Nthejane v National Motors Company (Pty) Ltd (CIV/APN 72 of 92) [1994] LSCA 78 (11 April 1994)

CIV/APN/72/92 IN THE HIGH COURT OF LESOTHO In the matter between: MATSOSO NTHEJANE APPLICANT AND NATIONAL MOTORS COMPANY (PTY) LTD RESPONDENT Delivered on the 11th April, 1994 by the Honourable Mr. Justice W. C. M. Maqutu, Acting Judge. In this application Applicant brought an application for a declaration that his dismissal was null and void. Reinstatement was implicit in the application. Such cases are often highly disputed and the appropriate remedy is often an award of damages. This is not a matter that can normalies be dealt with without hearing full evidence. The first hurdle that had to be cleared was whether or not the court as a general principle ought to order reinstatement in matters of Master and Servant. Damages are the normal remedy for wrongful dismissal and not reinstatement in employment. In Schierhout v Minister of Justice 1926 AD 99 at 107 Innes CJ (dealing with specific performance which reinstatement includes) said: *But the practice has long since been abandoned, and for two reasons: inadvisability of compelling one person to employ another whom he does not trust in a position which imports a close relationship and the absence of mutuality, for no Court could by its order compel a servant to perform his work faithfully and diligently." The matter is not always that simple because employment is a matter of contract. It seems an employee has a right of election. In Venter v Livni 1950 (1) SA 524 at page 528 where Ramsbottom J said: "A master cannot by a unilateral act terminate a contract of employment unless he has good grounds for doing so If without good cause, be seeks to terminate a contract of service the servant may accept that termination and bring the contract to an end or he may refuse to accept termination and keep the contract alive until the end of its term ..." Van Winsen J in Myers v Abramson 1952 (3) SA 121 at page 123 G noted that courts are unwilling to enforce specific performance in contracts of employment but nevertheless: "it does not necessarily follow that they are taken out of the operation of the general rule and must be treated as contracts which can be completely terminated by unilateral action." In contracts where personal service is rendered to order specific performance is not often a realistic way of doing things. In this case the way I see it the words of Broome J in Rogers v Durban Corporation 1950(1) Sa 65 at page 69 are appropriate where he said: "so far as an ordinary service contract between private persons, ... a servant wrongly dismissed has no other remedy other than damages." As will be seen later this is often the beat thing to do. It is however mistating the law to say reinstatement can never be ordered because in many cases it is not. To do so would be to borrow Corbetts JA's words in South Cape Corp. v Engineering Management Services 1977 (3) SA 534 at 547G to turn of the "what started as a rational and comon sense exercise Court's discretion, in the course of time hardened ... in some later decisions, conveys a suggestion of inflexibility which, in my view, is ... contrary to the concept of wide discretion which the court enjoys ..." In National Union Textile Workers & Orthers v Stag Packing (Pty) Ltd and Another 1982 (4) SA 151 it was held that an employee could hold an employer to the contract which had been unlawfully terminated if the employee so elected. This was the decision of the Transvaal Pronvincial Division which reversed the decision of the Witwatersrand Local Division in National Union of Textile Workers And Another v Stag Packing (Pty) Ltd and Another 1981 (4) SA 932. Principles governing specific performance revolved round the court's discretion which has to exercise judicially not arbitrarily and capriciously. Each case has to be judged in the light of its own circumstances. See Haynes v Kingwilliamstown Municipality 1951 (2) SA 371 at 378 to 379. Van Dijkorst J in National Textile Workers and Others v Stag Packing (Pty) Ltd and Another 1982 (4) at 158 said "The Appellate Division did not in Haynes case, when laying down the approach to the granting of orders of specific performance, exclude the case of an ordinary servant. There was no reason to do so. In my view the approach to the application of the discretion in respect of specific performance laid down in Haynes case is equally applicable to the wrongful dismissal of an ordinary servant." It is a wrong approach to say in every case involving an ordinary servant reinstatement can never be ordered. The Court is obliged to examine the facts of each case in order to decide whether or not the balance of convenience favours reinstament. In Seloadi and Others v Sun International (Bophuthatswana) Ltd. 1993 (2) SA 174 at 189 Lawrence AJ in considering whether employees should be reinstated said: "... applicants would be most unhappy with their employment, with strong grievances towards This would result in respondent. enormous mischief being done to respondent." enmity and /. .. The Court in that case after weighing this reason together with others held that the ends of justice would be better served in not ordering reinstatement. It is clear that is is wrong for courts to deny themselves (as they have often done in the past) an opportunity to assess the situation in each case in the belief that they have no discretion to order reinstatement in cases of wrongful dismissal from employment. Each case must be dealt with according to its merits. In this case the relationship of Master and Servant was never terminated by the Respondent, See the Minutes of the Board dated 18th November, 1991 at page 2 where the Board did not take a decision to dismiss Applicant. The Board bad intended to hear Applicant on allegations levelled against him by Teke and the General Manager. Such a meeting has not yet taken place. A company takes decisions through its Board of Directors. That being the case the Applicant's fate cannot be said to have been finally determined. I considered whether or not application proceedings were appropriate in this case. If there was a dispute of fact that was forseeable then the Court might have been obliged to consider dismissing this application in terms of Rule 18 (14) of the High Court Rules 1980. Price J in Garment Workers Union v de Vries 1949 (1) SA 1110 at 1133 ventilated the grievance of courts against the tendency to bring disputed applications in the hope that courts will turn them into trials or hear viva voce evidence. The following words of Price J are apposite: "Applicants thereby obtain a great advantage over other litigants who have proceeded by way of action and who may have to wait for many months to get their cases before the court. Such applications - cum - trials interpose themselves, occupying the time of judges and still further delaying legitimate trials." Applicant was fortunate to find that there was no real dispute of fact much as the Respondent's General Manager tried to manufacture one in his affidavit although Respondent's annexure "B" clearly corroborates Applicant. The Board has simply not yet heard the matter and taken a decision. The Minutes show that the General Manager had almost got a decision he desired but the Board held back. Applicant brought an application in which he asked /. . . for an order in the following terms: "(1) Declaring the termination of the Applicant's employment by the Respondent null and void (b) Directing the Respondent to pay costs of this application (c) Granting Applicant such further and \ or alternative relief as this Honourable Court may deem fit." Answering Affidavits were filed or record on the 17th June, 1992. It is common cause that Applicant was employed by Respondent in terms of a written contract as a Technical and Service Manager. Furthermore Applicant was second in command and therefore acted as manager when the General Manager was absent. It is common cause that on the 6th November, 1991 Applicant wrote to the General Manager complaining that the company was losing thousands of rands because of continuous shortages of petrol money. There is also in / . . . the letter a report of theft tyres, misuse of company property and a 5-year failure of management staff to pay outstanding petrol and workshop bills. Applicant requested that these issues be addressed at top management level. On the 7th November 1991 (that is the day after Applicant's letter to the General Manger) the General Manager wrote Applicant a letter suspending Applicant from his duties pending an investigation of certain improprieties. Applicant immediately wrote a letter dated 8th November, 1991 expressing surprise at his suspension but nevertheless urging Top Management to meet to address the issues raised in Applicant's letter of 6th November, 1991. Applicant continued to come to work as before. This caused the Managing Director to write a letter dated 12th November, 1991 in which he stated that it was now the decision of the Board to suspend Applicant. Applicant immediately wrote back to the General manager asking for the particulars or exact nature of the "impropriety" that is being suspected against him. There is no dispute up to this point, except that Applicant claims the General Manager's private motor vehicle was involved in the theft of petrol. Respondent denies this, stating that because this fact was not /. . . mentioned in the letter of the 6th November, 1991 it is an after thought. The General Manager does not deny the rest of Applicant's allegation up to the writing of Applicant's letter dated 13th November, 1991. The General Manger states he suspended Applicant because he had information from the Police that during interrogation Francis Teke had confessed that he stole tyres with Applicant. The General Manager claims this information was reliable. According to Applicant his letter of 13th December, 1993 was never answered. From this point applicant's affidavit and the General Manager's affidavit do not agree. Applicant says he was invited to a meeting at the Lesotho Bank on the 14th November, 1991. He found the General Manager, the night- watchman and the Board in discussion. He was told Co go home. He was invited to the Board meeting on the 18th November, 1991 where queries which Applicant does not specify were raised. He was told to come on another date but when he came there was no quorum, therefore no business was transacted. He was surprised to get a letter dated 13th December, 1991 from the General Manager summarily dismissing him from employment because:- "The Board finds you unworthy of the position of Technical manager. You are summarily dismissed from the employ of National Motors Company (Pty) Limited." Applicant says he was not given a hearing as he was never given a charge. He says questions that were put to him and his answers to them do not amount to a quasi judicial hearing he was entitled to. The General Manager of Respondent says Applicant was given a fair hearing and cites the statement annexed by applicant to his papers marked Annexure "MT9" as evidence of Applicant preparation for the hearing of 18th November, 1991. The General Manager does not say anything about the fact that Applicant was never given a written reply or statement as to the nature of the impropriety alleged against him. Applicant's presentation of the National Motors to the Board marked Annexure "MT9" and the letter of dismissal Annexure "MT10" were filed with Applicant's application. A short comparison of the two should reveal if indeed Applicant knew of the charge and was prepared for the hearing of the disciplinary case. Applicant claims he went before the Board to discuss hie letter of 6th November, 1991 to the General Manager in which he had asked for a meeting of to Management. Applicant in Annexure "MT9" makes the following points: (1) Two Audit reports had shown financial problems of National Motors. In the letter of 6/11/91 this appears. (2) Losses of petrol and unpaid bills owed by staff members also appear in the letter of 6/11/91. (3) Applicant claims in September 1991 he approached the General Manager ;about losses. This does not appear in the letter of 6/11/91. The General Manager does not challenge this. (4) That thieves of petrol money were caught through Applicant. In the letter of 6/11/91 this does appear. (5) That thieves of tyres were caught also appears in Applicant's letter of 6/11/91. (6) The fact that police informed Applicant of the General Manager's frequent visits tot he police asking for certain staff members to be arrested does not appear in the letter of 6/11/91. Also /... not mentioned in that letter is the fact that Applicant was interrogated by the police. (7) The fact that on 11/11/91 Applicant found burnt out remnants of financial data from burnt out files is a new fact, so is the fact that Applicant picked them up and now has these in bis possession. In the letter of dismissal are the following:- (1) M300.00 which Applicant receive from a company supplier and could not explain satisfactorily must have come as a surprise to Applicant. (2) The confession of the night-watchman that implicated Applicant in the theft of tyres before the police might or might not have surprised Applicant. This is clear from the fact that in his memorandum of 12th November, 1991 be shows that the police had interrogated him. Nevertheless it does not mean he went to the meeting of 18th November, 1991 being aware he was a suspect in the eyes of the company. (3) Favouritism towards the confessing thief by asking for the thief's accelerated promotion might have surprised him bit it ties up with the confession. (4) Accusations of incompetence, use of customers' vehicles without permission, several law suits Applicant had caused the company losses and release of vehicles to customers resulting in a number of unauthorised debtors must have surprised Applicant. (5) The refusal to be suspended by the Manager without any clear reason is conceded even in the memorandum of 12/11/91. The question that I immediately asked myself was why was there this mud-slinging match between applicant and the General manger? What were these two up to? could it not be that both the General Manager and Applicant were far from being innocent bystanders in the activities that led to severe losses to the company? Could the letter of 6th November, 1991 written by Applicant, not be an attempt to get in first so that the General Manager could be the only one on the defensive? If the General Manager was not involved in these illegal activities, why did he not take action at all. If he did not have anything to hide why did he instantly suspend Applicant from duty when applicant called for a meeting of top management to look into the company's massive losses? Could the General Manager seriously consider an allegation (by a thief caught red-handed) levelled by the Applicant who is virtually Deputy General Manager to be enough grounds for Applicant's suspension? What was at the root of the General Manager's action in suspending his Deputy without the Board's authorisation? It is clear that Applicant though responsible to the General Manager, bad in terms of his Job Description Annexure "MT3" direct access to the Director of PPO LNDC. This is not surprising because Paragraph 9 of his Job Description makes Applicant duty bound: "To act in the position of General Manager in the absence of the substantive holder of that position," The problem we have here is that the General Manager does not deny that as early as September 1991 applicant requested from and got permission from the General Manager to mount an investigation. Not long thereafter arrests were made. It was only after applicant had asked Top Management to take action that the General Manager began to act precipitously and illogically. He acted as if he had something to hide. Moat of the charges that were levelled against Applicant were not those traversed in annexure "MT9" on which the General Manager relies substantiate his claim for a fair trial. The first reason for Applicant's dismissal is the receipt of M300.00 which he received from a supplier which the General Manager says he could not explain. This is a far cry from the confession of a thieving watchman that the General Manager advances as the reason for suspension. Although applicant does not seem to have expected to be charged with theft, annexure "MT9" gives the impression that he knew that the General Manager was busy working on the police to arrest other members of staff who seem to have included Applicant. What comes as a surprise in the dismissal letter annexure "MT 10" are charges of lack of diligence against Applicant. Indeed these also include implications of criminality. What does not put Applicant in a favourable light is the allegation that the thief implicating Applicant in a confession before the Police is the one that stole tyres after being highly recommended by Applicant for promotion over seniors. This does not appear in annexure "MT9" which according to the General Manager shows the charges Applicant expected to meet. What is clear is that the General Manager refused to give Applicant the written details that Applicant sought in order to know the "impropriety" he was suspended for. Mr. Matooane counsel for Respondent said the employer need not hold a formal hearing in order for the audi alteram principle to apply. Indeed according to him only to public companies and parastatals such as the LNDC and the Lesotho Bank are obliged to have a proper hearing. The principle of legitimate expectations according to Mr. Matooane does not apply to ordinary employees such as companies and individuals. In other words according to Mr. Matooane the ordinary employer can interview witnesses away from the Applicant, never bringing them together and decide there and than to dismiss Applicant. Mr. Matooane cited the case of Koatsa Koatsa v National University of Lesotho C of A (CIV) No.15 of at page 12. He also refers to Embling v Headmaster St. Andrews College 1991 4 (SA) 458. Emblings's case is the case where dismissal was in terms of a contract. Furthermore applicant in Emblings's case had on several occasions been criticised for his teaching and for his attitude to colleagues. In the Embling case Cooper J at page 469 said:- " In the light of the aforegoing and the applicant's apparent intransigence I am not persuaded that the was unfairly treated and the manner in which he was dismissed offends my feelings of fairness." This case differs in this regard from that of Embling. In this case I have already shown that Applicant received a rather cavalier treatment. He was accused of misconduct based on a repudiated statement of a thief in a very unfair manner and dismissed from employment on unsubstantiated grounds in the most ignonimous way and I quote: "The Board of Directors directs me to inform you that you have betrayed the trust placed on you as a senior employee of the company .... The Board finds you unworthy of the senior position ... You are summarily dismissed from the employ of National Motor Company Pty Ltd. ... Please surrender forthwith all company property in your possession." The question is whether National Motors, the Respondent, which was once a subsidiary of the Lesotho National Development Corporation and is now owned by Lesotho Bank which are both parastatals, can treat people as Applicant was treated. In argument the parastatal nature of these bodies was conceded. The letter of dismissal annexure "MT10" shows that the Proprietor of National Motors is Lesotho Bank. It is probably no more treated as a company with Limited Liability because the proprietorship of Lesotho Bank is written with bold letters at the bottom while the (Pty) Ltd at the top of the page is written with letters that can only be seen by some bad-sighted people through the use of a lens. If an employee is dismissed summarily because of a misconduct Section 15 (3) of the Employment Act 1967 lists the circumstances in which such dismissal might take and says there are no other circumstances in which employees can be so dismissed. Surely an employer is not entitled to act on unsubstantiated repudiated confession of arrested people who implicate whoever they can in the hope of escaping punishment. All contracts of service in terms of Section 11 of the Employment Act. 1967 cannot offer conditions that are less favourable than those provided for by the Employment Act 1967. In terms of Clause 5 of Contract of Employment Respondent could terminate applicant's contract of employment without giving a reason. This unfortunately does not apply because Applicant was accused of misconduct. This has to be proved or substantiated, and it has not been. In Federal Storage Co. v Angehm & Ano. 1910 TPD 134 Lord Atkin at the Privy Council where a company had summarily dismissed employees from their positions held: "The burden of proving a justification for that dismissal rests, no doubt, upon the company." In that case the employees did not deny that they "had been guilty of falsehood, hypocrisy thereby showing they were unfit persons to discharge the duties of the positions they held". What National Motors should at least have put before this court was a case which called for a clear, full and conclusive answer from Applicant. This they did not do. Applicant has disproved that Francis Teke never implicated Applicant in the theft although this is challenged by R. Mapetla, the Respondent's Chairman. They made affidavits to that effect. Respondent's Minutes of the Board dated 12/11/91 annexure "A" reveal that the letter dated 6/11/91 calling for a meeting of Top Management was written at the Chairman's suggestion when Applicant complained about his working relations with the General Manager. Applicant had also made "a tirade of other allegations" against the General Manager. When this letter was received the General Manager suspended Applicant on 7/11/91. Teke who was brought by General Manager alleged he had seen Applicant steal tyres. Applicant was not heard. The Minutes of the 18th November, 1991 show clearly that the General Manager is not telling the truth when he alleges that Applicant was given a hearing on the 18th November, 1991. Only the General Manager was heard. The Board decided to confront Applicant with these facts and accusations so that his defence could be heard. A meeting was scheduled for the 22nd November, 1991. These Minutes which contain two pages are Respondent's annexure "B". The strange thing is that conclusions adverse to Applicant which appear in his letter of dismissal annexure "MT10" appear in the Minutes. Page 2 of the Minutes of 18th November, 1991 which are Respondent's annexure "B" shows clearly that E. M. Mapetla, the Chairman is mistaken when he alleges that Applicant was ever heard. It is clear that the meeting of 22nd November, 1991 never took place as Applicant has correctly shown. That being the case Applicant was never given an opportunity to deal with the allegations made by the General Manager on the basis of which his employment was terminated on the 13th December, 1991 as more fully in annexure "MT10". It is therefore clear that both the General Manager and the Chairman of the Board E. M. Mapetla are mistaken when they say Applicant was heard, the Board had wanted to hear him but that hearing scheduled for 22nd November, 1991 never took place. Applicant has not been heard by the Board as the Board had wished as more fully appears in annexure "B" of the Board Minutes of 18th November, 1991. Mr. Matooane for Respondent has read more into the remarks of Mahomed P. in Koatsa Koatsa v National University C of A (CIV) No.15 of 1986. What he meant was that courts do not in their discretion order specific performance as a matter of course in such case. If people can no more work together in a small business or firm it is most unwise to order reinstatement. Courts would rather order damages. In this case I will only content myself with granting the order as prayed subject to some clarification. Respondent is free to proceed with the hearing of Applicant's aide of the story as it intended on 18th November, 1991. Nevertheless the effect of the order will be that Applicant has not yet been dismissed from his employment because the Board has not (nor has it ever) dismissed him from Respondent's employment. I was worried by the delay of this court in finalising this application. Two full years have passed, but then if Respondent had checked the Minutes of 18th November, 1991 he would have spotted his error and put things right. In the light of the aforegoing the court makes the following Declaratory Order:- (a) Applicant's employment was never terminated by the Board of Directors of the Respondent Company consequently the letter terminating applicant's employment with the Respondent company dated 13th December, 1991 was written by mistake. (b) The termination of applicant's employment as contained in the General Manager's letter dated 13th December, 1991 is null and void. (c) Respondent is directed to pay the costs of this application. Delivered at Maseru This 11th Day of April, 1994. For the Applicant For the Respondent : Mr. T. Matooane : Mr. M. Mafantiri W. C. M. MAQUTU ACTING JUDGE