IN THE
INDUSTRIAL COURT OF SWAZILAND
HELD AT MBABANE
CASE NO. 210/05
In the matter between:
ANDREW MKHONTA & 6
OTHERS…………………
1st APPLICANT
SEBENELE SIBANDZE & 4
OTHERS………………..2nd
APPLICANT
and
SWAZILAND POSTS &
TELECOMMUNICATIONS…RESPONDENT
CORAM
N. NKONYANE:
ACTING JUDGE
DAN MANGO:
MEMBER
GILBERT
NDZINISA: MEMBER
FOR APPLICANTS: MR. Z.
DLAMINI
RESPONDENT: MR. Z. JELE
RULING ON
POINTS OF LAW 27.07.05
The applicants
brought a notice of application to court on 20.07.2005 for an order
in the following terms:-
"1. The
respondent to fully comply with the order of the court granted on the
28th of June 2005.
2. The respondent be
ordered to pay the applicants the sum of Thirty Six Thousand Four
Hundred and Twenty
Six Emalangeni
Thirty One cents (E36,426.31), which has been deducted by the
respondent alleging same to be in respect of Income tax due to the
Commissioner of Taxes.
3. The monies aforesaid in
prayer two (2) above be made
payable to the offices of TZD &
Associates, Central
House Nkoseluhlaza Street P. O. Box 6990
Manzini.
4. The respondent be
ordered to pay costs of this application.
5. Any further and/or
alternative relief that the Honourable court may deem fit."
The respondent
filed a notice of intention to oppose. It also filed a notice to
raise points of law dated 19.07.2005.
The points of
law raised are as follows:-
"1. That
the settlement agreement concluded by the parties at the Conciliation
Mediation & Arbitration Commission on the 23rd June
2005, was a settlement and not an award of compensation.
2. It was never the
respondent's intention to assist the applicant evade the tax
obligations by agreeing to have the agreement made an order of
court."
The respondent
did not file an answering affidavit simultaneously with its notice to
raise the points of law. The court will therefore consider the points
of law raised in the background of the Founding affidavit before it
deposed to by one Andrew M. Mkhonta.
The court will
make an observation that the deponent does not say in any paragraph
that he is deposing to the facts therein on behalf of the other
applicants. There is also not annexed thereon any confirmatory
affidavit by any of the other applicants.
The court will
however excuse the inelegance in the drafting of the papers on the
basis that there is evidence from the memorandum of agreement that it
was the same parties that appeared before the Conciliation Mediation
and Arbitration commission, hereinafter referred to as CMAC.
The background
facts are that on 23 June 2005 the parties entered into an agreement
before a CMAC Commissioner in terms of which the respondent would pay
the applicants a sum of One Hundred and Fifty Eight Thousand and Ten
Emalangeni, Thirty-Eight cents (El58,010.38) in full and final
settlement. The payment is referred to as being made ex-gratia. In
terms of clause 3 thereof, it is stated:
"The
parties now agree that this shall be made the order of the Industrial
court once it is registered by either party."
The court is
bringing to the fore the contents of clause 3 of the memorandum of
agreement for a particular reason. It was one of the arguments by Mr.
Jele on behalf of the respondent, that the court should not place any
particular importance to the fact that the agreement was registered
in court on 28.06.2005. He argued that the registration was merely
for security reasons, that is, if the respondent failed to pay the
money, the applicant would be in a position to sue out a writ of
execution.
It is clear
however from clause 3 that it has always been the clear intention of
the parties that the agreement entered into should be made an.order
of the court.
After the
agreement was registered in court therefore on 28.06.2005, it became
an order of the court. It is no less important than any other order
of the court.
It was also
argued on behalf of the respondent that it is only compensation for
unfair dismissal that is exempt from taxation. It was argued that the
payment in this case was ex-gratia and therefore not exempt.
When one removes
the chaff of the nomenclature and has regards to the substance the
issues giving rise to the payment of the money was the unfair
dismissal of the applicants by the respondent. Paragraph 4 of the
Founding affidavit states as follows:
"On or
about the 20th April 2005, we reported a dispute with the
Labour Commissioner for unfair dismissal against the respondent,
wherein the matter was referred to the Conciliation, Mediation and
Arbitration Commission (CMAC) for determination."
Whatever name is
given to the amount of money in question, it is clear that it was
arrived at following the dismissal of the applicants by the
respondent.
There is no
provision under Section 12(1) (g) of the Income Tax order no.21 of
1975 that the dismissal must have been determined or decided by the
court.
The other
question that must be determined by the court is whether the
respondent was obliged to seek the tax directive in this matter.
This question
was addressed by this court in the case of LEWIS STORES (PTY) LTD VS
GUGULETHU NSIBANDE, DEPUTY SHERIFF AND THE ATTORNEY GENERAL, (I.C.)
CASE NO. 39/04 and was answered in the negative. In that case
reference was also made to the High Court case of MAHLALELA LUCKY G.
V. SWAZILAND ROYAL INSURANCE CORPORATION AND FOUR OTHERS CIVL CASE
NO.281/2001, which addressed the action of the respondent in seeking
a tax directive.
The High Court
found that the 1st respondent was not obliged or entitled
to deduct any amounts from the payment made to the applicant.
In the Lewis
Stores case this court also pointed out that as Lewis Stores was no
longer the employer of the applicant, it acted ultra vires the Income
Tax Order by seeking the tax directive.
A similar
finding will be made in the present case, that is, as the respondent
was no longer the employer of the applicants, it had no obligation to
seek a tax directive.
It follows
therefore that the points raised will be dismissed by the court, and
that is the order that the court makes.
No order for
costs is made.
N. NKONYANE
ACTING
JUDGE-INDUSTRIAL COURT
