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[2018] ZALCJHB 170
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National Union of Mineworkers and Others v Eskom Holdings SOC (JS257/15) [2018] ZALCJHB 170 (8 May 2018)
THE
LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
Not Reportable
Case no: JS 257/15
In
the matter between:
NATIONAL
UNION OF
MINEWORKERS
First
Applicant
ML
MAPONYA AND 7
OTHERS
Second Applicant
and
ESKOM
HOLDINGS SOC
Respondent
Heard:
06
- 07 November 2017
Delivered:
08 May 2018
JUDGMENT
MAMOSEBO,
AJ
Introduction
[1]
This
is a referral in terms of s 77(3) of the Basic Conditions of
Employment Act
[1]
(BCEA). The
nature of the claim is an allegation of breach of contract by Eskom
Holdings (SOC) Limited (Eskom).
The
parties
[2]
The first applicant is the National Union of Mineworkers (NUM), a
trade union cited in its representative capacity and acting
on behalf
of its members, the second and further applicants, who are employed
by Eskom in various positions at Kusile Power Station.
[3]
The issue that stands for determination by this Court is whether or
not there was a breach of contract by Eskom or whether a
bona
fide
mistake was made on 10 May 2012.
The
relevant facts as presented during evidence are as follows:
[4]
Mr A Masango, General Manager at Kulisile Power Station, signed
letters dated 10 May 2012 under the head “Salary Review
–
Salary Adjustment” which were handed over to the applicants.
The letters read almost the same except for the difference
in the
salary amounts. The second applicant’s letter reads as follows:
“
I
have pleasure in informing you that your basic salary has been
increased from R231 300.00 to R265 590.00 per annum,
with
effect from 01 May 2012. All other conditions of service will remain
unaltered. Thank you for your continued contribution.
You are one of
our Guardians –helping us power this great nation!
Yours sincerely
A MASANGO
GENERAL MANAGER
KUSILE POWER STATION PROJECT”
[5]
The applicants fell within the ambit of Basic Salary for Bargaining
Unit Employees, Grades T04 to T/P13. In terms of this procedure,
implementation of individual ad hoc salary adjustments can take place
anytime during the year and must be conducted by the responsible
E-band Manager with approval from the relevant Managing Director.
[6]
The applicants’ contention is that they accepted Eskom’s
offers for these salary adjustments dated 10 May 2012.
[7]
On 22 May 2012 Eskom issued payslips to the applicants. The amounts
appearing on the payslips differed from those as contained
in the
aforementioned letters.
[8]
Subsequent to receipt of the payslips the applicants received revised
letters dated 25 May 2012 in which lesser salaries were
reflected as
compared to those appearing on the letter of 10 May 2012. Aggrieved
by the salary discrepancy they lodged a grievance
with the Human
Resources Department of Eskom. They contend that they had accepted
the original offers as contained in the first
letters dated 10 May
2012; considered the offer by Eskom; and accepted this as a binding
contract between the parties which Eskom
has breached. The applicants
further contend that Eskom has unilaterally changed the terms and
conditions of their employment.
They do not regard the letters of 10
May 2012 as an error because they were signed by the general manager
who should have picked
up the error but did not.
[9]
On 30 July 2012 a grievance session was held and it was facilitated
by the Industrial Relations Manager, Mr L Mabena and chaired
by the
General Manager, Mr Masango. Mr Masango’s explanation in that
session was to the effect that the salary letters were
written and
quality checked by the Human Resources Shared Services Unit (HRSSU)
staff who are not part of Kusile Power Station
and the error occurred
between the two groups. He further explained in that meeting that the
fact that letters had been issued
to the employees with incorrect
figures was brought to his attention before the payment of salaries
and the filing of the grievance
by the employees. I revert to this
aspect later on.
[10]
Two witnesses testified on Eskom’s behalf. Ms Veronica De
Bruin, Kusile HR Manager, and Ms Phumla Nzuza, an Assistant
HR
Officer. Ms De Bruin outlined the process followed by Eskom when the
ad hoc salary adjustments occur. She also testified on
the schedule
marked Annexure 52A which postulates the salary determination model.
However, she admitted that she was not involved
in the development or
population of that schedule. Neither did she participate in the
preparation or distribution of the letters
written to the applicants.
She could not explain the reasons for the alleged errors. She
testified that, due to the pressure experienced,
payroll had to be
updated by 12 May 2012, which may have caused the letters not to be
checked by HR. Mr Masango also signed the
said letters without
checking the correctness of their content.
[11]
Ms
Phumla Nzuza typed the letters. She says although she typed numerous
similar letters, in this instance, she did not look at the
headings
but merely looked at the figures when typing.
[12]
Eskom raised two defences. First, Eskom claimed that the applicants
failed to accept the offers made on 10 May 2012; second,
if the
offers were accepted, the letters contained reasonable and
justifiable errors which were of no force and effect.
[13]
Eskom relies on mistake. It is necessary to elaborate on this aspect.
In
Sonap
Petroleum (SA) (Pty) LTD (formerly known as Sonarep (SA) (Pty) Ltd) v
Pappadogianis
[2]
Harms
AJA drew the following distinction:
“
I use the
term ‘mistake’ and not ‘error’ because,
although they may be used interchangeably, ‘mistake’
rather implies misunderstanding, misinterpretation, and resultant
poor judgment, and is usually weaker than
error
in
imputing blame or censure’. (
American
Heritage Dictionary sv ‘error’.)
The
law, as a general rule, concerns itself with the external
manifestations, and not the workings, of the minds of parties to a
contract.
South
African Railways & Harbours v National Bank of South Africa
Ltd
[3]
”
At
239I-240B the Court pronounced:
“
In my view
therefore, the decisive question in a case like the present is this:
did the party whose actual intention did not conform
to the common
intention expressed, lead the other party, as a reasonable man, to
believe that his declared intention represented
his actual intention?
To answer this question, a three-fold enquiry is usually necessary,
namely, firstly, was there a misrepresentation
as to one party’s
intention; secondly, who made that representation; and thirdly, was
the other party misled thereby? See
also
Du
Toit v Atkinson’s Motors Bpk
[4]
;
Spindrifter (Pty) Ltd v Lester Donovan (Pty) Ltd
[5]
.
The
last question postulates two possibilities: Was he actually misled
and would a reasonable man have been misled?
Spes
Bona Bank Ltd v Portals Water Treatment South Africa (Pty) Ltd
[6]
.
”
[15]
Strikingly, the explanation by Mr Masango, as captured in the
grievance document, seems to suggest that the HR Department dealt
with the issue and not only the population of the documents, but also
the writing of the offers and checking same.However, Ms De
Bruin
testified that she had not participated in the process. She added
that Mr Masango just signed the letters without reading
them first.
Mr Masango, undoubtedly, was a material witness, but was not called
to testify and neither was his availability or
non-availability
explained.
The
making of a negative inference from a party’s failure to call a
witness or present evidence was considered in
Titus
v Shield Insurance Co Ltd
[7]
where
the Court said:
“
It
is clearly not an invariable rule that an adverse inference be drawn;
in the final result the decision must depend in large measure
upon
'the particular circumstances of the litigation' in which the
question arises. And one of the circumstances that must be taken
into
account and given due weight, is the strength or weakness of the case
which faces the party who refrains from calling the
witness. It would
ordinarily be unsafe to draw an adverse inference against a defendant
when the evidence of the plaintiff, at
the close of the latter's
case, was so vague and ineffectual that the Court could only by a
process of speculation or very dubious
inferential reasoning, attempt
to find the facts. (See
Marine
& Trade Insurance Co Ltd v Van der Schyff
”
[8]
[16]
In respect of individual ad hoc salary adjustments, Mr Masango, in
his capacity as the General Manager, had authority to approve
them in
terms of the procedure agreed to between Eskom and the unions. In
terms of paragraph 3.12(a) of the Basic Salary for Bargaining
Unit
Employee, the ad hoc adjustments are determined by the Divisional R &
B Manager and agreed to by the respective Managing
Director.
[17]
The argument presented on behalf of the applicants that the
adjustment of salaries involves vigorous quality checks by various
departments and that Eskom should have picked up the so-called
mistake prior to issuing the letters dated 10 May 2012 is, in my
view, sound.
[18]
There was no set method of accepting or rejecting the offer of the
salary adjustment. The fact that the letters dated 10 May
2012 were
signed by an Executive Member, Mr Masango, gives credence to the
assertion that due process was followed. The fact that
Ms Maponya in
her testimony testified that she went through a similar salary
adjustment process in 2010 where she was called in
to a manager’s
office and handed a letter of salary adjustment and was subsequently
paid the amount that appeared on the
letter at the end of the month.
This part of her evidence was not challenged. She maintained that she
was not required to react
after receiving the letter. This testimony,
in my view, supports the applicants’ version that the contract
was indeed accepted.
[19]
The Appellate Division has clarified the relationship between
unilateral mistake and quasi-mutual assent in
George
v Fairmead (Pty) Ltd
[9]
where
Fagan CJ said:
“
When can an
error
be said to be
Justus
for the purpose of entitling a man to repudiate his apparent consent
to a contractual term? As I read the decisions, our Courts,
in
applying the test, have taken into account the fact that there is
another party involved and have considered his position. They
have,
in effect, said: Has the first party – the one who is trying to
resile – been to blame in the sense that by his
conduct he has
led the other party, as a reasonable man, to believe that he was
binding himself? (
vide
Logan v Beit
1890 (7) SC 197
; I. Pieters & Company v Solomon,
1911 AD 121
esp at pp. 130, 137; Van Ryn Wine and Spirit Company v
Chandos Bar,
1928
TPD 417
, esp. at pp. 422, 423, 424;
Hodgson
Bros., v South African Railways
1928
CPD257 at p. 261). If his mistake is due to a misrepresentation,
whether innocent or fraudulent, by the other party, then,
of course,
it is the second party who is to blame and the first party is not
bound.”
[20]
National
& Overseas Distributors Corporation (Pty) Ltd v Potato Board
[10]
concerned
an attempt by the Board to escape from a contract which resulted from
its manager mistakenly writing to inform the company
that its tender
had been accepted when he should have written to one of the other
tenderers. Schreiner JA expanded on what he pronounced
earlier in the
George
v Fairmead
(
supra
)
as follows:
“
If the
respondent had been a natural person who had accepted a tender
according to its terms, there is no doubt that a contract
would have
been made when the acceptance was communicated to the tenderer, as by
posting it. It would not be possible for such
a natural person, if he
repudiated, to escape liability by proving that he had posted the
wrong letter or the like. That follows
from the generally objective
approach to the creation of contracts which our law follows. (See
Van
Ryn Wine and Spirit Co v Chandos Bar,
1928
TPD 417
at pp. 424, 425;
Irvin
and Johnson (S.A) Ltd v Kaplan,
1940
CPD 647
at pp. 650, 651; and the cases therein cited.) No other
approach would be consistent with fairness or practicality. Our law
allows
a party to set up his own mistake in certain circumstances in
order to escape liability under a contract into which he has entered.
But where the other party has not made any misrepresentation and has
not appreciated at the time of acceptance that his offer was
being
accepted under a misapprehension, the scope for a defence of
unilateral mistake is very narrow, if it exists at all. At least
the
mistake
(error)
would
have to be reasonable
(Justus)
and
it would have to be pleaded.”
[21]
The applicants were under the impression that Mr Masango was offering
them a market-related ad hoc salary adjustment which
was equivalent
to the minimum salaries earned by persons within their specific field
and positions. There was no misapprehension.
They did not make any
misrepresentations to him. They could not have known at the time of
receipt of those letters that there was
a mistake. They also did not
cause that mistake. In my view, Eskom cannot escape from the contract
because the alleged mistake
is due to their fault of not thoroughly
verifying the correctness of the contents of the letters by not only
the person who typed
them but its entire HR Division. Clearly,
Eskom’s personnel failed to carry out their duties and their
fault cannot be placed
at the doorstep of the
applicants. It is inconceivable that Mr Masango did not even bother
to read the letters
before appending his signature thereon. In my
view, Eskom cannot claim that the
error
is
Justus.
I
am not satisfied that Eskom has discharged the onus to show that its
mistake was reasonable. I am therefore not persuaded by Eskom’s
defence of mistake. It is my view that the applicants stand to
succeed in their claim.
[22]
Counsel for the applicants, Ms Jackson, made submissions relying on
the Turquand Rule which was not pleaded by the applicants.
In view of
my conclusion above it is not necessary to deal with that argument.
[23]
I am now left with the question of costs. In my view, it will be in
accordance with the requirements of the law and fairness
that Eskom
to pay the costs of suit.
[24]
I accordingly make the following order:
Order
1.
Eskom
Holdings (SOC) Limited, the respondent, is ordered to comply with the
terms and conditions of the contract entered into on
10 May 2012 with
the applicants;
2.
The
respondent is to pay arrear salaries in adjustment of the difference
that the applicants received for the period 01 May 2012
to date.
3.
That
the respondent is to pay costs of suit on a party and party scale.
_______________
M C Mamosebo
Acting
Judge of the Labour Court of South Africa
Appearances:
For
the Applicant:
Advocate S Jackson
Instructed
by:
Finger Phukubje Inc
For
the First Respondent:
Advocate K Tsatsawane
Instructed
by:
Geldenhuys Malatji Attorneys
[1]
Act 75 of 1997.
[2]
1992(3) SA 234 (A) at 238 H – I.
[3]
1924 AD 704
at 715 – 716.
[4]
1985 (2) SA 893
(A) at 906C –
G.
[5]
1986 (1) SA 303
(A) at 316I –
317B.
[6]
1983 (1) SA 978
(A) at 984D –
H, 985 G – H.
[7]
1980 (3) SA 119
(A) at 133E – G.
[8]
1972 (1) SA 26
(A)
at 40E, 49F - H).
[9]
1958 (2) SA 465
(A) at 471
.
[10]
1958 (2) SA 473
(A)
.