IN THE
INDUSTRIAL COURT OF SWAZILAND
HELD AT
MBABANE
CASE NO.
242/03
In the matter
between:
JOHN WEATHERSON
…….APPLICANT
And
USUTHU
FARM…………....RESPONDENT
CORAM:
NDERI NDUMA:
PRESIDENT
JOSIAH YENDE:
MEMBER
NICHOLAS MANANA:
MEMBER
FOR APPLICANT:
P. R. DUNSEITH
FOR RESPONDENT:
J. S. MAGAGULA
J UDGEM E
NT-31/01/05
The Applicant
John Weatherson, formerly the Managing Director of the Respondent,
Usuthu Farm brought an application for determination of an unresolved
dispute in terms of Section 85 of the Industrial Relations Act, No. 1
of 2000.
The Applicant
claims maximum compensation for alleged unfair termination of his
services with effect from the 11th March 2003.
The reason for
the termination as alleged in the letter of termination was that xthe
farm is scaling down its operations'. The Applicant was therefore
retrenched.
He alleges in
the particulars of claim that the termination of his services was
unlawful, unfair and unreasonable in that:
1. The Respondent did not
comply with the provisions of Section 40 of the Employment Act, 1980
(as amended);
2. The Respondent did not
give the Applicant adequate or any notice of his retrenchment;
3. The Respondent did not
consult with the Applicant prior to his retrenchment.
4. And that the
retrenchment of the Applicant was not bonafide and could have been
avoided.
In addition to
the claim for maximum compensation, the Applicant further claims
benefits owed to him by the Respondent as follows:
1. Education Allowance in
the sum of E46,900.00 (Forty Six Thousand Nine Hundred Emalangeni).
2. Dollar difference
reimbursement as per agreement with the Board in the sum of
E27,000.00 (Twenty Seven Thousand Emalangeni).
We will note at
this point that the 2nd item was conceded by the National
Director of World Vision Swaziland who is also a Board Member of the
Respondent. The aforesaid sum of E27,000.00 is outstanding out
rightly and is awarded to the Applicant therefore.
At the time the
matter was brought to the Industrial Court, other terminal benefits
listed under schedule XD' had already been paid pursuant
to an urgent application at the High Court and an attachment of the
Respondent's assets.
The statutory
benefits comprising of severance allowance, notice pay, leave pay,
medical aid reimbursement, salary for six days worked up to the 11th
March 2003 and additional notice had been offset. Schedule C however
represents allegedly the proper recalculation of the said benefits
and the Applicant claims the difference thereof, having acknowledged
receipt of E61,203.96. The difference claimed amounts to E102,730.20.
This however is inclusive of the non contested E27,000.00 dollar
difference and the school fees aforesaid.
The court was
specifically requested by Mr. Dunseith for the Applicant to note the
lack-adaisical attitude of the Respondent towards the Applicant as
derived from the necessity to approach the High Court to receive non
contested items, aforesaid.
It was submitted
that this was the attitude that prevailed at the time of the alleged
retrenchment, which in the Applicant's view was a disguised
dismissal.
Upon
termination, the Applicant reported the dispute to the Labour
Commissioner. Efforts by CMAC to resolve the dispute via conciliation
failed and the certificate of unresolved dispute was issued on the
1st September 2003, in terms of Section 85 (1) of the Act.
At the time of
the termination, the Applicant earned E12,600.00 (Twelve Thousand Six
Hundred Emalangeni) salary per month and the enumerated benefits.
A spirited
effort that however was in vain was made by the Respondent to
disclaim school fees in respect of the Applicant's children at
Waterford Kamhlaba for the year 2003.
The
documentation presented before court comprising of correspondence
from the donors that funded the Respondent and the minutes of the
Board meeting clearly show that a provision had already been made for
the payment of the annual fees of the children for the year 2003.
Indeed the money had already been dispatched by the donor at the time
of the termination. Refusal to forward the donation to the intended
recipient can only be described by the court as callous and most
inconsiderate especially in view of the fact that no immediate
payment of terminal benefits was made to the Applicant upon
termination.
He was indeed
placed in a very embarrassing situation with respect to his children
at Waterford. This can hardly be described as a Christian attitude
that the Employer professed to follow to the letter and encouraged
its employees to abide by. The court finds therefore that a sum of
E46,900.00 (Fourty Six Thousand Nine Hundred Emalangeni) is owed by
the Respondent to the Applicant and same is to be paid forthwith.
The Respondent
hardly contested the recalculated difference in respect of severance
allowance, notice pay, additional notice, leave pay, medical aid
reimbursement and salary for days worked as may be seen from the two
annexures *C and TJ' representing the total difference less the sum
of E61,203.95 (Sixty One Thousand Two Hundred and Three Emalangeni
and Ninety Five Twenty Cents) already paid.
The court finds
in view of the afore-going that the said sum has been proven to its
satisfaction as owing to the Applicant in total. The Respondent is
directed to pay the same.
The only other
outstanding issue and actually, the key one, for that matter is
whether or not the termination of the Applicant was done for a reason
permitted by Section 36 of the Employment Act and if so, whether the
termination was fair, just and reasonable in all the circumstances of
the case.
The onus to
discharge this burden rests squarely on the Employer in terms of
Section 42 (2) (a) and (b) of the Employment Act.
It is not
disputed that the Applicant was an employee to whom Section 35 of the
Employment Act applied. The section obliges every employer to only
dismiss an employee covered thereof for a fair reason hence the onus
created by Section 42 aforesaid.
In the endeavour
to discharge this onus, the Respondent adduced evidence of the
National Director of World Vision Swaziland and a Board Member of the
Respondent Mr. Patrick Siame.
The witness told
the court that the Respondent farm was a project under the auspices
of World Vision Swaziland and was fully donor funded to create
employment for the rural communities at Luyengo.
The Applicant,
an Agriculturist was initially commissioned to write the project
proposal, which he did and the same was approved by the targeted
donor. He was then employed as the project's first manager in terms
of a two-year contract of employment in 1998. The contract was
renewed twice. At the time of termination the Applicant was serving
the third contract.
A sample of the
contract was produced and marked exhibit 'A'. The same stipulates the
terms of employment for the Farm Manager and a job description was
attached to the same.
The Applicant in
terms thereof reported to Mr. Siarne the National Director of World
Vision and a member of the Board of Directors of the Respondent.
It was
specifically provided therein that the 'ultimate management
responsibility for the Usuthu Farm lies with World Vision Swaziland'.
The Diocesan
Trust Board of the Anglican Church in Swaziland was also a partner to
the farming venture; the chairman of the Board was one Tom Mbelu.
According to Mr.
Siame, since 1998 when the farm operation commenced up to the date
the Applicant was retrenched, the farm operation had failed to make a
profit. The sustainability of the entire project had been brought to
question because for the fourth year in a row, the Farm continued to
depend on donations from the World Vision in the United States of
America. The donor had developed fatigue as a consequence and
demanded that the project be terminated.
That the
concerns of the Donor were shared with the Applicant and all the
issues were discussed in the Board meetings. The applicant, being the
Chief Executive Officer of the project was a key player and the
failure or success of the project largely depended on him. The
Applicant attended the Board meetings and was very well aware of the
financial constraints the project was undergoing. He was aware that
his salary and benefits was a major expense for the farm and the
project could not be expected to retain him even when it was clear
that it could not, and had not thus far generated adequate income to
cover that expense.
The farm
operation was labour intensive and had a large workforce that also
depended initially on the donations but was expected to be sustained
by the project once it had become viable.
According to Mr.
Siame as at the year 2004, it had become clear to the Board and the
donors that the project had failed to sustain itself and retrenchment
of the Applicant and other employees was inevitable.
He told the
court that this issue was discussed with the Applicant on numerous
occasions and this was well documented in correspondence between the
Board and the Applicant and in the Minutes of the Board meetings.
The budget for
the period October 2002, to September 2003, prepared by the Applicant
and reviewed by an external accountant by the name of N, Ormsher
indicated that a significant increase in production was forecast from
March 2003. To achieve this however, sufficient working capital was
required to finance inputs.
The stalemate
came when the World Vision, U.S.A. upon which the project had all
along depended refused to disburse the capital ejectment needed to
sustain the forecast production for the year 2003.
The project at
that point had no revenue internally generated to cover up for the
donation that had been expected but was not forthcoming.
The sticking
point between the parties while in agreement that the project was in
financial dire straights was that the Applicant remained optimistic
that funds could be sourced from other Donors and that the project
remained highly viable subject to that capital ejectment. The
Respondent represented by the Board on the other hand however held a
gloomy view of the project and was convinced that the project had run
its course and the Applicant in particular could not take it any
further.
They felt that
the Applicant had significantly failed in his responsibilities
towards the project and that they could no longer continue to retain
him. Furthermore the operation had to be down sized by way of staff
reduction if it were to survive.
Other options
suggested by the Applicant to jump start the project were not
considered suitable by the Board. This culminated in the decision to
retrench the Applicant and subsequently in staff reduction. Soon
thereafter, the entire project collapsed and ceased to operate.
The Applicant
told the court that he was not consulted at all prior to the
retrenchment and the decision came to him like a bolt from the blue.
He added that the various options he had offered the Board to sustain
the farm operations were unreasonably ignored.
That the failure
by the World Vision Swaziland to provide financial services to the
project, contrary to the initial undertaking significantly
contributed to the collapse of the project.
He denied that
he was ineffective as a manager but to the contrary painted what
would have been a very bright future for the project had World Vision
Swaziland played its role in a meaningful manner.
Looking at the
two versions of the events leading to the termination of the
Applicant, the inescapable conclusion is that for whatever reason, as
of March 2003 the Respondent farm had failed to marshal sufficient
capital ejectment to sustain production.
That the key
donor had withdrawn its support and wanted the project to be
terminated.
That given the
circumstances and considering the relatively high salary and benefits
the Applicant enjoyed, the project could no longer be able to sustain
his employment.
The court is
satisfied that, notwithstanding that there was no specific forum
convened specifically to discuss the termination of the Applicant's
employment, by virtue of his position, and access to the Board
meetings and management correspondence, the Applicant was all along
aware of the possibility of his termination. Indeed a document
produced in one of the Board meetings, prepared by Mr. Gumede, a
legal officer at World Vision fully canvassed the possibility and the
consequences of retrenching the Applicant and other staff members.
The evidence
available indicates that as at the 11th March 2003, only
the Applicant was retrenched and therefore Section 40 of the
Employment Act No. 5 of 1980 did not come into play. The court did
not get specific information as to when other employees were
retrenched. The fact of the matter is that, subsequently on a date,
month or year not specified, the entire operation came to a halt.
The court upon
consideration of the entire evidence is of the view that the
Applicant's employment was terminated for operational reasons and in
conformity with the provisions of Section 36 (j) of the Employment
Act, that deems retrenchment fair.
In terms of
Section 42 (2) (a) the Applicant was dismissed therefore for a lawful
reason.
It being a
foregone conclusion that the collapse of the Respondent was imminent
at the time of the said retrenchment and in terms of Section 42 (2)
(b) of the Act it was fair and reasonable in all the circumstances of
the case to terminate the services of the Applicant.
In conclusion,
the Respondent is only liable to pay terminal benefits earlier
enumerated in the sum of E102,730.20 (One Hundred ad Two Thousand
Seven Hundred and Thirty Emalangeni and Twenty Cents).
There will be no
order as to costs.
The members
agree.
NDERI NDUMA
JUDGE
PRESIDENT-INDUSTRIAL COURT
