CHIGUMBA
J:
One
morning in February 2009, Zimbabweans woke up and found themselves
subjected to a 'multicurrency system'. The Zimbabwean dollar was
no longer accepted as legal tender. A basket of other currencies such
as the United States dollar and the South African Rand, were
introduced into our society.
The
truth of the matter is that these currencies had been circulating on
what had been dubbed a 'parallel market' for quite some time.
There are those who welcomed the formal adoption of those currencies
as legal tender in this country, which had been ravaged by the knock
on effects of super hyper inflation. Others bemoaned the symbolic
annihilation of our currency, which they associated with a
corresponding perception of the annihilation of our national
sovereignty. The majority of the people were perturbed by the effect
of the introduction of the multi-currency system on their pensions,
insurance policies and life savings.
This
case is about a group of workers who between them, gave more than
twenty years of loyal service to their employer. In terms of the
pension policy that was in operation at the outset, both employer and
employees diligently contributed monthly to a pension fund.
The
issue that falls for determination, put simply, is whether all sixty
seven employees are entitled to challenge the determination by the
employer as to what constitutes their basic annual salary for
purposes of calculating their pension benefits. Depending on the
answer to this question, the court will have to determine further,
whether these employees are entitled to demand further payments by
the employer towards their eventual pensions.
At
the heart of these issues lies the contentious issue of the effect of
the introduction of the 'multicurrency' system on the calculation
of pension contributions which had previously been based on our local
currency, and were now set to be calculated on the basis of the
United States dollars, the currency that the employees were now
remunerated in.
Some
would say that the question ought to be holistically and definitively
addressed by Parliament, as a matter of policy. Others feel that it
is simply a question of implementing the provisions set out in the
relevant Pension Fund.
We
have been asked to issue an interdict and a declaratur
as to the parties' rights and obligations in terms of the rules of
their pension fund.
The
application before the court was filed of record on 16 December 2013.
The founding affidavit, was deposed to by G. Chiparaushe, in a
personal capacity and as the duly authorized representative of sixty
six other applicants, who attached supporting affidavits authorizing
him to represent them.
The
first respondent is a sugar cane growing and processing company duly
registered in accordance with the laws of this country, and the
employer of the sixty seven applicants.
To
avoid confusion, the first respondent shall be referred to as
TRIANGLE. The second respondent is the Triangle Senior Staff Pension
Fund, (to be referred to as TSSPF), a properly constituted pension
fund, duly registered with the Commissioner of Insurance, Pension and
Provident Funds Act (IPEC), in terms of section 6 of the
Pension
and Provident Funds Act [Chapter
24:09].
The
TSSPF is governed by its rules (the Fund Rules).
The
first applicant averred that the application before the court was
brought in accordance with Rule 9 of the Fund Rules which provides
that a member or any person whose claim is derived from a member
shall have the right to refer a dispute to a court of law in this
country for determination.
The
applicants had previously approached an arbitrator Honourable J.T
Mawire in terms of the Labour Act [Chapter
28:01]
to determine the dispute, and on or about the 5th
of September 2013, the arbitrator found that he did not have the
jurisdiction to determine the dispute between the parties.
It
was submitted on behalf of the applicants that they had a clear right
to the interdict and declaratur
that they sought.
The
1st
applicant averred that he became an employee of TRIANGLE on the 1st
of April 1980, and a member of the TSSPF on the 1st
of July 1996. As from the date of his membership to the TSSPF,
TRIANGLE commenced deducting his share of pension contributions from
his basic salary. The applicant remains a member of the TSSPF, to
date.
First
applicant averred further, that in terms of clause 11 of his contract
of employment, membership to the TSSPF became compulsory on the date
of his appointment, and his contribution of 7% of his basic monthly
salary was automatically deducted and forwarded to the TSSPF, by
TRIANGLE, every month. According to the Terms and Conditions of the
employment of C band staff (loss control manager), as at 1 July 1996
the basic salary was pegged at ZW$90,948-00. The pension contribution
of 13% came to ZW$11,823-00. Under the heading “remuneration” was
a note to the effect that:
“The
basic salary is pensionable and the company currently contributes 13%
to the Triangle
Senior
Staff Pension Fund.”
After
the basic salary was a list of benefits which were to be paid on
behalf of the employee on a 50% contribution basis, such as CIMAS
medical aid and a drug scheme. Further benefits included an education
allowance which was expressly qualified as being taxable.
First
applicant averred that, currently, in terms of Rule 19 of the TSSPF
Fund rules, TRIANGLE is obliged to make a corresponding monthly
contribution to the TSSPF, of 13.5% of first applicant's basic
monthly salary. On the basis of the aforesaid, 1st
applicant averred that he and his fellow applicants have a clear
right to have a deduction of 7% of his basic monthly salary made, and
to have a corresponding 13.5% of his basic monthly salary contributed
by TRIANGLE. Failure to match first applicant's contribution would
be a failure by TRIANGLE, to abide by the TSSPF Fund rules.
It
was submitted that, in or about October 2000, the Managing Director
of TRIANGLE, Mr. J. M. Cleasby, advised members of the TSSPF that it
was closed to new entrants, on the basis that its existing members
would be given an option to transfer to a different pension fund, the
Triangle Pension Plan (hereinafter referred to as The Money Plan). In
November 2000, Mr. Cleasby wrote a letter to the members of the TSSPF
and advised them that the date of transfer to The Money Plan was the
1st
of January 2001. Paragraph 3 of the letter stated that:
“To
assist you in making a decision please find enclosed;
(a)
Comparison booklet.
(b)
Illustration letter.
(c)
Option form.”
It
was submitted on behalf of the applicants that, TRIANGLE caused a
booklet called 'Defined Benefit Triangle Senior Staff Pension Fund
or Defined Contribution The Money Plan', which compared the two
schemes to be published. All sixty seven applicants opted to remain
members of the TSSPF.
First
applicant averred that the applicants suffered an injury and/or that,
alternatively, an injury is reasonably apprehended by them. In
support of this contention is the averment found in paragraph 18 of
the first applicant's founding affidavit, that TRIANGLE has
unilaterally decided to refuse to make its share of contributions to
the TSSPF and/or to deduct their 7% contributions from their basic
monthly salaries. The allegation against TRIANGLE is that, by
refusing to recognize most of the earnings of members of the TSSF as
'pensionable', it has, by its conduct, breached the terms of the
Fund rules and interfered with the accrual of pension benefits.
In
support of this averments, the first applicant referred to a letter
to the trustees of the TSSPF, dated 1 April 2009, written by the
TRIANGLE managing director Mr. S. D. Mutsambiwa. The letter was
entitled “Pensionability of US$ Salaries”. It reads as follows:
“Kindly
note that the January 2009, February 2009 and March 2009 salaries
have been paid in USD$ to employees who are members of the Triangle
Senior Staff Pension Fund (TSSPF). These
salaries were paid in USD$ without any confirmation by the employer
whether or to what extent the salaries would constitute pensionable
emoluments.
A decision in this regard is still to be made pending a review of the
'dollarisation' of the Zimbabwean economy and the bearing this
will have, amongst other things, on the functioning of the fund. The
company will be arranging a meeting with the board of Trustees in the
near future to consider the way forward both in relation to existing
pensioners and active member. In the meantime, and until further
notice, contributions will be remitted to the Fund administrators as
an interim measure pending final decisions regarding the way forward
in respect of the TSSPF. This
interim arrangement should under no circumstances be regarded as an
implied decision having been taken that current USD$ salaries are
indeed classified as pensionable emoluments.”
(my
emphasis)
On
8 July 2009, TRIANGLE introduced the “guaranteed package” to
employees in the executive grade, backdated to June 2009. See
Annexure H1 to the founding affidavit.
In
paragraph 24 of his founding affidavit, first applicant avers that
all the applicants were forced to sign the acceptance letter in
unilateral variation of their conditions of employment. To prove this
claim, he referred to an electronic mail communication dated 15
December 2009, addressed to Mr, Eston, in which Fred Nyangwe advised
that Mr. Eston's failure to sign the letter which contained the new
conditions of service, meant that, with effect from 1 December 2009,
his salary as set out in the letter would be discontinued and he
would go back to earning his old salary as at 31 May 2009. He was
also advised that the difference between the two salaries, which he
had been paid, would be deducted from his old salary until it had
been recovered in full.
On
7 October 2010, TRIANGLE announced that the TSSPF would be
discontinued, and its active members moved to the Money Fund with
effect from 1 November 2010. The TSSPF Trustees refused to sign a
resolution to approve the disbanding of the Fund, on the basis that
this violated the TSSPF Rules, and constituted a reversal of the
undertakings made by TRIANGLE to the Fund members.
The
Trustees were of the view that the procedure set out by Rule 36 of
the TSSPF Rules had not been followed.
A
meeting was held at which TRIANGLE announced the transfer of the Fund
members to the Money Plan, and told the members that the transfer
values would be based on January 2009 salaries and not on current
salaries. Again, this was alleged to be in violation of the Fund
rules. The applicants' contention is that the relevant rule equates
pensionable emoluments to a member's basic salary or wage. Members'
basic salaries had increased significantly since 2009, in some
instances by 500%. TRIANGLE contended that following the TPSSF Fund
rules would result in its bankruptcy.
On
19 October 2010, the TSSPF members delivered a petition to the
trustees of the TSSPF to demonstrate that they did not wish or agree
to transfer from the TSSPF to the Money Plan. On 15 February 2011 the
trustees addressed a letter to the TRIANGLE Human Resources Manager.
Paragraph 3 of the letter reads as follows:
“…Of
concern by members is why the trustees are not being consulted on the
future of the Fund in accordance with the Fund's rules. Member
trustees are not being kept informed as to what is happening and are
not being asked for input or direction…”
In
February 2011, TRIANGLE announced a further annual salary review
together with changes to the structure of employment benefits.
Members were asked to agree to and sign for these changes by 7 March
2011. Part of a letter written to Mrs. Eston (one of the applicants)
on 21 February 2011 by Human Resources reads as follows:
“Dear
Mrs Eston,
The
structure of your remuneration package has been reviewed in the
context of the need to align the employee remuneration framework ….It
is confirmed that your actuarily calculated benefit in the TSSPF is
to be based on the USD$ salary that has been used to determine your
Fund contributions since 1 January 2009…”
In
response to the petition by members of the TSSPF, IPEC called a
meeting and advised that TRIANGLE was at liberty to disband the
TSSPF, but only after fully funding it, and complying with the
requisite termination procedures.
In
para 38 of the founding affidavit, it is averred on behalf of the
applicants that they have no other remedy. Various meetings with the
trustees have not yielded any results. TRIANGLE has continued to
refuse to recognize members' basic salary as the pensionable
emolument. Repeated appeals to IPEC to intervene have not yielded any
tangible solutions. Applicants reiterate that no other remedy other
than a declaratur
and an interdict can assist them to assert their pension rights.
On
20 January 2014, TRIANGLE filed a notice of opposition.
The
opposing affidavit was deposed to by Fred Nyangwe, the Human
Resources director. He raised various points in
limine, the
first of which was that the applicants had failed to exhaust domestic
remedies. The second preliminary point raised is that there are
material disputes of fact which make this matter incapable of
resolution on the papers filed of record. The third preliminary point
raised in the founding affidavit is that this matter is lis
pendens,
the decision of the arbitrator Mr. Mawire of 23 September 2013, not
being final. The final preliminary point raised is that this matter
has prescribed because the applicants' claims arose in August 2009,
or alternatively January and August 2010.
On
20 February 2014, an answering affidavit was filed on behalf of the
applicants. TRIANGLE was accused of usurping the power of the board
of trustees of the TSSPF, and of attempting to close the Fund. The
trustees deliberated over the dispute for more than two years and it
was alleged that they have failed to resolve the issue because the
chairman of the Fund frustrated all efforts to settle the matter. It
was contended that TRIANGLE frustrated efforts by IPEC to resolve the
dispute starting with the meeting of 6 October 2011, by failing to
comply with the IPEC directives.
The
issues that fall for determination before this court are as follows:
1.
Whether this court is correctly seized with this matter.
2.
Whether the applicants failed to exhaust domestic remedies.
3.
Whether the applicants claim has prescribed.
4.
Whether there are material disputes of fact which are not capable of
resolution on the papers filed of record.
5.
What constitutes basic salary for purposes of calculating the
contributions due from the applicants and from TRIANGLE for onward
transmission to the TSSPF every month.
6.
Whether the applicants are entitled to the relief sought.
POINTS
IN LIMINE
(a)
Whether this court is correctly seized with this matter-the cause of
action
I
am grateful to the insightful heads of argument filed by counsel for
both parties' which provided great assistance to the court in the
resolution of all the issues under consideration in this matter.
It
was submitted on behalf of TRIANGLE that that applicants'
contention that their cause of action is derived from Rule 9 of the
Fund rules, is a misconception. It was submitted that because there
is no cause of action, no relief can be given by this court.
Rule
9 of the Fund Rules reads as follows:
“Rule
9 Disputes
“If
a dispute arises in respect of any Member or any person whose claim
is derived from a Member, the Trustees, acting upon such evidence as
they deem adequate, whether amounting to legal proof or not, shall
determine the matter provided however, that the Member or person
whose claim is derived from a Member shall have the right, in the
event that they are not prepared to abide by the decision of the
Trustees, to refer the dispute to any recognized body for arbitration
or to a court of law within Zimbabwe for determination. In the event
of such referral the Principal Officer shall inform the Registrar, in
writing, of the nature of the dispute.”
The
contention that Rule 9 does not create a cause of action but merely
sets out the pre-requisites to a right of action to resolve disputes
against the TSSPF is a curious one. Let us examine it further.
TRIANGLE
contended that, in order for this court to have jurisdiction to hear
the dispute, we must consider whether the dispute contemplated by
Rule 9 embraces a dispute between a member and the employer, we must
consider whether the requirement of the matter being determined by
the Trustees is a pre-requisite to further action, and whether a
Member can rely on Rule 9 where there has been no decision by the
Trustees, when Rule 42(ii) of the Fund Rules is taken into
consideration.
“Rule
42 Effect on terms of employment
(i)…
(ii)
No person shall have any claim in respect of the Fund or against the
Fund or against the Trustees or the employers, except in accordance
with the provision of these rules.
(iii)…”
In
paragraph 84 of its heads of argument, it is submitted on behalf of
TRIANGLE that the dispute contemplated by Rule 9 is one between a
member and the TSSF, and not between a Member and the employer. It is
argued that Rule 9 gives no right of action to an employee against
the employer, such a dispute must first be determined by the
Trustees.
Rule
9 is peremptory, in the event of a dispute the Trustees Shall
determine
the matter. It is mandatory that the Trustees first determine the
matter. In the interpretation of statutes the word shall, is
construed as being peremptory rather than directory. See Sutter
v
Scheepers,
where
the court said that:
“Without
pretending to make an exhaustive list I would suggest the following
tests, not as comprehensive but useful guides. The word 'shall'
when used in a statute is rather to be construed as peremptory than
as directory unless there are other circumstances that negative this
construction…”
See
also Prospect
Estates Ltd v
The King,
Washaya v
Washaya,
Bulawayo Bottlers (Pvt) Ltd v
Minister of Labour, Manpower Planning & Social Welfare &
Ors,
S v
Makamba.
The
word 'may' is directory, which means that when it is used in a
statute, it gives a discretion whether or not to act.
Clearly,
Rule 9 explicitly gives a Member who is not prepared to abide by a
decision of the Trustees, a right to refer the dispute to arbitration
or to court. It was contended on behalf of TRIANGLE that the
applicants do not have a right to approach this court, that doing so
flies in the face of Rule 42(ii) of the Fund rules, because the
alleged dispute has not been subject of a compulsory determination by
the Trustees.
It
is my view that the arguments proffered on behalf of TRIANGLE are
self serving and circuitous.
The
record is replete with minutes of the Trustees meetings which show
quite clearly that the Trustees were unable to resolve the dispute
between the parties. The failure to make a decision is in my view a
state of affairs that can be interpreted as a decision.
At
ad para 4.3 of the applicants' answering affidavit, Record pages
395-396, is an averment made on behalf of the applicants that a
dispute was declared on 7 October 2010. The dispute was referred to
the Trustees in accordance with Rule 9. The TSSPF board of Trustees
took two years to deliberate on the dispute, and failed to agree.
Applicants averred that the Chairman of the TSSPF, who is nominated
by TRIANGLE, frustrated all efforts to resolve the dispute.
It
therefore cannot in my view, be said that the Trustees of TSSPF were
not approached in terms of Rule 9, and asked to resolve the dispute
between the parties. The Trustees were approached, and in their
wisdom failed to resolve the dispute. The Trustees' failure to act,
is itself the result of inability to resolve the dispute. In my view
it is implied by the wording of Rule 9 that any decision made by the
Trustees, or lack of decision, can be referred to arbitration or to a
court, by any member who cannot abide by it. We have been petitioned
by 67 members who cannot abide by the Trustees' failure to make a
decision.
My
reading of Rule 9 does not support the interpretation submitted on
behalf of TRIANGLE, that the nature of the dispute contemplated,
relates to a dispute between members and Trustees of the TSSPF only,
and does not confer a right to legal recourse against TRIANGLE.
Rule
9 makes no distinction between the Trustees of the TSSPF and
TRIANGLE.
It
is my view therefore that the applicants are properly before this
court, in terms of Rule 9 of the Fund Rules, as read with Rule
42(ii).
I
find the argument proffered by the applicants persuasive, that the
failure by the Trustees of the TSSPF to resolve the dispute for over
two years, cannot and should not be allowed to preclude them from
enforcing their rights as against the respondents, merely because it
is not a 'positive' or a conclusive decision. Even a 'negative'
decision, as in a failure to act, amounts to a decision that ought to
be subjected to judicial review and scrutiny, in the interests of
justice.
(b)
Did the applicants fail to exhaust internal remedies?
This
is an aspect of the Rule 9 argument, which is raised in the opposing
affidavit para 6 at Record pages 247-248.
To
rehash the argument in brief, TRIANGLE contends that Rule 9 of the
TSSPF Fund Rules mandates the Trustees to make a decision as a
pre-requisite to a member referring a dispute to arbitration or to a
court. Otherwise Rule 42(ii) prohibits such litigation.
The
court was reminded that the TSSPF Rules are binding on the parties by
virtue of section 7(3) of the Pension and Provident Funds Act
[Chapter
24:09].
The Rules are said to provide a complete domestic remedy for disputes
of this nature. It is contended that there has been no compliance
with Rule 9.
It
was submitted on behalf of the applicants, at record p 460, in their
heads of argument, that there is no merit in this preliminary point.
The applicants contended that, as a matter of law, a litigant has a
duty to exhaust domestic remedies only where those remedies are
capable of providing effective redress in respect of the complainant.
The internal remedy must not be illusory or inadequate.
The
case of
Djordjevic
v
Chairman, Practise Control Committee, Medical and Dental
Practitioners Council of Zimbabwe & Anor
was
cited as authority for the proposition that where there are good
reasons for not exhausting domestic remedies, they need not be
resorted to before the court can entertain the cause. The court in
that case had this to say:
“Where
domestic remedies are capable of providing effective redress in
respect of the complainant, a litigant should first exhaust those
remedies unless there are good reasons for not doing so.”
Similarly
in
Moyo
v Forestry Commission,
it was held that:
“A
court will not insist on an applicant first exhausting domestic
remedies where the appeal created by the code of conduct does not
confer on the aggrieved party better and cheaper benefits than its
remedies or where the decision appealed against undermined the
domestic remedies. In the present case, the domestic remedy was not
better and cheaper than the court remedy and the failure to hold an
inquiry and to keep a record of proceedings undermined the domestic
remedies themselves.”
The
applicants contended further, that the provisions of Rule 9 are
clear. Trustees of the TSSPF should ordinarily, determine a dispute
arising in respect of a Member or a person whose claim is derived
from a Member, subject to the Trustees' capability to provide
effective redress in respect of the complainant.
I
find this argument persuasive, especially when regard is had to the
contents of the letter dated 15 February 2011 written by two TSSPF
Trustees, in which they express dismay at TRIANGLE's failure to
consult the Trustees on the future of the TSSPF in accordance with
the Fund's Rules. There is a clear implication in that letter, by
the Trustees, that the Rules of the Fund were not being followed by
TRIANGLE, to the detriment of the TSSPF. At record p 109, where the
letter appears, the Trustees state unequivocally that they were not
being asked for input or direction.
It
is my view that this preliminary point lacks merit, for the reasons
already stated above, and this court will not insist that the
applicants first exhaust domestic remedies when the Trustees clearly
failed to resolve the dispute over a two year period. The referral of
the dispute to the Trustees did not provide effective redress to the
applicants. The Trustees failure to resolve the dispute, by failing
to come to any decision in regards to the dispute, is a very good
reason why the applicants should not be made to go back and seek
resolution from them. This preliminary point is dismissed for lack of
merit.
(c)
Is this matter still pending before another forum?
It
was contended on behalf of TRIANGLE, that the applicants had referred
a dispute to a labour officer who referred the matter to compulsory
arbitration in terms of section 93(5)(a) of the Labour
Act [Chapter 28:01].
The arbitrator made a series of awards, the latest of which is dated
5 September 2013. That award, it is argued, is an interim award based
on interim issues raised and is not a final award. For that reason,
the resolution of the pension and labour issues on merit, is still
pending before the arbitrator. It was submitted that the principle of
lis
pendens is
one of public policy to avoid a litigant having to meet multiple
actions on the same subject matter before different fora
at
the same time. The second court has a discretion whether or not to
stay the additional proceedings having regard to the equities and to
the balance of convenience in the matter. The court was referred to
the following cases as authorities for this proposition.
Baldwin
v
Baldwin ,
and Mhungu
v
Mtindi.
Applicants
strenuously denied that this same matter is currently pending before
the labour arbitrator, Mr. Mawire. They accepted that they had
approached a labour officer on the basis that TRIANGLE was depriving
them of their pension benefits. They admitted that the matter was
referred to compulsory arbitration, and, after a protracted hearing,
the arbitrator concluded, in an award dated 5 September 2013, that
the enforcement of pension rights falls outside the purview of labour
rights justiciable under labour courts and tribunals. The arbitrator
said that:
“While
pensions are referred to in labour jurisprudence, this does not
necessarily mean that they are exhaustively labour rights. They may
have labour tenets but for purposes of enforcement, they retain a
predominantly non-labour complexion. They fall outside the purview of
labour rights justiciable under labour courts and tribunals.”
Clearly
the arbitrator declined jurisdiction to determine the dispute between
the parties, and no appeal was filed by TRIANGLE, to the Labour
Court, against this determination of lack of jurisdiction by the
arbitrator. The decision of the arbitrator is extant. The Labour
Court does not have jurisdiction to grant a declaratory order which
is granted in terms of section 14 of the
High
Court Act [Chapter 7:06]
as
follows:
“14
High Court may determine future or contingent rights
The
High Court may, in its discretion, at the instance of any interested
person, inquire into and determine any existing, future or contingent
right or obligation, notwithstanding that such person cannot claim
any relief consequential upon such determination.”
In
the case of Agribank
v Machingaifa
the
court said that:
“The
High Court's inherent jurisdiction to grant declaratory orders in
labour matters has not been ousted. The only issue for determination
was whether the case was a proper one for the exercise of the
discretion under section 14 of the High Court Act. The fact that the
dispute could well have been determined in the Labour Court was not
the determining factor.”
In
Mushoriwa
v Zimbank
it
was held that:
“The
power to issue a declaratory order is specific to the High Court. The
Labour Court, unlike the High Court, has not been specifically
empowered to issue declaratory orders and cannot create such relief
or the procedure for granting such relief as it is not a court of
inherent jurisdiction. Consequently, if the relief that an applicant
seeks is in the nature of a declaratory order, the High Court would
have original jurisdiction as that power has not been specifically
ousted by statute.”
It
is trite that the Labour Court does not have power to grant
interdictory relief. See NRZ
v
Zimbabwe
Railway Artisans Union & Ors.
It
is my view that the preliminary point that the matter is pending
before another forum clearly has no merit. Not only has an arbitrator
declined jurisdiction to deal with the dispute between the parties,
no appeal has been filed to challenge that finding by the arbitrator.
This court clearly has jurisdiction to grant the relief sought, which
the Labour Court does not. The Labour Court also cannot grant
interdictory relief. There is no matter pending before another court
between the same parties in regards to the same subject matter.
(d)
Has the applicants' claim prescribed?
In
terms of section 14(1) of the Prescription Act [Chapter
8:11]
'a debt shall be extinguished by prescription after the lapse of
the period which in terms of the relevant enactment applies in
respect of the prescription of such debt'. A 'debt' is defined
in section 2 as:
“Without
limiting the meaning of the term, includes anything which may be sued
for or claimed by reason of an obligation arising from statute,
contract, delict, or otherwise.”
It
was contended on behalf of TRIAGLE that, in terms of section 15(d)
the period of prescription applicable in this matter is three years.
In terms of section 16(1) 'prescription shall commence to run as
soon as a debt is due'. A debt is due when the creditor has a
complete cause of action, that is when all the facts necessary to
sustain the cause of action have come into existence.
See
Syfin Holdings Ltd v
Pickering
,Dube v
Banana,
Peebles v
Dairiboard Zimbabwe (Pvt) Ltd
, Mukahlera v
Clerk of Parliament & Ors
The
issue that falls for determination of this preliminary point is
therefore this: Have all the facts necessary to sustain the
applicants' cause of action come into existence?
In
my view they have not. Some of the applicants' pensions are not yet
due because those applicants are yet to reach retirement age.
Prescription
applies as much to a declaratur
as to an interdict, which are common law remedies. See
Syfin v
Pickering
, Maharaj v
National Horseracing Authority of Southern Africa
,Harker v
Fussel.
The
purpose of the Prescription Act has been described as follows, in the
case of Uitenhague
Municipality
v
Molloy
“One
of the main purposes of the Prescription Act is to protect a debtor
from old claims which it cannot effectively defend itself against
because of loss of records or witnesses caused by lapse of time. If
creditors are allowed by their deliberate or negligent acts to delay
the pursuit of their claims without incurring the consequences of
prescription, that purpose would be subverted”.
In
Cape Town Municipality v Allie NO
the
court said the following:
“It
cannot be denied that society is intolerant of stale claims. The
consequence is that a creditor is required to be vigilant by
enforcing his rights. If he fails to enforce them timeously, he may
not enforce them at all”.
TRIANGLE's
argument in support of its contention that the applicants claim has
prescribed, is that the applicants' cause of action arose out of
the decision taken in 2009 to change the payment of salaries of all
of TRIANGLE's employees from Zimbabwe currency to United States
dollars. The determination of what portion of that payment
constituted basic salary for purposes of pensionable emoluments
depended on the definition of basic salary. The letter of 1 April
2009, annexure F, at record p 86, made it clear that no decision had
been made on the issue.
Applicants
contend that their claim has not prescribed, because the injury that
they complain of, is of a continuing nature.
I
find this argument persuasive, when regard is had to the purpose of
the Prescription Act, and to the TSSPF Rules. It has not been
suggested that TRIANGLE needs to be protected because it has lost its
records and witnesses due to the passage of time. Rule 30 of the
TSSPF Fund Rules provides that a member of the TSSPF has a right to
be paid a pension upon retirement. None of the applicants, except the
nine retirees referred to by TRIANGLE have reached retirement age.
Their rights are contingent on them reaching retirement age, death,
or termination of their contracts of employment. None of these events
have occurred to any of the applicants. For these reasons, it is my
view that the applicants' claim has not prescribed.
(e)
Whether there are material disputes of fact which are not capable of
resolution on the papers filed of record
The
court was asked to bear in mind three fundamental principles well
established in the law of this country in its approach to this
matter. The first principle submitted on behalf of TRIANGLE, was that
it is a trite rule of procedure that an applicant bringing a matter
by way of court application must make his or her case on the founding
papers.
The
court was referred to the following cases as authority for this
proposition:
Mauberger
v Mauberger
, Shepherd v Tuckers Land & Development Co (Pty) Ltd,
Mobil Oil Zmbabwe (Pvt) Ltd v Travel Forum (Pvt) Ltd
and Mangwiza v Ziumne NO & Anor .
The
approach has been well summarized in the case of Transnamib
Ltd v
Imcor Zinc (Pty) Ltd (Moly-Copper Mining and Exploration Corporation
(WSA) Ltd and Another,
as
follows:
“It
is trite law that, generally, an applicant must make out his case in
his founding papers and that such papers are a combination of
pleadings and evidence. Furthermore, an applicant cannot merely set
out a skeleton case in the founding papers and then fortify this in
reply. If scant material is furnished in the founding papers the
applicant runs the risk of his application being dismissed and should
not complain if this is done as it was up to him to put more facts
before the court if he could. The court may in its discretion allow
deviations from the normal procedures but it must be borne in mind
that the normal procedures developed as they did because they would
almost invariably be consonant with the best interest of the
administration of justice.”
The
second principle that the court was asked to bear in mind was that,
having chosen to approach the court by way of application, the
applicants took the risk that the matter would result in disputes of
fact arising, and that those disputes of fact would be resolved on
the basis of facts alleged by TRIANGLE, together with those of the
applicants which are admitted, subject to any resolution of the
disputed facts which could be made without causing injustice to
either party. The applicants chose the procedure at their own peril.
As authority for this proposition, the court was referred to the
following cases;
Tamarillo
(Pty) Ltd v
B N Aitken (Pty) Ltd ,
Plascon-Evans Paints Ltd v
Van Riebek Paints (Pty) Ltd,
Masukusa
v
National Foods & AnorZimbabwe
Bonded Fibreglass (Pvt) Ltd
v
Peech ,
Truth Verification Testing Centre CC v
PSC Truth Detection CC & Ors ,
Jirira
v
Zimcor Trustees Ltd & Anor.
The
third well established principle that the court was asked to have
regard to is that a court will not entertain a matter such as this
court application where the applicants knew or ought to have known in
advance that there were disputes of fact which could not be resolved
on the papers. As authority for this proposition, the court was
referred to;
Masukusa
v
National Foods Supra, Tamarillo (Pty) Ltd
v N
B Aitken Supra, Adbro Investment Co Ltd v
Minister of the Interior ,
Shereni v
Moyo.
It
was submitted that the applicants ought to have regard to the
admonition by the Judge in the case of Mashingaidze
v
Mashingaidze
where
he said that:
“It
is necessary to discourage the oft-recurring practice whereby
applicants who know or should know, as was the case with the
applicant in this matter, that real and substantial disputes of fact
will are likely to arise on the papers, nevertheless resort to
application proceedings on the basis that, at the worst, they can
count on the court to stand the matter over for trial...Unless this
practice is seen to be curbed, applicants will continue to believe
that they have nothing to lose and, indeed, everything to gain
tactically by embarking upon application proceedings notwithstanding
their knowledge or belief at the time of doing so that the respondent
will be able to show that genuine and serious disputes of fact exist
on the papers.”
Two
examples of “known disputes of fact”, were given on behalf of
TRIANGLE at p 27 of its heads of argument. It was submitted that
applicants knew in advance of instituting the present application
that certain of their critical allegations were disputed. It was
submitted further, that, at the very least the applicants must have
realized that “real and substantial disputes of fact will or are
likely to arise on the papers”, and adopted the correct procedure.
It
was contended that the first substantial dispute of fact pertained to
the booklet that was produced in the year 2000 at the time that the
option to move from the TSSPF to the Money Plan. The applicants have
disputed the assertion by TRIANGLE that the booklet was produced for
and on behalf of the Trustees by the Fund administrators, AON Minet.
At paragraph 59.1.2 of the opposing affidavit, at record p 262,
TRIANGLE disputes that it produced this booklet.
In
my view, this is not a real and substantial dispute of fact which is
incapable of resolution on the papers filed of record. As previously
stated, the booklet is endorsed on its face that it was prepared by
Aon Minet. Its contents clearly show that it was intended to provide
an analysis of the pros and cons of the TSSPF as opposed to the Money
Plan.
The
second example of a known dispute of fact is the issue of the letter
of 8 July 2009, which was produced as an example of how TRIANGLE
allegedly communicated a change in the applicants' conditions of
service and introduced a new form of remuneration. It was submitted
that the applicants knew that this allegation would be disputed by
TRIANGLE, and that TRIANGLE would argue that the letter was
superceded after further discussions with E Band management by the
letter of 31 July 2009 (see opposing affidavit Record pages 372-376).
Again
in my view, this issue referred to as an example of known disputes of
fact cannot be said to constitute a 'real' or a substantial
dispute of fact which is incapable of resolution on the papers.
Applying
the test set out on behalf of TRIANGLE, in regards to one of the
three well established principles that the court was enjoined to keep
at the back of its mind, the formula to be used in order to determine
whether there are disputes of fact which cannot be resolved on the
papers is 'that those disputes of fact must be resolved on the
basis of facts alleged by TRIANGLE, together with those of the
applicants which are admitted, subject to any resolution of disputed
facts not causing injustice to either party'.
Applying
this formula to the alleged dispute of fact, that is whether TRIANGLE
unilaterally sought to alter the applicants conditions of service
through communicating the same to them in a letter dated 8 July 2009,
the following becomes clear: the letter of 8 July 2009 was meant for
E Band employees only, not for all the applicants or for all Members
of the TSSPF, the letter of 8 July 2009 was subsequently revised
following representations by E Band employees, only ten applicants in
this matter are E Band employees, an amended letter dated 31 July
2009 was subsequently sent to the E Band employees, 11 E Band
employees counter signed that letter to show their acceptance of the
revised conditions of employment. The 11 E band employees
subsequently prepared similar letters for the D Band employees, of
whom 21 out of 22 countersigned the letter, and 29 out of 34 C Band
employees followed suit.
In
the result, there are no material, real, or substantial disputes of
fact which are incapable of resolution on these papers, and there are
no deficiencies in the applicants' founding papers, which would
justify sanctions against them for choosing this procedure. That
preliminary point is dismissed for lack of merit. I will now consider
the merits of the matter before the court.
AD
MERITS
The
heart of the matter, the crux of it, the issue that falls for
determination in the main matter between the parties is the question
of what constitutes basic salary for purposes of calculating the
contributions due from the applicants and from TRIANGLE for onward
transmission to the TSSPF every month.
In
order to do justice to this question, it is necessary to inquire into
and determine whether the court may in the circumstances of this
case, issue a declaratory order and an interdict.
(f)
Basic salary for purposes of calculating pensionable emoluments
Rule
2 of the TSSPF Fund Rules defines pensionable emoluments as;
“'Pensionable
Emoluments' of a member shall mean his basic annual salary or wages
together with any contractual bonus. For purposes of the Fund,
changes in Pensionable Emoluments shall be recognized immediately.”
See Record page 39.
The
dispute between the parties pertains to the definition of what
constitutes 'basic annual salary or wages'.
I
agree with the contention that in order to answer that question, it
is necessary to examine who is entitled to make that determination.
The
contract of the first applicant of July 1996, shows that the employer
set out the definition of basic salary, and that first applicant
signed the contract, in acceptance of this. TRIANGLE has promised to
make its determination of what constitutes basic annual salary after
a review, and applicants appeared to have accepted this stipulation,
by signing to indicate acceptance of the 'restructured cash
package'. First applicant in his answering affidavit at para 39,
record p 410, appears to accept that the employer has a contractual
right to set the basic salary at the point of initial engagement, but
not thereafter.
Let
us examine this assertion to see if it is correct both in fact, and
law.
Subject
to any statutory requirement, an employer is entitled to make an
offer to its existing employees in respect of salary structures. The
employees have no obligation to accept the offer made by the
employer, and often negotiate in that regard. Subject to anything
that comes out of the negotiations, the offer made as to the
structure of the salary is made unilaterally by the employer. Once
the employees accept the offer it becomes binding on both the
employer and the employees.
It
was contended that in this case, there was formal acceptance of the
document containing the offer, and there was further acceptance by
conduct in continuing to accept the salary package.
I
find this contention persuasive.
First
applicant was first employed in 1980. In 1996 he signed a new
contract on terms set by TRIANGLE. So, in fact, and at law, the
employer has the right to set the conditions of employment, including
a determination of what an employee's basic annual salary is.
Having
gotten that out of the way, it is pertinent at this stage, to
consider whether the restructuring of the applicants' packages
conformed with the TSSPF Rules, i. e. whether the definition of cash
package that the applicants accepted in 2009, complied with the TSSPF
Rules specifically in relation to the co-relation between the 'basic
salary' and the calculation of the pensionable emoluments.
It
has been contended that, by keeping the definition of basic salary in
respect of TSSPF Members, at their January 2009 salaries, despite
subsequent increases in salaries, TRIANGLE is unilaterally varying
the Rules of the TSSPF, to the applicants' prejudice. The basic
annual salary is being kept deliberately and intentionally low, at
2009 levels, for the specific reason that TRIANGLE intends to keep
the basic annual salary down, in order to keep the applicants'
pensionable emoluments down.
That
is the crux of the dispute.
TRIANGLE
has taken the stance that it will review this decision in due course.
Nine
applicants have retired and had their pensionable emoluments
calculated on the basis of their January 2009 salaries despite the
fact that their actual salaries may have increased significantly
since January 2009.
Is
this in accordance with the TSSPF Rules?
In
my view it is not. The reasons why I hold this view are discussed
extensively below. I hold the further view that the applicants are
entitled to have their pensionable emoluments calculated in
accordance with the TSSPF Rules. Any continued contravention of the
TSSPF Fund Rules is prejudicial to the applicants. The ways in which
TRIANGLE has contravened the TSSPF Rule, in regards to the
calculation of the applicants' basic annual salary, are explored in
detail below.
(g)
Are the applicants entitled to the relief that they seek, when regard
is had to the TSSPF Rules?
It
was submitted, on behalf of TRIANGLE, that the TSSPF Rules do not
give the applicants such a cause of action as to be entitled to the
relief sought in the draft order set out at Record pages 239-240. It
was submitted further, that an analysis of the Fund Rules, will show
that no cause of action arises in favour of the applicants. It was
submitted that the Rules do not require adjudication as to what
constitutes basic salary for the purposes of determining pensionable
emoluments, or to compel TRIANGLE to make any particular
contributions to the TSSPF.
In
a nutshell, the argument raised is that the applicant's action
against TRIANGLE cannot lie in the TSSPF Rules.
With
all due respect to Mr. DeBourbon
for TRIANGLE, again I find that this argument is circuitous and self
serving and is not based on an accurate reading of the TSSPF Rules.
Some
of the parties rights and obligations set out in the TSSPF Rules form
part of the contracts of employment between the applicants and
TRIANGLE.
There
is a correlation between the applicants' contracts of employment
and the TSSPF Rules. The first applicant's initial contract of
employment set out the terms and conditions of the employment of C
Band staff (loss control manager), as at I July 1996. The basic
salary was pegged at ZW$90,948-00. The pension contribution of 13%
came to ZW$11,823-00. Under the heading “remuneration” was a note
to the effect that the basic salary was pensionable and that the
company currently contributed 13% to the Triangle Senior Staff
Pension Fund.
In
terms of the submissions made on behalf of TRIANGLE on record pages
48 to 49 of its heads of argument, the applicants have the right to
be paid their cumulative contributions as at the date of termination
of employment. That right is derived from Rule 29 of the TSSPF Rules,
as read together with the contract of employment, which specifies the
parties respective pension contributions. The pension contributions
are calculated in accordance with Rule 17 of the TSSPF Rules, as read
together with the applicants' contract of employment.
Part
of a letter written to Mrs. Eston (one of the applicants) on 21
February 2011 by Human Resources confirmed that her remuneration
package had been restructured. The restructured remuneration package
was valid from 1 March 2011. The letter confirmed her actuarily
calculated benefit in the TSSPF was to be based on the USD$ salary
that had been used to determine her Fund Contributions since 1
January 2009.
Now,
surely, it not being suggested that Mrs. Eston's Fund Contributions
since January 2009 had not been determined in terms of the Fund Rules
as read with her contract of employment. The Fund Rules have a
symbiotic relationship with the applicants' contracts of
employments.
Some
of the benefits which constitute the rights and obligations of the
parties in the contract of employment, depend on the Fund Rules for
their definition, and alteration, and amendment from time to time. It
is simply not sustainable in my view, to argue that, as a matter of
law, the applicants' cause of action cannot be determined in terms
of the Fund Rules. The symbiotic nature of the parties rights and
obligations is as clear as crystal, in my view.
In
conclusion, it is this court's view that the cause of action of the
applicants against TRIANGLE lies in the TSSPF Fund Rules, as read
with the parties contracts of employment.
Another
contentious issue raised by TRIANGLE in opposition to the granting of
the relief sought by the applicants, at record page 251 par 13 as
read with annexures at record pages 291-293, is that the application
was erroneously brought in the name of Godfrey Chiparaushe, a C Band
employee, of TRIANGLE. It was submitted that the application should
have been brought in the name of 58 employees and 9 retirees, broken
down as follows:
E
Band (senior management) 10 employees 1 retiree
D
Band (middle management) 21 employees 1 retiree
C
Band (supervisors) 27 employees 7 retirees
The
point being made is that in terms of the definition of member in
clause 2 of the TSSPF Rules those who are retirees are no longer
members of the Fund, a member being a 'person prospectively
entitled to any benefits' and a pensioner being a retired Member
(see record p 39). TRIANGLE disputes, correctly in my view, the right
of the nine retirees to the relief sought.
I
find persuasive, the argument raised on behalf of TRIANGLE, that the
real cause of action concerns the determination of what constitutes
basic salary for the purposes of contribution by the employer and the
employees to the TSSPF. It was submitted that as such, the real cause
of action in the present matter has already accrued to the nine
retirees, and will accrue to the other applicants when they become
entitled to the benefit in terms of the TSSPF Rules.
I
agree that the nine retirees, having already attained retirement age,
and having had their pensions calculated on their retirement dates,
have already exercised their right to be paid their cumulative
contributions made to that date, the date of retirement. They have
exercised their right to be paid a pension upon retirement, and
declaratur
made by the court at this stage cannot apply retrospectively to them
in regards to TRIANGLE. Rules 22 and 29 are clear. The right to have
one's pension calculated and paid, accrues at the retirement date,
no sooner, and no later.
(h)
Requirements of a Declaratory Order
Applicants
seek a declaration of their rights. TRIANGLE is not opposed to the
declarations sought by the applicants in terms of (a)-(c) and (d) of
the draft order at record page 239-240. What is in issue is that the
applicants want the court to declare that the pensionable emolument
in respect of each applicant shall be his basic annual salary (as
used for PAYE, Group Life Assurance and National Social Security
calculations, together with any contractual bonus). Applicants seek
the consequential relief that TRIANGLE be directed, forthwith, to
recommence making its contributions towards the balance of the costs
of providing benefits towards the applicants on terms of the TSSPF
Rules as determined by the TSSPF actuary, including any arrears which
have arisen until such a time as the TSSPF has been terminated in
accordance with the TSSPF Rules.
Finally,
applicants seek an order as to costs.
It
is not in dispute that the High Court has jurisdiction to issue a
declaratur,
in its discretion, at the instance of any interested person, i. e. to
inquire into and to determine any existing, future or contingent
right or obligation.
It
was submitted, correctly in my view, on behalf of the applicants,
that the requirements of a
declaratur
are as follows:
Firstly,
that, the issue of a declaratur
is not contingent upon there being a possibility of providing
consequential relief. The applicants referred the court to the
following cases as authority for this proposition;
Munn
Publishing (Pvt) Ltd v
ZBC.,
the
grant of declaratory relief is discretionary,
United Watch & Diamond Co (Pty) Ltd & Ors v
Disa
Hotels Ltd & Anor.
In
order to qualify for a
declaratur
applicant must be an interested person with a direct and substantial
interest in the subject matter of the suit that could be
prejudicially affected by the judgment of the court. The interest
must relate to an existing, future or contingent right, the court
must not decide abstract, academic or hypothetical questions which
are not related to the applicant's interest. See also Milani
& Anor v South African Medical and Dental Council & Anor
.
The
existence of an actual dispute between persons interested is not a
statutory requirement to an exercise of the court's discretion. See
Anglo-Transvaal
Collieries Ltd v
SA Mutual Life Assurance Soc.
The
availability of another remedy does not preclude does not render the
declaratory order incompetent. See
Ex
Parte Nell,
Gelcon Investments (Pvt) Ltd v
Adair Properties (Pvt) Ltd
The
applicants submitted that, at the next stage of the inquiry it is
incumbent upon the court to decide whether or not the case is a
proper one for the exercise of its discretion in terms of section14
of the High Court Act.
What
constitutes a proper case has been described as follows:
“…despite
the fact that no consequential relief is being claimed or perhaps
could be claimed in the proceedings, yet nevertheless justice or
convenience demands that a declaration be made, for instance as to
the existence of or as to the nature of a legal right claimed by the
applicant or of a legal obligation said to be due by a respondent. I
think that a proper case for a purely declaratory order is not made
if the result is merely a decision on a matter which is really of
mere academic interest to the applicant. I feel that some tangible
and justifiable advantage in relation to the applicant's position
with reference to an existing, future or contingent legal right or
obligation must appear to flow from the grant of the declaratory
order sought.”
See
Adbro
Investment Co Ltd v
Minister of the Interior & Ors .
See
also Johnsen
v
Agricultural Finance Corporation,Exp
Chief Immigration Officer.
TRIANGLE
contended that the grant of declaratory relief is discretionary and
will not be used to usurp the function of another court and cited the
case of Khupe
v
Officer in Charge, Law & Order Section, ZRP, Bulawayo Central &
Ors,
as
authority for this proposition. It was submitted further, that, the
courts will use the power to issue a declaratur sparingly, and with
utmost caution. See
Russian
Commercial & Industrial Bank v British Bank for Foreign Trade Ltd
.
It
is a power that will only be exercised where there is a good reason
for so doing. See Vine
v National Dock Labour Board.
At
p 73 of its heads of argument, para 152, TRIANGLE stated that,
subject to its rights in terms of the TSSPF Rules, it does not
challenge the issues raised in the first three paragraphs of the
draft order seeking declaratory relief. The other two orders sought
were disputed on the basis that the factual and legal basis for such
declaratory orders has not been established on the papers.
It
was admitted that there is no dispute between the parties as to the
rate of deduction from the salaries of the applicants, nor that such
deductions have been made each month. There is no dispute as to the
rate of contribution by TRIANGLE, nor as to the fact that TRIANGLE
has been making that contribution each month.
It
was submitted on behalf of the applicants that there can be no doubt
that they are all interested parties, being members of the TSSPF or
persons entitled to derive benefits from a member. On that basis, it
is argued that they have a direct and substantial interest in the
operation, existence, and regulation of the TSSPF. In addition, the
issues in respect of which a declaratur
is sought are not academic and they have a bearing on the existence
of the TSSPF and on the accrual of applicants' pension benefits.
Applicants view is that there are some tangible and justifiable
advantages to be gained by the grant of the declaration in regards to
their pension rights.
It
is this court's considered view that there is no legal impediment
that would preclude the applicants (except for the retirees) from
being issued with a declaration in these circumstances. That leaves
the issue of the definition of basic salary for the purposes of
calculating pension emoluments as the only real dispute between the
parties.
(i)
Interdict
In
order to obtain a final mandatory interdict (a
mandamus),
an applicant must show the following requirements:
(i)
A clear or definite right - this is a matter of substantive law.
(ii)
An injury actually committed or reasonably apprehended - an
infringement of the right established and resultant prejudice.
(iii)
The absence of similar protection by any other ordinary remedy. The
alternative remedy must be:
(a)
Adequate in the circumstances.
(b)
Be ordinary and reasonable.
(c)
Be a legal remedy.
(d)
Grant similar protection.
See
Tribac
(Pvt) Ltd v
Tobbacco Marketing Board ,
Setlogelo v
Setlogelo,
Diepsloot Residents and landowners Association & Anor v
Administrator Transvaal,
Kaputuza & Anor v
Executive Committee of the Administration for the Heroes & Ors.
It
was contended on behalf of the applicants, that one of the
requirements of a final interdict, a clear right, has been defined by
the learned authors Herbstein & Van Winsen The
Civil Practise of the Supreme Court of South Africa
4th
ed, p1068, as 'a definite right'.
The
word 'clear' relates to the degree of proof required to establish
the right. The existence of a right is a matter of substantive law.
Whether the right is clearly established is a matter of evidence. In
order to establish a clear right, the applicant has to prove on a
balance of probabilities the right that he seeks to protect. See
Devilliers
v
Soetsane ,
Beukes v
Crous.
It
was submitted on behalf of the applicants that, in terms of Rule 17
of the TSSPF Rules, they have a clear right to have a compulsory
contribution equal to7% of their pensionable emoluments deducted from
their basic monthly salary. It was submitted further, that, in terms
of Rule 2 of the TSSPF Rules pensionable emolumens are defined as
basic annual salary together with any contractual bonus. In terms of
Rule 19 of the TSSPF Rules the TSSPF has an obligation to contribute
the balance of the costs of providing the benefits in terms of the
Fund Rules, as determined by an actuary, which contribution shall be
no less than the compulsory contributions paid by the members. See
record p 44.
These
obligations remain valid and binding for as long as the TSSPF has not
been disbanded. Applicants submitted that TRIANGLE cannot change the
definition of a pensionable emolument without amending the provisions
of Rule 2 of the Fund Rules. TRIANGLE was charged with 'unilaterally'
changing the structure of a Member applicant's remuneration to
introduce a new structure of remuneration called “Guaranteed
Package” which excludes any mention of how the pensionable
emoluments of Member applicants would be dealt with. See Record pages
86 and 95. It was argued that Rule 2 of the TSSPF Fund Rules includes
a Member's basic annual salary and any contractual bonus. It was
submitted that Member applicants have a clear right to have their
basic salary considered to be their pensionable emoluments, to have
7% deducted therefrom and to have TRIANGLE pay its share of the
monthly contributions into the TSSPF.
It
was contended on behalf of TRIANGLE that the interdict as claimed is
premised on the false allegation, or alternatively the disputed
allegation, that it is not making its contributions in terms of Rule
19 nor deducting the contribution of the members in terms of Rule 17
of the TSSPF Rules. It was submitted that these allegations are
incorrect, and consequently, the requirements of a final interdict
had not been met on the papers filed of record.
TRIANGLE
relied on the following cases as authority for this proposition;
Nument
Security (Pvt) Ltd v
Mutoti
& Ors ,
See also Stellenbosch Farmers Winery Ltd v
Stellenvale Winery (Pty) Ltdwhere
the court said that:
“It
seems to me that where there is a dispute of facts a final interdict
should only be granted in notice of motion proceedings if the facts
as stated by the respondents together with the admitted facts in the
applicant's affidavits justify such an order.”
I
find myself unable to agree with the submissions made on behalf of
TRIANGLE that there is a dispute of fact which is incapable of
resolution on the papers, for reasons previously stated. It was
submitted further, that the proposed interdict confuses the
obligations of TRIANGLE under Rule 19 and Rule 41(iii) of the TSSPF
Rules.
Rule
19 reads:
“Each
Employer shall contribute the balance of the costs of providing the
benefits in terms of these Rules as determined by the actuary and
agreed by the Principal Employer from time to time provided that the
Employer's contributions shall not be less that the compulsory
contribution by the Members.”
Rule
41(iii) dealing with Actuarial valuation, reads:
“If,
as a result of a valuation by an Actuary, the Trustees decide that
the benefits laid down in these Rules cannot be adequately financed
by the maximum company contribution rate specified by the Principal
Employer from time to time, then notwithstanding the provisions of
Rule 45, the benefits shall be reduced or the employee contribution
rate increased as the Trustees, with the consent of the Principal
Employer, and on the advice of the Actuary, decide”.
Record
pages 58-59. The Principal Employer is TRIANGLE.
In
this matter the company contribution rate is 13.5% of each Members'
basic salary. It is contended that this fulfills the obligation of
TRIANGLE in terms of Rule 19.
I
agree with that interpretation of Rule 19 which requires that the
employer's contributions be not less than 7%, which is what the
employees are contributing. It was submitted on behalf of TRIANGLE
that it is not in dispute that at present it is contributing 13.5% of
each Member applicant's salary to the TSSPF.
Rule
41(ii) allows a variation upwards or downwards of the monthly
contributions by the employer and/or by Member applicants, on
condition that, after the contributions that are proposed to be
varied are valued by an actuary, the Trustees must agree to the
proposed variation, and TRIANGLE must agree with the decision of the
Trustees.
The
issue that is taxing the court is that, in these circumstances, there
was no such agreement by the Trustees to vary the monthly
contributions of the Member applicants or of TRIANGLE, and
consequently TRIANLGE could not purport to do so in the absence of
any agreement to that course of action by the Trustees.
By
altering the composition of the Member applicant's basic salary,
TRIANGLE caused a ripple effect which varied the calculation of the
Member applicants' monthly contributions, as well as TRIANGLE's
own monthly contributions, and failed, refused or neglected to get
the consent of the Trustees, to the proposed variation.
A
deduction of 7%, and 13.5% of the Member applicants' basic salary
as at January 2009, for onward transmission to the TSSPF involves a
decision to use Member applicant's January 2009 salaries as a
benchmark for the deductions. The Member applicants' salaries as at
January 2009 are not the same salaries that they were individually
paid when they joined TRIANGLE. Nor is it the same as the salaries
that the Member applicants are being paid now. The decision to keep
the January 2009 salary benchmark as a basis for calculating the
member applicant's pensionable emoluments, requires the approval of
the Trustees to bring it into line with Rules 2 and 19 and 41(iii).
In
my view, the applicants have proved on a balance of probabilities
that they have a clear right that they seek to protect. The right to
enforce compliance with the provisions of Rules 2, 19 and 41(iii) of
the TSSPF Rules. The right to have a valuation done by an actuary, as
to whether their benefits in terms of the TSSPF Rules can no longer
be adequately financed, and if so whether the benefits should be
reduced, and if so, to what extent in regards to the employer and in
regards to the Members of the TSSPF. The right to have the valuation
done by an actuary put to the Trustees for consideration. The right
to have a decision made by the trustees. And finally, the right to
have the employer agree or disagree with the decision of the
Trustees.
The
second requirement for an interdict is an act of interference which
is defined as 'injury actually committed or reasonably
apprehended'. See
Setlogelo
v
Setlogelo Supra.
The
word 'injury' must be understood in the wide sense to include any
prejudice suffered by an applicant as a result of the infringement of
his rights. See Herbstein
& Van Winsen Supra
at
p 1070.
The
injury must be a continuing one. The court will not grant an
interdict restraining an act already committed for the object of an
interdict is the protection of an existing right; it is not a remedy
for a past invasion of rights. As authority for this proposition see
Performing
Right Society Ltd
v
Berman
.
The
test for apprehension is an objective one. The applicant must show,
objectively, that, his apprehensions are well grounded. See Ex
Parte Lipschitz.
The apprehension must be induced by some action performed by the
respondent or authorized to be performed by his agent.
See
Goldsmith
v
The SA Amalgamated Jewish Press
.
The
applicants contended that TRIANGLE stated that it will not consider
the basic salary being paid to the Member applicants as their
pensionable emoluments. As evidence of this is the minutes of June
2011 where TRIANGLE stated that:
“…considering
all the events that have taken place over the past few years, for
TSSPF employees to argue that the full cash package should be
pensionable is a position that the employer will not reconcile to”.
And
minutes of the June 2011 Trustees meeting where the employer
communicated a preference for employees to move to the defined
contribution fund:
“The
Employer has signaled for some time that its preference is for
employees to move to a DC Fund for the following reasons (amongst
others): The Employer wants to ensure that going forward all
employees are treated equitably in terms of their conditions of
employment, there is a general move towards remuneration on a 'total
package', or 'total cost of employment' basis, and once all
employees are on a DC Fund, it would be much easier to ensure fair
and equitable treatment of employees in terms of all their respective
conditions of employment”.
The
applicants' well grounded fear is that, for every month that passes
without TRIANGLE complying with its obligations in terms of the TSSPF
Rules, it is interfering with the accrual of their pension benefits.
It
is this court's view, that the applicants have successfully
discharged the onus on them, and adduced sufficient evidence on the
papers, to show, on a balance of probabilities, that the applicant's
fear is well grounded. An injury of a continuing nature is actually
being perpetrated against them. The injury actually committed, which
is continuing to be committed, is prejudicing them. The injury is
compounded by the fact that TRIANGLE did not bother to cause an
actuary to re-evaluate the respective parties' contributions, as
provided in terms of Rule 41(iii) and Rule 19. We are not taken into
TRIANGLE's confidence with regards to the basis on which it decided
to peg Member applicants' January 2009 salaries as the benchmark
for calculating pensionable emoluments.
The
third requirement for an interdict, is that there be no other
satisfactory remedy available to the applicants.
A
final interdict is a drastic remedy which is within the discretion of
the court. The court will not in general grant an interdict when the
applicant can obtain adequate redress in some other form of ordinary
relief. See Reserve
Bank of Rhodesia v
Rhodesia Railways.
It
was held in this case that where there is an existing remedy with the
same result for the protection of the applicant, an interdict will
not be granted.
Applicants
submitted that they have no other remedy that can provide them with
satisfactory redress in these circumstances. Attempts to have the
matter resolved by the Trustees failed. The Commissioner of the
Insurance Pension and Provident Fund, failed to resolve the dispute.
The Labour arbitrator declined jurisdiction. A claim for damages
would be inadequate.
It
is this court's view that the three requirements of an interdict
were met by the applicants.
The
final mandatory interdict sought in this matter, in effect is a
direction that TRIANGLE abides by the Rules of the TSSPF Fund, more
particularly, that it allows the TSSPF actuary to determine what the
balance of the cost of providing benefits towards the applicants is,
in accordance with the TSSPF Rules. The mandatory interdict sought,
is merely an order to TRIANGLE to comply with the Rules of the TSSPF,
by consulting the TSSPF Trustees and actuary, and working with them
to achieve consensus, in terms of the TSSPF Rules. It is accepted
however, as previously stated, that the nine retirees are excluded
from the relief granted to the rest of the applicants, in regards to
the interdict.
(j)
Whether the applicants are entitled to the declaratur
sought
and an interdict in the circumstances
It
is common cause that TRIANGLE put in place an arrangement whereby
each of its employees received a payment in United States dollars,
after dollarization in 2009. The arrangement was that each of its
employees would receive payment in United States dollars, and in
respect of members of the TSSPF who opted to remain with the TSSPF,
the question of the extent to which any payment or portion of payment
in United States dollars was to be treated as a basic salary and
therefore pensionable, remained open.
TRIANGLE
then purported to 'restructure' the conditions of employment of
its employees, starting with the E Band employees. After negotiations
with senior employees, the final restructured package was set out in
a letter dated 31 July 2009. The letter carried a caveat that the
employees would be advised in due course, of the extent to which the
current cash package would be pensionable. It is common cause that 11
of the E Band employees signed the letter. It was contended on behalf
of TRIANGLE that, by accepting the revised remuneration offered each
month thereafter 31 July 2009, the employees accepted this position
by their conduct.
On
19 January 2009, a similar letter was dispatched to middle management
employees, D Band. The letter was prepared by some of the E Band
employees. 21 out of the 22 D Band employees signed the letter in
acceptance of the 'restructured package'. Thereafter
restructuring of the salaries and other terms of employment of
supervisory and skilled staff, C Band employees was dealt with by way
of a letter dated 24 August 2010. 29 out of the 34 C Band employees
signed the letter and indicated acceptance of the revised terms.
The
applicants contended that these changes to the conditions of
employment were imposed unilaterally. It was submitted on behalf of
TRIANGLE that the evidence does not support this contention.
I
find myself in agreement with the position adopted by TRIANGLE, that
the 'restructuring' of the remuneration packages was done in
consultation with senior staff E Band employees. It is common cause
that 61 out of the 66 applicants signed acceptance of the new
conditions of employment. Subsequently, the employees who had signed
the letters received increases in their monthly cash packages, which
indicate further acceptance of the changes in their contracts. The
letter of 16 August 2010 repeated the assertion that the review of
the status of defined benefit funds and of the TSSPF was still in
progress. The applicants continued to accept payment of their
'restructured cash package', on that basis.
Are
the applicant bound by an issue estoppel?
In
the celebrated case of Ais
Enterprises (Finance) (Pty) Ltd v
Protea Assurance Co Ltd
the
court had this to say:
“The
essence of the doctrine of estoppels by representation is that a
person is precluded, i.e. stopped, from denying the truth of a
representation previously made by him to another person if the
latter, believing in the truth of the representation, acted thereon
to his prejudice (see Joubert
The Law of South Africa vol
9 para 367 and the authorities there cited). The representation may
be made in words, ie. expressly, or it may be made by conduct,
including silence or inaction, i.e. tacitly (ibid
para
371); and in general it must relate to an existing fact (ibid
para
372)”.
I
am in agreement with the contention that, the essence of the issue in
the present matter, and of the problem caused by the relief sought by
the applicants, is that, they have been paying less than what they
should have as a contribution to their pension, 7% of the January
2009 salary and not 7% of the total cash package or total
remuneration. Likewise TRIANGLE has been paying 13.5% of the January
2009 salary as the employer's contribution to the pensions scheme.
The
applicants seek that position to change only in relation to TRIANGLE
(based on the terms of the mandatory interdict sought) and for a
declaratur
that their rights to a pension are based on quite a different figure
from that on which they have been making payment, but with no
corresponding declaration that they have to make a contribution based
on their total cash package. This would create gross inequality
between the applicants themselves, and the nine retirees, and cause
prejudice to the TSSPF and to TRIANGLE. Applicants have not tendered
repayment of all the arrears of the difference between that which was
paid and 7% of the remuneration received.
For
these reasons it is this court's view that, the applicants by
conduct accepted remuneration between January 2009 and the
introduction of the total cash package with the explicit knowledge
that TRIANGLE has been paying 13.5% of the January 2009 salary as the
employer's contribution to the TSSPF. With the introduction of the
total cash package the applicants knew that there was no question
that the amount being paid to them each month was to be treated as
their basic salary, and each of them accepted that position. It was
clear to them, and each of them accepted the position, that their
pension contributions were based on an amount less than their actual
total pay package. By their conduct in continuing to accept that
position the applicants represented to TRIANGLE their acceptance of
what TRIANGLE had determined. It must be borne in mind that, in
granting declaratory relief to an interested person, person's
interest must concern an 'existing, future or contingent right'.
The
court finds that the applicants are estopped from enforcing their
existing interests in the TSSPF, in the sense of recouping arrear
contributions from TRIANGLE.
It
would have been in the interests of justice to order both parties to
pay their mutual arrear contributions to the TSSPF, had the
applicants not accepted by their conduct the determination of basic
salary by their employer. However, the court sees no reason why
applicants may not be granted consequential relief with regards to
their future, or contingent rights. For these reasons the following
orders are made:
Applicants
are accordingly estopped:
(a)
From disputing the right of their employer, TRIANGLE to determine
what portion of their total remuneration package is to constitute
basic salary for the purposes of pension contributions and
determining their pensionable emoluments between the period January
2009 to the date of this judgment.
(b)
From denying that their basic salary in terms of the TSSPF Rules is
the full amount paid to each of them for the month of January 2009,
up to the date of this judgment.
The
parties being in agreement on certain issues in respect of which the
applicants sought a
declaratur,
and these declaraturs
not having retrospective effect:
IT
IS HEREBY DECLARED WITH THE CONSENT OF THE PARTIES THAT:
(c)
The Triangle Senior Staff Pension Fund is valid and binding in
accordance with its Rules.
(d)
TRIANGLE
LIMITED can only disband the Triangle Senior Staff Pension Fund in
accordance with its Rules.
(e)
The applicants who are members of the Triangle Senior Staff Pension
Fund (a defined benefit fund) have no obligation to move to the Money
Plan (a defined contribution plan).
IT
IS HEREBY DECLARED AND IT IS COMMON CAUSE THAT:
(f)
TRIANGLE LIMITED has an obligation to deduct 7% of the applicants'
basic annual salary as their contribution towards the TSSPF and to
meet its share of the contribution towards the TSSPF in accordance
with Rule 19 of the TSSPF Rules.
(g)
IT IS HEREBY DECLARED THAT TRIANGLE LIMITED has an obligation to
cause the determination of the applicants' basic annual salary for
purposes of the calculation of applicants' pensionable emoluments,
from the date of this judgment onwards, in accordance with the TSSPF
Rules, and that, this obligation shall be discharged, in full, within
(90) ninety days of the date of this order.
(h)
CONSEQUENT TO THE ABOVE DECLARATIONS, TRIANGLE is hereby directed,
within (90) ninety days of the date of this order, to recommence
making its contributions, and to deduct the applicants'
contributions for onward transmission to the TSSPF, towards the costs
of providing benefits towards the applicants in terms of the TSSPF's
rules as determined by the TSSPF's actuary, and approved by the
TSSPF Trustees, EXCLUDING any arrears which arose between January
2009 and the date of this order, until such time as the TSSPF has
been terminated in accordance with the TSSPF Fund Rules.
(i)
TRIANGLE shall pay the costs of this application.
Messrs
Chinawa Law Chambers,
applicants' legal practitioners
Messrs
Gill Godlonton & Gerrans, 1st
respondent's legal practitioners
Messrs
Scanlen & Holderness, 2nd
respondent's legal practitioners
ANNEXURE
'A'
1.
G. CHIPARAUSHE
2.
D.D. SOKO
3.
B. MACHOKOTO
4.
K. NYEVEDZANAI
5.
E. ESTON
6.
T. MUNYERI
7.
G. MABIKA
8.
C. NYATI
9.
R.B. MAGOCHA
10.
J. CHIRUME
11.
S. MUDARIKWA
12.
D. CHITIYO
13.
C. P. MUTANGA
14.
S.M. MANDLEKO
15.
S. MASHAPA
16.
S.J. LEATT
17.
K.D.M. MOLYNEUX-SANDWITH
18.
R. MOLYNEUX-SANDWITH
19.
P.J.G. BOOTHWAY
20.
L. MAKONESE
21.
E.M. MAPAPA
22.
S.C. NHONDOVA
23.
I.D.C. MIDDLETON
24.
B. MIDDLETON
25.
L.H. CURRUTHERS-SMITH
26.
I. CURRUTHERS-SMITH
27.
D.MAZAMBANI
28.
H. MATEVEKE
29.
G.T. TAKAYEDZA
30.
L.MUTANDA
31.
O. ESTON
32.
M. M. CHUCHU
33.
Y. DENENGA
34.
C.T. MUWANI
35.
S. MAKOPA
36.
C. NDAIRA
37.
A.B. MORM
38.
O. MUSHORIWA
39.
D.I. MACINTOSH
40.
M.E. MUGAZAMBI
41.
A. J. J. RENSBURG
42.
R. CHIGAGURE
43.
D. MAKATI
44.
R. NHONDOVA
45.
A. P. NYIKADZINO
46.
S. MAKOVERE
47.
J. MANYONGA
48.
A.J. MUSIIWA
49.
N.D. MUTOVO
50.
D.Z.SHIRICHENA
51.
A.J. BOSCH
52.
C. CHISARE
53.
E.MUTANDE
54.
V.R.C. STREAK
55.
C.J. NAGO
56.
D.M. SIBANDA
57.
K.T. MUTANDA
58.
V. GANDANZARA
59.
T. W. MHLAFUNA
60.
J.C. SHAMUYARIRA
61.
E.M. GAVAZA
62.
K. GWAMURA
63.
L. MABIKA
64.
M. KOKAI
65.
T. MAVHUNDU
66.
J. MUKAHLERA
67.
R.T. KARIDZA
1.
1932 AD 165 @ 173
2.
1942 SR 41 @44
3.
1989 (2) ZLR 195 (HC) @ 199
4.
1988 (2) ZLR 129 (HC) @ 138
5.
2004 (1) ZLR 169 (HC) @ 174
6.
2009 (2) ZLR 221(H)
7.
1996 (1) ZLR 173(H)
8.
1967 RLR 289 (G)
9.
1986 (2) ZLR 171 (SC)
10.
2008 (1) ZLR 244 (S)
11.
2008 (1) ZLR 125 (H)
12.
2005 (1) ZLR 341 (S)
13.
1982 (1) ZLR 10(S) @19-20
14.
1998 (2) ZLR (HC) @95-96
15.
1999 (1) ZLR 41 (HC) @ 45-46
16.
2005 (2) ZLR 365 (HC) @ 368-369
17.
1982 (1) ZLR 10 (SC) @ 19
18.
2008 (4) SA 59 (N) @ 68
19.
2002 (1) SA 170 (T)
20.
1998 (2) SA 735 (SCA) @ 742-743
21.
1981 (2) SA 1 (C) @ 5
22.
1948 (3) (SA 731 (C) @ 732-733
23.
1978 (1) SA 173 (W) @ 178
24.
1990 (1) ZLR 67 (HC)
25.
2000 (2) ZLR 489 (SC) @ 492
26.
1994 NR 11 (HC) @ 15-16
27.
1982 (1) SA 398 (A) @ 430G-431A
28.
1984 (3) SA 623 (A) @ 635
29.
1983 (1) ZLR 232 (HC) @ 234-235
30.
1987 (2) ZLR 338 (SC)
31.
1998 (2) SA 689 (W) @ 698E-99B
32.
2010 (1) ZLR 133 (H) @ 136F
33.
1956 (3) SA 345 (A) @ 350
34.
1989 (2) ZLR 148 (S) @ 150
35.
1995 (1) ZLR 219 (HC) @ 221-222
36.
1994 (1) ZLR 337 (S)
37.
1972 (4) SA 409 (C) @ 415
38.
1990 (1) SA 889 (T) @ 902G-H
39.
1977 (3) SA 631 (T) @ 635G-H
40.
1963 (1) SA 754 (A) @ 759H-760A
41.
1969 (3) SA 142 (R) @ 144D-F
42.
1961 (3) SA 283 @ 285B-C
43.
1995 (1) ZLR 65 (SC) @ 72
44.
1993 (1) ZLR 122 (S) @ 129F-G
45.
2005 (2) ZLR 394 (SC) @ 397
46.
[1921] 2 AC 438 (HL) @ 445 Viscount Finlay
47.
[1957] AC 488 (HL) @ 500
48.
1996 (2) ZLR 52 (SC) @56
49.
1914 AD 221 @227
50.
1994 (3) SA 336 (A) @ 344H
51.
1984 (4) SA 295 (SWA) @317E
52.
1975 (1) SA 360 (E)
53.
1975
(4) SA 215 (NC) @ 219
54.
2007 (2) ZLR 300 (SC) @ 303
55.
1957 (4) SA 234 © @ 235E-G
56.
1966 (2) SA 355 ® @357
57.
1913 CPD 737
58.
1929 AD 441
59.
1966 (3) SA 656 (SR)
60.
1981 (3) SA 274 (A) @ 291 D-E
