For
the Appellant: ADV. DAVE SMITH, instructed by Cloete Corporate
in
association
with E.J. Henwood & M. L Dlamini
For
the Respondent: MR. P. R. DUNSEITH, of Dunseith attorneys, Mbabane
JUDGMENT
MAY
2006
[1]
Respondent was an applicant in the court a quo
where
he instituted a claim set out below:
(a)
The applicant was employed by the Respondent from 1st
September
1999 as manager of the Hub Super spar Supermarket, and the in the
continuous employ of the Respondent until the 29th
November
2004.
(b)
In terms of his employment contract, the applicant was entitled to
an incentive commission based on a percentage of net profits before
tax in each financial year.
A
copy of the contract is annexed marked "A".
©
The incentive package in terms of Annexure "A" is as
follows:
7.5%
of the net profits before taxation for the period 1st
September 1999 to 30th
June 2000 (with a minimum monthly profit bonus of E3.000.00).
7.5%
of net profits before taxation for the period 1st
July 2000 to 30th
June 2001. (With a minimum monthly profit bonus of E14,000.00).
10%
of net profits before taxation for the period 1st
July 2001 to 30th
June
2002 and each financial year thereafter with a guaranteed minimum
monthly profit bonus of E5,000.00.
(d)
In respect f the financial years ended 30th
June 2000, 2001, 2002 and 2003, the respondent misrepresented its
net profits before taxation in its financial records and books of
accounts by falsely
allocating
drawings amounting to E11,218,558.17 to purchases, thereby
understanding its actual net profits for the aforesaid financial
years by the said amount of E11,218,558.17.
(e)
As a consequence of the understatement of its
actual net profits, the Respondent underpaid the
Applicant's incentive
bonus as follows:
Period
Bonus due Bonus
paid Balance
due
1999/2000
199,557.16 188,901.81 10,655.34
2000/2001
277,333.06 274,925.42 2,407.64
2001/2002
490,034.28 226,496.64 264,537.64
2002/2003
749,457.53 248,303.37 501,154.16
E777,754.77
(f)
The Respondent misrepresented its net profits before taxation in
respect of the financial year ended 30th
June 2004 by falsely allocating drawings amounting to E3, 329,452.54
to purchases, thereby understanding its actual net profits for the
said financial year by the said amount of E3,329,452.54.
(g)
The respondent paid a sum of E113,632.81 in respect of the
Applicant's incentive bonus for the financial year ended 30th
June 2004, but has failed and/or refused to disclose the actual net
profits for this year.
(h)
The Respondent has underpaid he Applicant's incentive bonus for the
financial year ended 30th
June 2004 in an amount of at least E332.954.25.
(i)
In or about 22 September 2004 the Applicant formally demanded
payment of the balance of his incentive bonus for the financial
years ended 30th
June 2000 -2004.
(j)
In response, the managing director of the Respondent :-
informed
the Applicant that he will make continued employment intolerable
for the Applicant if he persists in his claim.
compelled
the Applicant to vacate the manager's office and occupy the
customer services kiosk at the front door.
Removed
the Applicant as a signatory for cheques and petty cash.
Suggested
that the Applicant resigns from his employment.
Harassed
the Applicant with unjustified accusations, unreasonable
instructions and unwarranted disciplinary proceedings.
(k)
On 29th
November 2004 the respondent summarily terminated the Applicant's
services on grounds of mismanagement and insubordination.
(I)
The termination of the Applicant's services was unfair and
unreasonable in all the circumstances.
(m)
The termination of the Applicant's services was contrived and
motivated by malice because the Applicant exercised his lawful right
to claim his bonus entitlement. In the premises, the termination of
Applicant's services was automatically unfair.
(n)
At the date of termination of his services, the Applicant's
remuneration was E32,500.00 per month.
(o)
The Applicant claims the following terminal benefits: Severance
allowance
(4x
10 xE1,300.00) E52.000.00
Notice
pay E32.500.00
Additional
notice pay
(4
x4xE1,300.00) E20.800.00
E105.300.00
(p)
The Applicant claims the balance of his bonus for the years ended
30th
June 200 - 2003 in the sum of E777.754.77.
(q)
The Applicant claims circulation of the balance of his bonus for
the year ended 30th
June 2004 and payment of such balance in an amount of at least
E332,954.25.
(r)
The Applicant-claims payment of his pro rata bonus for the 5
months worked in the year ended 30th
June 2005 in the sum of E25.000.00.
(s)
The Applicant claims maximum compensation for unfair dismissal
and/or automatically unfair dismissal,
(t)
The Labour Commissioner grated the Applicant an extension of time
for reporting a dispute regarding the unpaid incentive bonus. A copy
of this certificate is annexed marked "b".
(u)
The Applicant duly reported a dispute in respect of all the issues
raised in this application, but despite conciliation the dispute
could not be resolved. A certificate of unresolved dispute is
annexed hereto marked "C".
WHEREFORE
the Applicant claims:
(a)
Payment of terminal benefits in the sum of E105,300.00
(b)
Payment of balance of bonus for the years ended 30th
June 2000. - 2003 in the sum of E777.754.77
(c)
An order that the respondent pays to the Applicant the sum of
E332.945.25 alternatively such amount as this Honourable Court may
find to be due in respect of the balance of incentive bonus payable
for the financial year ended 30th
June 2004.
(d)
Payment of E25.000.00 in respect of the pro rata bonus for the year
ended 30th
June 2005.
(e)
Payment of maximum compensation for unfair dismissal in the sum of
E780,000.00
(f)
Costs.
(g)
Further and/or alternative relief.
[2]
Attached to the proceedings in the court a quo
was
annexure 'C a certificate issued in terms of Section 85 (1) of the
Industrial Relations Act No. 1 of 2000.
(a)
Annexure 'C sets out concisely the prayers respondent was asking the
court to grant in its favour.
(b)
Paragraph 3 of annexure 'C tabulates the issues in dispute as
advanced by the Respondent.
(c)
There is no indication in annexure 'C that appellant had alleged
that it had over paid respondent's profit bonuses and that that it
was claiming a refund of the overpayment. This, it ought to have
done in order for the Commissioner to have deliberated on it and
then include his findings in the certificate annexure 'C in terms of
Section 80 of the Industrial Relations Act 2000.
(d)
Annexure 'C contains only what respondent reported to the
Commissioner and no averment or allegations by the appellant there
against, one would have expected the appellant to have told the
respondent that infact it owed it the amount it now mentioned in its
counter claim; and the Commissioner would have focused his attention
there at.
[3]
During the hearing in the court a quo it appeared that the
respondent was and infact it filed a conditional counter claim and
relied on the conditional counter claim which is to the effect that
Appellant over paid the respondent's profit bonuses during the
period 1st
September 1999 up until November 2004 and Appellant was claiming a
refund of the alleged overpayment.
3.1.
As the counter claim was strongly opposed by Mr. Dunseith on behalf
of the respondent, it was agreed between Mr. Dunseith an Mr. Smith
that the judge should be asked to rule on the objection to the
conditional counter claim before dealing with the merits of the
case.
3.2.
Mr. Smith on behalf of the Appellant also challenged the
jurisdiction of the court a quo
in
dealing with:
3.2.1.
Specific performance of a commercial contract.
3.2.2.
A claim for damages arising from a breach thereof.
However
in the head of argument, Mr. Smith on behalf of the appellant
indicated that they would abide by the court's ruling in relation to
the lack of jurisdiction and would only persist with the appeal in
relation to Appellant's conditional counter claim, on the basis that
same was not separately reported to the Labour Commissioner and no
certificate of unresolved dispute was issued in regard, thereto..
[4]
The court a quo
handed
down its ruling on 30m
September 2005, a very comprehensive ruling I dare say.
4.1.
It
is against that ruling that the appeal is about. It, the appeal
involves the application of Rule 3 (2) of the Rules of the
Industrial Court. The learned judge of the court a quo
in
its ruling also dealt with the appellants special plea i.e. that the
Industrial court lacked jurisdiction to entertain respondent's
claim. This is so because it was only at the commencement of the
appeal proceedings that, it was brought to the court's attention
that appellant was abiding by that part of the ruling of the court a
quo.
4.2.
This court will thereof be concerned with the appeal relating to
appellant's conditional counter claim on the basis that the amount
claimed by appellant in its counter claim was never separately
reported to the Labour Commissioner and no certificate of unresolved
dispute was issued in regard thereto.
4.3.
Mr. Smith in his heads first dealt with and referred to the
provisions of Rule 3 (2) and stated that in so far as that rule is
interpreted to mean that a report of a dispute to the Labour
Commissioner is a prerequisite to the jurisdiction of the Industrial
Court then that rule will be ultra
vires the
Industrial Relations Act.
4.4.
In so far as the Appellant's counterclaim constituting a separate
dispute which needed to be referred to the Labour Commissioner
separately; Mr. Smith argued very forceful that the Industrial Court
should not approach and follow a very strict and formalistic
approach in dealing with industrial disputes. It was Mr. Smith's
argument that counsel for the Respondent was having a problem with
the counter claim and not that the counter claim was infact a
separate dispute.
4.5.
Once the dispute was lodged with the Commissioner, all the facts of
it was before the Commissioner and it was not necessary for the
appellant to lodge its own counter claim arising from the claim by
the Respondent.
4.6 Reference
was made by counsel for the Appellant to a plethora of authorities,
these included sections of the Industrial Relations Act 1 of 2000
and also RSA decided cases and our Swaziland decided cases.
4.6.1.
In the Industrial relations Act 1 of 2000 a dispute is defined
inter
alia as:
(a) "dispute includes a grievance, a grievance over a practice,
trade dispute and means any dispute over the:
(i) entitlement
of any persons to any benefit under an existing
Collective
agreement, Joint Negotiation Council agreements
or Works council
agreements".
(ii) In
Williams
vs Benoni Town Council 1949 (1) SA 501 9W)
Roper J
in a dictum said the following "a
dispute exists when
one party maintains one point of view and the
other a
contrary or different one. When that problem has arisen,
the
fact that one of the disputants, while disagreeing with
his
opponent, intimates that he is prepared to listen to
further
argument does not make it any less a dispute". The
above
decided cases and many others Mr. Smith referred this
court
to correctly reflect what constitutes a dispute. Indeed
it
seems to me that the parties, i.e. the Appellant and
the
respondent are ad
idem that
the alleged overpayment of
E267,497.06 by the Appellant to the
respondent is a dispute.
If is a dispute, the question to be
answered, was it reported.
[5]
Mr. Smith argued vociferously and supported his arguments by
numerous legal principles and decided cases mostly of RSA origin. It
was his submission that the counter claim advanced and pleaded by
Appellant should not have been treated separately by the court a
quo.
He
argued that the contents of the counter claim are intrinsically
linked to the dispute reported by the respondent and in respect of
which a certificate in terms of Part V111 of the Industrial
relations Act was issued.
5.1
It was Mr. Smith's argument that a dispute such as he was dealing
with s composed of various facets and it was not necessary to
separate these facets and treat them as different disputes so that
each facet needs to be reported separately to the Commissioner.
[6]
In regard to whether or not any matter serving before the Industrial
Court should first be referred to the Commissioner as a prerequisite
before hearing by the Industrial Court, Mr. Smith argued that it was
not a prerequisite but a pre jurisdictional requisite.
[7]
Mr. Dunseith, on the other hand has argued and supported his
argument by local decided cases which have been handed down from
time to time.
In
my judgement these cases state very clearly the legal position as
obtains in the industrial work place. The industrial Court had,
from its inception been very careful not to cloud its stance with
that obtaining in the High Court and the requirement or common law.
This is understandable if one takes into account that the
establishment of the Industrial Court was solely for the purpose of
regulating relationship at the work place. In a sense the court is
a special court, created for a specific purposes.
The
provisions of Section 77 (1) of the Industrial Relations Act 2000
dealing with the contents of the report and notice of dispute are
as follows: 77(1) a report of a dispute shall be made in writing,
signed by the person making the report and shall specify:-
The
parties to the dispute.
The
address of each of the parties.
"particulars
of all issues in dispute stating as precisely as possible their
nature and scope.
what
steps, if any, have been taken for settlement of the dispute either
in accordance with the provisions of a Joint Negotiation Council
Constitution a Collective Agreement registered under part
V11,
a Works Council Constitution or otherwise", (emphasis my own).
[8]
The argument advanced by Mr. Dunseith on behalf of the Respondent is
that the subject of the counter claim was never an issue deliberated
by the Commissioner because it was never reported to the
Commissioner as a dispute.
8.1.
The industrial court can therefore not take cognizance of the
counter claim arising before if for the first time.
8.2.
Mr. Smith on the other hand argues that the Industrial Court can
deal with the counter claim notwithstanding that it was never
reported to the Commissioner by the Appellant. Mr. Smith based his
argument on the basis that in terms of the common law once a
litigant submits itself to the jurisdiction of the court it cannot
stop the court from dealing with disputes arising from the matter
before the court whether reported or not.
8.3.
Secondly, argues Mr. Smith that the question of over payment is
between the same parties and is closely interwoven such that it is
not necessary to report the overpayment separately.
[9]
In Industrial
Court case No. 33/98 Catherine Udoidunq vs IDM
Parker J. dealt with the question of a claim in reconvention head
on. The learned judge referred to the case of Ubombo
Ranches vs Pan Attendants, Industrial Court Case No. 6/90
where Claseen A.J said following:
"It
is the
very dispute with which the Labour Commissioner was concerned with
because it was incapable of settlement it has to be determined by
the Industrial Court, It (the court) cannot resolve disputes which
are different from the one which the Labour Commissioner dealt
with."
(Emphasis
my own).
9.1 The
learned Judge Classen AJ went on and stated "one
cardinal
statement
which is apposite in the present matter is this which
comes
immediately after the above quoted passage in the Ubombo
Ranches -
The Industrial Court is not vested with inherent
jurisdiction like the High
Court.
Indeed,
the power of the court to determine a matter is carefully considered
by Part V111 of the Industrial Curt to determine the dispute is that
the Labour Commissioner should have attempted and failed to secure a
settlement of that very dispute". Ubombo
Ranches at p 10 (emphasis added).
9.2
If one reads Udoidung's case with Ubombo Ranches one gets the
impression that a dispute contained in a claim in reconvention made
by a Respondent in answer to the Applicant's claim is a dispute. If
not reported to the Commissioner it would amount to a clear
disregard of a specific provisions of Part V111 of the Industrial
Relations Act.
9.3.
The Industrial Court being a creature of statutes cannot ignore the
provisions of that statute which created it.
[10]
The learned judge of the court a quo
in
his judgement at p62 referred to the contents of the certificate of
unresolved dispute. He then made a factual finding to the effect
that there was no evidence that the issue of overpaid profit bonuses
was reported to the Labour Commissioner and dealt with by a CMAC
Commissioner and a certificate of unresolved dispute issued.
10.1.
The learned judge then proceeded to reproduce the contents of the
certificate of unresolved dispute.
10.2.
Referring to the Catherine Udoidunq
and Swaziland Fruit Canners (Ptv) Ltd vs Phillip Vilakati and
Bernard Dlamini Industrial Court Case No. 2/1989
the learned judge in the court a quo
upheld
respondent's objection to Appellant's counter claim and dismissed
the counter claim.
10.3.
The court took into account all factors and made the final
ruling:
"1.
Respondent's special plea is dismissed.
2.
The Applicant's objection is upheld.
3.
No order for costs".
10.4
(a) After a very careful consideration taking into account all the
legal principles and the rationaj^in the quoted decided cases. I
find the following:
(b)
The fact that the issue of overpaid profit bonuses was not reported
to the Labour Commissioner and dealt with by CMAC Commissioner and
no certificate of unresolved dispute was issued, I am of the view
that the court a quo
correctly
held on the authorities that it could not take cognizance of the
counter claim.
(c)
I am of the view that the appeal should be dismissed with costs. The
costs relate to this appeal before this court.
J.
P. ANNANDALE JP
J.M.
MATSEBULA JA
S.B.
MAPHALALA JA
