In terms of the rules of the Pension Fund i.e. Rule 8(f) the
employees of the respondent were entitled to a gratuity which
consisted of the employer's contribution (see Rule 8(a) dealing with
contributions). This, an employee would be paid in the month in
which he dies, withdraws or retires (see Rule (9) of annexure "X1".
An application was launched by applicant Phyllis P. Ntshalintshali
in the court
that the court orders the respondent to pay is a sum of E158,151.88
as amount applicant was entitled to after respondent had terminated
applicant's services on the ground of redundancy and which amount it
was withholding from applicant.
Applicant admitted that she had been paid by respondent an amount of
E60,195.00 as severance allowance in terms of Section 34 of the
Employment Act 5/1980.
Respondent on the contrary resisted the claim by applicant on the
basis that in terms of Section 340 of the Employment Act it was
entitled to the repayment of the Employer's contribution to the
Pension Fund which was equivalent to the severance pay it had paid
to the employees (the applicant) in the sum mentioned above.
The Fund mentioned under paragraph 2 above had in the meantime paid
the appellant E59.393.39 for onward transmission to the respondent.
This amount was paid to respondent and the respondent was
dissatisfied with this payment and was demanding an amount of
E158,151.89 from the appellant.
The amount of E158.151.88 was apparently amount due to her on
account of appellant termination of her services with it.
Whereas the payment of the E60,195.00 being severance allowance was
paid to respondent by appellant in terms of Section 34 (3) of the
Employment Act 1980.
Appellant is appealing against the decision of the court
a quo ordering
it to pay back respondent the sum of E60,195.00.
Reading the rules i.e. Rules of the "SEDCO
MIDAS PENSION SCHEME" Rule
Rule 25 reads "if member's service is terminated before normal
retirement date because he is retrenched or becomes redundant ....he
shall receive in addition to any benefits due to him under Rule 25
(2) the balance (if any) of his member's share
I find a very striking similarity in the Swaziland Court of Appeal
of the Trustees of Swaziland Railway Gratuity Scheme and Swaziland
Transport and Allied Workers Union -
APPEAL CASE NO.1442/93.
In that case, it was also held that payment of a gratuity was based
on a contract between the employee and the Pension Fund Scheme. On
the other hand payment of the severance allowance was a statutory
obligation imposed by the provisions of Section 34 of the Employment
Act on the part of the employer.
The Appeal Court in rejecting the case for a set-off stated as
Mr. Kades submitted to us that since the appellant (Pension Scheme)
has to pay a gratuity in terms of the Rules of the Scheme and also
has to refund the contribution made to the Fund by the employer this
amounts to a double allowance to the employee. In my view there is
no substance in this submission. It ignores, as was argued by Mr.
Flynn before us on behalf of the respondent (Union), the distinction
between the employees contractual right to the gratuity in terms of
Rule 8(f) and his statutory right to severance allowance in terms of
The learned Judge President in the present case following ratio
the Railway case supra found that the respondent should recover any
severance allowance paid from the Pension Fund and not from its
employee the applicant.
It was on that basis that the court
a quo ordered
a refund to the respondent the sum of E60,195.00 withheld by the
is my considered view that the appeal should be dismissed. And I so
Even though this court can order that costs of this appeal be
for the successful party, I am of the view that in the particular
circumstances of this case there should be no order as to costs.