Further
incentives to be received monthly Volume, Quarterly Volume, CS1 and
other incentives.
3.
On the 28th
August
2005 the Respondent wrote to the Applicant, in the following terms:
"Regretfully
it appears that your performance levels do not at present measure up
to the standards we believe are necessary for the position. We are
however willing to assist you in attaining those standards. We have
accordingly drafted a more meaningful job description against which
you will be assessed. In terms thereof we intend to renew your
probation for a further four-month pen'od in order for you to be
given the time necessary to get to grips with the job. During this
time all other conditions of employment will remain unchanged."
4.
The Applicant accepted the renewal of his probation on the terms set
out in this letter.
5.
On 28th
October
2005 the Respondent addressed a further letter to the Applicant. The
letter commences with the statement, 'Your
period of probation ends on 31 October 2005." This
statement is clearly wrong. The extended probationary period ran for
a further four-month period from 31st
August
2005 and ended on 31st
December
2005.
6.
The letter goes on to propose that a new employment arrangement be
negotiated with the Applicant, based on an initial three-month
contract at a substantially reduced salary. It was proposed that
benchmarks be negotiated to provide the Applicant with clear duties,
responsibilities and targets, against which additional incentive
earnings could be achieved.
7.
Although the Applicant says that he was willing to participate in
the negotiation of a new employment arrangement, it is common cause
that these negotiations never commenced and on 4th
November
2005 the Applicant received a letter informing him that a decision
had been made to terminate his services with immediate effect.
8.
The Applicant reported a dispute to CMAC claiming that he had been
unfairly dismissed. The dispute could not be resolved by
conciliation and a certificate of unresolved dispute was duly
issued.
9.
The Applicant has applied to the Industrial Court, claiming payment
of compensation for unfair dismissal and payment of monthly and
quarterly incentives on motor vehicles sold in his department in the
course of his employment. Other ancillary claims were abandoned at
the beginning of the trial.
10.
In his particulars of claim, the Applicant avers that at the time
his services were terminated on 4th
November
2005 he was an employee to whom section 35 of the Employment Act
1980 applied. He alleges that the Respondent had no fair reason for
the termination of his services in terms of section 36 of the Act,
and such termination was unreasonable in all the circumstances.
11.
In its Reply, the Respondent pleads that the Applicant's period of
probation came to an end on the 31st
October
2005 at which date his employment was terminated. Thereafter the
parties entered into a three month fixed term contract which
contract the Applicant unilaterally terminated.
12.
This defence as pleaded is entirely at variance with the facts
advanced by the Respondent in evidence. At the close of evidence,
Respondent's counsel applied for an amendment of the Reply to
substitute paragraph 4.2 with the following averment:
"The
Respondent avers that the Applicant's services were terminated
within the second term of his probationary period."
13.
The Respondent's counsel had intimated in his opening address that
his client's defence rested entirely on the proposition that the
Applicant was not an employee to whom section 35 of the Employment
Act applied and the Respondent was not in the circumstances required
to show fair reason for the termination of his services.
14.
Having received advance notice of the Respondent's intention to rely
on a defence other than the one pleaded, the Applicant will not be
prejudiced if the amendment is granted. Mr. Sibandze for the
Applicant very properly conceded this and withdrew his opposition to
the amendment. The amendment is accordingly granted.
15.
Section 35 of the Employment Act provides that no employer shall
terminate the services of an employee unfairly, but this does not
apply to
"an employee who has not completed the period of his
probationary employment provided for in section 32." - see
section 35 (1) (a) of the Act.
16.
Section
32 of the Act provides as follows:
"
Probationary period:
(1)
During any period of probationary employment as stipulated either in
the form to be given to an employee under Section 22, or in a
collective agreement governing his terms and conditions of
employment, either party may terminate the contract of employment
between them without notice.
(2)
No probationary period shall, except in the case of employees
engaged on supervisory, technical or confidential work, extend
beyond three months.
(3)
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"
17.
The effect of section 35 read with section 32 is that an employer
may terminate the services of an employee who has not completed his
probationary period without giving notice and without any fair
reason.
18.
In the matter before court, the Respondent alleges that the
Applicant was still serving his second term of probation when his
services were terminated, hence he is not an employee to whom
section 35 apples and the Respondent is not required to furnish fair
reason for the termination.
19.
Section 42 of the Act states that in the presentation of any
complaint of unfair termination of services, the employee shall be
required to prove that at the time his services were terminated he
was an employee to whom section 35 applied.
20.
The Applicant thus bears the burden of proving that he was not
serving under a period of probationary employment when his services
were terminated. If he is successful in discharging this burden, it
follows that his services were terminated unfairly, since the
Respondent has not pleaded that it had fair reason for termination
as provided in section 36 of the Act (see section 42 (2) (a) of the
Act in this regard.)
21.
The Applicant was employed as Sales & Marketing Manager. His job
description expressly required him to supervise staff. As an
employee engaged on supervisory work, section 32 (3) of the Act
required that his probation period "shall
be fixed, in writing, between the employer and employee at the time
of engagement."
22.
The Applicant argues that the probation period which was fixed in
writing at the time of his engagement was for a period of 4 months,
from 1st
May
2005 to 30th
August
2005. He submits that the renewal of the probation period for a
further 4 months contravened section 32 (3) of the Act and was a
legal nullity. As a result, when the lawful probation period expired
on 30th
August
2005 the Applicant became an employee to whom section 35 applied,
and the Respondent was not entitled to terminate his services
unfairly i.e. without fair reason.
23.
In response to this argument, Mr. Magagula for the Respondent
submits that:
23.1.
section 32 of the Act does not prohibit extension of the initial
probationary period; and
23.2.
the Applicant accepted the extension of probation without objection;
and
23.3.
the Applicant was in any event never confirmed as a permanent
employee, therefore he had not completed his probationary period and
the Respondent was entitled to terminate his services without notice
or fair reason.
24.
Mr. Magaguia referred the court to page 63 of Van
Niekerk: Unfair Dismissal, but
no assistance can be obtained from the author's analysis of
probationary employment in South African law - for the simple reason
that the South African Labour statutes do not have a section similar
to section 32 of our Act, nor do the terms of the South African Code
of Good Practice which van Niekerk refers to extensively have any
counterpart in our law.
25.
The Swaziland legislature provides that the probation period of
supervisory employees shall be fixed, in writing, at the time of
engagement. Section 3 of the Act provides that:
"Except
as
expressly
provided by fh/'s
Act
any arrangement by any person to contract out of its provisions
shall be null and void."
Section
27 of the Act provides that:
"No
contract of employment shall provide for any employee any less
favourable condition than is required by any law. Any condition in a
contract of employment which does not conform with this Act or any
other law shall be null and void and the contract shall be
interpreted as if for that condition there were substituted the
appropriate condition required by law."
26.
Section 32 of the Employment Act 1980 was introduced to improve the
status of employee in Swaziland - see the Preamble to the Act. The
legislature in its wisdom considered it necessary to protect
employees on probation by:
26.1.
limiting the period of probation to 3 months, except in the case of
employees engaged to perform work of a specialized nature, namely
supervisory, technical or confidential work, where the employer may
require a longer period to determine whether the probationary
employee meets the required standards; and
26.2.
insisting that in the case of employees engaged on supervisory,
technical or confidential work the probation period must be fixed in
writing in advance, to avoid any uncertainty as to the length of the
period during which the employee's performance will be under
scrutiny.
27.
Sections 3 and 27 of the Act were promulgated in recognition of the
comparatively weak bargaining position of employees and to protect
employee from giving up the protections afforded them by the Act
through ignorance or through pressure from the employer.
28.
In the present matter, the Applicant's probation period was fixed at
four months in his letter of engagement, from 1st
May
to 30th
August
2005. The parties thereafter entered into an arrangement whereby the
probation period was renewed or extended for a further period of
four months.
The Applicant consented to this arrangement, and were it not for the
provisions of section 3 of the Act, the renewal or extension would
be valid and binding upon him.
29.
There can be no doubt that an agreement to renew or extend the
probation period, entered into some four months after the
Applicant's engagement constitutes an arrangement to contract out of
that part of section 32 (3) which requires the probation period to
be fixed in writing at
the time of the engagement.
Section 3 provides that such an arrangement shall be null and void.
30.
Since the renewal or extension of the Applicant's probation period
was null and void, he completed serving his probation on the 30th
August
2005. By the time the Respondent terminated his services on the 4th
November
2005, the Applicant was not "an
employee who has not completed the period of probationary employment
provided for in section 32."
31.
Neither section 32 of the Act nor the letter of engagement provides
that completion of the period of probation requires express
confirmation by the Respondent. The probation was complete when the
period fixed at the time of engagement expired by effluxion of time.
32.
The court finds that at the time his services were terminated by the
Respondent, the Applicant was an employee to whom section 35
applied.
33.
To establish that the termination was fair, the Respondent must
prove that the reason for termination was one permitted by section
36, and that, taking into account all the circumstances of the case,
it was reasonable to terminate the services of the employee - see
section 42 (2) of the Act.
34.
The Respondent has neither pleaded nor argued that the Applicant's
services were terminated for one of trie reasons permitted by
section 36 of the Act. The Respondent has relied solely on its
defence that the Applicant was not an employee to whom section 35
applied and that it was accordingly entitled to terminate his
services without fair reason. This defence has failed, and the court
must find in accordance with section 42 (2) that the services of the
Applicant were unfairly terminated.
35.
The Applicant has claimed compensation for the unfair termination of
his services. In assessing the amount of compensation to be awarded,
the court will take into account the following factual
considerations which it finds to have been proved on the evidence
before it:
35:1
we
find that the Respondent bona fide but mistakenly believed that it
was entitled to dismiss the Applicant without fair reason or fair
process. This is not a case where the Respondent acted maliciously
or with reckless disregard of the law;
35.2
the Applicant was employed for only six months, and he had been
informed twice during that period that he was not performing
satisfactorily. The Applicant purported to consent to the extension
of his probation, thereby purporting to accept further evaluation of
his performance with the possibility of summary termination if he
did not meet the required standards. Were it not for the provisions
of section 3 of the Act, the termination of his services would have
been lawful and contractual. The Applicant's position, when
considering the question of compensation, cannot be equated with
that of an employee who regards his employment as permanent and his
prospects as secure and whose dismissal is unforeseen.
35.3
nevertheless, the Applicant was unfairly dismissed from a job which
he enjoyed, in circumstances which must have injured his dignity and
self-respect. He was obliged to accept another job at a
substantially reduced salary in order to support his family, and it
took one year before he rose to a managerial position at a salary
comparative to his earnings with the Respondent.
36.
Taking the above factors and the Applicant's personal circumstances
into account, the court is of the view that compensation equivalent
to four (4) months salary will adequately compensate the Applicant
for the loss of his employment.
37.
The Applicant's counsel has argued that the value of the use of a
company vehicle should be included in the Applicant's remuneration
for purpose of calculating compensation. The court is not required
by section 16 of the Industrial Relations Act 2000 (as amended) to
peg its award of compensation to a specific number of months
remuneration. Section 16 (6) permits the court to award just and
equitable compensation, which does
not exceed 12
months remuneration.
38.
In any event "remuneration" is defined in the Act to mean
"wages
or salary and any additional payments payable in cash or in kind
directly or indirectly by the employer in connection with the
employment of an employee."
We
do not consider that the provision of a vehicle for business and
private use can be properly regarded as an additional "payment*
in terms of the statutory definition of remuneration Nor is the
definition of "wages" in the Employment Act 1980 of any
assistance to the Applicant, since again there is an explicit
reference to "remuneration or earnings including allowances
.... which are payable
by
an employer to an employee ..."
39.
Even if we are wrong in this regard, and the use of a vehicle can be
regarded as some kind of remuneration for services rendered, it is
only the private use of the vehicle which can be considered as
remuneration, since use of the vehicle for carrying on the business
of the employer is not a benefit which accrues to the employee in
return for services rendered. The Applicant has not tendered any
evidence as to the value to be attached to the private use of the
demonstration vehicle allocated to him.
40.
We award the Applicant four months salary in the total sum of
E60,000-00 by way of compensation.
41.
The Applicant has also claimed monthly and quarterly incentives on
motor vehicles sold by the Respondent's motor department. The letter
of engagement does not set out any terms or methods for calculating
incentive commissions or bonus. The mere mention of incentives in
the letter of engagement is too vague to give rise to any
contractual entitlement. The Applicant has claimed a commission of
E1000-00 per vehicle sold in the motor department, but this claim is
not supported by any evidence of a trade custom or contractual
undertaking to pay such commission.
42.
The Respondent has tendered payment of a commission of 5% in respect
of the net profit earned by the company on vehicles sold by the
Applicant. The amount tendered is E1595-55. The Applicant has not
proved his entitlement to an amount in excess of the amount
tendered.
43.
The court enters judgement against the Respondent for payment to the
Applicant as follows;
E60.000-00
as compensation
E
1,595-55 as commission
E61,595-55
in
total
The
Respondent is to pay the Applicant's costs.
The
members agree.
PETER R. DUNSEITH
PRESIDENT
OF INDUSTRIAL COURT
