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[2018] ZALCCT 22
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Theunissen v Legal Aid South Africa (C279/2017) [2018] ZALCCT 22 (20 June 2018)
THE
LABOUR COURT OF SOUTH AFRICA, CAPE TOWN
Not
reportable
Case
no: C279/2017
DANIEL
CORNELIS THEUNISSEN
Applicant
and
LEGAL
AID SOUTH AFRICA
Respondent
Heard:
24 May 2018
Delivered:
20 June 2018
Summary:
The Applicant seeks an order declaring his retirement age to be 65
and that the termination of his contract of employment
when he turned
60, constituted a breach of contract. The Applicant’s contract
of employment provided for retirement at the
age of 65 and early
termination constituted a breach of contract. Applicant reinstated
retrospectively.
JUDGMENT
PRINSLOO,
J
The
material facts
[1]
The
material facts that are common cause in this matter can be summarised
as follows:
[2]
The
Applicant has been employed by the Respondent since 1 May 2008 in the
position of a High Court legal practitioner. The Applicant
was issued
with a written employment agreement wherein the terms and conditions
of his employment, as supplemented by the Respondent’s
policies
and procedures, were recorded. The Respondent regarded this as the
Applicant’s individual contract of employment
(the contract).
[3]
The
contract did not provide for a fixed term of employment or an
automatic or compulsory retirement date. The terms and conditions
contained in the Respondent’s ‘Human Resources Policy and
Procedure Manual 2007’ (the Manual) were incorporated
and
formed part of the Applicant’s individual contract of
employment. Clause 3.7.1 of the Manual provides that the retirement
age for all employees is 65 years.
[4]
It
was an express and written term of the Applicant’s employment
that his retirement age was contractually agreed to be 65.
[5]
The
Respondent changed the retirement age by way of the ‘Legal Aid
South Africa Terms and Conditions of Employment’
in 2009 (the
2009 Policy), which replaced the 2007 Manual.
[6]
The
Respondent published a document titled ‘Legal Aid South Africa
Terms and Conditions of Employment’ (the 2015 policy)
which
purports to be approved by the Respondent on 28 February 2015 and by
the Minister on 10 November 2015 and to be effective
from 1 December
2015. Clause 3.9 thereof deals with the issue of retirement and
provides that the retirement age of employees is
60. The retirement
age is contentious and I will fully deal with it
infra.
[7]
On
29 August 2016 the Applicant’ received a letter from the
Respondent’s human resources manager, Mr Richard Baloyi
(Baloyi) wherein he reminded the Applicant that he was due for
retirement as from 30 June 2017, when he turned 60 and Mr Baloyi
informed the Applicant that his employment with the Respondent would
terminate with effect from 30 June 2017. The Applicant responded
to
this and indicated that his retirement age is 65 and that it could
not be changed unilaterally, as it would constitute a breach
of
contract.
[8]
The
Applicant’s services were indeed terminated on 30 June 2017.
Relief
sought
[9]
The
Applicant has approached this Court for an order declaring that his
retirement age in terms of his contract of employment is
65, that the
termination of his employment at the end of June 2017 constituted a
breach of his contract of employment and that
the termination of his
employment be set aside and that he be re-instated retrospectively.
Retirement
age
[10]
The
first issue to be considered is whether the Applicant’s
retirement age is 65.
[11]
It
is common cause that the Applicant’s agreed retirement age was
65 when he commenced employment with the Respondent and
that the
terms of the Manual, which provided for a retirement age of 65, were
incorporated into the Applicant’s contract
of employment.
[12]
The
Respondent’s case however is that the Manual did not remain
applicable and in force in its 2007 form, but was changed
in
subsequent years. The retirement age was changed by way of the 2009
Policy from 65 to 60 years.
[13]
Clause
3.8.1 of the 2009 Policy has the same wording as clause 3.9.1 of the
2015 policy and any reference to clause 3.8.1(i) is
to be understood
to include clause 3.9.1(a) of the 2015 Policy, without specifically
referring to it. Clause 3.8.1 of the 2009
Policy has set the
retirement age at 60 years ‘save in respect of employees :
i.
Expressly entitled to retire at 65 in terms of their individual
contracts of employment with Legal Aid SA; or
ii. who had reached the
age of 55 years on or before 1 August 2009 whilst being in the
permanent employment of Legal Aid SA, in
respect of whom the
retirement age shall be 65.
[14]
The
Respondent’s employees are subject to the new retirement age of
60 years, subject to their falling into one of the two
exceptions.
[15]
The
Applicant does not dispute that the Manual was changed in subsequent
years and that the retirement age was changed to 60, but
his case is
that the subsequent changes had no effect on his retirement age as he
was saved by the exception in clause 3.8.1(i)
(the savings clause).
The Applicant argued that the savings clause made the new retirement
age inapplicable to him. Clause 3.8.1(ii)
is not applicable and needs
no consideration.
The
savings clause
[16]
The
essential issue is whether the Applicant is saved by the savings
clause and whether he is to retire at the age of 65 in terms
of his
individual contract of employment.
[17]
The
Respondent’s case is that the Applicant falls outside the
savings clause. Much turns on the interpretation of the savings
clause and particularly what is meant by the phrase ‘individual
contracts of employment with Legal Aid SA.’
[18]
The
Respondent accepts that the Applicant’s letter of appointment
is regarded as his individual contract of employment. However,
so the
Respondent’s argument goes, the phrase ‘individual
contract of employment’ cannot be taken to refer to
every
employee whose contractual deal (in the Applicant’s case
contained in his letter of appointment and the 2007 Manual)
entitled
them to retire at the age of 65 because, prior to 2009, the
contractual deal for all the Respondent’s employees
had a
retirement age of 65. If that is so, there would have been no need to
insert clause 3.8.1(i) to indicate exceptions to the
change in the
retirement as there would have been nothing ‘individual’
about those contracts. ‘Individual’
connotes something
unique or particular and clause 3.8.1(i) must have been referring to
something indicating a retirement age of
65 which was not applicable
to all employees.
[19]
The
Respondent further submitted that the reference to ‘their’
contracts in clause 3.8.1(i) must be taken to refer to
a particular
contractual arrangement between employees and the Respondent, not one
that is universally applicable. If the intention
was to exclude
everyone who had a retirement age of 65 at the time the change was
introduced in 2009, the 2009 Policy would simply
have said so.
[20]
The
Respondent submitted that this Court should interpret the savings
clause to mean that the reference to ‘individual contracts
of
employment’ must be a reference to employees who did not just
have a retirement age of 65 by virtue of the Manual, but
that it was
expressly referred to somewhere else,
id
est
their
letters of appointment.
[21]
The
Supreme Court of Appeal (SCA) in
Natal
Joint Municipal Pension Fund v Endumeni Municipality
[1]
affirmed
the principles applicable to the interpretation of legislation and
contracts. What the judgment underscores is that the
exercise of
interpretation does not require a court to discern the intention of
the legislature or the parties to a contract
only by reference to
plain meaning of words with a deferential nod, if necessary, in the
direction of the
Oxford
English Dictionary
.
It was held at paragraph 18 that:
'The present state of the law can be
expressed as follows: interpretation is the process of attributing
meaning to the words used
in a document, be it legislation, some
other statutory instrument, or contract, having regard to the context
provided by reading
the particular provision or provisions in the
light of the document as a whole and the circumstances attendant upon
its coming
into existence. Whatever the nature of the document,
consideration must be given to the language used in the light of the
ordinary
rules of grammar and syntax; the context in which the
provision appears; the apparent purpose to which it is directed and
the material
known to those responsible for its production. Where
more than one meaning is possible each possibility must be weighed in
the
light of all these factors. The process is objective, not
subjective. A sensible meaning is to be preferred to one that
leads
to insensible or unbusinesslike results or undermines the
apparent purpose of the document…. The "inevitable point
of departure is the language of the provision itself" read in
context and having regard to the purpose of the provision and
the
background to the preparation and production of the document….'
[22]
The
SCA held
[2]
further that where
the court is faced with two or more possible meanings that are to a
greater or lesser degree available on the
language used, in selecting
the proper meaning the apparent purpose of the provision and the
context in which it occurs will be
important guides to the correct
interpretation. An interpretation will not be given that leads to
impractical, unbusinesslike or
oppressive consequences or that will
stultify the broader operation of the legislation or contract under
consideration.
[23]
In
Bothma-Batho
Transport (Edms) Bpk v S Bothma and Seun Transport (Edms) Bpk
[3]
the
SCA also considered the principles applicable to the interpretation
of legislation and contracts and held that:
'Whilst the starting point remains the
words of the document, which are the only relevant medium through
which the parties have
expressed their contractual intentions, the
process of interpretation does not stop at a perceived literal
meaning of those words,
but considers them in the light of all
relevant and admissible context, including the circumstances in which
the document came
into being. The former distinction between
permissible background and surrounding circumstances, never very
clear, has fallen away.
Interpretation is no longer a process that
occurs in stages but is essentially one unitary exercise.’
[24]
In
interpreting the terms of the savings clause, this Court should have
regard to the
words
used, the context provided by reading the particular provision or
provisions in the light of the document as a whole and the
circumstances attendant upon its coming into existence.
[25]
The
process leading to the adoption of the 2009 Policy provides some
context to the savings clause.
[26]
It
is evident from the documents before me that when the change of the
retirement age from 65 to 60 years was proposed and discussed
in 2009
and subsequent to the Applicant’s appointment, the Respondent
received comments from its employees and the trade
union, SAPTU. The
comment made in respect of clause 3.8.1 was that the retirement age
should remain at 65 years for all the Respondent’s
employees
and it is clear that the employees and union did not agree to the
change. Pursuant to the negotiations, the 2009 Policy
was adopted
wherein the compromise was reflected by way of the savings clause,
which was also included in the 2015 Policy.
[27]
The
savings clause must be considered within the context that the parties
could not agree to a change to the retirement age and
the savings
clause was included in the 2009 Policy to protect employees and to
preserve existing rights of employees who have contracts
specifically
entitling them to retire at the age of 65. The Respondent is by law
not permitted to unilaterally amend terms and
conditions
contractually agreed to.
[28]
The
words ‘
individual
contracts of employment’ should be given its ordinary meaning
and in the context of the savings clause the plain
meaning thereof is
that ‘individual’ pertains to the person in question and
the contracts belonging to the individuals
concerned. It means the
individual’s personal contract, regulating their own terms and
conditions of employment, as set out
in the relevant documents (eg
letter of appointment, Manual etc). ‘Individual contract’
refers to the individual’s
contract and is in the context not a
reference to a single, separate or self-contained document.
[29]
Applying
the principles applicable to the interpretation of contracts and
considering the savings clause in the broader context,
I
cannot but find that the ‘individual contract of employment’
the savings clause referred to, is the Applicant’s
contract of
employment with the Respondent.
[30]
This
Court should give an interpretation to the savings clause that would
save and protect individual rights and that would give
effect to the
provisions of the law and the operation of the employment contract.
[31]
The
savings clause was included to preserve the employees’ existing
rights of retirement at the age of 65 and the intention,
given the
aforesaid context, was to exclude everyone who had an agreed to
retirement age of 65 at the time the change was introduced
in 2009.
[32]
If
the Respondent’s interpretation is to be accepted, it would
lead to impractical, unbusinesslike and oppressive consequences
that
would stultify and undermine the broader operation and purpose of the
savings clause.
[33]
It
is common cause that the Applicant’s agreed retirement age at
the time of his appointment was 65 years. The savings clause
applies
to the Applicant’s contract of employment and he is saved by
the clause and therefore excluded from the new retirement
age as
contained in the 2009 and 2015 Policies.
[34]
The
Applicant’s retirement age is, as agreed between the parties
and as incorporated in the terms and conditions of his employment,
65
years.
Breach
of contract
[35]
Having
found that the Applicant’s contractually agreed to retirement
age is 65, the next question is whether the termination
of the
Applicant’s contract of employment at the age of 60 constitutes
a breach of contract.
[36]
The
Applicant’s case is that the early termination of his
employment was in breach of his contract of employment.
[37]
The
Respondent submitted that the Applicant’s difficulty is to
demonstrate how the Respondent breached his contract of employment.
This is so because the Applicant’s retirement age was 60 years
and his employment was merely brought to an end once the agreed
retirement age was reached. For reasons already stated, this argument
is without merit.
[38]
Alternatively
and in the event this Court finds that the Applicant’s
retirement age was 65 years, the termination of his contract
of
employment was lawful and valid. The Respondent submitted that the
Applicant’s claim presupposes that the termination
of his
contract could only be effective if he had reached retirement age.
[39]
Mr
Bosch for the Respondent argued that there is no requirement in the
Applicant’s contract of employment that his employment
can only
be terminated after certain requirements have been met and for his
contract to be lawfully terminated, all that is required
is that he
be given one month’s notice. There is no requirement for a
particular reason, nor that a certain procedure needs
to be followed
prior to termination. The fact that the Respondent may have been
mistaken in thinking that it was entitled to retire
the Applicant as
of 30 June 2017 is neither here nor there. The Respondent in any
event gave the Applicant notice significantly
more than what is
required.
[40]
The
Respondent’s arguments are flawed and without merit.
[41]
The
Applicant’s contractually agreed retirement age is 65 years. Mr
Baloyi issued a letter to the Applicant, informing him
that his
employment with the Respondent would terminate due to retirement with
effect from 30 June 2017, when the Applicant turned
60 years old. The
Applicant responded to Mr Baloyi’s letter and pointed out that
his retirement age was 65 years and that
this could not be changed
unilaterally. The Respondent did not respond to the Applicant’s
letter but proceeded to terminate
his services at the end of June
2017. The Respondent terminated the Applicant’s contract of
employment due to retirement
at the age of 60 and did so in breach of
the contract of employment, which provided for retirement at the age
of 65.
Specific
performance
[42]
The
Applicant seeks the primary relief of specific performance for the
breach of his contract, which is to include an order re-instating
him
retrospectively on the same terms and conditions of employment as
applicable at the time of the termination of his contract.
[43]
Section
77A(e) of the Basic Conditions of Employment Act
[4]
(BCEA) empowers this Court to make an order for specific performance.
[44]
The
Applicant is entitled to seek specific performance of his contract
and to the restoration of the
status
quo ante
the
termination of his services.
Costs
[45]
This Court
has a broad discretion in respect of costs.
[46]
In argument
Mr Steltzner for the Applicant and Mr Bosch for the Respondent both
submitted that the costs should follow the result.
[47]
I see no
reason to deviate from the ordinary rule that costs should follow the
result.
[48]
In the
premises I make the following order:
Order:
1.
The
Applicant’s retirement age in terms of his contract of
employment with the Respondent is declared to be 65 years;
2.
The
Respondent’s decision to terminate the Applicant’s
employment on 30 June 2017 upon his attaining the age of 60 years
constituted a breach of the terms of the Applicant’s contract
of employment;
3.
The
termination of the Applicant’s employment is set aside;
4.
The
Applicant is reinstated in the Respondent’s employ on the same
terms and conditions which applied as at 30 June 2017,
retrospectively with effect from 1 July 2017;
5.
The
Respondent is to pay the costs.
__________________
Connie
Prinsloo
Judge
of the Labour Court of South Africa
Appearances:
For
the Applicant:
Advocate R G L Stelzner SC
Instructed
by:
Arlene Duval Attorneys
For
the Respondent:
Advocate C Bosch
Instructed
by:
Legal Aid South Africa
[1]
2012 (4) SA 593 (SCA).
[2]
At para 26.
[3]
2012 (2) ALL SA 517
(SCA) at para 12.
[4]
Act 75 of 1997.