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[2016] ZALCJHB 84
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Orange Riet Water Users Association (Pty) Ltd v PAWUSA obo Moolman (J633/2015) [2016] ZALCJHB 84 (25 February 2016)
REPUBLIC
OF SOUTH AFRICA
THE LABOUR COURT OF
SOUTH AFRICA, JOHANNESBURG
JUDGMENT
Not
Reportable
case
no: J633/2015
In
the matter between:
ORANGE RIET WATER
USERS ASSOCIATION (PTY) LTD
Applicant
And
PAWUSA OBO DJ
MOOLMAN
Respondent
Heard:
11 June 2015
Delivered:
25 February 2016
Summary:
Applicant seeks a declarator that the respondent is not entitled to
relief in terms of an arbitration
award issued in his favour, as he
signed a settlement agreement subsequent to the issue of the award,
in which he compromised his
claim.
JUDGMENT
RALEHOKO
AJ
Introduction
[1]
The
respondent, Mr Moolman is in possesion of an arbitration award in his
favour, in terms of which he was retrospectively re-instated
after he
succesfully challenged his dismissal by the applicant. However,
subsequent to the issue of the award, his reprsentative
approached
the applicant and suggested a negotiated settlement to avoid a drawn
out dispute which would have been occasioned by
the filing of a
review application. Those discussions resulted in a signed settlement
agreement. Despite the settlement, Moolmaan
sought to enforce the
award and to that end, obtained a writ of execution against the
applicant. The applicant successfully obtained
an interim order
setting aside the writ of execution. In these proceedings the
applicant seeks a declarator in terms of
section 158(1)(a)(iv)
of the
Labour Relations Act No 66 of 1995
[1]
that Moolman is not entitled to any relief in terms of the award but
only in terms of the settlement agreement. The applicant also
seeks a
final order setting aside the writ of execution.
[2]
After the parties had filed affidavits, the
matter was referred for oral evidence.
Background
common cause facts
[3]
Moolman was dismissed by the applicant for
alleged misconduct in October 2012. He successfully challenged his
dismissal through
the CCMA and obtained an award in his favour, which
is dated 10 December 2012. He was retrospectively re-instated and the
applicant
was ordered to pay him R82 872.00 in back pay.
[4]
The applicant advised the union that it
would take the award on review.
[5]
Notwithstanding the company’s
intentions, on 3 January 2013 Moolman brought an application to have
the award certified.
[6]
On 4 January 2013, Mr PA Louw, a shop
steward of PAWUSA at the applicant, approached Mr Du Toit of the
applicant and proposed a
negotiated settlement of the dispute.
According to Louw, Moolman was terminally ill. It is not in dispute
that Moolman had been
diagnosed with prostate cancer and was
hospitalised in October 2012 as a consequence.
[7]
On the same day, a memorandum of agreement
was concluded and signed by Du Toit, Mr Nel of the applicant
and by Louw.
[8]
Subsequently on 11 January 2013 the parties
met and Louw explained the terms of the settlement agreement to
Moolman. It is common
cause that in that meeting, Moolman inquired as
to what would happen if he is declared medically fit. Parties have
differing versions
on the response to that question, with Du Toit
testifying that he clearly stated that the settlement agreement would
still apply
and that Moolman was unhappy with that response but
nevertheless signed the agreement. Moolman’s version was that
he informed
all present that the agreement would become null and void
if he is declared medically fit.
[9]
The salient terms of the settlement
agreement are:
9.1
Louw was duly authorised to represent
Moolman and to conclude an agreement on behalf of Moolman and
communicate the terms of the
agreement to Moolman.
9.2
The agreement was concluded to resolve the
dispute and avoid the filing of a review application;
9.3
Moolman was terminally ill and he would be
accommodated as he was unable to resume his duties.
9.4
The applicant would assist and pay for
Moolman’s visits to a specialist, provide free accommodation
and pay Moolman R5000
monthly. These benefits were to apply for a
period of 6 months from the date when the application to be declared
medically unfit
is received.
9.5
The applicant would assist Moolman to claim
for permanent medical disability;
9.6
The R76 000 owed by Moolman in respect of
the Mahindra Scopio vehicle which the applicant had financed to
enable Moolman to perform
his duties would be written off;
9.7
Moolman will accept his dismissal and would
have no further claims against the applicant.
[10]
In line with the terms of the settlement
agreement, applicant made the first payment of R5000 to Moolman at
the end of January 2013.
However Moolman returned this amount to the
applicant.
[11]
On 2 February 2013, Moolman consulted with
Dr Potgieter who refused to declare him medically unfit.
[12]
On 6 February 2013 Moolman obtained a writ
of execution to enable him to recover the back pay of R82 872 in
terms of the award.
The applicant successfully obtained an interim
order setting aside the writ of execution.
[13]
Further common cause facts are that Moolman
did not return the vehicle he had to the applicant nor did he
continue making payments
on it. He had vacated the applicant’s
accommodation when he was hospitalised in October 2012 and he also
did not report for
duty after signing the settlement agreement.
[14]
During oral testimony, more information
came to light as set out below.
Oral
evidence
[15]
At the commencement of the hearing of
evidence, Mr Malapela for Moolman handed up a bundle of documents,
which included a document
purporting to be the minutes of the meeting
held on 11 January 2013. Mr Snyman for the applicant objected to the
handing up of
the minutes on the grounds that his client disputed the
veracity of the document. He also submitted that the content of the
document
was at odds with pleaded common cause facts. I did not
understand Mr Malapela’s position to be insisting that the
minutes
must still be admitted into evidence even in the face of Mr
Snyman’s objections. Accordingly l have not had regard to those
minutes in determining this matter.
[16]
Du Toit, applicant’s sole witness
testified about how he was approached by Louw for a negotiated
settlement and how the settlement
agreement was signed. He further
testified that at the meeting of 11 January Moolman posed the
question what would happen if he
is declared medically fit and the
response was that the agreement would still apply. Moolman left the
meeting looking unhappy.
[17]
Moolman testified on his own behalf. He
referred to events subsequent to the issue of the award but prior to
the signature of the
agreement, which evidence l did not regard as
relevant. On or about 6 or 8 January Louw approached him and showed
him the memorandum
of agreement, which they discussed but he saw it
as a suggestion. He informed Louw that the agreement means nothing as
he has an
award in his favour. Louw informed him that the memorandum
was conditional on him being declared medically unfit. Subsequently
Louw telephoned him and informed him that Du Toit wanted to see them.
They met on 11 January and he inquired from Du Toit why he
wanted to
get rid of him. Du Toit presented him with the memorandum for his
signature and he signed but he also stated that the
memorandum would
only apply if he is declared medically unfit.
[18]
In cross examination, Moolman conceded that
the agreement does not state that it would apply only if he is
declared medically unfit.
When questioned on why he signed a
‘suggestion’, he stated that Louw and Du Toit “put
him in a corner”.
He also conceded that he signed the document
out of his own free will although he also pointed out that this was
debatable. Prior
to signing, he read the document and understood what
it meant. He added that at the time he had been without a salary for
3 months,
had drawn all his pension funds and he thought that if he
signed, he would at least get R5000 per month.
[19]
When it was put to him that the pleaded
version that him and the union later rejected the agreement was at
odds with his testimony,
he stated that he thought about the
memorandum after he had signed it and realised that the applicant
wanted to get rid of him.
[20]
When questioned on a version in the
pre-trial minute to the effect that Louw was not authorised to
conclude and sign the agreement,
a version which was not repeated
during oral testimony, Moolman stated he did not instruct Louw to
approach the applicant.
[21]
Moolman also testified that he had been
treated for cancer in October 2012 and that in December 2012 the
treatment was successful.
He was questioned on why Louw had
approached Du Toit in January 2013 stating that Moolman was
terminally ill and he responded that
Louw made that conclusion on his
own.
[22]
On 12 January 2013 Du Toit informed him
that he would be paid the first R5000 at the end of the month. He
also testified that Du
Toit made an appointment for him to see the
doctor on 2 February 2013.
[23]
He stopped making payments for the car
because the company refused to re-instate him. He denied that he owed
R76 000 but only R58
000 in respect of the car.
[24]
Despite that in the pre-trial minute it was
recorded that Louw would testify, he was not called. Mr Malamela
informed the court
that there was a fall out between Louw and the
union and for that reason, he would have been a hostile witness.
However Louw had
deposed to an affidavit in which he stated as
follows:
24.1
On 4 January 2013 he approached Du Toit and
requested that Moolman be given an opportunity to be medically
boarded as it had come
to his attention that Moolman had prostate
cancer.
24.2
He questioned Du Toit and Nel on what would
happen if Dr Potgieter declares Moolman medically fit and Du Toit
stated that the agreement
would become null and void.
24.3
At the meeting of 11 January 2013, Du Toit
produced a new agreement with different terms and Moolman refused to
sign it, stating
that prostate cancer can be treated and that he was
not interested in a settlement.
24.4
The agreement is voidable as it was
dependent on Moolman being declared medically unfit.
The
parties respective submissions
[25]
On the one hand the Applicant submits that
Moolman is no longer entitled to any relief in terms of the award as
he compromised his
claim in the settlement agreement concluded on 4
January 2013 which he signed on 11 January 2013. The submission is
therefore that
the cause of action (in terms of the award) has
novated.
[26]
The applicant also submits that the
respondent cannot accept the benefits of the settlement by,
inter
alia
, retaining the vehicle and also
seek to enforce the award. The respondent cannot approbate and
reprobate, so the applicant submits.
[27]
On the other hand the respondent contends
that the applicant cannot unilaterally circumvent the award by
relying on a settlement
agreement which was concluded in the absence
of Moolman, and which Moolman together with the union rejected when
they became aware
of the terms of the agreement. The respondent also
contends that the settlement agreement was concluded based on an
error by Louw
that Moolman had a permanent disability. Finally the
respondent submits that the condition that Moolman be declared
medically unfit
was not fulfilled and this renders the agreement null
and void.
Legal
principles and analysis
[28]
A
settlement agreement has the effect that it disposes of a matter if
it resolves all aspects of the dispute. Where such an agreement
is
concluded, it has the effect of compromising a claim
[2]
and precludes the other side from taking further legal action in
respect of an issue resolved in the settlement agreement.
[29]
Dealing
with the issue of compromises, the court in
FAWU
v Cape Hospitality Services
[3]
and with reference to case
authority stated as follows:
9.
It is so that an offer of compromise “in full and final
settlement” of a debt constitutes a compromise and precludes
the creditor from claiming the balance of the amount owing, if that
offer is accepted. But, as Malan AJA remarked in Be Bop a Lula
Manufacturing & Printing CC v Kingtex Marketing (Pty) Ltd.
[4]
‘
The
essential issue is whether an agreement of compromise was concluded:
one is concerned simply with the principles of offer and
acceptance.…
In other words, ‘the proposal, objectively construed, must be
intended to create binding legal relations
and must have so appeared
to the offeree.’
[30]
In
Wilson
Bayly Homes (Pty) Ltd v Maeyane and Others
[4]
the court stated as follows regarding compromises,
The
contract in the present case was one of compromise. The nature of
such a contract is that it is concluded because the rights
of the
parties are uncertain, and they choose not to resolve that
uncertainty
.
[31]
To
resolve disputes of facts in trial matters, the approach set out in
Stellenbosch
Farmers' Winery Group Ltd and Another v Martell ET CIE and Others
[5]
must be followed. This is that the
court
must make findings on the credibility of the witnesses, their
reliability and the probabilities.
[32]
On the facts l find that there is no
substance to any of the respondent’s contentions for the simple
reason that his own version
is contradictory. He states that he
rejected the agreement but at the same time seeks to rely on some
unwritten clause that the
settlement agreement was subject to some
condition. Either there is no settlement agreement or the agreement
was conditional. It
cannot be both.
[33]
Moolman agreed to accept his dismissal from
the applicant in exchange for a number of benefits.
[34]
The applicant did not unilaterally seek to
circumvent the award by imposing a settlement agreement on Moolman as
submitted. It was
Louw, Moolman’s representative, who initiated
the settlement negotiations because Moolman was terminally ill and he
would
not be able to resume his duties. Moolman himself signed the
agreement, whose terms he conceded he understood.
[35]
On whether Louw had the mandate to approach
the applicant and propose a negotiated settlement, the more probable
version is that
he did. The union represented Moolman during the
arbitration proceedings. Louw was one of the two shop stewards
at the applicant
and he was aware that applicant intended to take the
award on review. He was also aware of Moolman’s condition. I
reject
Moolman’s version that Louw assumed that he was
terminally ill.
[36]
There is yet another reason why l find that
on the probabilities, Louw was mandated by Moolman to approach the
applicant and negotiate
a settlement. Moolman met with Louw on
6 or 8 January 2013. He did not challenge Louw on why he had
initiated settlement
discussions without his mandate. Instead they
discussed the document.
[37]
Thereafter and at the meeting of 11 January
2013 the agreement was again explained to Moolman who signed it.
He admitted
that he read and understood the terms of the
agreement and that he signed out of his own free will. There is
therefore no merit
to the responent’s contention that the
agreement was concluded and signed in Moolman’s absence. The
initial negotiations
might have taken place in his absence after he
mandated Louw to initiate those discussions but subsequently he
signed the agreement.
[38]
Having listened to Moolman’s
testimony, it is very clear that he had a change of heart after
signing the agreement. His version
that he signed the agreement
because he had been without a salary for 3 months, had drawn all his
pension funds and he thought
that if he signed, he would at least get
R5000 per month, says it all. Subsequently and perhaps in
consultation with a different
union representative, Moolman sought to
renege on an agreement reached. He could not unilaterally resile from
a settlement agreement
which he had freely signed.
[39]
Moolman’s version that he made it
clear that the agreement would be null and void if he is declared
medically fit does not
assist his case. He might have stated this in
the meeting but there was no agreement on the issue. He could have
insisted that
the settlement agreement must specify this. He had
representation. Both him and Louw were content to sign an agreement
which presumed
that Moolman would be declared medically unfit without
making provision for the other possibility.
[40]
If the settlement agreement had been
entered into based on an error on the part of Louw as Moolman
contends, he could have applied
to have the settlement agreeent set
aside on that basis. He did not do so.
[41]
In
the heads of argument filed on behalf of Moolman, Mr Malapela relied
on a decision of this court in
Tsotetsi
v Stallion Security (Pty) Ltd
[6]
to argue that the settlement agreement cannot supersede the award.
[42]
In
Tsotetsi
the court granted leave to appeal against its decision to make a
settlement agreement an order of court on the grounds that there
was
a reasonable prospect that the appeal court might come to a different
conclusion. As l understand the court’s reasoning,
it is that
sections 158(1)(c)
[7]
read
together with
section 142A
[8]
of
the LRA deal with a situation where a settlement agreement is
concluded in respect of a dispute which a party has a right to
refer
to arbitration or adjudication, either before the dispute is referred
or after it has been referred.
[43]
On the facts before it, the court found
that as the dispute had already been referred and an award issued,
there was no dispute
capable of settlement and therefore there was a
reasonable prospect that the appeal court could find that the court
erred in making
the settlement agreement an order of court.
[44]
At the time of writing this judgment,
despite a diligent search, it was unclear whether the appeal in the
Tsotetsi
matter was heard and what the outcome was.
[45]
Be that as it may, as l understand the
court’s reasoning in
Tsotetsi
,
it is that once an award or a court order is issued and the parties
subsequently conclude a settlement agreement, the court cannot
make
such a settlement agreement an order of court as there is no longer a
dispute between the parties.
[46]
It seems to me that the limited issue
decided in
Tsotetsi
was
simply whether a settlement agreement concluded subsequent to the
issue of an award should be made an order of court, given
the
provisions of
section 158(1)(c)
read together with
section 142A
of
the LRA. The issue was not whether such a settlement agreement is
binding and whether it supersedes the award or the court order.
[47]
In the present matter the issue is whether
the settlement agreement must take precedence over the award, which
in my view is a different
issue altogether. I see no reason in law or
fairness why parties cannot conclude a settlement agreement after an
award or even
a judgment has been handed down to finally resolve the
matter and avoid further litigation. In fact this happens often in
practice.
[48]
I
have also considered the decision of the court in
Molaba
v Emfuleni Local Municipality
[9]
which the respondent relied on in support of its contention. That
judgment deals with the question whether a settlement agreement
concluded prior to invoking the dispute resolution mechanisms set out
in the
Labour Relations Act can
be made an order of court. The court
found that it could not. In any event that decision was overturned by
the Labour Appeal Court
in
Greeff
v Consol Glass
[10]
where the court stated that the approach in
Molaba
was erroneous. Clearly that case has little if any relevance to the
issue in the present matter.
[49]
The applicant should succeed. The award was
overtaken by the settlement agreement, which the applicant is willing
to comply with,
should Moolman now be advised to accept benefits in
terms of that settlement agreement.
Costs
[50]
Taking into account the requirements of law
and fairness as l am obliged to do, l do not believe that this is a
case where costs
must follow the result. Moolman’s change of
heart is understandable but not permitted. He cannot unilaterally
renege on that
agreement. I intend not to penalise him with a costs
order for defending this matter.
Order
[51]
l make the following order.
51.1
The late filing of the answering affidavit is condoned.
51.2
The respondent, Moolman is not entitled to relief in terms of the
arbitration award dated
5 December 2012 issued under case number
FS6511-12.
51.3
The writ of execution issued on 6 February 2013 in the matter is
finally set aside.
51.4
There is no order as to costs.
_______________________
Ralehoko AJ
Appearances
For the
Applicant:
Ms S Snyman
Instructed
by:
Snyman Attorneys
For the
Respondent:
Mr Malapela
(Uinion Official)
Instructed
by:
PAWUSA
[1]
Section
158(1)(a)(iv)
provides as follows:
(1)
The Labour Court may-
(a)
make any appropriate order, including
(iv)
a declaratory order.
[2]
NUM &
Others v Crown Mines Limited
[2001] 7 BLLR 716
(LAC) at para 26.
[3]
(2014) 35 ILJ 3394 (LC).
[4]
1995 (4) SA 340
(T) at 345E.
[5]
2003 (1) SA 11 (SCA).
[6]
(2009)
30 ILJ 2802 (LC) at para 19.
[7]
The section deals with making settlement agreements orders of court.
[8]
The section deals with settlement agreements which can be made
arbitration awards.
[9]
[2009] 7 BLLR 679 (LC).
[10]
(2013) 34 ILJ 2835 (LAC)