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[2019] ZALCCT 45
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Hofmeyr v Saaiman t/a SA Endovascular Group Practice (C599/2017) [2019] ZALCCT 45; ZALCCT 39 (3 December 2019)
IN THE LABOUR COURT OF
SOUTH AFRICA, CAPE TOWN
Reportable
Case
no: C599/2017
In the matter between:
JOHANNES
WYNAND LOUW
HOFMEYR
Applicant
And
ANDRE SAAIMAN t/a SA
ENDOVASCULAR
GROUP
PRACTICE
Respondent
Date
heard: October 21-23 2019
Delivered:
December 3 2019-
Summary
– Application of section 187(1)(c) - An individual employee
cannot rely on section 187(1)(c). Post amendment,
it is only
section 187(1)(c) that refers to “employees” as opposed
to “employee”. This is because
the section is
concerned with ensuring that collective bargaining and the associated
right to strike is not undermined. These
underlying rights are
collective in nature. It is not concerned with individual
rights.
JUDGMENT
CONRADIE,
AJ
[1]
The applicant in this matter (Dr Hofmeyr)
is a cardiologist who was formerly employed by the respondent (Dr
Saaiman) from around
June 2013 to 2 May 2017.
[2]
Dr Hofmeyr first met Dr Saaiman when he
worked for him as a locum in his practice, SA Endovascular Group
Practice (the practice),
for approximately two months between
November 2011 and January 2012.
[3]
During this period Dr Hofmeyr was offered a
fellowship position in a hospital in Brisbane, Australia. He
accepted the position
and while in Australia he remained in contact
with Dr Saaiman.
[4]
In 2013 Dr Hofmeyr accepted an offer from
Dr Saaiman for a permanent position in his practice. The
position was offered with
a view to Dr Hofmeyr gaining the necessary
general cardiology experience. Thereafter the thinking was that
Dr Hofmeyr could
take over the running of the practice and become the
primary cardiologist when Dr Saaiman started winding down for
retirement.
This understanding was also expressed to Dr Hofmeyr
when he met with Dr Saaiman at his home in early 2013.
[5]
The above understanding was however never
concretised and as time passed it appeared that Dr Saaiman’s
retirement would be
further delayed and that he had no intention of
leaving his practice immediately.
[6]
In the initial two years of working
together, Dr Hofmeyr confided in and sought career advice from Doctor
Saaiman concerning prospective
employment opportunities that he had
been offered in various other hospitals in South Africa and the
possibility of taking a full-time
position as a Head of Department in
a hospital in Australia. He also regarded Dr Saaiman as a
mentor.
[7]
However, according to Dr Hofmeyr, during
2015 the relationship began to sour due to differences in their
approach to medical practice;
Dr Saaiman’s volatile character
traits, and a number of failed attempts by Dr Hofmeyr to ascertain
his future prospects and
career growth within the practice. It
was at this time that Dr Hofmeyr started making inquiries for
positions at other medical
institutions. Dr Hofmeyr felt that
he could no longer trust, confide in, nor seek career advice from
Doctor Saaiman since
he felt that Dr Saaiman no longer had his best
interests at heart.
[8]
On 28 April 2017 a discussion took place in
terms of which Dr Saaiman told Dr Hofmeyr that he had heard that he
was joining Mediclinic
Panorama in the Western Cape. Dr Saaiman
indicated that he had no difficulty with Dr Saaiman taking up another
position in
general, either locally or overseas, but that he should
not take up a position at Mediclinic Panorama or establish a practice
at
Netcare Kuilsriver because this would lead to unfair competition
with Dr Saaiman’s practice. If Dr Hofmeyr however wished
to take up the position at Mediclinic Panorama, he would have to
leave Dr Saaiman’s employ with immediate effect.
[9]
On 1 May 2017 the parties communicated
further by way of WhatsApp. Dr Saaiman told Dr Hofmeyr that if
he wished to remain
employed at the practice, he was required to sign
a restraint of trade agreement, restricting/restraining him from
practicing within
a negotiable radius of Kuilsriver for a period of
two years after termination of employment.
[10]
On 2 May 2017 the parties held a discussion
during which Dr Saaiman again told Dr Hofmeyr that if he wished to
continue working
for him, he had to sign a restraint of trade
agreement which restrained him from taking up a position at
Mediclinic Panorama or
establishing his own practice at Netcare
Kuilsriver.
[11]
Dr Hofmeyr countered with a proposal that
he be allowed to continue working without signing a restraint
agreement. Dr Saaiman then
indicated to Dr Hofmeyr that his
employment was terminated with immediate effect and that he was no
longer to take care of his
current patients who would be cared for by
Dr Saaiman’s practice. Dr Hofmeyr was also to leave the office
with immediate
effect.
[12]
On 2 May 2017 Dr Saaiman reduced to writing
his proposal that Dr Hofmeyr remain employed for a further period of
two years on condition
that he did not set up a competing practice at
Mediclinic Panorama or Netcare Kuilsriver, after which period Dr
Hofmeyr’s
entire practice would be transferred to Dr Saaiman.
Although this proposal was prepared on 2 May 2017, it was only handed
to Dr Hofmeyr on 5 May 2017.
[13]
As a result of Dr Hofmeyr’s refusal
to sign the restraint of trade agreement, he was dismissed on 2 May
2018.
[14]
After Dr Hofmeyr was dismissed, Dr Saaiman
offered, on more than one occasion, to reinstate him with back pay.
Dr Hofmeyr refused
the offer.
[15]
In addition to Dr Saaiman paying Dr Hofmeyr
all monies due to him, he also paid him a month’s pay in lieu
of notice.
[16]
The matter was referred as an unfair
dismissal dispute to the CCMA and was set down for con-arb on 12 June
2018.
[17]
After conciliation failed, and a
certificate to that effect was issued, the matter did not proceed to
arbitration as Dr Saaiman’s
legal representative sought a
postponement on the basis that the Dr Saaiman was overseas at the
time.
[18]
The matter was set down for arbitration on
23 June 2017 and again on 25 July 2017. On both occasions the
matter was postponed
due to the unavailability of Dr Saaiman.
[19]
The matter was then set down for
arbitration on 11 September 2017 on which occasion the arbitrator
recused himself at the request
of Dr Saaiman’s counsel.
As no other Senior Commissioner was available to arbitrate on that
day, the parties agreed
to postpone the hearing to 4, 5 and 6 October
2017.
[20]
On 2 October 2017 Dr Hofmeyr filed a
statement of claim in this court alleging an automatically unfair
dismissal. The matter
therefore did not proceed in the CCMA on
4 October 2017.
[21]
In terms of the pre-trial minute, the
issues to be determined by this court are recorded as follows:
21.1.
“
Whether the applicant’s
dismissal constitutes an automatically unfair dismissal as envisaged
in section 187(1)(c) of the Labour
Relations Act 66 of 1995 (LRA), in
that, the reason for the dismissal was to compel the applicant to
accept a demand in respect
of a matter of mutual interest between the
respondent as employer and the applicant as employee;
21.2.
Whether, in the alternative to paragraph
16.1 above, the applicant’s dismissal was an unfair dismissal
as envisaged in section
188 of the Act in that it was not for a fair
reason, or in accordance with a fair procedure as envisaged in that
section
;
21.3.
Whether the applicant is entitled to
compensation amounting to his remuneration as at the date of
termination of his employment
for a period of 24 months,
alternatively 12 months
”
.
Point
in limine
[22]
Before dealing with the above issues I need
to deal with a point
in limine
which was raised in court on the morning of 21 October 2019 when the
trial commenced.
[23]
According
to Mr Rautenbach, who appeared on behalf of Dr Hofmeyr, on Friday 18
October 2019 he was informed that Dr Saaiman intended
arguing a point
in
limine
based on jurisdiction pursuant to the decision of the Constitutional
Court in
National
Union of Metalworkers of South Africa v Intervalve (Pty) Ltd and
others
.
[1]
[24]
The argument is that this court does not
have jurisdiction because the dispute between the parties was not
referred to conciliation
in terms of section 191 of the LRA.
[25]
I do not agree that this court does not
have jurisdiction to hear the matter.
[26]
In his referral to conciliation, Dr Hofmeyr
records the reason for his dismissal as “
I
was dismissed for refusing to sign a restraint of trade agreement”.
[27]
In
Intervalve
the Constitutional Court quoted with approval the decision of
NUMSA
v Driveline Technologies (Pty) Ltd & another
[2]
. In
Driveline
the facts were that the original claim referred for conciliation was
based on the dismissal of the applicants for reasons relating
to
operational requirements, which the applicants had alleged was
unfair. The amendment sought in the Labour Court was to
broaden
the claim by additionally alleging that the dismissal was
automatically unfair as envisaged in section 187(1)(c) of the
LRA.
The amendment was opposed on the basis that the claim was based on an
automatically unfair dismissal that had not been
referred for
conciliation. The Court held that a dispute is constituted by
two parties holding opposing views, and in the
context of section 191
of the LRA, it is a dispute where the employee party alleges that the
dismissal was unfair, and the employer
that it was fair.
[3]
The Court also pointed out that the appropriate forum for
adjudication of a dispute that has not been conciliated successfully,
depends on the categorisation of the dispute by reference to the
broad reason for dismissal (conduct, capacity or operational
requirements) or whether the employee is unaware of the reason for
the dismissal.
[4]
The
categorisation of the dispute as such, does not however constitute
the dispute itself.
[5]
According to the court:
“
It follows,
therefore, from what I have said above in regard to a
dismissal for
operational requirements that also the reference to a
dismissal as an
automatically unfair dismissal is nothing more than giving
a reason for the
dismissal. That this is the case is confirmed by a reading
of the provisions of
sec 187(1) which deal with automatically unfair
dismissals. It is
clear from sec 187(1) that whether a dismissal is
automatically unfair
depends on the reason for the dismissal. Of course,
once the reason for
dismissal has been established, this may have various
implications in terms
of the Act which may differ from the implications
which would flow from
the establishment of another reason as the reason
for dismissal.
An amendment of
the appellants' statement of claim to the effect that
the dismissal is an
automatically unfair dismissal will therefore not
introduce a new
dispute but will simply be an allegation of another reason
for dismissal or will
be the reason relied upon by the appellants in the
place of, or, as an
alternative to, the reason of operational requirements.
The dispute remains
the same dispute that was referred for conciliation in
terms of sec 191(1) of
the Act, namely, the dispute about the fairness of
the dismissal of the
second and further appellants.”
[28]
The Court further held that:
“…
I would
say that a dispute about the fairness of a dismissal remains the same
dispute whether or not the reason alleged as the reason
for dismissal
is changed, withdrawn or added to. The mere allegation of another or
an additional reason for dismissal or the mere
allegation of another
ground of alleged unfairness does not change one dismissal dispute
into as many dismissal disputes as there
are alleged reasons for the
dismissal or into as many disputes as there are grounds of alleged
unfairness. If this was not the
case, an employer could frustrate the
entire processing of such a dispute by the mere device of keeping on
changing the alleged
reasons for dismissal.
[6]
”
[29]
In
Driveline
the dispute was characterised as an "
alleged
unfair termination of services of our members (unfair
retrenchment)
”.
The Court held that: “…
A
dismissal that is automatically unfair would also fall within the
ambit of the phrase: “alleged unfair termination of services
of
our members”…”."
[7]
[30]
Finally, the Court held that:
“…
it
matters not for purposes of jurisdiction whether at the
time of the
conciliation of a dismissal dispute, the reason alleged for the
dismissal was
operational requirements or an automatically unfair reason.
The dispute is about
the fairness of the dismissal. Therefore, provided the
alleged reason is one
referred to in sec 191(5)(b), the Labour Court will
have jurisdiction to
adjudicate the real dispute between the parties without
any further statutory
conciliation having to be undertaken as long as it is
the same
dismissal.”
[8]
[31]
In the present matter, the dispute that was
referred to conciliation was based on an alleged unfair dismissal.
The further
characterisation of the dispute as an automatically
unfair dismissal in terms of section 187(1)(c) of the LRA was
introduced after
the issuing of the certificate of outcome, but prior
to trial in the Labour Court.
[32]
Ultimately, the dispute about the fairness
of the dismissal was conciliated. The fact that alleged reason
for the dismissal
has changed makes no difference.
[33]
The fact that in the one case that
introduction occurred by way of an amendment application and in the
other by way of a fresh referral
to the Labour Court, is immaterial.
[34]
The point
in
limine
is therefore dismissed.
[35]
I will now turn to the merits of the case.
Was the dismissal
automatically unfair
[36]
During
argument, I brought the judgment of van Niekerk J in
Jacobson
v Vitalab
[9]
to the attention of the parties. In this case, which dealt with
an exception, the court held that a single employee had no
cause of
action under section 187(1)(c) of the LRA, because that section only
finds application in the sphere of collective bargaining.
[37]
In reaching its conclusion the court took
the following into account:
37.1 Under
the 1956 LRA a lock-out included a tactical dismissal (termed a
lock-out dismissal);
37.2 The 1995
LRA put an end to this practice by:
37.2.1
adopting a definition of ‘lock-out’ which excluded
dismissal as a tactic in collective bargaining
disputes; and
37.2.2
making a lock-out dismissal automatically unfair.
37.3
The
legislator in 2014 amended the wording of the section, the express
purpose of which was to
remove
an anomaly
which, by virtue of the
Fry’s
Metals (Pty) Ltd v National Union of Metalworkers of SA &
others
[10]
and
Chemical
Workers Industrial Union & others v Algorax
(Pty)
Ltd
[11]
decisions, discouraged employers from offering re-employment to
retrenched workers. The legislator amended the wording to
better reflect the intended purpose, which was to protect the
integrity of the process of collective bargaining.
37.4 It was
thus clear that the purpose was to “
preclude the use of
dismissal as a legitimate instrument of coercion in the collective
bargaining process”.
37.5 That it
was not intended to apply to individual employees is fortified by the
use of the plural: ‘
employees
’ and ‘
them
and their employer
’.
[38]
Mr Rautenbach argued that the
Vitalab
decision was wrongly decided. According to him:
38.1
The original version of section 187(1)(c) was intended to prevent the
evil of the dismissal lockout
that existed under the 1956 LRA.
The original version used to apply to single employees as much as to
collective groups of
employees.
38.2
The anomaly that was exposed by the
Fry’s Metal
case and
other cases, was the problem that an out and out dismissal did not
satisfy the definition of an automatically unfair dismissal,
as it
could not be said that a dismissal was done to compel the acceptance
of a demand unless the demand remained open for acceptance
after the
dismissal. Only a conditional dismissal would suffice.
38.3
In order to remedy the anomaly, the legislature amended section
187(1)(c) to include an out and
out dismissal and thus widened the
scope of the right created for employees.
38.4
When amending section 187(1)(c) the legislature also amended the term
“employee”
to “employees”. In arguing
that the plural form does not mean that single employees are not
entitled to the protection
offered by sub-section 187(1)(c) regard
must be had to section 6 of the Interpretation Act 33 of 1957 which
provides that “
words in the singular number include the
plural, and words in the plural include the singular”
.
Reference to employees in the amended sub-section therefore has to
also apply to individual employees.
38.5
The previous sub-section included single employee’s and this
was not identified as an anomaly
requiring amendment. On the
contrary, the protection was applied by our courts to single
employees.
38.6
If the legislature intended to remove the remedy from single
employees, one would have expected
the memorandum and the amendment
to expressly state that.
38.7
If a later provision of an amendment contradicts or is inconsistent
with an earlier provision
of the same enactment, an attempt must
first be made to interpret the two provisions in such a way that each
is accorded its full
effect, especially if the later one violates or
modifies rights safeguarded by the former one. Only if such an
attempt fails,
should it be concluded that the latter provision was
meant to nullify the rights created by the earlier one.
38.8
Courts are also expected to interpret legislation in
accordance with constitutional rights. Section 9(1) of the Bill
of Rights
provides that “
Everyone is equal before the law
and has the right to equal protection and benefit of the law”.
Section 23(1) provides that “
Everyone has the right to fair
labour practices”
. There is no way that the amendment
of section 187(1)(c), in the event of uncertainty, can be interpreted
contrary to the
above provisions. In case of doubt, single
employees should be afforded the same protection as collective
groups.
[39]
Ms Harvey argued that I should follow the
decision in
Vitalab
for the following reasons:
39.1
The LRA gives effect to the constitutional right to fair labour
practices. It does so through
section 185 which provides that
employees have a right not to be unfairly dismissed. Over and
above this, the LRA provides
in section 187 that dismissals for
certain defined reasons are automatically unfair.
39.2
The automatically unfair reasons are those which clearly counter the
constitutional and statutory
rights. This is because, if
employees could be fairly dismissed for those reasons, it would
undermine the purpose of the
LRA. Read in context, all the
reasons proclaimed to be automatically unfair, support the structure
and design of the LRA
itself.
39.3
The LRA recognizes that there are many other possible unfair reasons
for dismissing an employee
and places the onus on the employer to
prove the fairness of the reason. Where a single employee is
dismissed for refusing
to accept a demand, this reason is not one
which warrants special protection from the Labour Court instead of
the CCMA, and the
enhanced compensation attached to automatically
unfair dismissals.
39.4
The decision in
Vitalab
does not take rights away from
individual employees. The right not to be unfairly dismissed
remains intact and well managed
by the CCMA.
[40]
I agree with the conclusion of Van Niekerk
J, and the reasons he provides in support of his conclusion, that
section 187(1)(c) does
not apply to individual employees. There
is however another reason why I believe that section 187(1)(c) does
not apply to
an individual employee.
[41]
In interpreting the amended section
187(1)(c), the change from “employee” to “employees”
can also be considered
with reference to the underlying protection
afforded by the sub-section read with the underlying protections
afforded by the other
automatically unfair dismissal grounds.
Section 187(1)(c) provides as follows:
187.
Automatically unfair dismissals.—(1) A dismissal is
automatically unfair if the employer, in dismissing the employee,
acts contrary to section 5
[12]
or, if the reason for the dismissal is—
(a)
that the employee participated in or
supported, or indicated an intention to participate in or support, a
strike or protest action
that complies with the provisions of Chapter
IV;
(b)
that the employee refused, or indicated an
intention to refuse, to do any work normally done by an employee who
at the time was
taking part in a strike that complies with the
provisions of Chapter IV or was locked out, unless that work is
necessary to prevent
an actual danger to life, personal safety or
health;
(c)
a refusal by employees to accept a demand
in respect of any matter of mutual interest between them and their
employer;
[Para.
(c) substituted by s. 31 of Act No. 6 of 2014.]
(d)
that the employee took action, or indicated
an intention to take action, against the employer by—
(i)
exercising any right conferred by this Act; or
(ii)
participating in any proceedings in terms of this Act.
(e)
the employee’s pregnancy, intended
pregnancy, or any reason related to her pregnancy;
(f)
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;
(g)
a transfer, or a reason related to a
transfer, contemplated in section 197 or 197A; or
[Para.
(g) added by s. 42 of Act No. 12 of 2002.]
(h)
a contravention of the
Protected
Disclosures Act, 2000
, by the employer, on account of an employee
having made a protected disclosure defined in that Act.
[Para.
(h) added by s. 42 of Act No. 12 of 2002.]
[42]
All
of the sub-sections refer to “employee” except
sub-section (c) which now refers to “employees”.
So, for example, an individual employee can refer an automatically
unfair dismissal dispute if there is a violation of that employee’s
section 5 rights, which are concerned with freedom of association.
If an employee is dismissed for participating in or supporting
a
protected strike, that individual employee can refer an automatically
unfair dismissal dispute. The same applies if an employee
refuses to
do any work normally done by an employee taking part in a protected
strike. In both these latter instances, the
intention of the
legislature is to protect the constitutional right to strike and to
ensure that it cannot be undermined by employers.
An individual
employee may also refer an automatically unfair dismissal if
dismissed for exercising any of their rights in the
LRA or for
participating in any proceedings in terms of the LRA. This is
to ensure that the rights contained in the
LRA are not undermined.
Individual employees can also refer automatically unfair dismissal
disputes if they are unfairly
discriminated against on a host of
grounds or as a result of the employee’s pregnancy. In
addition, individual employees
also have the right to refer an
automatically unfair dismissal dispute in relation to a transfer in
terms of section 197 of the
LRA or where an employee is dismissed for
making a protected disclosure. In my view the former has been
included to ensure
that employers cannot undermine the LRA by
transferring a business with the aim of escaping their employment law
obligations to
their existing employees. The latter has been
included to
inter
alia
underline the importance of accountable and transparent governance in
a democracy. In
City
of Tshwane Metropolitan Municipality v Engineering Council of SA and
Another
[13]
, the
Supreme Court of Appeal stated that the broad purpose of the
Protected Disclosures Act is
‘
to
encourage whistleblowers in the interests of accountable and
transparent governance in both the public and the private sector.
That engages an important constitutional value and it is by now
well-established in our jurisprudence that such values must be
given
full weight in interpreting legislation.’
[43]
The above grounds are concerned with
freedom of association, protecting employees against unfair
discrimination, ensuring that employees can exercise their rights in
terms of the LRA and giving effect to the Constitution.
[44]
An individual employee can utilize the
automatically unfair dismissal protection in all of the above
instances because what is worthy
of protection are the underlying
rights.
[45]
Post amendment, it is only section
187(1)(c) that refers to “employees” as opposed to
“employee”.
This is because the section is
concerned with ensuring that collective bargaining and the associated
right to strike is not undermined.
These underlying rights are
collective in nature. It is not concerned with individual
rights.
[46]
In the context of section 187, as dealt
with above, I can see no reason why an individual dispute between an
employee and employer
must be afforded the enhanced protection and
remedies applicable to automatically unfair dismissals. Such
protection is simply
not consistent with the scheme of section 187.
[47]
In the circumstances, I find that the
dispute before me is not capable of being heard as an automatically
unfair dismissal dispute.
Was the dismissal
substantively and procedurally fair in terms of section 188 of the
LRA
Substantive fairness
[48]
Ms Harvey’s submissions can be
summarised as follows:
48.1
The proximate reason for the dismissal was a breach of trust and that
the employer’s insistence
that the employee sign the restraint
was a practical, reasonable solution to correct the breakdown and
avoid termination.
If anything, the employer wanted to keep the
employee, but the employment relationship could only be
continued/resumed if trust
could not be restored.
48.2
Having been reliably informed of the employee’s secret plans on
28 April 2017, the employer
confronted him. The employee’s
response was that he was looking for other positions, had no
guaranteed position yet,
and would give adequate notice.
48.3
The employer’s trust in the employee had been breached.
The employer required the
employee to remedy the breach of trust, so
that the relationship could continue, albeit on a new basis (an
express, limited restraint
of trade agreement). That a
continued relationship depended upon this remedy was clearly
communicated in the WhatsApp message
of 1 May 2017.
48.4
Because the breach concerned a reciprocal duty, it was incapable of
unilateral correction.
The employer could not enforce the
remedy, yet the consequence of failing to remedy the breach was that
the relationship could
not continue.
48.5
Viewed this way, it becomes clear why Dr Saaiman did not consider
himself to have dismissed Dr
Hofmeyr, but felt that Dr Hofmeyr had
chosen to walk away from their relationship. Real life does not
always easily fit into
legal frameworks, and the facts of this case
may only awkwardly be wedged into one or other of its possible
narratives.
48.6
What is clear is that there was misconduct on the part of Dr Hofmeyr
who breached his duty of
loyalty and good faith, the tacit
undertaking to keep Dr Saaiman informed of his plans, and his
fiduciary duty to disclose his
intention to compete.
48.7
It is trite that such breach of trust is a fair reason to
terminate the employment relationship.
[49]
Mr Rautenbach’s submissions can be
summarised as follows:
49.1
The dismissal was not as a result of a breach of trust. It may
be that the event leading
up to the dismissal for refusing to sign
the restraint of trade was a perception of a breach of trust, but
that was not Dr Saaiman’s
version at the time of the
dismissal. The closest Dr Saaiman got to such a reason, was the
statement in the WhatsApp message
of 1 May 2017 that “
Should
you decide to stay, such restoration of trust will only be achieved
by the conclusion of a work condition (trade restriction)
contract.”
49.2
Even
if it is accepted that the real reason for the dismissal was
misconduct in the form of a breach of trust, the Respondent’s
case does not make the grade. The principle was formulated as
follows in
Council
for Scientific & Industrial Research v Fijen
[14]
,
:
“
It
is well established that the relationship between employer and
employee is in essence one of trust and confidence and that, at
common law, conduct clearly inconsistent therewith entitles the
"innocent" party to cancel the agreement (Angehrn and
Piel
v Federal Cold Storage Co Ltd
1908 TS 761
at 777-778.) On that
basis it appears to me that our law has to be the same as that of
English law and also that a reciprocal
duty as suggested by counsel
rests upon the employee. There are some judgments in the LAC to this
effect (e g Humphries & Jewell
(Pty) Ltd v Federal Council of
Retail and Allied Workers Union (1991) 12 ILJ 1032 (LAC) 1037G). I
may add that this much was not
placed in issue for the respondent by
Mr Scholtz. It does seem to me that, in our law, it is not necessary
to work with the concept
of an implied term. The duties referred to
simply flow from naturalia contractus.”
49.3
The important point is that, as
Fijen’s
case makes
clear, the duty is a mutual one. It is important further,
that in this matter, the employer places reliance
on a tentative
understanding that the parties had at the conclusion of the original
employment contract, best encapsulated by the
following statement in
the e-mail of Dr Saaiman of 28 May 2012:
“
Ek
jy en Johan kan dan sit as jy terug is en deel dan praktyk op ‘n
regverdige manier (sonder inkoop) tot jul later (oor 5-7
jr)
oorneem. Dan kan jy my weer met ‘n oggend of middag
joppie help?”
49.4
It is on the basis of this loose arrangement that Dr Saaiman now
claims that the parties had
a special type of relationship that
entailed a duty of trust or good faith that extended to a duty on Dr
Hofmeyr’s part to
take him into his confidence about enquiries
that he made that would threaten the practice by competing for its
database of patients.
49.5
Our law
does not impose such a duty on an employee in the normal course.
According to Brassey “
When
the termination of employment is contemplated or imminent, the
employee may, during his free time, seek other employment, or
begin
establishing a business of his own …”
That duty is obviously subject to respecting the employer’s
confidence, and not competing with the employer while employed.
[15]
In
Atlas
Organic Fertilizers (Pty) Ltd v Pikkewyn Ghwano (Pty) Ltd
[16]
the court approved of the setting up of a company in anticipation by
the employee (who was also a director) of his departure, but
obviously not the soliciting of clients.
49.6
It is therefore clear that the content of the duty of confidence and
trust is a flexible one
in the sense that it has to be assessed based
on the different facts of each case. What is perhaps more
important, is that
the duty is a mutual one. Dr Hofmeyr’s
evidence was clear that he had for several years periodically made
enquiries
with Dr Saaiman about his future prospects, with obvious
reference to the loose arrangement that he would eventually take over
the practice. These enquiries led nowhere. In particular,
shortly before the events leading to his dismissal, Dr Saaiman
indicated that he intended practicing for a further four years, as
pointed out to him by Hofmeyr in the discussion of 2 May 2017.
Dr Hofmeyr stressed that over the years it had become progressively
clear to him that Dr Saaiman did not have his best interests
at
heart. This included an increasingly bad temper and volatility,
exclusion from training and most importantly a failure
to reassure
him, despite a number of enquiries, that he had a future in the
practice in the long term.
49.7
It is further highly significant that Dr Saaiman had already drafted
an offer in terms of which
he would transfer the practice to Dr’s
Hofmeyr and Augustyn in two years’ time, but did not show the
offer to Dr Hofmeyr
at any stage during their discussion. Dr
Saaiman’s contorted attempts at suggesting that the document
was on his desk
and that he pointed it out, is laughable. Even
if it were true that the document was lying face-up on the desk and
pointed
to by Dr Saaiman, that would not have informed Dr Hofmeyr of
the crucial fact, namely that he was being offered the prize which
he
had sought for so long, and which would vindicate his many enquiries
over the years. Dr Saaiman’s failure to make
the offer
during the meeting, is fatal to his case. It demonstrates that
he had not been conducting the discussion in good
faith.
49.8
Instead of offering the reasonable alternative of a transfer of the
practice, Dr Saaiman demanded
a restraint of trade agreement, on pain
of immediate dismissal.
49.9
Dr Hofmeyr’s evidence is that the meeting, notably the attempt
to impose the restraint
on the strength of a threat of dismissal,
resulted in a breakdown of the trust relationship.
49.10 This
was not a sudden event, as it had been coming on for some years,
especially due to the many enquiries made
by Dr Hofmeyr about his
future, which essentially remained unanswered.
[50]
In my view, while the dismissal may have
had its origins in what Dr Saaiman regarded as a breach of trust,
this was not a breach
of trust in the sense which Ms Harvey tried to
argue. She submitted that Dr Hofmeyr was a fiduciary employee
and as such
had a duty not to compete with Dr Saaiman. Once Dr
Hofmeyr formed an intention to compete, when his employment ended, he
was under a duty to disclose his plans in order to avoid a conflict
of interest. Dr Saaiman was entitled to request Dr Hofmeyr
to
sign a restraint of trade in order to restore the trust.
[51]
While the legal submission may be correct,
this is not what drove Dr Saaiman to resort to effectively immediate
dismissal.
Dr Saaiman’s response, when he learnt of Dr
Hofmeyr’s plans, were driven more by anger and disappointment
than by an
operational response underpinned by an appreciation of Dr
Hofmeyr’s failure to comply with his legal obligations as a
fiduciary
employee.
[52]
This is clear from the following:
52.1
Dr Saaiman was enraged that Dr Hofmeyr wanted to leave. When he
learned that Dr Hofmeyr
wanted to go to Mediclinic Panorama he was
disappointed like a father would be when losing a child.
52.2
It was put to Dr Saaiman that at paragraph 23 of his pleadings he
indicated that the dismissal
was for a fair reason, being the breach
of Dr Hofmeyr’s duty of care. He was asked if by this he
meant that Dr Hofmeyr
was negligent. He responded that he was
not negligent, but greedy, as within six months he had taken over Dr
Murray’s
practice as opposed to waiting for two years for him
to retire. He continued to state that he dismissed him because
he had
already set everything up.
52.3
He further testified that Dr Hofmeyr was obliged, as a colleague, to
tell him of his plans.
52.4
Dr Saaiman testified that he wanted Dr Hofmeyr to understand that if
he wanted to leave, he had
to leave immediately. Dr Hofmeyr
wanted to build up his practice from within Dr Saaiman’s
practice and that it was
bad business for someone to stay in a
practice in order to build up their own practice. He conceded
that he threatened Dr
Hofmeyr and played hard ball.
52.5
It is common cause that after Dr Hofmeyr proposed that he continue
working without having to
sign a restraint, he was dismissed with
immediate effect.
52.6
If Dr Saaiman really wanted Dr Hofmeyr to sign a restraint of trade
agreement, he would have
presented it to him for consideration prior
to dismissing him. It is common cause that Dr Hofmeyr was
dismissed on 2 May
2017, but the restraint agreement was only given
to him on 5 May 2017.
[53]
In the circumstances, I find that the
dismissal was substantively unfair.
Procedural Fairness
[54]
Ms Harvey argued the following in respect
of procedural fairness
54.1
The procedure preceding the dismissal was sufficiently fair and met
the requirements of the Code.
54.2
Dr Hofmeyr was aware of the allegations, and he understood them.
54.3
He had been apprised of Dr Saaiman’s required remedy, and had
had time, not only to consider
it, but to take legal advice by the
time the parties met on 2 May 2017. At that meeting, Dr Hofmeyr
engaged freely with Dr
Saaiman.
54.4
Although Dr Hofmeyr’s intention in the
meeting was to set Dr Saaiman up for an unfair dismissal claim, Dr
Hofmeyr made full
use of the required opportunity to state a case in
response to the allegations. He was afforded the same
opportunity on 28
April 2017.
[55]
By no stretch of the imagination can
the meeting of 2 May 2017 be equated with an opportunity for Dr
Hofmeyr to state a case before
the decision was taken to dismiss
him. The purpose of the meeting from Dr Saaiman’s side
was clear. If Dr Hofmeyr
wanted to remain in his employ, he had
to sign a restraint. Towards the end of the discussion, Dr
Saaiman alluded that Dr
Hofmeyr could stay, but on the basis that he
‘closed the other doors’ in Cape Town. In other
words, if he signed
the restraint he could stay. For the rest,
Dr Saaiman wanted to hear nothing. Irrespective of the
consequences for
Dr Hofmeyr, he had to leave immediately.
[56]
I also do not believe that the immediate
termination was based on Dr Saaiman’s need to protect his
business, after he heard
rumours about Dr Hofmeyr’s plans.
In the meeting, Dr Hofmeyr put it to Dr Saaiman that what was
actually happening
was that he was being told to leave immediately on
the strength of rumours. Dr Saaiman responded by saying that it
is not
because of rumours but because of the decision Dr Hofmeyr
took.
[57]
Dr Saaiman was upset and felt deeply
betrayed by Dr Hofmeyr’s decision. He was not meeting to
take representations from
Dr Hofmeyr but rather to make his condition
for continued employment clear. In effect, Dr Hofmeyr was given
an ultimatum.
If you want to continue working for me then sign
the restraint. If you do not sign you are terminated.
[58]
In the circumstances, I find that the
dismissal was procedurally unfair.
Remedy
[59]
Ms Harvey argued that the following
considerations should be taken into account if compensation is to be
awarded:
59.1
Dr Hofmeyr’s earnings at the time of dismissal were unusually
high.
59.2 Dr
Hofmeyr suffered no financial loss as a consequence of the
dismissal. On the contrary, he was financially
better off than
he would have been had he not been dismissed, if regard is had to the
fact that he:
59.2.1
received a full salary from Dr Saaiman for the months of May and June
2017 (in the amount of R414,359.26);
59.2.2
was paid for locum work during May 2017; and
59.2.3
was paid R230,000.00 in June 2017 by Dr Murray, for whom he commenced
working on 3 June 2017.
59.3
Dr Saaiman made with-prejudice offers of a further R257,159.84 on 12
June 2017 and 24 July 2017,
which offers, Dr Hofmeyr unreasonably
refused.
59.4
Dr Hofmeyr had acted in bad faith throughout. He failed to
disclose his plans to compete
with Dr Saaiman, secretly recorded Dr
Saaiman on 2 May 2017 with the intention of using the recording to
buttress this claim, utilised
Dr Saaiman’s handwritten letter
of 5 May 2017 solely to embarrass him, and misrepresented the facts
in his CCMA claim.
59.5
Dr Hofmeyr precipitated the series of events leading to his dismissal
by failing to disclose
to his employer that he was in discussions
with Mediclinic Panorama.
59.6 Dr
Hofmeyr suffered no actual reputational damage, and his future
prospects of employment were unaffected as evidenced
by his immediate
securing of locum work in May 2017, his employment from 3 June 2017,
and the ultimate establishment of his own
practice on 1 December 2017
which he still runs.
59.7
Dr Saaiman is a sole proprietor and any compensation will have to be
paid from his personal savings.
[60]
In
ARB
Electrical Wholesalers (Pty) Ltd v Hibbert
[17]
the LAC held that:
“
Compensatory
relief in terms of the LRA is not strictly speaking a payment for the
loss of a job or the unfair labour practice but
in fact a monetary
relief for the injured feeling and humiliation that the employee
suffered at the hands of the employer.
Put differently, it is a
payment for the impairment of the employee’s dignity.
This monetary relief is referred to
as a solatium and it constitutes
a solace to provide satisfaction to an employee whose
constitutionally protected right to fair
labour practice has been
violated. The solatium must be seen as a monetary offering or
pacifier to satisfy the hurt feeling
of the employee while at the
same time penalising the employer. It is not however a token
amount hence the need for it to
be “just and equitable”
and to this end salary is used as one of the tools to determine what
is “just and equitable”.
“
The
determination of the quantum of compensation is limited to what is
“just and equitable". The determination
of what is
“just and equitable” compensation in terms of the LRA is
a difficult horse to ride. There are conflicting
decisions
regarding whether compensation should be analogous to compensation
for a breach of contract or for a delictual claim.
In my view,
and as I said earlier, because compensation awarded constitutes a
solatium for the humiliation that the employee has
suffered at the
hands of the employer and not strictly a payment for a wrongful
dismissal, compensation awarded in unfair dismissal
or unfair labour
practice matters is more comparable to a delictual award for
non-patrimonial loss. While a delictual action
(ie action
injuriarum) for non-patrimonial loss is fashioned as a claim for
damages, it is no more than a claim for a solatium
because it is not
dependent upon patrimonial loss actually suffered by the claimant.
Hence, awards made under a delictual
claim for non-patimonial loss
may serve as a guide in the assessment of just and equitable
compensation under the LRA. In Minister
of Justice &
Constitutional Development v Tshishonga (Tshishonga), this Court in
an award of solatium referred to the delictual
claim made under the
actio iniuriarum for guidance in what would constitute just and
equitable compensation for non-patrimonial
loss in the context of an
unfair labour practice. It stated that since compensation
serves to rectify an attack on one’s
dignity, the relevant
factors in determining the quantum of compensation in these cases
included but were not limited to:
‘…
the
nature and seriousness of the iniuria, the circumstances in which the
infringement took place, the behaviour of the defendant
(especially
whether the motive was honourable or malicious), the extent of the
plaintiff's humiliation or distress, the abuse of
the relationship
between the parties, and the attitude of the defendant after the
iniuria had taken place…’.
[61]
I have already found that Dr Saaiman’s
decision to dismiss Dr Hofmeyr had nothing to do with his failure to
comply with his
legal obligations as a fiduciary employee. He
was outraged that Dr Hofmeyr whom he had been grooming as a
successor, was
looking for alternative employment, particularly at
Mediclinic Panorama. He then proceeded to terminate Dr
Saaiman’s
employment in a most undignified manner.
[62]
Dr Hofmeyr was called to the meeting on 2
May and told in no uncertain terms that if he did not sign the
restraint he had to leave
immediately. This, despite Dr Hofmeyr
offering to continue working in terms of his existing contract and
pointing out that
it was a tough decision and making it clear that he
did not have any job lined up. While he had been in talks with
other
possible employers, he had not secured alternative employment.
[63]
Dr Saaiman behaved in a malicious manner.
He testified that he wanted to employ “
shock
tactics
” to remind Dr Hofmeyr of
reality. I cannot comprehend why Dr Saaiman, who testified that
he actually wanted Dr Hofmeyr
to stay, would, throughout the meeting,
tell him that he must leave immediately.
[64]
In the end, Dr Saaiman had to pack up his
things and leave immediately, with alternative arrangements being
made for his patients.
It must have been humiliating for him to
leave in this manner.
[65]
When Dr Hofmeyr was asked to describe his
personal situation after he was dismissed, in particular when he
broke the news to his
family, he testified that “
I
felt humiliated, I was in turmoil, I was uncertain, and I was
inconvenienced. Although I realise that all these feelings
are
subjective. When I got home, my nine year old child asked me if I was
fired (as a joke). I felt that my reputation
had been
seriously harmed. I kept wondering what all the other
cardiologists would say. I thought there would be serious
repercussions to my whole career. Cardiology is a small circle,
which means that you are constantly in the eye. My reputation
would
be seriously tarnished. I did not know what to do. The
day after, I made an A-Z list of possible places
to work and
started calling each one and tried to pick up a locum. I
considered locums in Emirates and Singapore”.
(sic)
[66]
Even after the dismissal, Dr Saaiman
behaved in an unacceptable manner in relation to Dr Hofmeyr. I
say this with reference
to the letter which Dr Saaiman sent to Dr
Hofmeyr and his lawyer on 5 May 2017. While there are positive
aspects in the letter,
the bulk of it is a personal attack on Dr
Hofmeyr and his professional abilities. This letter was written
three days after
the dismissal and there can be no justification for
its contents.
[67]
In deciding on the appropriate amount of
compensation, I have also taken into account that Dr Hofmeyr received
his salary for May
and June 2017, so in that sense, he was not
summarily dismissed. To a lesser extent, I have taken into
account the offer
of R257,159.84 which Dr Saaiman made. This
offer was coupled with reinstatement which was not a viable option
given the breakdown
in the relationship. The offer was probably made
on legal advice after Dr Saaiman’s lawyers told him he was not
entitled
to dismiss Dr Hofmeyr in the manner he did.
[68]
In the circumstances, I am of the view that
four months compensation is appropriate.
[69]
As far as costs are concerned, each party
is to pay their own costs. While Dr Hofmeyr was successful with
an ordinary unfair
dismissal claim, Dr Saaiman was successful in
warding off an automatically unfair dismissal claim.
[70]
In the circumstances the following order is
made:
Order
1. The
dismissal of the applicant was not automatically unfair.
2. The
dismissal of the applicant was substantively and procedurally unfair.
3. The
respondent is ordered to pay the applicant the amount of
R1 028 639.36 (4 x R257 159.84
per month).
4.
There is no order as to costs.
_________________
BN.
Conradie
Acting
Judge of the Labour Court of South Africa
Appearances:
For the
applicant:
Advocate F Rautenbach
Instructed
by:
Carelse Khan Attorneys
For the
Respondent:
Advocate S Harvey
Instructed
by:
De Klerk & Van Gend Attorneys
[1]
[2015]
3 BLLR 205 (CC).
[2]
[2007] ZALC 66
;
[2000]
1 BLLR 20
(LAC).
[3]
At
paras 36 - 37.
[4]
At
paras 39 – 39.
[5]
At
paras 40 – 42.
[6]
At
para 48.
[7]
At
para 55.
[8]
At
para 64.
[9]
(2019)
40 ILJ 2363 (LC).
[10]
(2003)
24 ILJ 133 (LAC).
[11]
(2003)
24 ILJ 1917 (LAC).
[12]
Section
5 confers protections relating to the right to freedom of
association and on members of workplace forums.
[13]
(2010)
31 ILJ 322 (SCA) at para 42. See also
Ngobeni
v Minister of Communications and Another
(2014) 35 ILJ 2506 (LC) at para 10 where the court stated that
“
In
its preamble, the PDA recognized that criminal and other irregular
conduct in organs of state and private bodies are detrimental
to
good, effective, accountable and transparent governance in organs of
state and open and good corporate governance in private
bodies, and
can endanger the economic stability of the Republic and have the
potential to cause social damage.
In
Tshishonga
v Minister of Justice and Constitutional Development and Another
[2007] 4 BLLR 327
(LC)
at
para 10 it was stated that “
The
PDA takes its cue from the Constitution of the Republic of South
Africa Act No 108 of 1996. It affirms the “democratic
values
of human dignity, equality and freedom”.
[14]
[1996] 6 BLLR 685
(AD) at page 691-692 J.
[15]
Brassey:
Employment
Law
D2 27.
[16]
1981
(2) SA 173
(T).
[17]
[2015]
11
BLLR 1081
(LAC) at paras 23-24.