Skinner and Others v Nampak Products Limited and Others (JS197/16) [2019] ZALCJHB 189 (20 June 2019)

Skinner and Others v Nampak Products Limited and Others (JS197/16) [2019] ZALCJHB 189 (20 June 2019)

The Court found that the policy governing post-retirement medical aid benefits contained a clause granting the employer sole discretion to set a maximum contribution level for future pensioners, thereby limiting the general entitlement to 100% or 50% contributions. The applicants failed to prove that the exercise of...

Source-derived case information.

Citation
[2019] ZALCJHB 189
Parties
Applicant: PHIL SKINNER AND 208 OTHERS; Respondent: NAMPAK PRODUCTS LIMITED; Respondent: MAIN STREET 1301 (PTY) LTD; Respondent: MAIN STREET 1310 (PTY) LTD; Respondent: SACKS PACKAGING (PTY) LTD
Court
Labour Court Johannesburg
Jurisdiction
South Africa
Judgment Date
20 June 2019
Case Number
JS197/16
Procedural Posture
Civil Trial / Substantive Unfairness Aspect of Unfair Labour Practice Dispute; Breach of Contract Claim
Outcome
Applicants' claims for breach of contract and unfair labour practice are dismissed.
Judges
GN Moshoana
Legal Topics
Unfair Labour Practice, Contractual Discretion, Post Retirement Medical Aid, Section 197 Transfer, Remedies for Unfair Labour Practice
Labour Law Civil Procedure Unfair Labour Practice Contractual Discretion Post Retirement Medical Aid Section 197 Transfer Remedies for Unfair Labour Practice

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Summary, issues, holding and outcome

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Parties

PHIL SKINNER AND 208 OTHERS

Applicant

NAMPAK PRODUCTS LIMITED

Respondent

MAIN STREET 1301 (PTY) LTD

Respondent

MAIN STREET 1310 (PTY) LTD

Respondent

SACKS PACKAGING (PTY) LTD

Respondent

Procedural Posture

Civil Trial / Substantive Unfairness Aspect of Unfair Labour Practice Dispute; Breach of Contract Claim

Legal Issues

  1. 1 Whether the first respondent's decision to cap the post-retirement medical aid benefit constitutes a breach of the applicants' conditions of employment in terms of their contracts of employment.
  2. 2 Whether the first respondent's exercise of its discretion to cap the benefit constitutes an unfair labour practice relating to a benefit.
  3. 3 Whether the respondents should implement the post-retirement medical aid as it was applicable before 1 June 2016 as a condition of employment for the applicants.

Ratio Decidendi

The Court found that the policy governing post-retirement medical aid benefits contained a clause granting the employer sole discretion to set a maximum contribution level for future pensioners, thereby limiting the general entitlement to 100% or 50% contributions. The applicants failed to prove that the exercise of this discretion was unreasonable or not in good faith. The respondent's actions were commercially rational, motivated by escalating costs and declining profitability, and followed legal advice and Board approval. The Court held that there was no breach of contract, as the capping was within the terms of the agreement. Furthermore, the applicants did not discharge the onus to...

Court Disposition

Applicants' claims for breach of contract and unfair labour practice are dismissed.

Orders

  • The applicants have failed to show that the respondents breached their contracts of employment.
  • The applicants also failed to show that the respondents substantively committed an unfair labour practice.