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[2018] ZALCCT 25
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Bester v Selfmed Medical Scheme (C171/2015) [2018] ZALCCT 25 (31 July 2018)
REPUBLIC
OF SOUTH AFRICA
Not
reportable
Of
interest to other judges
THE LABOUR COURT OF
SOUTH AFRICA, CAPE TOWN
JUDGMENT
C
ase
no: C 171/2015
In
the matter between:
Martha
Petronella BESTER
Applicant
and
SELFMED
MEDICAL SCHEME
Respondent
Heard
:
11-13 September 2017; 18-20 June 2018
Delivered
:
31 July 2018
Summary:
Contractual claim for outstanding leave pay. BCEA s 77.
JUDGMENT
STEENKAMP
J
Introduction
[1]
The applicant, Mrs Marthie Bester, claims that she is contractually
entitled to 218 days’ (alternatively 213.5) accrued
leave pay.
Her former employer, Selfmed, says that she was only entitled to 45
days’ leave pay when she resigned; and that
it had paid her
that amount.
Background
facts
[2]
Mrs Bester was initially permanently employed as the national
marketing director of Selfmed. That was converted to a fixed term
contract expiring on 31 December 2014. Her husband, Mr Leon Bester,
was the CEO. When her fixed term contract was terminated in
December
2014, her payslip recorded that Selfmed owed her 218.74 days’
accrued leave. Selfmed disputes that. It says that
she was entitled
to 45 days’ outstanding leave and that it was paid to her.
[3]
The standard terms and conditions of employment at Selfmed contained
the following relevant clauses dealing with annual leave:
“
5.4
On termination of employment, an employee shall be paid out the value
of annual leave and but not taken, on a pro-rated basis.
…
5.6
Leave becomes due to an employee once the employee has completed one
and every consequent annual leave cycle; i.e. the period
of 12
months’ employment immediately following the employee’s
commencement of employment. Such leave must be taken
not later than
the six months after the end of the annual leave cycle, failing which
any accrued leave shall be forfeited.”
[4]
It is common cause that the Selfmed Board of Trustees adopted the
following resolution as “Addendum 2 to the leave policy”
on 27 September 2005:
“
In
any year, an employee may only accumulate 50% of their annual leave
entitlement. For example – if allowed 20 days leave
per annum,
then a maximum of 10 days may be transferred to the next year. At the
end of year three, the accumulated balance may
therefore not exceed
30 days. The only exception being that an 18 month window is allowed
to take a year’s leave entitlement.
Leave may be sold in lieu
of cash provided a minimum balance of 10 days is left. Only days
accumulated during previous years may
be sold. Any leave sold must be
approved by the CEO.”
[5]
That addendum was never rescinded by the Board of Trustees.
[6]
In April 2013, and without notice to the applicant, Selfmed and two
other parties (the Registrar of Medical Schemes and the
Council for
Medical Schemes) entered into an agreement that was made an order of
court, by agreement between those parties, before
Blignaut J in the
Western Cape High Court. Mrs Bester was not a party to the court
proceedings or the agreed order. Part of the
agreed order read:
“
4.
The Board of Trustees of the respondent in case number 3135/2013
(“Selfmed”) shall forthwith give notice in writing
to Mr
Leon du Toit Bester (“Mr Bester”) and to Mrs Martha
Petronella Francina Bester (“Mrs Bester”):
4.1
requiring them to absent themselves from Selfmed’s premises
with immediate effect pending the outcome of the enquiry envisaged
by
paragraph 10.3 below to be initiated by the Acting Principal Officer
within 14 days of date hereof; and
4.2
stipulating that, pending the outcome of such enquiry they shall not
involve themselves in any way in the running or affairs
of Selfmed
including the general meeting of Selfmed or the election of the
members of the new Board of Trustees referred to herein
or any other
general meetings or elections of such members.
5.
Selfmed shall pay Mr Bester and Mrs Bester the basic salaries pending
the outcome of such enquiry.
6.
Selfmed shall not disburse to Mr Bester and Mrs Bester any further
amounts on account of their employment with Selfmed (other
than their
basic salaries as aforesaid) or its termination pursuant to the
enquiry contemplated by paragraph 4 above and 10.3 below,
including
but not limited to the following:
6.1
any amount in respect of the balance of the terms of their respective
contract of employment with Selfmed;
6.2
any amount in lieu of leave in respect of any leave not taken; and
6.3
any bonuses, long service awards or any other discretionary payments,
it
being recorded that the contents of this paragraph do not preclude Mr
and Mrs Bester from claiming from Selfmed payment of any
further
amounts to which they believe they are entitled.”
[7]
The agreed order provided for the acting principal officer to:
“
forthwith
initiate and thereafter conduct, or cause to be conducted, an
appropriate and fair enquiry aimed at decisions by Selfmed
as to
whether the employment of Mr and/or Mrs Bester should be suspended
and/or terminated or any disciplinary sanctions should
be imposed on
Mr and/or Mrs Bester.”
[8]
No disciplinary enquiry was conducted. Selfmed withdrew any
allegations of misconduct against Mrs Bester on 21 February 2014.
[9]
It is not clear what the words “pursuant to the enquiry”
in clause 6 of the Western Cape High Court order mean.
Presumably
that clause was only meant to relate to the possible termination of
the Besters’ employment. Selfmed took the
view that it was not
obliged to pay Mrs Bester interest on the emoluments that had been
withheld in terms of the agreed court order,
retrospectively to the
date she was barred from its premises. It only repaid her the capital
sum that had been withheld and interest
from 21 February 2014 (when
it withdrew the charges against her) to June 2014 (when it paid her
those amounts).
[10]
Mrs Bester’s employment terminated at the end of December 2014.
Her payslip for that month reflected 218.74 “leave
days due”.
But Selfmed only paid her out the equivalent of 45 days’ leave
pay.
[11]
She queried the non-payment of the balance of the accrued leave as
reflected on her payslip with the principal officer, Mr
Christo
Becker, on 12 February 2015. He simply stated in response:
“
The
leave has been calculated at 45 days and the leave amounts to R 281
422, 08.”
[12]
The applicant then asked Becker:
“
Please
disclose the details, reasons and justification for not paying me my
contractual leave entitlement amount as per the Selfmed
records and
systems. Selfmed is quite aware what the exact amount of my accrued
leave days amounts to. Also provide me with how
you have arrived at
the arbitrary amount of 45 days. In the meantime, I must demand all
outstanding leave to be paid immediately
in compliance with my
entitlements and contractual obligations Selfmed has towards me.”
[13]
Becker responded more than a week later, simply stating:
“
Your
leave has been calculated and paid out as the maximum leave that may
be accrued in a leave cycle as per the policy of Selfmed.”
[14]
The applicant replied on the same day. She asked Becker to email her
quote the Selfmed leave policy detailing the quantifications
and
qualifications that you have used and that you are referring to in
your email below immediately.” He did not respond.
She wrote
him again four days later, on 10 March 2015:
“
With
reference to my emails below, there has been no response to a very
simple request. To email me copies of the alleged leave
policy can
best take two minutes maximum and it is urgently awaited. This is my
final demand to disclose and provide me with the
Selfmed leave policy
as referred to by you being the reason why Selfmed is not paying me
my contractual leave entitlement.”
[15]
Becker never responded.
[16]
The
applicant then, initially and mistakenly, referred an unfair labour
practice dispute relating to benefits to the CCMA. On 27
March 2014
the CCMA ruled that it did not have jurisdiction. She then referred a
dispute in terms of section 77 of the Basic Conditions
of Employment
Act
[1]
to this Court.
The
claims
[17]
Mrs Bester relies on two claims, styled as claim A (including an
alternative claim introduced by way of an amendment) and claim
C.
Claim
A: Accrued leave
[18]
The applicant initially claimed payment for 218.74 days’
accrued leave as reflected on her December 2014 payslip. At
the first
sitting of this trial in September 2017 she amended her statement of
claim to incorporate an alternative claim for 213.5
leave days,
calculated in terms of the Selfmed policy reflected in Addendum 2 to
the leave policy (i.e. the amended policy adopted
by the Board of
Trustees in September 2005).
[19]
In his oral argument at the end of the trial in June 2018 Mr
Crowe
SC
, for the applicant, confined her claim to that pleaded in the
alternative, i.e. in respect of 213.5 leave days. That amounts to
R 1
470 562, 38, comprising a capital sum together with interest.
Claim
C: Interest on emoluments
[20]
The applicant’s initial claims B and D have been abandoned.
Claim C relates to interest on the unpaid emoluments for
the periods
when the payments became due each month until they were paid in June
2014. That amounts to R20 619, 74, together with
further interest on
that amount from 27 June 2014 until date of payment.
The
evidence
[21]
Only Mrs Bester and Mr Becker (on behalf of Selfmed) testified.
[22]
Although the applicant had some difficulty in situating her claim for
accrued leave in either her initial claim (that was simply
based on
the amount reflected on her December 2014 payslip) or the alternative
calculation based on the policy contained in Addendum
2, she remained
steadfast that that policy had not been changed since it was adopted
in September 2005. And her oral evidence confirmed
the calculations
set out in the amended pleadings, based on that policy. She explained
that she and her legal team had calculated
the amount owing to her
based on the accrual of 50% of her leave entitlement per year. Those
calculations were set out in detail
in a document that her counsel
handed up to the Court.
[23]
Mr Becker, on the other hand, had difficulty explaining why he based
his calculations on the applicant only being entitled
to 45 days’
accrued leave. When he first did the calculation, he was not even
aware of the amended leave policy adopted in
September 2005. He only
became aware of that policy in preparation for the first sitting of
this trial, prior to September 2017;
and then he did nothing more to
ascertain what it actually meant. The copy he was initially given,
read as follows:
““
In
any year, an employee may only accumulate 50 [
sic
] of their
annual leave entitlement. For example – if allowed 20 days
leave per annum, then a maximum of 10 days may be transferred
to the
next year. At the end of year three, the accumulated balance may
therefore not exceed 30 days. The only exception being
that an 18
month window is allowed to take a year’s leave entitlement.
Leave may be sold in lieu of cash provided a minimum
balance of 10
days is left. Only days accumulated during previous years may be
sold. Any leave sold must be approved by the CEO.”
[24]
Becker did not enquire further into the obvious omission after the
numeral “50” in the first sentence. He interpreted
it as
“50 days”, despite the obvious discrepancy when that is
read in the context of the rest of the clause (e.g. 10
out of 20 days
that may be transferred, is clearly 50%).
[25]
Despite the document being clearly marked “
ADDENDUM 2 TO
LEAVE POLICY AS PER THE MINUTES OF THE BOARD OF TRUSTEES MEETING 27
SEPTEMBER 2005
”, Becker did not attempt to access those
minutes. The minutes, that were before Court, clearly reflect “50%”.
The amendment was adopted and the minutes were again adopted at the
next meeting of the Board of Trustees. The applicant was present
at
both meetings. Becker was not. He only joined Selfmed at a later
stage.
[26]
The best that Becker could do was to testify that he had been
informed by people in the Finance Department that the amended
leave
policy had never been implemented. No witnesses who had direct
knowledge of that allegation were called; nor did Selfmed
produce any
documentary evidence to that effect.
Evaluation
/ Analysis
[27]
In order to evaluate the applicant’s claims, I shall confine
myself to her alternative to claim A (as Mr
Crowe
did in his
oral argument) and then deal with claim C.
Claim
A: Accrued leave pay
[28]
Mr
Ellis
summed up the crux of the dispute with regard to
Claim A: What was the Selfmed leave policy at the time of Mrs
Bester’s departure?
[29]
On a balance of probabilities, the answer to that question is a
simple one. Mrs Bester was a more credible witness than Mr
Becker.
She had direct knowledge of and was present at the Board of Trustees
meeting where the amended leave accrual policy was
adopted. She
presented the Court with minutes of that meeting and of the
subsequent meetings where that minute was adopted. The
amended policy
was also included in the Nexus report that led to her temporary
removal from Selfmed’s premises. It was never
rescinded.
Becker, on the other hand, could only testify to a vague allegation
by other employees in the Finance Department –
who were never
called – that the policy was not implemented as it stood. That
does not nullify the fact that the policy existed
and that both
parties were bound by it. Mrs Bester certainly never waived her right
to be bound by it.
[30]
The
technique to resolve disputes of fact is well known:
[2]
“
The
technique generally employed by courts in resolving factual disputes
of this nature may conveniently be summarised as follows.
To
come to a conclusion on the disputed issues a court must make
findings on (a) the credibility of the various factual witnesses;
(b)
their reliability; and (c) the probabilities. As to (a), the
court’s finding on the credibility of a particular
witness will
depend on its impression about the veracity of the witness.
That in turn will depend on a variety of subsidiary
factors, not
necessarily in order of importance, such as (i) the witness’s
candour and demeanour in the witness-box, (ii)
his bias, latent
and blatant, (iii) internal contradictions in his evidence, (iv)
external contradictions with what was pleaded
or put on his behalf,
or with established fact or with his own extracurial statements or
actions, (v) the probability or improbability
of particular aspects
of his version, (vi) the calibre and cogency of his performance
compared to that of other witnesses testifying
about the same
incident or events. As to (b), a witness’s reliability
will depend, apart from the factors mentioned
under (a)(ii), (iv) and
(v) above, on (i) the opportunities he had to experience or observe
the event in question and (ii) the
quality, integrity and
independence of his recall thereof. As to (c), this
necessitates an analysis and evaluation of the
probability or
improbability of each party’s version on each of the disputed
issues. In the light of its assessment
of (a), (b) and (c)
the court will then, as a final step, determine whether the party
burdened with the onus of proof has
succeeded in discharging it.
The hard case, which will doubtless be the rare one, occurs when a
court’s credibility
findings compel it in one direction and its
evaluation of the general probabilities in another. The more
convincing the former,
the less convincing will be the latter.
But when all factors are equipoised probabilities prevail.”
[31]
Not only was Mrs Bester a more credible witness, the reliability of
her evidence is backed up by the documentary evidence.
Quite simply,
it is beyond doubt that the amended leave policy was adopted by the
Board of trustees in September 2005 and that
both parties were bound
by it. On the other hand, there is no credible evidence that the
policy was ever rescinded or that Bester
and Selfmed no longer
considered themselves bound by it. And Bester’s evidence that
the Selfmed staff attended a celebration
at a restaurant to celebrate
the “excellent news that the staff can now accumulate 50% of
their leave” could not be
gainsaid by Becker. The same goes for
her evidence that, in her position as marketing and operations
director, she personally told
staff members that they could “sell”
their accumulated leave once it was approved by the CEO.
[32]
The probabilities are overwhelmingly in the applicant’s favour.
She has, on a balance of probabilities, discharged the
onus to show
that the amended leave policy applied to her. And applying that
policy, she has shown – through the meticulous
calculations
handed up by her legal team – that she is entitled to the
amount set out in her alternative to claim A. That
amount is
calculated on the basis of her monthly remuneration as at December
2014, which was R149 260, 29.
Claim
C: Interest on emoluments
[33]
The claim for unpaid interest on emoluments arises from the order
that Blignaut J granted by agreement between Selfmed and
two other
parties – with no input by Mrs Bester, who was not cited as a
party – on 16 April 2013. Of course the parties
to that
agreement were bound by it, even though Bester was not a party
.
But does that mean, as Selfmed contends, that it was not obliged to
repay Mrs Bester the interest on the emoluments that she sacrificed
while she was barred from Selfmed’s premises?
[34]
To recap: in terms of the High Court order, Mrs Bester had to leave
Selfmed’s premises and she was only paid her basic
salary
pending an inquiry; and Selfmed would not “disburse to Mr
Bester and Mrs Bester any further amounts on account of
their
employment with Selfmed (other than their basic salaries as
aforesaid) or its termination pursuant to the enquiry”.
[35]
On 21 February 2014 Selfmed withdrew all charges of misconduct
against Mrs Bester and reinstated her. That should have restored
the
status quo
; but Selfmed argues that it is only obliged to pay
her interest on the emoluments that were unpaid during her
de
facto
suspension from 21 February 2014 to the actual date of
payment. That, argued Mr
Ellis
, was the date on which the
payments became due and owing.
[36]
That argument cannot hold water. When Mrs Bester was reinstated, the
status quo
was restored. The emoluments became due and owing
each month that they were withheld. Interest thus runs from each of
those dates.
That is the date on which Selfmed was
in mora
each month in terms of the common law.
[37]
It is common cause that, on 27 June 2014, Selfmed paid Bester an
amount of R362 602, 34 being the capital sum owing to her
for the
unpaid emoluments. It also paid interest from 21 February to 27 June
2014, amounting to R 19 532, 77. That leaves a balance
of R20 619, 76
unpaid in respect of the claim for interest which Selfmed has not
paid, despite demand. It must therefore pay the
applicant that sum
together with further interest thereon until date of payment.
Conclusion
[38]
The applicant is successful in both claims. In respect of claim A,
her unpaid accrued leave based on 213.5 days’ accrued
leave
amounts to R 1 470 562, 38. Selfmed has paid
her R 281 422, 08, leaving an unpaid balance of R 1
189 140, 30. It
must also pay her interest on the outstanding amounts.
[39]
In respect of claim C, Selfmed must pay Bester the outstanding amount
set out above in paragraph [37] together with interest.
[40]
With regard to costs, I take into account that both parties asked for
costs to follow the result; and that Mrs Bester, an individual,
had
to resort to lengthy and costly court action to recover what was
lawfully hers.
Order
[41]
I therefore make the following order:
41.1
The respondent is ordered to pay the applicant the following amounts
in respect of claim A:
41.1.1
An amount of
R 1 189 140, 30
in respect of unpaid accrued
leave;
41.1.2
Capitalised interest that accrued at the then prevailing rate of 9%
per year on the sum of R 1 470 562,
38 during the period 25 December
2014 to 17 February 2015, amounting to
R 19 218, 03
;
41.1.3
Interest on the total amount of R 1 208 358, 33 from 17 February 2015
to date of payment at the prevailing
prescribed rate of interest.
41.2
The respondent is ordered to pay the applicant the following amounts
in respect of claim C:
41.2.1
R 20 619, 76
in respect of capitalised interest, together with
interest thereon from 28 June 2014 until date of payment at the
prescribed rate
of interest of 15,5% per year..
41.3
The respondent is ordered to pay the applicant’s costs.
_______________________
Anton
Steenkamp
Judge
of the Labour Court of South Africa
APPLICANT:
Michael
Crowe SC
Instructed
by Bagraims (B Schiff).
RESPONDENT:
Edwin
Ellis of Edward Nathan Sonnenbergs.
[1]
Act
75 of 1997.
[2]
Stellenbosch
Farmers Winery v Martell et cie
2003
(1) SA 11
(A) par 5 [per Nienaber JA].