REPORTABLE
IN THE LABOUR COURT OF SOUTH AFRICA
SITTING IN DURBAN
CASE NO D642/98
Heard : 1 July 2002
Delivered : 1 July 2002
Revised :19 August
2002
In the matter between:
DOUGLAS V NGUBANE Applicant
and
SPRAY FISHING (PTY) LTD
Respondent
BEFORE THE HONOURABLE MS JUSTICE PILLAY
ON BEHALF OF APPLICANT MR BUTHELEZI
ON BEHALF OF RESPONDENT MR B DENNY
TRANSCRIBER SNELLER RECORDINGS (PROPRIETARY) LTD - DURBAN
J U D G M E N T
PILLAY J
1. By agreement, this matter proceeds only on the point in
limine, which is dispositive of the entire matter. The question I
am required to determine is whether the applicant was
permanently employed or employed in terms of a fixed term
contract. However, pursuant to discussions with the parties in
chambers I am also required to determine whether the
employment contract still subsists.
2. The facts were that about December 1996 the applicant was
invited by the respondent to serve on its vessel as a second
engineer during December and January 1996. The applicant
accepted. He asked if he could be permanently employed as
he was getting on in years. He testified that the respondent
had assured him that he would be permanently engaged.
3. The respondent's version is that the assurance given to the
applicant was that he would be employed beyond December
and January 1996, the most unpopular of sailing periods, if his
performance and conduct were satisfactory. The applicant
was offered further voyages after the December and January
voyage.
4. At the end of 1997, he was offered another voyage, which he
accepted. However, he failed to arrive on the date the vessel
sailed off. The respondent made other arrangements. His
failure to honour his commitment to undertake that voyage
was not held against him as he had just returned from a three-
month voyage at sea.
5. The respondent issued the applicant with a letter dated
30 January 1998 (Exhibit A4), advising him that it did not have
a position for him at that stage and that his salary would cease
on 31 January 1998. He was also informed that he would be
contacted again if his services were required. The applicant
did not receive that letter immediately as he had changed
residence without informing the respondent. When he
inquired about not receiving his salary for February, he learnt
of the letter and that he would no longer be paid.
6. It was submitted for the applicant that based on the initial
discussion between Mr Walsh, the managing director of the
respondent, and the applicant, the former undertook to
employ the latter permanently. For the respondent it was
submitted that the letter of appointment, Exhibit A1, and the
conditions of employment prevailing in the trawling industry
were such that permanent employment was not economically
feasible and therefore not the practice. This was, so it was
submitted, reinforced by the provisions of sections 103 and
106 of the Merchant Shipping Act No 57 of 1951 (the “MSA”),
which also governed the applicant's employment.
7. Both parties proceeded with the matter without taking issue as
to whether this Court has jurisdiction. I intend to deal with the
matter as if it does have jurisdiction.
8. Of particular note are the following provisions of section 103 of
the MSA, which also applies to fishing boats referred to in
section 106 thereof:
"S103: The following provisions shall apply to agreements with the
crew of a foreign-going South African ship:
(f) separate agreements may be made for each single voyage or an
agreement ( in this Act referred to as a running agreement) may be
made to extend over two or more voyages;
(g) a running agreement shall not be for a longer period than one year,
but if the period for which the agreement was entered into expires
while the ship is not in a port in the Republic, the agreement shall
continue in force until the ship is again in a port in the Republic:
Provided that the agreement shall not continue for more than three
months after the expiration of the period for which it was entered into
unless the seamen concerned agree thereto in writing."
9. Subsection (f) permits separate agreements for each voyage.
This implies that contracts of employment are linked to the
voyages. It was further submitted that employment on a
vessel is in terms of the articles. It commences and terminates
on completion of the articles. The articles refer to the
agreement between the respondent and the crew in terms of
the MSA.
10. Contracts of employment in the trawling industry
are of a special kind. When employment commences,
terminates or is suspended, depends, in my view, from all the
circumstances including the terms of the articles, the contract
of employment and the law and practice in the industry.
11. Section 103 of the MSA creates a right and a
protection for employees in the industry. The right is to a
written contract of engagement i.e. the articles. The protection
is that the employment at sea is limited to one year, and may
be extended only with the consent of the employees. It also
protects the employer by limiting the obligation to provide
work at sea to that agreed upon in writing in the articles.
12. The critical clauses of Exhibit A1 provide as follows:
"The company may at its sole discretion continue monthly payments to
you on a casual basis when you are not signed on. Such payments
may be in the nature of a compensatory salary or an advance.
However, this does not constitute monthly employment and the
company is entitled to give you notice at any time of its election that
your employment will cease forthwith.
Please note that you are required to sign the articles and additional
clauses applicable, and should you break such articles your commission
entitlement immediately falls away solely at the discretion of the
company.
All personnel can, in addition, apply to join the company's medical aid,
pension and group life schemes."
13. Exhibit A however, developed the relationship
between the parties beyond the articles. The fact that the
respondent could give “notice at anytime of its election that
his (sic) employment will cease,” confirms that the
employment relationship continued even when the applicant
was “not signed on” a voyage, that is after the expiry of the
articles. This inference is fortified by the option that personnel
can join the respondent’s benefit schemes. The availability of
medical, pension and group life schemes indicate that a
relationship longer than a year was contemplated. Whether
the applicant exercised the option of any of these benefits, is
not evident.
14. The contract of employment created mutual
obligations that the parties bore towards each other. These
included the payment of the equivalent of the basic salary at
the employer's discretion. Furthermore, there was a reciprocal
commitment to call back and report for duty whenever a
voyage had to be undertaken. The contract of employment
was such that different terms applied when the applicant was
on a voyage and when he was not.
15. EXHIBIT A1 also corroborates the evidence for the
respondent about the discussion when the applicant was first
engaged in December 1996.
16. In the context, Exhibit A4 meant that there was no
voyage to which the applicant could be assigned. The
respondent terminated the discretionary salary, that is, the
monthly payment made when the applicant was not signed on,
because of difficult economic circumstances. Furthermore,
there was a large pool of skilled labour available and the
vessels had undergone a major refit. That was not challenged
by the applicant. Exhibit A1 authorised the respondent to
terminate such payment.
17. What then is left of the rights of the parties in
terms of the contract of employment, Exhibit A1? Without the
payment of a normal or discretionary salary, the respondent’s
obligations are whittled down to merely offering the applicant
a voyage whenever it arises. If it had any obligations in terms
of the benefit schemes, it would be obliged to continue to fulfill
them, subject to the rules of such schemes. Whilst being paid
either a normal or discretionary salary, the applicant was not
permitted to work on any vessel other than those belonging to
the respondent. If the applicant accepted employment
elsewhere whilst he was receiving a discretionary salary, it
could be withdrawn. By inference, he would not be barred from
taking up employment with another employer if he received no
remuneration at all. The original contract of employment is
therefore substantially weakened when the remuneration is
withdrawn. In these circumstances, I conclude that the full
terms and conditions of the contract are suspended until they
are revived or terminated.
18. Mr Denny submitted, somewhat tentatively, that
the employment contract ceased when the applicant was not
at work as the discretionary payment was not remuneration. I
do not agree. The discretionary payment was a term of the
employment contract. It is also a practice that exists for the
mutual benefit of the employer and the employee operating in
the industry. The employer has the advantage of having
secured the kind of skilled labour it requires and the employee
has some security of employment when not at sea.
19. Mr Denny also submitted that the discretionary
payment was not remuneration but a benefit which may be
claimed under Schedule 7 of the unfair labour practice
jurisdiction of the Labour Relations Act No. 66 of 1995 (the
“LRA”). I assume that he made this submission in the
alternative as it would otherwise contradict his previous
submission that there was no contract of employment. I also
infer from this submission that Mr Denny accepts that the LRA
applies to the employment contract.
20. As a discretionary payment, it could potentially be
withheld or not be made regularly. It was also not a direct quid
pro quo for services rendered. The discretionary payment was
therefore a benefit.
21. The withdrawal of the benefit per se was not
challenged by the applicant in his pleadings. It is not an issue
to be determined in this dispute, which is about the alleged
unfair dismissal of the applicant. The applicant chose not to
proceed for relief in terms of Schedule 7. However, from his
evidence, it would seem that his primary concern was the non-
payment of the benefit and leave pay, not the dismissal. This
suggests that the applicant understood and accepted the
nature of his employment.
22. Exhibit A4 was not in the circumstances a letter of
dismissal. It varied the terms of the contract of employment
by suspending the remuneration of the applicant as it was
entitled to do in terms of Exhibit A1. The stage at which the
employment contract comes to an end depends, as I said, on
all the circumstances.
23. In this case, it is common cause that the applicant
was offered a further voyage at the end of 1997. He did not
take up the offer. It was also common cause, in the sense that
it was not challenged in cross-examination, that he could not
be found after his discussion with Mr Walsh in February.
24. The content of the discussion with Mr Walsh in
February is in dispute. The applicant alleges that he was
chased away. Mr Walsh testified that that was not so. I find
on the probabilities that Mr Walsh's version is more likely. I
say so because it is consistent with Exhibit A4, which preceded
the discussion in February. Furthermore, Mr Walsh had sent a
message asking the applicant to see him. The respondent
might also have had need for the applicant's services at some
future time and it served no purpose to burn its bridges with
him. There seemed to be no reason for Mr Walsh to chase the
applicant away. It is not the respondent’s case that it
terminated the applicant’s contract of employment when and
because he failed to report for a voyage after having
undertaken to do so. In terms of Exhibit A1, it would have been
entitled to terminate “instantly in the event of failing to report
on duty at the time specified by the Company’s
representative.” If Mr Walsh was angry or irritated by the
applicant to such a degree that he might have wanted to
chase him away, then he was more likely to have dismissed
him instantly for not reporting for duty.
25. The applicant's conduct in not taking up the further
voyage and not making himself available for further voyages
could imply that he elected to terminate the employment
relationship. That is another aspect which was canvassed in
the hearing before me. Whether there are further
circumstances that might impact on whether the employment
relationship subsists, may yet emerge from a full ventilation of
all the issues. However, that is a matter that the parties can
pursue hereafter.
26. In the circumstances my findings are as follows:
(i) The applicant was employed indefinitely (in terms of Exhibit A1)
to undertake voyages for fixed periods in terms of the articles
(ii) The applicant was entitled to a salary whilst he was on a
voyage.
(iii) He was not entitled to a salary but a benefit when he was not on
a voyage.
(iv) The respondent withdrew the discretionary payment ( or benefit)
which applied to the period when the applicant was not on a
voyage. Whether the withdrawal of the benefit was fair or not
is not a matter before me.
(v)On the evidence before me the respondent did not terminate, but
suspended the contract of employment.
(vi)Exhibit A4, relied upon by the applicant does not, in the context
of the trawling industry, amount to evidence of termination of
the applicant’s employment.
(vii)As to whether the applicant terminated his employment by his
conduct, that appears prima facie to be the case, on the limited
evidence before me. It is the applicant who failed to tender his
services even before the respondent withdrew the salary. It is a
matter for the parties to pursue if they so wish.
(vi) There is no order as to costs.
PILLAY D, J