IN THE LABOUR COURT OF SOUTH AFRICA
SITTING IN DURBAN
REPORTABLE
CASE NO D849/02
Date heard: 2003/04/17
Date delivered : 2003/04/23
In the matter between:
STEVEN CHRISTOPHER JARDINE APPLICANT
and
TONGAATHULETT SUGAR LIMITED
RESPONDENT
JUDGMENT DELIVERED BY THE HONOURABLE MS JUSTICE PILLAY
ON 23 APRIL 2003
FOR THE APPLICANT : SHANTA REDDY
SHANTA REDDY ATTORNEYS
FOR THE RESPONDENT: IRVIN LAWRENCE
GARLICKE AND BOUSFIELD
TRANSCRIBER
SNELLER RECORDINGS (PROPRIETARY) LTD DURBAN
PILLAY J
[1] The applicant's claim is for payment of 8,8 days annual leave pay
amounting to R8 327,13. The respondent has tendered to settle his
claims for other outstanding leave and certain incentives. It is
common cause that the applicant had accumulated 48,8 days annual
leave at the time of his dismissal. The respondent paid him for 40
days.
[2] Mr Lawrence for the respondent contended, firstly, that Chapter III of
the Basic Conditions of Employment Act No 75 of 1977 (the “BCEA”)
did not apply, as the leave provisions offered by the respondent were
better than the statutory minimum.
[3] Secondly, in terms of its policy, employees were precluded from
accumulating leave in excess of 40 days which, therefore, was the
maximum payable to the applicant on dismissal.
[4] Section 19(2) of the BCEA provides:
"Unless an agreement provides otherwise, this
chapter does not apply to leave granted to an
employee in excess of the employee's entitlement
under this chapter."
I interpret this to mean that the Chapter does not apply to the excess
leave. It remains applicable to leave granted in terms of the Chapter.
[5] The word "agreement" is defined to include a collective agreement.
As the BCEA does not take the definition further, the ordinary
meaning of the word applies.
[6] No evidence has been led of any agreement that deals
comprehensively with leave. Reliance has been placed on extracts
from the respondent's personnel procedures manual relating to
annual leave. The terms of the contract of employment were implied
from this.
[7] Mr Lawrence submitted that the applicant was granted 20 working
days leave per annum, which was in excess of the statutory minimum
of 21 consecutive days stipulated in section 20(2)(a) of the BCEA.
Furthermore, the respondent's policy provided employees with a
facility to accumulate leave which section 20(4) of the BCEA does not
permit them to do.
[8] Ms Reddy disputed that the leave was calculated on the basis of
working days and not consecutive calendar days. In support of this
she relied on the reference to the BCEA in clause C2.5 of the policy
quoted below. With regard to the accumulated leave facility she
contended that section 20(4) dealt with when leave must be taken. It
did not deal with the payment for leave accrued. That, she said, was
covered by section 40(b).
[9] Clause C2(5) of the policy provides:
"General provision .
The following provisions apply to both the above categories of
staff:
In terms of the BCEA employees must be granted at least twentyone consecutive
calendar days annual leave on full remuneration in respect of each leave cycle.
However, an employee's annual leave entitlement may be reduced by the number of
days occasional leave requested by the employee during that leave cycle. In terms of
company policy, at least ten working days leave should be consecutive and taken within
6 months of falling due, while the remainder may be fragmented.
Management at all levels must ensure that the company's leave policy is strictly adhered
to and that employees take their annual leave whenever it is due during the course of
their employment. In the unlikely event that employees do not take leave when they are
required to do so, managers will be required to keep a written record of the reasons
surrounding such failure to take leave, at the time this event takes place. In such
instances the written permission of the Divisional Managing Director, acting in
consultation with the Divisional Human Resources Director, will have to be obtained
before any payment is made for leave accrued in excess of the maximum allowed.
Leave is accumulated from the employee's date of
engagement.
None of the statutory public holidays (refer C13) is
regarded as a working day for the purposes of leave
calculation.
For agricultural employees, leave accrues at the rate of 1,42 days per completed month
of service for employees entitled to 17 working days per annum and 1,83 days per
completed month of service for employees entitled to twentytwo working days per
annum."
[10] The reference in clause C2.5 and C2.6 quoted below is to working
days, not ordinary or consecutive days or statutory public holidays.
This is quite obvious from the last two sentences of clause C2.5
quoted above.
[11] The applicant also admitted in reply at paragraph 11 that working
days are taken to calculate annual leave. Twenty working days leave
exceeds the statutory minimum of twentyone consecutive days by
about five working days per annum.
[12] Mr Lawrence submitted as the second basis on which the
respondent's leave policy exceeded the statutory minimum is that it
permitted the accumulation and payment for leave not taken within six
months as prescribed by section 20(4).
Section 20(4) provides:
"An employer must grant annual leave not later
than six months after the end of the annual leave
cycle."
[13] The purpose of the BCEA is to advance economic development and
social justice by fulfilling the primary object of the BCEA by, inter alia ,
establishing and enforcing basic conditions of employment and by
regulating variations of such conditions.
[14] Read in the context of this purpose, section 20(4) exists for the
protection of employees who might otherwise be denied annual leave.
It imposes an obligation on the employer, enforceable at the instance
of the employee. It does not impose an obligation on the employee to
take leave within six months after the end of the annual leave cycle.
Leave not taken within six months is not automatically forfeited.
[15] I agree with Ms Reddy that section 20 also does not preclude
payment for leave not taken within six months.
[16] Nothing in section 20, however, prevents an employer from requiring
an employee to take annual leave in terms of section 20(4).
[17] Clause C2.5 of the policy is consistent with this interpretation of
section 20(4), in that, firstly, it permits the fragmentation of leave at
the request of employees. Secondly, it reinforces the duty of the
management of the respondent to ensure that leave is taken.
[18] Not only is the policy an enforcement of the rights and protection of
employees, but also a means for the respondent to control the cost of
labour. The latter objective is not inconsistent with section 20(4),
provided it does not undermine the former.
[19] Whether the facility per se of accumulating leave is a term of the
employment contract that was superior to the BCEA depends on
whether the BCEA, in particular section 40(b), sanctions the forfeiture
of leave which is in excess of the statutory minimum and which has
not been taken. If it does not, then the BCEA will be more favourable
to the applicant.
[20] The respondent's policy provides at clause C2.6 as follows:
"C2.6 Accumulation
Not more than one week (five working days) may be
accumulated per annum, up to a maximum of
40 working days. This means that the absolute
minimum number of days leave due to an employee at
any one time will be sixty days (i.e. the maximum
accumulation of 40 days plus the current year's leave).
After attaining the age of fiftyfive years of age,
employees may accumulate up to a maximum of
60 working days paid leave which may be paid out on
retirement, provided that the accumulation does not
exceed one week's leave per annum.
At the discretion of the Human Resources Director, any leave accumulated in excess of
the normal entitlement is liable to forfeiture and, in any event, should an employee
terminate his services (other than by retirement, retrenchment or death in service) he will
not be paid out for more than a total of 40 days, inclusive of current leave.
Where an employee retires or is retrenched or dies in service, the minimum number of
days leave payable at termination date is 60, inclusive of current leave."
[21] Section 40(b) of the BCEA provides that on termination of
employment, an employer must pay an employee:
“remuneration calculated in accordance with section
21(1) for any period of annual leave due in terms of
section 20(2) that the employee has not taken.”
[22] Although the accumulation of leave at the instance of an employee is
not prohibited by section 20(4), section 40(b) qualifies the employer's
obligation to pay for any period of annual leave that has not been
taken by, inter alia , limiting it to annual leave due in terms of section
20(2), which in the case of the applicant would be 21 consecutive
days. This obligation would therefore not apply to the five working
days leave in excess of the statutory minimum. However, this is not
the end of the matter. There are further considerations discussed
hereunder.
[23] Assuming that there is no obligation to pay for the excess, it does not
mean that as a matter of law the claim for the excess is forfeited.
Although it cannot be enforced in terms 40(b), it nevertheless remains
a claim in favour of the applicant. It can be negotiated to his benefit.
[24] The respondent's policy, however, provides expressly for the
forfeiture of the excess leave, subject to the discretion of the Human
Resources Director. In this respect, section 40(b) is more favourable
to the employees than the respondent's policy.
[25] The policy is further disadvantageous to employees as it pegs the
accumulation of annual leave to 40 working days inclusive of current
leave. Neither section 20(4) nor 40(b) precludes an employee from
accumulating leave or being paid for it. In the case of section 40(b),
the employee's position may be weakened by the unenforceability of
the claim for the excess leave, but it is not forfeited, as in the case of
the respondent's policy.
[26] In my view, therefore, section 40(b) prevails over the forfeiture
provisions of clause 2.6.
[27] I find, therefore, that the only respect in which the respondent's policy
exceeds the BCEA is in the calculation of annual leave on the basis of
working days and not consecutive days. It follows that in terms of
section 19(2) of the BCEA, Chapter III would not apply to the period of
annual leave in excess of the statutory minimum of 21 consecutive
days amounting in this case to about five days per annum, the
balance of which now remaining due being 8,8 days.
[28] It would follow from this interpretation and application of the law to
Clause 2.6 that the respondent would have no obligation to pay the
applicant the annual leave in excess of the statutory minimum.
However, that is also not the end of the matter.
[29] Given the facts of this case, the excess is not an unenforceable claim.
The respondent had an obligation to pay the excess because, firstly,
in terms of section 20(4) read with clause 2.5 of the policy, the
respondent had to ensure that the applicant took his annual leave
whenever it was due during the course of his employment. This it
failed to do.
[30] Secondly, the respondent omitted to keep a written record of the
reasons surrounding his failure or inability to take leave.
[31] Thirdly, the applicant was suspended and eventually dismissed at the
instance of the respondent. The applicant was therefore deprived of
his right in terms of the respondent's policy to take leave during his
employment by circumstances beyond his control.
[32] I accordingly reject the submission by Mr Lawrence that the applicant
caused his dismissal because of his alleged misconduct. Dismissal for
misconduct terminates employment at the instance of the employer,
not the employee.
[33] Finally, I agree with Ms Reddy that before the Human Resources
Director exercised his or her discretion to forfeit the excess leave in
terms of Clause 2.6, the applicant ought to have been heard. The
failure to do so is at the very least procedurally unfair.
[34] In granting an order in terms of paragraph 1, I include the claims that
are admitted and for which there has been a tender.
____________
PILLAY, J