Grup v Renaissance BJM Securities (Pty) Ltd (J1720/12) [2014] ZALCJHB 72; (2014) 35 ILJ 3400 (LC) (25 February 2014)

Grup v Renaissance BJM Securities (Pty) Ltd (J1720/12) [2014] ZALCJHB 72; (2014) 35 ILJ 3400 (LC) (25 February 2014)

The court found that clause 4.5 of the employment contract created an unconditional and enforceable obligation for the respondent to pay the applicant deferred equity compensation in three instalments, subject only to the applicant providing proof of forfeiture and value of the shares from his previous employer. The obligation vested upon signature of the contract and acceptance of the share value by the respondent. There was no contractual condition requiring continued employment for payment of subsequent instalments. The respondent failed to prove the existence of an industry practice that would override the clear terms of the contract. Accordingly, the right to deferred equity...

Citation
[2014] ZALCJHB 72
Parties
Applicant: Steven Grup; Respondent: Renaissance BJM Securities (Proprietary) Limited
Court
Labour Court Johannesburg
Jurisdiction
South Africa
Judgment Date
25 February 2014
Case Number
J1720/12
Procedural Posture
Civil Application / Judgment on Opposed Application Under Section 77(3) of the Basic Conditions of Employment Act
Outcome
Application granted in favour of the applicant.
Judges
Molahlehi
Legal Topics
Deferred Equity Compensation, Contractual Interpretation, Termination of Employment, Industry Practice, Repudiation, Remedies for Breach
Labour Law Commercial and Corporate Deferred Equity Compensation Contractual Interpretation Termination of Employment Industry Practice Repudiation Remedies for Breach

Case Brief

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Parties

Steven Grup

Applicant

Renaissance BJM Securities (Proprietary) Limited

Respondent

Procedural Posture

Civil Application / Judgment on Opposed Application Under Section 77(3) of the Basic Conditions of Employment Act

Legal Issues

  1. 1 Whether the applicant is entitled to payment of deferred equity compensation after cancellation of the employment contract.
  2. 2 Whether the obligation to pay deferred equity compensation survives termination of the contract by resignation.
  3. 3 Whether industry practice precludes payment of deferred equity compensation after contract termination.

Ratio Decidendi

The court found that clause 4.5 of the employment contract created an unconditional and enforceable obligation for the respondent to pay the applicant deferred equity compensation in three instalments, subject only to the applicant providing proof of forfeiture and value of the shares from his previous employer. The obligation vested upon signature of the contract and acceptance of the share value by the respondent. There was no contractual condition requiring continued employment for payment of subsequent instalments. The respondent failed to prove the existence of an industry practice that would override the clear terms of the contract. Accordingly, the right to deferred equity...

Court Disposition

Application granted in favour of the applicant.

Orders

  • The applicant is entitled to an unconditional payment of USD 250,000.00 as the second instalment of deferred equity compensation.
  • The respondent is ordered to pay the applicant USD 250,000.00, with interest at 15.5% per annum a tempore morae from 30 June 2012.