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THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG

JUDGMENT

Not reportable

Case no: JS 172/15

In the matter between:

LEON DE LANGE                                                                                                           Plaintiff

and

KOSMOSDAL EXT 61 & EXT 62

HOMEOWNERS ASSOCIATION

BROOKLANDS 3 LIFESTYLE ESTATE                                                                    Defendant

Application argued: 22 March 2016

Judgment delivered 4 April 2016

JUDGMENT

VAN NIEKERK J

[1] The plaintiff was employed by the defendant in terms of a 24-month fixed term contract, from 22 July 2013 to 31 July 2015. The contract was terminated by the defendant on 17 April 2014 after a disciplinary enquiry into charges of misconduct. The plaintiff claims damages for breach of contract, being an allegedly unlawful premature termination of the contract by the defendant. The damages claimed equate to the plaintiff’s remuneration for the balance of the 24-month fixed term.

[2] After the plaintiff’s contract was terminated, he referred an unfair dismissal dispute to the CCMA. On 31 July 2014, the parties signed a settlement agreement, in terms of which the plaintiff agreed to pay the defendant a sum of money. The defendant has complied with the terms of that agreement.

[3] In these proceedings, the defendant has raised a special plea to the effect that the terms of the settlement agreement extend to the present dispute.

[4] The nature of the plaintiff’s claim is captured in the statement of claim filed on his behalf. Amongst other things, the plaintiff avers that the defendant’s disciplinary code was incorporated in and forms part of his contract of employment and that it provided for a hearing prior to disciplinary action or the termination of the contract. The plaintiff avers further that on 17 April 2014 his fixed term employment contract was unlawfully and prematurely terminated by the defendant in the absence of any material breach by him, and\or that the defendant terminated the contract in breach of the prescripts of the disciplinary code, and\or the defendant terminated the contract without following the same procedure envisaged by clause 11 of the agreement, and\all the defendant terminated the plaintiff’s contract in breach of its disciplinary code. The plaintiff further avers that he suffered damages consequent on the premature and unlawful termination of the contract. The issues that the plaintiff contends are to be decided are whether or not the defendant breached the contract; if so, whether the breach resulted in an unlawful premature termination of the contract; if so, whether the plaintiff suffered damages as a result; and if so, the quantum of damages suffered.

[5] The settlement agreement was completed prior to an arbitration hearing, utilising the standard form provided by the CCMA. The handwritten part of it reads as follows:

The parties have agreed to settle the dispute between them as follows:

1.         The respondent will pay to the applicant to the amount of R 102 000/00 (One Hundred and Two thousand Rand) minus tax as per a SARS tax directive.

2.         R51 000/00 (Fifty One Thousand Rand) will be paid by the 07 August 2014 into the applicant’s bank account Capitec, Centurion.

3.         The respondent will pay the balance to applicant within two days of receiving the tax directive from SARS.

4.         The respondent will provide appl. With a certificate of service ito sec 45 of the BCEA.

5.         Deductions of R3696, 20 which was erroneously made will be refunded by the respondent to appl. immediately.

[6] The standard form conditions printed on the form record the following:

The parties agreed that:

1.1   This being in full and final settlement of the said matter, without further recourse.

1.2   No variation of this agreement will be legally binding unless reduced to writing and signed by both parties.

1.3   In the event of respondent failing to comply with its obligations in terms of the agreement, the respondent consents to this agreement being made an arbitration award in terms of section 142A of the Labour Relations Act, 66 of 1995.

[7] In its special plea, the defendant contends that the defendant accepted the settlement in ‘full and final settlement of the said matter, without further recourse’ and that the dispute referred to this court for adjudication is the same dispute settled by the agreement. In the alternative, the defendant contends that by virtue of the settlement of the matter in the CCMA, the plaintiff accepted that the termination of his contract and any subsequent claim based on the termination of his contract was extinguished by the plaintiff’s acceptance of the settlement amount. Having said that, the heads of argument filed on the defendant’s behalf characterise the objection rather differently, seeking to equate the plea of settlement with one of res judicata.

[8] Turning first to the contention that the ‘full and final’ settlement clause extinguished any right to pursue the present claim, the ‘said matter’ referred to in clause 1.1 of the agreement can only refer to the dispute referred to the CCMA. That dispute was described in the LRA Form 7.11 as an unfair dismissal dispute, in which the plaintiff contended that he had been dismissed on ‘baseless grounds’ after a hearing at which the presiding chairperson ignored evidence in relation to the plaintiff’s defence against ‘baseless charges’. These averments amount to allegations of substantive and procedural fairness.

[9] Similarly, in respect of the contention that the settlement agreement had the consequence of extinguishing all claims that arose from the termination of the plaintiff’s contract, what was settled ‘without further recourse’ could only have been the ‘said matter’, i.e. the dispute concerning an alleged unfair dismissal.

[10] To the extent that the special plea is premised on a conflation of an action arising from an unfair dismissal and one arising from a breach of contract, in Fedlife Assurance Ltd v Wolfaardt (2001) 22 ILJ 2407 (SCA), the Supreme Court of Appeal was split on the question of whether common law claims in respect of the termination of contracts of employment survived the statutory unfair dismissal regime introduced by the LRA. The majority of the court held that they did, and concluded that a contract of employment for a fixed term is enforceable in accordance with its terms, and that an employer is liable for damages for breach of contract on ordinary common law terms. Support for this view was found in s 195 of the LRA, which provides that any award of compensation for an unfair dismissal is in addition to and not a substitute for any other amount to which an employee may be entitled in terms of any law or the contract of employment.

[11] A comparison of the form 7.11 and the statement of claim does not disclose that the cause of action in each case is identical. The referral is the referral of a statutory unfair dismissal claim based on averments of substantive and procedural unfairness; the statement of claim seeks to recover damages for breach of contract. While it is true that both claims may arise from the same factual matrix, that is not relevant. It is not uncommon that the same set of facts give rise to a multiplicity of actions, not all of then mutually exclusive. In the absence of any compromise of a contractual claim that may be available to the plaintiff consequent on any unlawful termination of his employment contract (in the sense of a breach of that contract by the defendant), the settlement agreement is no bar to the prosecution of that claim.

[12] To the extent that the respondent relies on the recent judgment by this court in Shongwe & 25 others v City of Johannesburg Metropolitan Municipality (JR 483/14, Tlhotlhalemaje J, 25 February 2016), that case dealt with a matter that was properly the subject of a claim of res judicata. The court correctly observed that it was untenable for a party to approach the court with essentially the same claim under a different guise, seeking the same relief. In the present instance, the claims are conceptually different, they arise from different causes of action and  different relief is sought. Of course, the extent of any compensation paid in terms of the settlement agreement will no doubt be relevant in the assessment of any damages that the plaintiff may be found to have suffered, but that is a matter for the trial court.

[13] In short: the settlement agreement resolved only the dispute referred to the CCMA, that concerning an unfair dismissal. The agreement did not extend to the settlement of any other dispute that may have had its roots in the termination of employment, and certainly not any claim for contractual damages consequent on a material breach of the contract by the defendant. The special plea therefore stands to be dismissed. The parties agreed that costs should follow the result.                

I make the following order:

1.    The special plea is dismissed, with costs.

ANDRÉ VAN NIEKERK

JUDGE OF THE LABOUR COURT

REPRESENTATION:

For the plaintiff: Adv C Goosen, instructed by Macintosh, Cross & Farquarson

For the defendant: Adv L Steenkamp, instructed by Tiaan Smuts Attorneys

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