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[2018] ZALCCT 11
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Khan v MMI Holdings Ltd (C384/17) [2018] ZALCCT 11; [2018] 7 BLLR 685 (LC); (2018) 39 ILJ 1772 (LC) (20 April 2018)
IN
THE LABOUR COURT OF SOUTH AFRICA, CAPE TOWN
Reportable
C
ase
no: C384/17
In the
matter between
BLUMERIOUS
LODEWYK EZRA
KHAN
Applicant
and
MMI
HOLDINGS
LTD
Respondent
Heard: 2 March 2018
Delivered: 20 April 2018
Summary:
Determination of exception raised in respect of amended statement of
claim; two complaints that claims do not disclose
a cause of action
considered.
JUDGMENT
RABKIN-NAICKER J
[1]
The respondent (MMI) has excepted to applicant’s statement of
claim, as amended on 28 September 2017, on the basis that
it lacks
averments necessary to sustain a cause of action. It raises
complaints in respect of Claim A and Claim B.
Claim A
[2] Applicant’s
statement of claim reads as follows in respect of Claim A:
“
CLAIM A
DAMAGES
AS A RESULT OF THE REPUDIATION AND CANCELLATION OF THE CONTRACT OF
EMPLOYMENT
41.
Applicant’s forced retirement constitutes a material
repudiation and/or breach of
the Contract of Employment which
repudiation and/or breach Applicant accepted alternatively accepts
herewith.
42.
As a result of the accepted repudiation and breach the Contract of
Employment was rescinded.
43.
Had it not been for the rescission of the Contract of Employment
Applicant would have remained
in the employ of the Respondent and
rendered his services for which he would have been remunerated until
at least 2021.
44.
Applicant’s remuneration at the time of the cancellation of the
Contract of Employment
is as set out in the remuneration statement
dated 24 June 2016. A copy of the statement is attached hereto marked
“BK10”.
45.
As a result of the rescission of the Contract of Employment Applicant
has suffered damages
in the amount of R55 548 000.00 as at
1 February 2017 calculated and arrived at as set out in the actuarial
report of
Mr Smit of 13 Actuaries and Consultants dated 15 March
2017. A copy of the aforesaid report is attached hereto marked
“BK11”.”
The
Complaint
[3]
MMI’s Complaint as far as Claim A is concerned reads as
follows:
“
1.The
applicant’s Claim A is founded on an alleged breach of his
contract of employment, the written part of which is annexed
to the
statement of claim as Annexure BK1.
2.
Annexure BK1 contains the following express terms:
“
TERMINATION
OF SERVICE
You
will be required to serve a three month probationary service period.
During this time, notice of termination will be in accordance
will be
in accordance with appropriate Act.
Thereafter, a notice period of
one month will apply to either side.
Notice
of termination will at all times be in writing, and may not be given
during periods of absence on paid leave or sick leave
to which you
may be entitled.
”
(emphasis
added).
3.
The applicant pleads, in paragraph 7 of the statement of claim, that
he completed his probationary period. His contract of employment
was
thereafter terminable on one month’s written notice by either
party.
4.
In paragraph 35 of the statement of claim, the applicant pleads that
he received correspondence from the respondent on 30 May
2016,
annexed as BK8 to his statement of claim.
5.
Annexure BK8 records the following (inter alia):
“
RETIREMENT
CONFIRMATION
We
hereby confirm your retirement effective 30 June 2016.
”
6.
The statement of claim read together with its annexures, established
that:
6.1
The respondent had a contractual right to terminate the applicant’s
employment on
one month’s written notice;
6.2
The respondent gave the applicant one month’s written notice of
the termination of
his contract of employment on 30 May 2016, as it
was entitled to do.
7.
For these reasons, as regards Claim A, the statement of claim fails
to disclose
a cause of action.”
Evaluation
of Complaint A
[4]
The function of an exception is to dispose of the case, in whole or
in part and this avoids the unnecessary leading of evidence
[1]
.
An exception must therefore be determined on the pleadings as they
stand, assuming the facts stated therein to be true; and no
facts
outside those stated in the pleading can be brought into issue and no
reference may be made to any other document.
[2]
[5]
In order to succeed an excipient has the duty to persuade the court
that upon every interpretation which the pleading in question,
and in
particular the document upon which it is based, can reasonably bear,
no cause of action or defence is disclosed: failing
this the
exception ought not to be upheld
[3]
.
MMI referred the court to the following dictum
[4]
in order to submit that an annexure to the statement of claim could
be taken into account for the purposes of the exception:
“
[7]
It is trite law that an exception that a cause of action is not
disclosed by a pleading cannot succeed unless it be shown
that
ex facie the allegations made by a plaintiff and any document upon
which his or her cause of action may be based, the claim
is (not may
be) bad in law.
In the circumstances of this particular case (putting aside for the
moment the complication to which I shall return in para 8)
that means
that the excipient (respondent) had to show that ex facie the written
documents relied upon by appellant it will not
be possible to
identify the res vendita on the ground and that there is no reason to
suppose that any admissible evidence could
conceivably exist which
would enable that to be done. In my view, the respondent failed to
establish that such was the case for
reasons to which I shall return
and the exception should have been dismissed on that ground alone.”
(emphasis mine).
[6]
The SCA in
Vermeulen
v Goose Valley
[5]
dealt with the sale of land and contractual formalities required by
the
Alienation of Land Act 68 of 1981
, in particular the
description of the
res
vendita
.
The Court held that the test for compliance was whether land sold can
be identified on the ground, by reference to provisions
of the
contract, without recourse to evidence from parties as to their
negotiations and consensus. In my view, there is no basis
for the
reliance placed by MMI on this case given the above. The documents
referred to in that case were those required to be annexed
to
particulars of claim by Rule 18 of the Uniform Rules and the Statute
in question.
[7]
In distinction, the annexure referred to by MMI is
BK8
and consists of email correspondence from MMI to the applicant and
attachments, i.e. a ‘Retirement letter’; U.I. 2.8
form;
U.I. 2.11 form and Retirement form. These are the ‘documents’
which MMI proposes are to be considered as a document
on which the
applicant’s cause of action is based. The annexure is attached
to the statement of claim in order to support
the setting out of the
material facts on which the claim is based. Its purpose is to
demonstrate that MMI alleged that the applicant
was subject to a
retirement policy. The reliance on
Vermeulen
v Goose Valley
is thus misplaced.
[8]
MMI further relies on a dicta contained in the judgment of
Figo
Putso Constuction CCv Lereko Mining Supplies (Pty) Limited
[6]
, an unreported judgment of
the North Gauteng High Court. The judgment states that ‘annexures
to pleadings constitute pleadings
themselves’. In that matter
the annexures in question were what the plaintiff contended were “the
written part of the
agreement” relied on in its claim. The
defendant contended that the particulars were vague and embarrassing
and did not contain
sufficient particularity in order to plead its
defence. Again, these annexures were required to be annexed to the
Particulars in
terms of Rule 18(6) of the Uniform Rules in terms of
which a written contract is required to form part of the Particulars
of Claim.
A defendant is required to plead to the Particulars reading
these together with the written contract annexed thereto. The dictum
relied on here by MMI does not carry any wider import and reliance on
it is misplaced.
[9]
Applicant argues that the statement of claim does not allege that his
employment was terminated in terms of Clause 6 of his
contract of
employment. Rather, his cause of action is that his contract was
terminated in light of an alleged unwritten compulsory
retirement
policy applicable at MMI.
[10]
I must agree. On a clear reading of the statement of claim, and in
particular of Claim A, there is no reference to clause 6
of the
written contract of employment nor do the allegations in the
statement of claim referring to correspondence he received
from MMI
make mention of clause 6 of the contract of employment, but rather to
his alleged compulsory retirement in June 2016.
[11]
In view of my evaluation above, I find there is no merit to Complaint
A.
Claim
B of the Statement of Claim
[12]
Applicant’s statement of claim reads as follows in respect of
Claim B:
“
CLAIM
B
UNFAIR
DISCRIMINATION IN TERMS OF THE EMPLOYMENT EQUITY ACT (“EEA”)
46.
In the alternative and only in the event of the Court finding that
there is an existing
retirement policy or practice to which Applicant
was bound and therefore that there was no repudiation or breach of
Applicant’s
Contract of Employment, Applicant avers that:
46.1
The Constitution, Convention 111 of the International Labour
Organisation and the Employment Equity Act recognises
that all human
beings, regardless of their position in society, must be accorded
equal dignity. Dignity is impaired when a person
is unfair (sic)
discriminated against.
46.2
Respondent has a duty to act in a fair, equitable and consistent
manner which must be in accordance with
the values and underlying
principles espoused in the Constitution, which it failed to do;
46.3
The alleged retirement policy which Respondent seeks to rely upon is
discriminatory and does not promote
equal opportunity and fair
treatment in the workplace. It further fails to redress the
disadvantages experienced by designated
groups and/or individuals as
required by Section 2(b) of the EEA;
46.4
The alleged retirement policy further differentiates between persons
younger than 60 and people older than
60. The aforesaid distinction,
exclusion or preference has the effect of nullifying or impairing
Applicant’s equality of
opportunity or treatment in his
employment;
46.5
Respondent’s discrimination on Applicant on age is a listed
prohibited ground in terms of Section 6(1)
of the EEA;
46.6
Applicant has never agreed nor was a term of his Contract of
Employment as set out above to be subject to
any such discriminatory
policy or practice;
46.7
To the extent that Respondent relied on a policy to require Applicant
to retire at age 60, Applicant seeks
a declaratory that such a policy
unfairly infringed upon his rights and seeks an award of damages,
under section 50 of the EEA;
46.8
Respondent’s alleged policy, as applied to Applicant, directly
prevents Applicant from continuing in
permanent employment with
Respondent. As such the policy discriminates against Applicant on the
basis of his age;
46.9
Applicant has suffered damages due to the fact that his Contract of
Employment was terminated on 30 June
2016 by Respondent in terms of
the alleged retirement policy or practice;
46.10
Applicant suffered damages in the amount of R55 548 000.00
as at 1 February 2017 calculated and arrived at as set
out in the
report of Mr Smit attached hereto as “BK.11” as a result
of the alleged policy or practice;
46.11
Applicant referred a dispute in terms of section 10 of the EEA to the
CCMA and a certificate of no-outcome was issued on 31
March 2017.”
[13]
MMA’s Complaint in as far as Claim B is concerned reads as
follows
:
“
8.
The applicant’s Claim B is pleaded in the alternative “and
only in the event of the court finding that there
is an
existing retirement policy or practice to which Applicant was bound”.
9.
In this event the applicant pleads that:
9.1
the retirement policy discriminated against him on the basis of his
age.
(SOC
para 48.8);
9.2
he has suffered damages “due to the fact that his Contract of
Employment was terminated on 30 June 2016
by Respondent in terms of
the alleged retirement policy or practice”
(SOC
para46.9).
10.
In terms of section 186(1)(a) of the LRA, the termination of an
employee’s employment by an employer is dismissal.
11.
The alleged act of discrimination complained of is the applicant’s
dismissal in accordance with the respondent’s
retirement
policy.
12.
Section 187(2)(b) of the LRA provides that:
“
a
dismissal based on age is fair if the employee has reached the
normal or agreed retirement age for persons employed
in
that capacity.”
13.
Section 187(2)(b) of the LRA, means that a dismissal carried out in
accordance with an applicable retirement
policy or practice;
13.1
is fair, and
13.2
in particular, does not constitute an act of unfair discrimination.
14.
The applicant cannot admit, on the one hand, that “there is an
existing retirement policy or practice
to which Applicant was bound”
(SOC para 46), while on the other hand alleging that his dismissal
was an act of unfair discrimination
under
section 6
of the
Employment
Equity Act 55 of 1998
(“the
EEA”).
15.
The applicant’s admission that there was an existing retirement
policy or
practice
which applied to him is a concession that there was a “normal…
retirement age for persons employed in [his]
capacity” and
consequently that:
15.1
his dismissal was fair; and
15.2
his dismissal was not an act of unfair discrimination.
16.
For these reasons, as regards Claim B, the statement of claim fails
to disclose a cause of action.”
Evaluation
of Complaint B
[14]
Claim B is an alternative claim, premised on the trial court finding
for MMI on Claim A, i.e.that there was no breach of contract
because
there was a retirement policy to which the applicant ‘was
bound’. MMI submits that the Claim ‘falls
squarely’
within the ambit of section 187 of the Labour Relations Act dealing
with automatically unfair dismissals, in particular
dismissals for
the reason: “that the employer unfairly discriminated against
an employee, directly or indirectly, on any
arbitrary ground,
including, but not limited to race, gender, sex, ethnic or social
origin, colour, sexual orientation, age, disability,
religion,
conscience, belief, political opinion, culture, language, marital
status or family responsibility;”. MMI refers
to section 187
(2)(b) which in relevant part provides that:
“
(2)
Despite subsection (1) (f) -
(a)
a dismissal may be fair if the reason for dismissal is based on an
inherent requirement
of the particular job;
(b)
a dismissal based on age is fair if the employee has reached the
normal or agreed retirement
age for persons employed in that
capacity.”
[15]
MMI’s Complaint to Claim B is thus premised on the following:
that if a dismissal caused by unfair discrimination is
considered fair under the LRA’s Section 187(2)(b), it cannot
amount to unfair discrimination under the EEA.
[16]
Chapter 2 of the EEA applies to all employees (i.e. not just
employees from designated groups) and reads:
“
5
Elimination of unfair discrimination
Every
employer must take steps to promote equal opportunity in the
workplace by eliminating unfair discrimination in
any employment
policy or practice
. (my emphasis)
6
Prohibition of unfair discrimination
(1)
No person may unfairly discriminate, directly or indirectly, against
an employee, in any employment policy or practice, on one
or more
grounds, including race, gender, sex, pregnancy, marital status,
family responsibility, ethnic or social origin, colour,
sexual
orientation, age, disability, religion, HIV status, conscience,
belief, political opinion, culture, language, birth or on
any other
arbitrary ground.
(2)
It is not unfair discrimination to-
(a)
take affirmative action measures consistent with the purpose of this
Act; or
(b)
distinguish, exclude or prefer any person on the basis of an inherent
requirement of a job…….”
[17]
It is noteworthy that section 6 of the EEA, while including the
‘inherent requirements of the job’ defence, as
contained
in the LRA, does not include any similar provision to section 187(2)
(b).
[18]
In the Court’s view, the submission made by MMI in respect of
the LRA provision cannot be correct. The existence of a
retirement
policy cannot
per se
shield employers from an unfair
discrimination claim. A simple example of this proposition is a
situation in which the content
of the policy differentiated between
the ages of male and female retirees. In
casu
the applicant
does not have knowledge of the content of the employment policy in
question. He is unaware who it targets amongst
the workforce or
whether it applies to all levels of the workforce or in general, the
way it has been applied in the past.
[18]
Complaint B, while thought provoking, simply does not therefore stand
scrutiny. The exception therefore cannot succeed. This
is a matter in
which costs should be awarded to the successful party. I therefore
make the following order:
Order
1.
The exception is dismissed with costs, including costs of two
counsel.
________________
H. Rabkin-Naicker
Judge of the Labour Court
Appearances
For
the Applicant: LM Olivier SC with A de Wet instructed by Gillan &
Veldhuizen Inc
For
Respondent: G. Leslie with LW Ackermann instructed by Loouis van Zyl
Attorneys
[1]
Barclays National Bank Ltd v Thompson
1989 (1) SA 547
(A) at
553F – I
[2]
Shell Auto Care (Pty) Ltd v Laggar and Others
2005 (1) SA 162
(D) at 170D-E
[3]
Theunissen en Andere v Transvaalse Lewendehawe Koöp
Bpk
1988 (2) SA 493
(A) at 500E – F; and see also Erasmus
Superior Court Practice at B1 – 151
[4]
In Vermeulen v Goose Valley Inv (Pty) Ltd 2001 (3) SA 986 (SCA)
[5]
Supra at paragraph 6 and 7
[6]
(32630/13)[2014]ZAGPPC 134 (12 March 2014)