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IN THE HIGH COURT OF SOUTH AFRICA

NATAL PROVINCIAL DIVISION

                                                                                                CASE NO: 13452/2007

In the matter between:

ALBERT  LOUIS  DU PREEZ                                                                Applicant

and

DURBAN UNIVERSITY OF TECHNOLOGY                                Respondent

______________________________________________________________

                                                    JUDGMENT                             19^th August 2008

MSIMANG, J:

This is an application for an Order directing the respondent to reinstate the applicant’s post retirement medical aid subsidy equivalent to 60% of the applicant’s monthly medical aid subscription to Discovery Health (“the PRMA subsidy”) with effect from a date to be determined by the Court and directing the respondent to pay –

“2.1     An amount equivalent to the PRMA subsidy (after tax, as the subsidy would have been tax free) which the respondent would have paid in respect of the applicant over the period commencing on 1 September 2006 up to the month in respect of which the subsidy is reinstated pursuant to paragraph 1 above ;  and

2.2             Interest at the rate of 15,5% per annum on each amount equivalent to the monthly PRMA subsidy calculated from the first day of the month following the month in respect of which the PRMA subsidy was payable to the date of payment of the amount in terms of paragraph 2.1 above.”

The applicant is a retired academic, previously in the employ of the respondent which is a State funded University and a public higher education institution as contemplated in the Higher Educational Act.   ^[1]   The applicant was previously employed as a Deputy Vice-Chancellor: Academic by Technikon Natal which academic institution existed alongside another institution called the M L Sultan Technikon.   Amongst the conditions of his employment with Technikon Natal, was that the applicant was entitled to retire upon attaining the age of 60 and that he was obliged to do so at the age of 65 and that, upon his retirement and provided he elected to remain on a medical aid scheme recognised by Technikon Natal, the latter would continue to pay 60% of his monthly medical aid subscription until his death and/or his wife’s death, whichever event took place later.  On or about 1 April 2002 the M L Sultan Technikon merged with Technikon Natal and from that date they formed one institution called the Durban Institution of Technology, a name which was later changed to Durban University of Technology, the respondent in this matter.    It is not disputed that, despite the said merger and the resultant formation of the respondent, applicant’s aforesaid conditions of service at retirement remained in force and legally binding.

One of the unintended consequences of a merger of these institutions is a sudden and inevitable surplus of staff.   When the merger in the present matter brought about this consequence, the respondent’s Interim Council (Council), on 20 July 2002, instituted and approved of a policy named the Special Voluntary Exit Policy (the Exit Policy) which was designed to reduce respondent’s staff members and in terms of which the staff members were permitted to apply for voluntary severance packages.    The Exit Policy prescribed, inter alia, the procedure for handling the applications as well as compensation and benefits payable in terms thereof.   In terms of the minutes of the Council meeting held on 30 August 2002 the then Vice Chairman of the respondent, Professor Ncayiyana, reported to Council that he had informed the applicant that, due to operational reasons, he would not, at that time, release him on the basis of the Exit Policy.   It was only on 27 February 2003 that the Council resolved that the Deputy Vice-Chancellor Academic and the Deputy Vice-Chancellor (Operations) could be allowed an option of a voluntary exit package.

At the beginning of February 2003 the applicant formed an opinion that he had given his assistance with a view to bedding down the merger and that it would, at that stage, be appropriate for him to consider an early retirement.   It was for this reason that he commenced negotiations for his exit from respondent’s employment and, for that purpose, on 4 February 2003, he despatched a memorandum to Professor Ncayiyana placing it on record that he was considering taking an early retirement to take effect as from 30 June 2004 and attached two conditions to such an intended retirement, one of which was that the merger severance package should apply.   It would appear that thereafter negotiations between the applicant and Professor Ncayiyana, regarding the former’s retirement, then ensued and correspondence on the subject was exchanged between them.   This culminated in a memorandum addressed by the applicant to Professor Ncayiyana dated 16 September 2003 in which memorandum the applicant set out to record the agreement which he understood he and Professor Ncayiyana had concluded should form a basis for his retirement.   In that memorandum he also invited Professor Ncayiyana to approve of or to add amendments to the same.   Paragraph 1 of the memorandum reads as follows :-

“1.   I will take the normal but early retirement on 30 June 2004 (effective 1 July 2004) with all the conditions as would normally be applicable to me in terms of my present conditions of service………”

Thereafter paragraph 2 is added, commencing with the following introductory paragraph :-

“2.   In lieu of the negotiated early part of my retirement (I am entitled to only retire at 65 years old i.e. in 2009), the following will additionally apply……………….:-

           

a.                  ………

b.                  ………

c.                  The principles of the Merger Severance Package, including the NTRF contribution shortfall part, as it applied to Mr A Cheddie and Mr U Purmasir, will apply to me on 30 June 2004………..”

The respondent’s Finance Department accordingly calculated the amount of the financial package that would be paid to the applicant in terms of the Voluntary Exit Package, which calculations were approved by Professor Ncayiyana on 26 September 2003.   On 27 October 2003 the applicant informed the respondent’s Human Resource Section, in writing, that he would be retiring at the age of 60 in terms of his conditions of service, such retirement to take effect on 30 June 2004,   He also placed it on record that, in separate negotiations between him and the Council, it had been agreed that he would elect to retire at 60 in terms of a mutual agreement.    The matter was referred to a Dr. Thabede who, at the time, held the position of Deputy Vice-Chancellor : Human resources and Corporate Services and therefore entitled to deal with an employee of applicant’s seniority.   A letter of reply addressed by Dr. Thabede to the applicant and dated 10 December 2003 reads as follows :-

“Thank you for your letter dated October 27, 2003 addressed to Mr. Mbatha informing him of your decision to retire on June 30, 2004 when you will be reaching a pensionable age of 60 years.   I wish to confirm that your last working day will indeed be June 30, 2004.

Mr. Mbatha (Director: Human Resources) will notify the pension fund of your impending retirement and also advise you of the necessary official paperwork which you must complete.

I would like to take this opportunity to thank you for your years of service to Technikon Natal and now and now Durban Institute of Technology, and wish you well in your retirement.”

At the end of June 2004 the applicant duly went on retirement and, when he did, he elected to remain a member of the Discovery Health medical aid scheme which was recognised by Council and he was therefore paid 60% of his monthly medical aid subscription.   In addition, the applicant was also paid the financial package which had been calculated in accordance with the Voluntary Exit Package.

On 25 November 2005 the respondent despatched a letter to the applicant advising him that a report of a forensic audit which had been commissioned by Council had revealed that a discrepancy existed regarding payment of applicant’s medical aid benefits which, in terms of the Voluntary Exit Package, ought to have been a maximum once-off payment of R60 000.00.   The respondent declared its intention to correct the discrepancy but, before doing so, gave the applicant an opportunity to make representations.   In reply, the applicant informed the respondent that the benefits which he was receiving had been properly calculated, explaining that the reason why he had been paid the severance payment as well as the PRMA subsidy lay in the fact that he had not applied for and received the Voluntary Severance Package in the ordinary course but that he had negotiated a specific agreement to form a basis for his exit from employment with the respondent.    Some eight months later and on 24 August 2006 the respondent wrote to the applicant persisting that, in terms of the respondent’s Voluntary Exit Package Policy, the applicant was entitled to a once-off payment of R60 000.00 in respect of his medical aid benefits, that, for that reason, his PRMA subsidy was being terminated and, as contributions in respect thereof to the date of the  letter amounted to R42978.40, a cheque in the sum of R17021.60 making up the shortfall, was being enclosed.

In response, the applicant characterised respondent’s conduct as being a unilateral alteration of his conditions of service and therefore constituting an unfair labour practice.   He returned respondent’s cheque for R17021.60 and threatened to sue.   On 9 January 2007 he submitted an unfair labour practice dispute to the CCMA and, when on 14 May 2007, an arbitrator decided that that body lacked jurisdiction to entertain the dispute, the applicant brought the present application.

The applicant’s case, as pleaded in his founding affidavit, is that payment to him of the PRMA subsidy constitutes a term and condition of his employment with the respondent which needed no agreement between himself and Professor Ncayiyana.    Regarding the additional benefits paid to him in terms of the Voluntary Severance Package Policy, he contends that he made an offer to Professor Ncayiyana which the latter duly accepted, thus bringing about a validly binding agreement which, until respondent’s repudiation on 24 August 2006, was acted upon and given full effect by the respondent.   He had not waived his rights flowing from his conditions of service and from the said agreement which therefore remain binding upon the parties.

Though the application is opposed on the merits, a point in limine, relating to the jurisdiction of this Court, has also been taken.   I propose first to deal with this point.

The respondent avers that applicant’s complaint is employment related and that, in terms of Section 157(1) of the Labour Relations Act (“LRA”),   ^[2]  it ought properly to be dealt with by the Labour court.   Relying on the Constitutional Court decision in Chirwa v Transnet and others,  ^[3]   the respondent contends that the applicant’s complaint ought to have been raised by way of proceedings in the Labour Court and not in the present Court.    The provisions of Section 157 of the LRA run as follows:-

“(1)      Subject to the Constitution and section 173, and except where this Act provides otherwise, the Labour Court has exclusive jurisdiction in respect of all matters that elsewhere in terms of this Act or in terms of any other law are to be determined by the Labour Court.

(2)               The Labour Court has concurrent jurisdiction with the High Court in respect of any alleged or threatened violation of any fundamental right entrenched in Chapter 2 of the Constitution of the republic of South Africa, 1996, and arising from –

(a)               employment and from labour relations;

(b)               any dispute over the constitutionality of any executive or administrative act or conduct, or any threatened executive or administrative act or conduct, by the State in its capacity as an employer;  and

(c)               the application of any law for the administration of which the Minister  is responsible …….”

In Chirwa, allegations of inadequate performance, incompetence and poor employee relations had been made against the applicant.    As a result of the conclusion reached in a subsequent enquiry the applicant had been dismissed from Transnet’s employ.    She thereafter referred the dispute to the CCMA, alleging an unfair dismissal.    That body could not resolve the dispute within the 30-day period, issued a certificate to that effect and recommended arbitration in accordance with Section 191 of the LRA.     The applicant, however, took the matter to the High Court and when she was met with an objection that that court lacked jurisdiction to hear the matter and that she ought to have proceeded with the process in the LRA, she contended that she had two causes of action available to her, one under the LRA and the other flowing from the Bill of Rights read with the provisions of the Promotion of Administration of Justice Act (PAJA)    ^[4]    in respect of which latter cause the High Court had concurrent jurisdiction with the Labour Court.   She had then, for practical consideration, decided to approach the High Court in the exercise of her constitutional right of access to Court.

After finding :-

“….. the aim of the LRA to be a one-stop shop dispute-resolution structure in the employment sphere…..,”

The Court, per Skweyiya, J,  ^[5]  held that :-

“…… it is not difficult to see that the concurrent Jurisdiction provided for in s 157(2) of the LRA is meant to extend jurisdiction of the Labour Court to employment matters that implicate constitutional rights.   However, this cannot be seen as derogating from the jurisdiction of the High Court  in constitutional matters, assigned to it by s169 of the Constitution, unless it can be shown that a particular matter falls into the exclusive jurisdiction of the Labour Court.”    ^[6]   

With regard to the applicant’s claim, he pronounced himself as follows :-

“Ms  Chirwa’s claim is that the disciplinary enquiry held to determine her poor work performance was not conducted fairly and therefore her dismissal following such enquiry was not effected in accordance with a fair procedure.   This is a dispute envisaged by s 191 of the LRA, which provides a procedure for its resolutions:  including conciliation, arbitration and review by the Labour Court.  The dispute concerning dismissal for poor work performance, which is covered by the LRA and for which specific dispute-resolution procedures have been created, is therefore a matter that must, under the LRA, be determined exclusively by the Labour Court.   Accordingly, it is my finding that the High Court had no concurrent jurisdiction with the Labour Court to decide the matter.”       ^[7

Reaching the same conclusion Ngcobo J   ^[8]   held that the provisions of Section 157(2) must be given a narrow meaning and be construed in the light of the primary obligations of the LRA, namely, to create :-

“……… a specialised set of forums and tribunals to deal with labour and employment related matters.   It establishes an interlinked structure consisting of, among others, various bargaining councils, the CCMA, the Labour Court and the Labour Appeal Court.   It also creates proceedings designed to accomplish the objective of simple, inexpensive and accessible resolutions of labour disputes, which is one of the purposes of the LRA”.    ^[9]

Ngcobo J continued to hold that the primary purpose of Section 157(2) was not so much to confer jurisdiction on the High Court to deal with labour and employment relations disputes,  but rather to empower the Labour Court to deal with causes of action that are founded on the provisions of the Bill of Rights but which arise from employment and labour relations.   The constitutional authority authorising the Legislature to do so is contained in Section 169(a)(ii) of the Constitution which authorises Parliament to assign any constitutional matter to another Court of a status similar to a High Court and to deprive the High Court of the jurisdiction in respect of a matter so assigned to another Court.    ^[10]   Given the manifest purpose of section 157(2), the use of the word “concurrent” therein was unfortunate as the Legislature could well have achieved its objective to extend the jurisdiction of the Labour Court to causes of action founded on the provisions of the Bill of Rights arising from employment and labour relations without using the word.    While section 157(2) remains on the statute book its application must be confined to instances, if any, where a party relies directly on the provisions of the Bill of Rights which was not the case with regard to Ms. Chirwa’s claim, which alleged non-compliance with the provisions of the LRA and in respect of which she ought to have sought the remedy in the LRA.   She could not, Ngcobo J concluded, as she now seeks to do, avoid the dispute-resolution mechanisms provided for in the LRA by alleging a violation of a constitutional right in the Bill of Rights.

It seems to me that what informed both the majority opinions in Chirwa was that the remedy in Ms. Chirwa’s claim was provided for in the mechanisms prescribed in the LRA and therefore that the Labour Court had exclusive jurisdiction in respect of the same.    This is not the respondent’s case in casu, which seems to be based on the contention that –

            “The applicant’s complaint is employment related …….”

and therefore that it –

            “…..ought properly to be dealt with before the Labour Court.”     ^[11]

Respondent’s reliance on Chirwa is therefore misplaced.

It would appear that the issue presented by the respondent’s point in limine falls to be determined by the following dictum taken from the decision in Fredericks and others v MEC for Education and Training, EC :-   ^[12]

“Section 157(1) therefore has the effect of depriving the High Court of jurisdiction in matters that the Labour Court is required to decide except where the Labour Relations Act provides otherwise.   Deciding which matters fall within the exclusive jurisdiction of the Labour Court requires an examination of the Labour Relations Act to see which matters fall ‘to be determined’ by the Labour Court.   It is quite clear that the overall scheme of the Labour Relations Act does not confer a general jurisdiction on the Labour Court to deal with all disputes arising from employment”.

The applicant’s claim in casu involves the post-employment enforcement of the condition of his employment with the respondent.   I have not been directed to any provision of the LRA or of any other law reserving a claim of that nature for determination by the Labour Court neither could I myself find one.   I accordingly find that the respondent’s point in limine is bad and that this Court is endowed with a jurisdiction to entertain the claim.

Returning to the respondent’s opposition on the merits, the applicant’s case is that he had negotiated and the respondent had agreed to a special dispensation to exit from respondent’s employ which entitled him to both the severance payment and the PRMA subsidy.    The respondent denies that the applicant had retired in the ordinary way and avers that when he left the respondent’s employ the applicant had elected to accept a Voluntary Exit Policy Package which entitled him to have received a once-off payment of R60 000.00 in lieu of the PRMA subsidy.   Prima facie therefore there is a dispute of fact on the issue as to whether, upon his departure from respondent’s employ, the applicant had retired  and therefore became entitled to the benefits in terms of his conditions of service, and if so, if he had elected to waive those benefits in favour of the Voluntary Exit Policy Package.

In the memoranda which had been exchanged between the parties during the negotiations leading up to the applicant’s departure from respondent’s employment, he would make it clear and the respondent’s representatives seemed to accept that the applicant was taking an early retirement at the age of 60.   Respondent’s denial on this issue is therefore so far fetched or untenable that it stands to be rejected on the papers.   ^[13]    I accordingly find that on the evidence before me the applicant took early retirement at the age of 60 as he was entitled to do in terms of his conditions of service and that, when he did so, he became entitled to receive the PRMA subsidy.

Regarding the special dispensation, the applicant relies primarily on the negotiations and the agreement which he alleged was concluded by him and Professor Ncayiyana which agreement was embodied in his memorandum addressed to the Professor and dated 16 September 2003.    This memorandum has already been referred to in this judgment and, of significance, the contents thereof make it abundantly clear that the applicant would take early retirement at the age of 60 “with all the conditions as would normally be applicable to me in terms of my present conditions of service” and that the principles of the merger Severance Package would apply.    Some ten days later the financial package to be paid to the applicant in terms of the Voluntary Exit Package was approved by Professor Ncayiyana.    In the affidavit filed in support of respondent’s answering affidavit, Professor Ncayiyana denies that he had reached any agreement with the applicant on the basis of paragraph 1 of the applicant’s memorandum dated 16 September 2003.    Having carefully considered the matter, it appears to me that this dispute is not capable of resolution on the papers and that it would either have to be referred to oral evidence or, as the applicant seeks final relief, it would have to be dealt with in terms of the general rule propounded in Plascon-Evans.    ^[14]

In my judgment there is, however, another manner of dealing with the issue.   Having found that the applicant took early retirement at 60 and that, in terms of his conditions of service with the respondent he was entitled to the PRMA subsidy, the respondent, who contends that the applicant is not entitled thereto, bears the onus to show that the applicant waived the right to receive his benefits in terms of his conditions of service with the respondent.   The position was put as follows by Innes CJ in Laws v Rutherfurd   ^[15]  :-

“The onus is strictly on the appellant.   He must show that the respondent, with full knowledge of her right, decided to abandon it, whether expressly or by conduct plainly inconsistent with an intention to enforce it.   Waiver is a question of fact, depending on the circumstances.   It is always difficult, and in this case specially difficult to establish”.    

The evidence presented to me does not justify a finding that this stringent onus has been discharged by the respondent.   To the contrary, the evidence shows that, at all material times and that as late as 23 September 2003, the applicant was intent on enforcing the conditions of his service with the respondent at retirement.   In the premises, I must find in favour of the applicant on this issue.

Mr. Watt-Pringle, who appeared for the applicant, has urged me to grant a punitive order for costs against the respondent.   I am not persuaded that the respondent’s conduct herein justifies such an order.

In the result, the following Order is made:-

1.                  The respondent is directed to reinstate the applicant’s post-retirement medical aid subsidy equivalent to 60% of the applicant’s monthly medical aid subscription to Discovery Health (the PRMA subsidy) with effect from 1 September 2008.

2.                  The respondent is ordered to pay –

2.1             An amount equivalent to  the  PRMA subsidy  which the respondent  would  have  paid  in  respect  of  the applicant over the period commencing on September 2006 up to the month in respect of which the subsidy is reinstated pursuant to paragraph 1 above;  and  

2.2             Interest at the rate of 15,5% per annum on each amount equivalent to the monthly PRMA subsidy calculated from the first day of the month following the month in respect of which the PRMA subsidy was payable to the date of payment of the amount in terms of paragraph 2.1 above;

2.3             The costs of this application are to be borne by the respondent.

  

For the Applicant                               Adv. C E Watt-Pringle SC (instructed by Helena Strijdom Attorneys)

For the Respondent:                         Adv. A A Gabriel (instructed by  Venn Nemeth & Hart Inc.)

Matter argued:                                   8 August 2008

C A V

Judgment delivered:                         19^th August 2008

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