Richardson v Tecmed Africa (Pty) Ltd (JA 86/2014) [2014] ZALAC 74 (18 December 2014)

Richardson v Tecmed Africa (Pty) Ltd (JA 86/2014) [2014] ZALAC 74 (18 December 2014)

The Labour Appeal Court held that the employment contract unambiguously entitled the appellant to a pro rata portion of the annual profit share, calculated as 3% of EBIT for the financial year, proportionate to the period worked. The correct method was to use the annual EBIT from the audited financial statements and apportion it according to the period of employment. The respondent's alternative calculation was impractical and unsupported by evidence. The profit share claim was a liquidated debt, ascertainable from the audited statements, and not a claim for damages. The appellant was entitled to mora interest from the date the debt became due, as provided by the Prescribed Rate of...

Citation
[2014] ZALAC 74
Parties
Appellant: Ross Richardson; Respondent: Tecmed Africa (Pty) Ltd
Court
Labour Appeal Court
Jurisdiction
South Africa
Judgment Date
18 December 2014
Case Number
JA 86/2014
Procedural Posture
Civil Appeal / Appeal and Cross Appeal From Labour Court Judgment
Outcome
Appeal upheld; cross-appeal dismissed; Labour Court's order varied to include interest on the profit share and salary amounts; costs awarded to appellant.
Judges
Murphy AJA, Waglay JP, Dlodlo AJA
Legal Topics
Profit Share Scheme, Specific Performance, Contractual Entitlement, Mora Interest, Liquidated Debt
Labour Law Commercial and Corporate Profit Share Scheme Specific Performance Contractual Entitlement Mora Interest Liquidated Debt

Case Brief

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Parties

Ross Richardson

Appellant

Tecmed Africa (Pty) Ltd

Respondent

Procedural Posture

Civil Appeal / Appeal and Cross Appeal From Labour Court Judgment

Legal Issues

  1. 1 Whether the appellant is entitled to payment of a pro rata portion of the profit share under his employment contract.
  2. 2 Whether the appellant is entitled to interest on the profit share amount from the date it became due.
  3. 3 Whether the Labour Court erred in its interpretation of the profit share clause and the calculation method.

Ratio Decidendi

The Labour Appeal Court held that the employment contract unambiguously entitled the appellant to a pro rata portion of the annual profit share, calculated as 3% of EBIT for the financial year, proportionate to the period worked. The correct method was to use the annual EBIT from the audited financial statements and apportion it according to the period of employment. The respondent's alternative calculation was impractical and unsupported by evidence. The profit share claim was a liquidated debt, ascertainable from the audited statements, and not a claim for damages. The appellant was entitled to mora interest from the date the debt became due, as provided by the Prescribed Rate of...

Court Disposition

Appeal upheld; cross-appeal dismissed; Labour Court's order varied to include interest on the profit share and salary amounts; costs awarded to appellant.

Orders

  • The respondent is ordered to pay the appellant the amount of R461,890 together with interest at the prescribed rate of 15.5% per annum from 26 April 2010 to the date of final payment.
  • The respondent is ordered to pay the appellant the amount of R13,290.79 together with interest at the rate of 15.5% calculated from 30 March 2010 to date of final payment.