hours of work,
basic salary, annual leave, sick leave, annual bonus, medical aid and
the like and had
a general provision entitled Company Rules which
read:
“
Your
employment is subject to company rules that will be made available to
you. You will be required to read them and signed acknowledgement
of
your understanding and acceptance thereof.”
1 July
2007 was in fact the date on which CIC Holdings acquired control of
the respondent.
[8]
A major issue in contention was whether OTI
policies at that time reflected those of the current holding company,
CIC Holdings.
During 2007, at which stage he was 58, he was
approached by the Financial Director, Mr M O’Neill (‘O’Neill’),

and asked to sign the new contract of employment, which entailed
agreeing to a retirement age of 60, but he refused as it would
be
difficult to find work at that age. Theart testified that it was a
requirement of CIC auditors that every employee should have
a signed
contract of employment. However, Theart claimed that CIC owned five
separate companies at the time each with their own
policies, which
CIC did not try to change. When he was employed at OTI, he found a 50
page document entitled “OTI Group of
Companies: Company Rules
and Procedures”. The document states in clause 1.1 thereof
that: “This manual will supersede
any existing regulations
currently in force and constitutes the terms and conditions of
employment of the company and comes into
effect from 1 May 2001.”
2.4.6 of the document dealing with retirement stated: “Termination
of the existing employment
contract is automatic when an employee
reaches the age of 60 (sixty).” As far as Theart was concerned,
this document applied
to all staff as long as CIC Holdings owned the
respondent. If it had emanated from CIC he would have participated in
drafting it.
When Imperial Logistics acquired the firm, its policies
applied except where existing contracts contained more favourable
terms
for an employee. Theart did concede that Harris had ‘dug
in his heels’ and there was no evidence that he had bound
himself to accept a retirement age of 60, and that if his retirement
age was 65 a different age could not be imposed on him.
[9]
Nathan was adamant that the document could
never have been drafted in 2001, and he had no recollection of a
staff manual being created
for what was a family business. At that
stage he was still fully in control of the business as managing
director and remained in
effective control 2008, although CIC
Holdings Ltd acquired the company in 2007. He resigned as executive
chairperson of the respondent
towards the end of 2009 when he felt he
was no longer in control of the business. Harris also claimed that as
a member of the board
in 2007, he would have been aware of such a
document if it had been adopted before CIC took over because the
board would have been
involved in producing it. He could not dispute
it might have been in existence by the time Theart took over as
Managing Director
of the respondent around 2008 or 2009.
[10]
Harris claimed he never saw the contract
which O’Neill asked him to sign in 2007, but he had asked him
what the new conditions
of employment entailed and the latter had
told him that the retirement age was now 60. On legal advice he did
not sign the contract.
[11]
Eventually, in March 2008 the applicant
signed a letter of employment at the request of the Financial
Director Matthew O’Neill
(‘O’Neill’) because
there was nothing on record. The letter in fact states that it
“…serves to confirm
the current employment of Keith
Harris in Ocean Traders International (Pty) Ltd.” The letter
only contained details of his
current salary, medical aid and annual
leave provisions. No reference was made in the letter to any other
policies governing his
employment or to a retirement age.
[12]
Around the time of his 60
th
birthday in 2009, the applicant received an email from the firm
saying that he must retire. He met with Mr Truter of the respondent

in a hotel in Maputo, who explained that the OTI policy was that 60
was the retirement age. The applicant told him that he did
not agree
because his retirement age was 65 and intimated that he would seek
legal advice. He claimed to have sent an email to
Theart confirming
this to which he never received any response. Theart did not recall
receiving such an email.
[13]
He assumed when he did not get an
instruction that he must retire that the matter was no longer under
discussion. Theart said that
the respondent did not proceed to retire
Harris at that stage because he was still needed by the company,
though this explanation
was not tested with Harris. Harris said he
did not approach Nathan that stage to confirm their agreement because
Nathan had already
sold his shares in the company and felt that he
had let people down and was somewhat embittered and communications
between them
had stopped. The contract which Truter wanted him to
sign he never did. According to Theart there were a couple of other
staff
members who also would not sign the contract. Theart accepted
that the applicant  never bound himself to the company policy
or
that he had agreed that a retirement age of 63 could be imposed on
him.
[14]
On 23 April 2012, shortly before the
respondent was acquired by Imperial Holdings, the applicant was
advised in a letter that he
would be retired in December that year
when he turned 63 in line with the rules of Imperial Holdings. Theart
said there was no
reason to do this other than to apply the
applicable retirement policy of Imperial Logistics. To assert his
understanding, Harris
asked Nathan to confirm that his retirement age
was in fact 65. The applicant requested the letter because there was
nothing in
writing about his retirement age. On 1 May 2012, Nathan
wrote a letter to confirm the applicant’s agreed retirement
age,
which stated:
“
I
hereby confirm that the retirement age applicable to Keith Harris who
was employed by Ocean Traders International (Pty) Ltd. (OTI)
was 65
years of age.In subsequent takeovers of OTI and its successors,
section 197
of the
Labour Relations Act no 66 of 1995
applied and his
retirement age should remain unchanged.”
Although
the letter was written on an OTI letterhead, by that time Nathan was
no longer a director of the company, but he readily
conceded that he
did not sign the letter in his official capacity, but was just
confirming the arrangement made with the applicant
when he was
employed. Theart did not dispute the integrity of Harris and Nathan
or mean to imply that they had fabricated the alleged
agreement about
Harris’s retirement age, but said he had a duty to apply the
firm’s policy and if there had been a
written agreement
stipulating Harris’s retirement that would have been a
different matter.
[15]
Harris also sent Theart a copy of the OTI
Old Mutual Death and Disability document mentioned above. Theart said
he was unaware of
this provision until it had been pointed out to him
by the applicant, but the death and disability policy had nothing to
do with
retirement. As he was not a party to drawing up the group
death and disability scheme he could not explain why it was stated
that
the normal retirement age was 65. By the end of 2011, the old
Mutual group scheme had been terminated.
[16]
On 22 May 2012, Theart responded that only
a letter of employment or contract or other binding document signed
by both parties would
be accepted as a valid contract with OTI. He
went on to say:
“
The
letter from Brian Nathan (on an OTI letterhead) is totally in
contradiction to the OTI “Employment Contract” that
we
have on file. The contract is not filled in or signed, but is an
example of the “old” OTI contract. In this contract
the
retirement age is stipulated as 60 years of age. I understand that
Brian wants to assist but really I do not want this to end
up in a
debate between him and Imperial due to statements made and documents
on file.
As
we do not have a document on file stating a different age to that of
the Imperial Group, the policy of 63 years of age will be
binding. As
asked before, should you have any binding document stating different,
please submit and we will adhere to the age stipulated
in such.”
(
sic
)
At
that stage, Theart said the company had no need to retain Harris
beyond his retirement age and in fact was suffering losses at
the
Swaziland operation where Harris was working.
[17]
Nathan believed that employees would have
been asked to sign employment contracts in 2007 after CIC acquired
the respondent and
that this would have been handled by the financial
director, O’Neill.  An unsigned draft contract confirming
the applicant’s
appointment as director intellectual management
of the respondents East African operation with effect from 1 July
2007 contained
no express provision relating to retirement age but
did contain the following clause:
“
9.
COMPANY RULES
Your
employment is subject to Company Rules that will be made available to
you. You will be required to read them
and sign acknowledgement of
your understanding and acceptance thereof
.”
(emphasis
added)
[18]
At the time he was asked to sign this
contract, which he did not want to because it would entail agreeing
to a retirement age of
60, despite the applicant’s close
association with Nathan, the applicant did not approach him to
corroborate his understanding
that the agreed retirement age was 65.
Evaluation
[19]
In essence,
the applicant contends that when he was employed in April 1998 by
Nathan and when shortly thereafter he had to take
out his own
retirement annuity because the company did not have a pension scheme,
he was advised by Nathan that his retirement
age would be 65. He also
understood this to be the normal retirement age applicable at the
respondent at that time. By contrast,
the respondent contends that
the agreed or normal retirement age since 2001 until the respondent
was sold to Imperial Holdings
(Pty) Ltd was 60 and thereafter was 63.
The company maintains that the retirement age was determined by the
current retirement
policy of the company at any point in time. The
respondent also asserted that the doctrine of quasi mutual assent was
applicable.
This doctrine of English law which is now a
well-established part of our law was first expressed succinctly
by
Blackburn J in
Smith v Hughes
[1]
:
“
If,
whatever a man’s real intention may be, he so conducts himself
that a reasonable man would believe that he was assenting
to the
terms proposed by the other party, and that other party upon that
belief enters into the contract with him, the man thus
conducting
himself would be equally bound as if he had intended to agree to the
other party’s terms.”
[2]
[20]
In terms of s 187(2) (b) of the LRA a
dismissal based on age will not be automatically unfair in terms of s
187(1) (f) of the LRA
if an employee has reached the “normal or
agreed retirement age for persons employed in that capacity”.
Consequently,
if the employer can establish that the employee had
reached either one of those ages that is a complete defence to a
claim of dismissal
based on age discrimination.
[21]
In
Rubin
Sportswear v SA Clothing & Textile Workers Union & Others
[3]
in which an
employer sought to impose a normal retirement when previously there
had been no agreed or normal age, the LAC viewed
the issue in the
following terms:
“
[11]   The
question that arises is whether the appellant could render 60 to be
the normal retirement age for the
second and further respondents by
simply declaring unilaterally that 60 was their normal retirement
age. In acting as it did, the
appellant was seeking in effect to
introduce a new condition of employment into the terms and conditions
of the employment of the
second and further respondents. In law it
had no right to do that without the second and further respondents'
consent. The appellant's
conduct in purporting unilaterally to fix 60
as the normal retirement age for the
former
Val employees including the second and further respondents was a
breach of their terms and conditions of employment which
it had taken
over from Val by reason of s 197(2)
(a)
and of the agreement of 30 January. It was a breach of their
contracts of employment in that regard because, with their contracts

not containing any clause or
G
provision
fixing a retirement age, it was implicit in their contracts of
employment that their contracts of employment could not
be terminated
in the absence of a fair reason and age could not per se be a fair
reason for their dismissal. Such conduct constituted
a repudiation of
the second and further respondents' contracts of employment. The
repudiation
gave the second and further respondents an election either to accept
it or to reject it and hold the appellant to the
terms and conditions
of their contracts of employment. In this matter the second and
further
I
respondents
chose the latter course. Accordingly, the purported change of their
employment terms and conditions was unlawful, wrongful
and of no
legal effect.”
[4]
[22]
Both Harris and Nathan disputed that “OTI
Group of Companies: Company Rules and Procedures” containing a
retirement
age of 60 had been adopted as OTI company policy. Theart
could only testify that he found the document when he joined
the
company in 2007. No evidence was adduced of it being adopted by
the board, nor that Harris at any stage had agreed to the terms
of
therein. It is possible it might well have been in circulation or
under consideration by the respondent at some stage, but there
is
nothing definite to indicate that it probably was implemented.
[23]
I am satisfied on the basis of the evidence
that after CIC Holdings took over the company there was an attempt
made to formalise
and regularise conditions of service, and that
employees were asked to sign contracts of employment. I am also
satisfied that on
a balance of probabilities Harris refused to sign
the contract because it would have bound him to a retirement age of
60, and that
when he refused, the respondent did not pursue the
issue. It is common cause that when he reached that age nothing was
said and
he continued working until he was approaching 63, which was
the retirement age Imperial Holdings applied in the absence of any
agreed retirement age above that.
[24]
I believe that the respondent was open to
persuasion that the applicant might have had an agreed retirement age
higher than 63,
but understandably was somewhat reluctant to accept
the say-so of a former director in the absence of a written contract
of employment
containing the agreed age.
[25]
In favour of the applicant is the
undisputed circumstantial evidence of him concluding a retirement
annuity policy with a retirement
age of 65 at a meeting when the
broker and the managing director were present. There is also the
evidence of the Old Mutual death
and disability policy provided by
the respondent for employees. That scheme was only discontinued in
2011 and provided cover until
the age of 65. It seems rather
improbable that the company would have effectively covered all
employees for a period of five years
beyond the normal retirement age
as a matter of course, if most of them were due to retire five years
earlier at 60. In my view,
the balance of probabilities favour the
version that when the applicant was employed, the understanding
between him and the respondent
was that he would retire at age 65.
[26]
The remaining factual question is whether
this agreed retirement age was varied subsequently under the changes
of ownership which
the respondent underwent in 2007 and 2010. On this
issue, it was common cause that there was no document evidencing that
the applicant
had waived his right to insist on a retirement age and
it is common cause when he was asked to sign a  contract which
might
have  had  that  effect he did not.
Consequently, I am satisfied that the applicant’s agreed
retirement age
of 65 was not varied subsequently.
[27]
In conclusion the applicant was dismissed
because of his age and neither of the defences afforded by s187(2)(b)
can assist the respondent.
Therefore his dismissal was automatically
unfair in terms of s 187(1)(f) of the LRA.
Relief
[28]
The
applicant has claimed compensation under the LRA and damages in terms
of the EEA. The respondent argued that in relation to
compensation,
the applicant had to demonstrate his patrimonial loss. While that may
be true of a claim for damages, it is not a
pre-requisite for a claim
of compensation. The most recent statement of this principle was made
by the LAC  in another age
discrimination case
ARB
Electrical Wholesalers (Pty) Ltd v Hibbert *
[5]
:
“
[22]
The compensation that an employee, who has been unfairly dismissed or
subjected to an unfair labour practice, may be awarded
is not aimed
at making good the patrimonial loss that she/he has suffered.
The concept of loss or patrimonial loss may play
a role to evince the
impact of the wrong upon the employee and thus assists towards the
determination of appropriate compensation,
but compensation under the
LRA is a statutory compensation and must not be confused with a claim
for damages under the common
law, or a claim for breach of contract
or a claim in delict. Hence, there is no need for an employee to
prove any loss when seeking
compensatory relief under the LRA.
[23]
Compensatory relief in terms of the LRA is not strictly speaking a
payment for the loss of a job or the unfair labour
practice but in
fact a monetary relief for the injured feeling and humiliation that
the employee suffered at the hands of the employer.
Put differently,
it is a payment for the impairment of the employee's dignity. This
monetary relief is referred to as a solatium
and it constitutes a
solace to provide satisfaction to an employee whose
constitutionally protected right to fair labour practice
has been
violated. The solatium must be seen as a monetary offering or
pacifier to satisfy the hurt feeling of the employee while
at the
same time penalising  the employer.  It is not however a
token amount hence the need for it to be 'just and equitable'
and to
this end salary is used as one of the tools to determine what is
'just and equitable'.”
[24] The determination of the quantum
of compensation is limited to what is 'just and equitable'. The
determination of what is 'just
and equitable' compensation in terms
of the LRA is a difficult horse to ride. There are conflicting
decisions regarding whether
compensation should be analogous to
compensation for a breach of contract or for a delictual claim.
In my view, and as I said
earlier, because compensation awarded
constitutes a solatium for the humiliation that the employee has
suffered at the hands of
the employer and not strictly a payment for
a wrongful dismissal, compensation awarded in unfair dismissal or
unfair labour practice
matters is more comparable  to a
delictual award for non-patrimonial loss. While a delictual action
(ie actio iniuriarum)
for non-patrimonial loss is fashioned as a
claim for damages, it is no more than a claim for a solatium because
it is not dependent
upon patrimonial loss actually suffered by the
claimant. Hence, awards made under a delictual claim for
non-patrimonial loss
may serve as a guide in the assessment of just
and equitable compensation under the LRA. In
Minister of Justice &
Constitutional Development & another v Tshishonga (Tshishonga
),
this court in an award of solatium referred to the delictual claim
made under the actio injuriarum for guidance in what would

constitute just and equitable compensation for non-patrimonial
loss in the context of an unfair labour practice. It stated
that
since compensation serves to rectify an attack on one's dignity, the
relevant factors in determining the quantum of compensation
in these
cases included  but were not limited to —
'the
nature and seriousness of the injuria, the circumstances in which the
infringement took place, the behaviour of the defendant
(especially
whether the motive was honourable or malicious), the extent of the
plaintiff's humiliation or distress, the abuse of
a relationship
between the parties, and the attitude of the defendant after the
injuria had taken place' ”
[6]
(footnotes
omitted)
[29]
In this instance, the applicant would have
continued working until age 65 for the respondent. He eventually did
secure alternative
full time employment only in February 2015.
Initially, he had relied on a tax rebate as his main source of
income. He had also
suffered the emotional impact of the
dismissal  which left him with a feeling of inadequacy and a
belief he would not
get alternative employment. Eventually, after a
year, he managed to start a small business in Swaziland. The primary
consideration
in this matter is that, he would have retired two years
later, but I accept the respondent’s contention that there was
no mala fides
on the part of the firm in insisting he should retire at 63 because I
am persuaded that Theart genuinely believed in the absence
of a
written agreement on the applicant’s retirement age, the
company was entitled to apply the policy which it had adopted.
[30]
The applicant also seeks damages under the
EEA, though it must be said he did not testify with much precision on
the extent thereof.
In
Hibbert
the
LAC had this to say about claims  for damages based on the same
facts:
[33]
Where there is a single action with claims under the LRA and the EEA
based on the employee being discriminated against and
the court is
satisfied that there has been an automatically unfair dismissal and
that the employer's action also constitutes a
violation of the EEA,
it must determine what is a just and equitable amount that
the employer should be ordered to pay as
compensation. In
arriving at this determination, the court should not consider
separate compensation under the LRA and the EEA
but what is just and
equitable for the indignity the employee has suffered. In doing this,
it may take various factors into account,
inter alia, as set out in
Tshishonga
,
additionally, including but not limited to the position held by the
employee within the employer's establishment, the remuneration
he
earned, how reprehensible and offensive was the employer's conduct,
how if at all did it affect the employee and what motivated
the
wrongful conduct by the employer to act as it did, etc.  If the
claim is under   the LRA only, the court must,
if the
amount determined by the court to be just and equitable exceeds the
threshold set in s 194(3) of the LRA, reduce the amount
of
compensation to bring it within the limitation provided in s 194(3).
The amount will not have to be reduced though if, like
in this
matter, the claim is brought under both the LRA and the EEA
because there is no limit prescribed to the amount of
compensation
that can be awarded under the EEA. The importance of this is that the
employee's right to claim under both the EEA
and the LRA is
recognised and given effect to while at the same time the employer is
not being penalised twice for the same wrong
as a single
determination is made as to what is just and equitable compensation
for the single wrongful conduct.”
[7]
[31]
Given the factors mentioned in paragraph
[29] above, I am satisfied that in this instance sixteen months’
remuneration would
be just and equitable compensation.
Order
[32]
The applicant’s dismissal was
automatically unfair for a reason related to his  age in terms
of s 187(1)(f)
[33]
The respondent must pay the applicant an
amount of R 1,283,760-00 (one million, two hundred and eighty three
thousand and seven
hundred and sixty rands) within 21 days of the
date of this order.
[34]
The respondent must pay the applicant’s
costs.
_______________________
Lagrange
J
Judge
of the Labour Court of South Africa
APPLICANT:
A
L Cook instructed by O De Sousa
RESPONDENT:
S
Snyman of Snyman Attorneys.
[1]
(1871) LR 6 QB 597
at
607
[2]
See discussion in RH Christie and
GB
Bradfield,
The
Law of Contract in South Africa
,
6th Edition 2011, pages 10-12 and 26-32.
[3]
(2004)
25
ILJ
1671
(LAC)
[4]
At 1676.
[5]
(2015)
36
ILJ
2989 (LAC)
[6]
[7]
At 2999-3000.