IN THE INDUSTRIAL COURT
OF SWAZILAND
HELD AT MBABANE
In the matter between:
CASE NO. 125/2002
HUMPHREY
MAGAGULA………………….APPLICANT
and
PAUL
FRIEDLANDER
T/A
AMANDLA FINANCIAL SERVICES…..RESPONDENT
CORAM
N. NKONYANE :ACTING JUDGE
G. NDZINISA :MEMBER
D. MANGO :MEMBER
FOR THE APPLICANT: MR. B.
MDLULI
FOR THE RESPONDENT: MR. S.
NSIBANDE
JUDGEMENT
30.09.05
The applicant is a former
employee of the respondent. He brought an application for
determination of an unresolved dispute before the court in terms of
Section 85 (2) of the Industrial Relations Act No. 1 of 2000.
The respondent is a money
lending business situate at Suite 203, Nedbank Centre at the Swazi
Plaza.
In his statement of claim the
applicant stated that he was employed by the respondent in June 2001
as a Marketing Consultant. He said he was verbally dismissed on the
2nd November 2001 for alleged poor performance. He said no
written warning was issued to him and that no hearing was held before
the termination of his employment. He said at the time of termination
he was earning E3,500.00 per month. He said he was not paid any
terminal benefits. He is praying for an order for the payment of 12
months wages as compensation, one month wages in lieu of notice and 5
days leave pay.
The application is opposed by
the respondent. The respondent in its papers denied that it employed
the applicant but said that he was engaged on an agency basis. The
respondent said it was agreed that the applicant would undergo a
three months' trial period. The respondent said that the
understanding was that after the three months trial period the
applicant's performance would be reviewed and if satisfactory, a
one-year agency contract was going to be entered into.
The respondent averred that
at the end of the three months trial period the applicant's
performance was below expectation and the respondent chose not to
offer the applicant the one-year agency contract.
Four witnesses testified
before the court. The applicant was the only witness for his case.
Three witnesses testified on behalf of the respondent.
It is not in dispute that the
applicant was engaged by the respondent from June 2001 until 2nd
November 2001. The issue that is in dispute is whether the applicant
was an employee to whom Section 35 of the Employment Act No.5 of 1980
applied.
It was argued on behalf of
the respondent that the applicant was not an employee to whom Section
35 applied because; he was engaged for a fixed term of three months,
which was extended by consent of the parties. It was further argued
that the three months period was a trial period, after which a
one-year contract was going to be entered into.
On behalf of the applicant it
was argued that the applicant having been employed for more than
three months, he was an employee of the respondent as on the 2nd
November 2001 when he was terminated, after having been five
months in the respondent's employment.
The evidence before the court
revealed that the applicant was hired by the respondent verbally. The
applicant's job was to get clients from companies to sign contracts
with the respondent. The respondent was engaged in money lending
activities. The applicant said he was told that he was on three
months' probation. RW2 Paul Friedlander denied that the applicant was
on probation. He said that the applicant was on three months trial
period. During cross-examination RW2 however conceded that the said
trial period meant the same thing as a probation period.
RW1, Andrew Bongani Magagula
told the court that he was an employee of the respondent. He told the
court that he was also first made to undergo a three months probation
period.
RW3, Sam Mnisi told the court
that he worked for the respondent at some point, and that he was no
longer employed there presently. He told the court that he did hear
RW2 telling the applicant to put more effort in his work. He said he
could hear RW2 talking to the other employees because they were
sharing the same office space.
RW2 told the court that he
dismissed the applicant for poor work performance. He said he did
tell the applicant towards the end of the three months period that he
was not happy about his performance. He said the applicant asked for
a month's extension and he agreed. During that month's extension the
applicant was involved in an accident and was hospitalized for two
weeks. RW2 said during the last month of October 2001, the applicant
was still recovering at home so he spent more time at home than at
work. RW2 said he could not terminate the applicant before he could
fully recover, as that would have been inhumane.
During his evidence the
applicant said that he was told by RW2 that he was going to be
employed as soon as he secured the first deal. He said he got the
first deal before the expiry of the three months.
It is clear to the court that
that evidence was incorrect. The applicant's case is that after the
three months' period he considered himself to have been automatically
employed, as he was not terminated at the expiration of the probation
period. If it were correct that there was an agreement that he would
be confirmed as soon as he clinched his first deal, he clearly would
have based his cause of action on those allegations. Furthermore,
there was no evidence that after he had clinched the first deal, he
approached the employer with a view to have him hired and sign the
one-year employment contract.
The question that the court
must consider is whether the applicant was an employee to whom
Section 35 applied. If he was not, the court will hold that after the
expiration of the three months' period, he automatically became an
employee of the respondent and that the respondent was bound to
follow the provisions of the law in order to lawfully terminate his
service. Section 35 of the Employment Act provides that; "(1)
This section shall not apply to -
(a) ....
(b) ...
(c) ...
(d) An employee engaged for a fixed
term and whose term of engagement has expired."
During the trial it became
clear to the court that the problem was that of choice of words. The
applicant said he was on probation and the employer said the
applicant was on a three months' trial period. The employer was
referring to the period as a trial period because he wanted to escape
the legal consequences of employing someone for about five months
without confirming that person into permanent staff.
It was argued on behalf of
the respondent that the applicant was a consultant, and that his
position was similar to that of an agent. It was argued that the
applicant paid tax on his own and was not deducted by the company
making him an independent agent for the respondent.
It became clear to the court
during the trial that the word consultant was being used in a less
formal fashion than what it normally means. THE CONCISE OXFORD OF
CURRENT ENGLISH (1995) 9th EDITION at page 287 defines the
word consultant as;
"1. A person providing
professional advice etc., especially for a fee."
It was not stated what
professional advice was the applicant providing to the respondent. On
the contrary the evidence revealed that the applicant was advised by
the employer to work closely with RW1 in order to learn the skills of
the trade.
The evidence also revealed
that the employer would tell the applicant to put more effort in his
work. That showed an element of control by the employer the evidence
also revealed that the employer told the applicant which companies to
approach. Furthermore, the applicant was paid a fixed salary.
It seems to the court
therefore that in this case the employer was in control of what work
had to be done and the manner in which that work had to be done. (See
ALAN RYCROFT AND BARNEY JORDAAN "A GUIDE TO SOUTH AFRICAN LABOUR
LAW at page 30).
The Employment Act defines an
employee as "any persons to whom wages are paid or are payable
under a contract of employment". The act also defines wages to
mean
"Remuneration or
earnings including allowances, however designated or calculated
capable of being expressed in terms of money and fixed by mutual
agreement or by law which are payable by an employer to an employee
for work done or to be done under a contract of employment or for
services rendered or to be rendered under such contract. "
From the foregoing
observations it is clear to the court that the applicant was not a
consultant properly so called, but an employee of the respondent.
After the three months probation period, the employer was entitled to
terminate the service of the applicant. The employer did not do that
however. The parties decided to extend the probation period.
The question that then arises
is whether the parties acted lawfully when they decided to extend the
probation period. Section 32 of the Employment Act which deals with
probationary period states in subsection (2) that;
"No probationary period
shall, except in the case of employees engaged on supervisory,
technical or confidential work, extend beyond three months "
The wording of the subsection
is peremptory. The parties therefore have no discretion in the period
of probation.
Section 32 (3) states that;
"In the case of
employees engaged on supervisory technical or confidential work, the
probation period shall be fixed in writing between the employer and
employee at the time of engagement."
The applicant in this case
was clearly not engaged on supervisory technical or confidential
work. The evidence revealed that the period of probation was fixed
verbally for a period of three months. Section 32 (3) therefore has
no applicability in this case.
This court had occasion to
deal with a similar question in the case of JERRY DUNGAZELA DLAMINI
vs. CARGO CARRIERS SWAZILAND (PTY) LIMITED (I.C.) CASE NO. 194/99. In
that case the applicant had worked for four months when he was
terminated. The court after dealing with the provisions of Section 32
of the Employment Act, held on page 3 of that judgement that;
"Respondent was supposed
to either confirm or terminate the services of applicant at the end
of this period. An agreement entered into between the two outside the
scope of the written contract and also outside the purview of Section
32 is ultra vires and as such of no force or effect."
The court having already
pointed out that the applicant was an employee of the respondent, and
that he was on three months probation, the parties had no authority
to extend the statutory period of probation.
It follows therefore that the
respondent could only lawfully dismiss the applicant for reasons
permitted by Section 36 of the Employment Act. Furthermore, the
respondent was expected to follow all the procedural steps before
dismissing the applicant. The respondent said that the applicant was
dismissed for poor work performance. In this regard Section 36(a)
provides that the termination must be preceded by a written warning.
The employer in this case never gave the applicant a written warning.
The termination was therefore not one permitted by Section 36 of the
Employment Act.
The termination of the
service of the applicant was therefore both substantively and
procedurally unfair.
RELIEF:
The applicant is claiming
12 months wages as
compensation......................E42,000.00
One month's wage in lieu of
notice and …..........E 3,500.00
Five days' leave
pay..............................................E
807.60
The evidence led before the
court showed that before the expiry of the three months, the employer
told the applicant that his performance was not satisfactory. The
applicant asked for one more month to prove himself and said there
were some deals that were going to come through. During that
extension period the applicant was involved in an accident. He was
hospitalized for two weeks. After his discharge, he was at home most
of the time as he was still recuperating.
The applicant was paid his
salary even though he was not at work most of the time in September
2001. The applicant was also paid his salary even though he was not
at work in October 2001.
The respondent's conduct of
agreeing to give the applicant another chance to prove himself, and
to continue to pay him his salary even though the was not at work
clearly showed that there were no ill-feelings between the parties.
The conduct of the respondent further showed that the respondent was
a reasonable and considerate employer, who was not eager to get rid
of the applicant even though he was not performing well. In his
magnanimity, the respondent unwittingly breached the provisions of
the Employment Act.
The respondent therefore does
not fall within the class of employers who deliberately violate the
rights of employees at the workplace. This case therefore is one
where only the minimum compensation should be ordered. The applicant
said he was thirty-two years old and has two children but is not
married. He has a degree in administration.
Taking into account all these
factors into account, the court will make an order that the
respondent pays the applicant the following amounts of money;
1. ONE MONTH'S SALARY AS NOTICE
PAYE.........3,500.00
2. ONE MONTH'S SALARY AS COMPENSA TION
FOR THE UNFAIR
DISMISSALE3,.............................500.00
3. FIVE DAYS LEAVE PAY
….....................................E
807.60
TOTAL
….....................................................................E7,807.60
No order for costs is made. The members
agree.
N. NKONYANE
ACTING JUDGE - INDUSTRIAL
COURT
