Court name
Labour Court
Case name
Municipal Council for the City of Windhoek v Swarts
Media neutral citation
[2005] NALC 3
















THE
MUNICIPAL COUNCIL OF THE CITY OF WINDHOEK
versus PETRUS
GERHARDUS SWARTS



CASE NO.: LC 01/2004








SILUNGWE,
P.











2005.10.17









LABOUR
LAW
– Basic conditions of Employment – Annual Leave –
Accumulation of --- - Right to accumulate leave distinguishable from
right to payment in lieu of leave - Rule 21(2)(a) of Personnel Rules
for Windhoek Municipal limiting to 130 the number of accumulated
leave days for which employee can be remunerated on termination of
services – Section 39(4)(a) of the Labour Act No 6 of 1992
providing that on termination of employment employer obligated to pay
employee full remuneration for any leave accrued but not granted
before date of termination – Annual Leave ostensibly designed for
restorative purposes for good of employee and employer – Parties to
employment contract entitled to regulate any leave or other
entitlements in excess of statutory minimum – Respondent’s right
to accumulate leave days in excess of statutory minimum of 24
consecutive leave days regulated by terms of contract between parties
- Applicant’s obligation in terms of Rule 21(2)(a) coextensive with
obligation created by section 39(4)(a) and so no conflict between
term of contract of employment and statutory provision – Statutory
expression “--- any leave accrued ---” is a reference to
contractual conditions of employment.







LABOUR
LAW
– Construction of statute – Golden rule of construction –
Meaning of expression: “--- any leave accrued ---.”

















CASE
NO.: LC 01/2004





IN THE
LABOUR COURT OF NAMIBIA











In
the matter between:











THE
MUNICIPAL COUNCIL FOR THE CITY OF WINDHOEK Applicant














and














PETRUS
GERHARDUS SWARTS Respondent











CORAM: Silungwe,
President











Heard
on: 2004.07.16





Delivered
on: 2005.10.14









JUDGMENT






SILUNGWE, P.: In
this notice of motion, the applicant seeks an order:







1. Declaring
that the applicant’s condition of service limiting the number of
accumulated vacation leave days payable upon termination of service
to 130 days is not in conflict with the Labour Act 6 of 1992 and is
accordingly enforceable.







2. Granting
the applicant such further and/or alternative relief as this ---Court
deems fit.”







The applicant is a duly
constituted local authority under the Local Authorities Act, No. 23
of 1992, and it is represented by Advocate Smuts, SC. The respondent
is a former employee of the applicant and he is represented by
Advocate Botes.







The application, which is
brought pursuant to section 18 (1)(e) of the Labour Act, No. 6 of
1992 (the Act), concerns a dispute between the parties wherein the
respondent claims that the applicant owes him a sum of N$82,282.07 in
respect of 135 days of accumulated leave.







It is common cause that the
respondent retired on February 28, 2003, after 39 years of service
with the applicant. Upon his retirement, the respondent had 265
accumulated vacation leave days to his credit. The applicant was,
however, prepared to pay, and actually paid, him for 130 leave days
only, thereby leaving a balance of 135 days in respect of which the
applicant denied responsibility. Consequently, the respondent
approached the Windhoek District Labour Court in an effort to recover
the sum of N$82,282.07 for the 135 days of accumulated leave. In its
reply, the applicant disputed the respondent’s claim to payment for
accumulated leave in excess of 130 days, by virtue of its conditions
of employment as stipulated in Rule 21(2) of the Personnel Rules for
the Windhoek Municipality (the Rules) which, it pleaded, were binding
on the respondent. The Rule provides:







21(2) Where
an employee or Council terminates that employee’s contract of



service
with Council and the employee has accumulated vacation leave days
granted in terms of Rule 18, Council shall pay to the employee, in
accordance with the formula referred to in Rule 20(4), the cash value
of the accumulated vacation leave days, but Council shall not pay any
cash for number of days which exceeds –







(a)
in the case of an employee who works a five day working week, 130
days”.







It is not in dispute that the
respondent worked a five-day working week. Further, it is evident
that Rule 21(2) limits to 130 the number of accumulated leave days
for which an employee of the applicant can be remunerated upon
termination of his/her services.







Advocate Botes contends that
Rule 21(2), which is contained in subordinate legislation, is in
conflict with section 39(4)(a) of the Act and is thus unenforceable.
But Advocate Smuts disagrees, arguing that section 39(4)(a)
contemplates remuneration for accumulated leave accrued in the
current leave cycle, upon termination of an employee’s services.
This, continues Advocate Smuts, is the proper interpretation to be
placed upon section 39(4)(a) when the section is construed as a
whole. Besides, so argues Advocate Smuts, the respondent’s reliance
on section 39(4) would, in any case, not arise or apply where parties
have agreed upon limiting accrued leave by way of contract, which
they did in this matter, as the applicant’s conditions of leave
specifically provide for the position, pursuant to Rule 21(2) of the
Rules.







For ease of reference, section
39(4)(a) reads:







39(4) Upon
termination of an employee’s employment his or her employer shall
pay to him or her –







(a) his or her full remuneration
in respect of any leave accrued to him or her but was not granted
before the date of termination of his or her employment; and







(b) ---”







The question that immediately
arises for consideration is whether Rule 21(2) of the Rules is in
conflict with section 39(4)(a) of the Act. This is indeed the very
essence of paragraph 1 of the Notice of Motion. It is clear from an
examination of subrule (2) of Rule 21 and subsection (4)(a) of
section 39 that - whereas the subrule expressly limits remuneration
for accrued accumulated vacation leave days to 130 days, the
subsection is without limitation or qualification. This, prima
facie,
seemingly answers the question posed above in the
affirmative. But what is the import of subsection (4)(a) when
subsection 39 is construed as a whole? In other words, given a
holistic interpretation of section 39, does the subsection thereof
contemplate remuneration only for accumulated leave accrued in the
current leave cycle on termination of an employee’s services, as
Advocate Smuts contends?







In construing a statute, it is
normally instructive to commence with the golden or general rule of
construction. As Joubert, J.A., put it in Adampol (Pty) Ltd v
Administrator, Transvaal
1989(3) SA 800 at 804A-C:







The
plain meaning of the language in a statute is the safest guide to
follow in construing the statute. According to the golden or general
rule of construction the words of a statute must be given their
ordinary, literal and grammatical meaning and if by so doing it is
ascertained that the words are clear and unambiguous, then effect
should be given to their ordinary meaning unless it is apparent that
such a literal construction falls within one of the exceptional cases
in which it would be permissible for a court of law to depart from
such a literal construction, e.g. where it leads to a manifest
absurdity, inconsistency, hardship or a result contrary to the
legislative intent. See: Venter v Rex 1907 TS 910 at 913-14;
Johannesburg Municipality v Cohen’s Trustees 1909 TS 811 at
813-14; Shenker v The Master and Another 1936 AD 136 at 142;
Ebrahim v Minister of the Interior1977 (1) SA 665 (A) at
678A-G.”







See: also Paxton v Namib
Rand Desert Trails (Pty) Ltd
NLLP 1998 (1) 105 NLC at 107; and S
v Russel
1999 NR 39 at 43F-G.







On a literal reading of section
39 as a whole, I find that the words are “clear and unambiguous”
and, indeed, there is no suggestion to the contrary. Hence, effect
should be given to their ordinary meaning. Noticeably, the wording in
subsection (4)(a), to wit:







(4) Upon
termination of an employee’s employment his or her employer shall
pay to him or her -







(a) his
or her full remuneration in respect of any leave which accrued
to him or her, but was not granted before the date of termination of
his or her employment.”







(emphasis is provided) is not,
by any stretch of imagination, confined to accrued accumulated leave
in a current leave cycle on termination of an employee’s
employment. It seems to me that the expression:






---any
leave which accrued---but which was not granted before termination
of---employment.”







defies limitation or
qualification. As Innes, CJ., observed in R v Hugo 1926 AD
271:







Any’ in s 16(f) of Act No.
14 of 1911 as amended by s 1 of Act No. 18 of 1925, is ‘a word of
wide and unqualified generality.’”






See: Dictionary of Legal Words
and Phrases, Vol. 1, 1975 ed. 97. And, in Clarke – Jervoise v
Scutt
190 ICH 382, Eve, J. had this to say:







Any’ is a word of a very
wide meaning, and prima facie the use of it excludes
limitation.”







See: Words and Phrases legally
defined, Vol. 1, 1988 ed. 92; Stroud’s Judicial Dictionary of Words
and Phrases, 6th ed. 134.





In
his Workplace Law book, 3rd ed., at 60, John Grogon
writes, and properly so, in my view:






On
termination of service, an employee is entitled to be paid for any
leave due but not taken, and to leave accrued during an incomplete
annual leave cycle---“





See also:
Wallis: Labour and Employment Law, 1993 ed., at 17.






Taking cognizance of the golden
rule of construction and the contents of the preceding paragraphs in
regard to the construction to be placed on section 39 with particular
reference to subsection (4)(a) thereof, I am not at all persuaded
that the subsection contemplates remuneration only for accumulated
leave accrued in the current leave cycle upon termination of an
employee’s services. This conclusion flies in the face of Franklin,
AJ’s finding in Jooste v Kohler Parking Ltd (2004) 25 IJL
121 (LC) at 126A-B.







A further submission by
Advocate Smuts, as previously indicated, is that the respondent’s
reliance upon section 39(4) of the Act would in any event not arise
or apply where parties have contractually agreed in their conditions
of employment, as in casu, to specifically limit the
employee’s entitlement to an accrued accumulated leave where such
conditions of leave are more favourable than the statutory minimum.







Advocate Botes, however,
contends that the applicant’s conditions of employment, based, as
they are, on subordinate legislation, must not be in conflict with
the Local Authorities Act or any other law, including the Labour Act.







As I see it, the thrust of the
issue raised is not limited to subordinate legislation but crisply
deals with the question whether the parties in casu were
entitled to regulate by agreement any leave entitlement in excess of
the statutory minimum.







In any case, it is settled law
that subordinate legislation must not be in conflict with the
enabling legislation. See: The Interpretation of Statutes (by Laurens
M. du Plessis), 1986 ed. at 16. E. A. Kellaway, the learned author of
Principles of Legal Interpretation puts it this way, at 375:







Any
provisions in subordinate legislation (for example a Town Planning
scheme embodied in a Provincial Ordinance) must be intra vires
its enabling legislation.”







The Personnel Rules for the
Windhoek Municipality are a creature of the applicant with the
approval of the Minister responsible for Regional and Local
Government and Housing, made under section 27(1)(c) of the 1992 Local
Authorities Act. Section 25 of the Labour Act, which, like section
29, falls under Part V, headed: Basic Conditions of Employment,
stipulates:







25. The provisions of this
part shall not be construed as preventing an employer from agreeing
to or granting any condition of employment which is more favourable
to any employee than any condition of employment referred to in this
Part.”







In similar vein, the Preamble
to the Act shows that one of the objects of the Act is:






-
to lay down certain obligatory minimum basic conditions of service
for all employees without inflinging or impairing the right to agree
to conditions of service which are more favourable than such basic
conditions.”







It is thus evident that one of
the purposes of the Act is to lay down certain basic conditions of
employment. With regard to annual leave, section 39(1)(a) thereof
does not more than to prescribe a minimum period of leave on full pay
which must be accorded to an employee for each period of 12
consecutive months. However, the actual number of leave days to be
granted, the category of workers, the right to accumulate leave days,
et cetera, are all matters that are left to parties to regulate by
contract, provided that what is regulated does not fall below, or is
not less favourable to an employee than, the basic conditions
prescribed by the Act.



Section 39(1)(a) makes the
following provision:







39(1)(a) An
employer shall grant at least 24 consecutive days’ leave of absence
on full remuneration in respect of each period of 12 consecutive
months for which the employee is employed by him or her (hereinafter
referred to as leave cycle): Provided that the period of leave may be
reduced by the number of days on which the employee was during the
relevant leave cycle granted occasional leave on full remuneration at
his or her request.”







Section 39(1)(a) exists for the
protection of employees who might otherwise be denied annual leave.
It places an obligation upon an employer to grant an employee at
least 24 consecutive days’ leave per annum which is enforceable at
the instance of the employee. See: Jardine v Tangaat-Hullet Sugar
Ltd;
2003 24 IJL 1147 (LC) at 1150, para. 14. The said leave is
ostensibly designed for restorative purposes for the good of the
employee, let alone the good of the employer. Such purposes are
undermined in the event of the employer refusing to grant leave, or
the employer failing to take leave. In the case of the latter, it is
to be observed that no provision exists for any sanctions against the
employee. It is thus hardly surprising that paragraph (b) of the
subsection precludes the employer from requiring the employee to
perform any work during the employee’s leave. Besides, section
39(9) provides that:







39(9) Subject
to the provisions of subsection (4), no employer shall agree with an
employee to pay him or her any amount in lieu of leave to which he or
she is entitled in terms of subsection (1) or pay such amount to him
or her.”







On a proper construction, the
foregoing subsection is obviously applicable only to an employee
whose employment is still subsisting. It is apparent that the
subsection serves to encourage employees to take their annual leave
regularly.







While section 39(1)(a)
prescribes the minimum of 24 consecutive leave days, the applicant’s
conditions of employment, which find expression in Rule 18(1) of the
Rules, provide for 32 working leave days per annum on full
remuneration. To this extent, the provision of section 32 working
leave days is more favourable than the statutory minimum of 24
consecutive leave days.







The respondent’s right to
accumulate leave days in excess of the statutory minimum was, in my
view, regulated by terms of contract between the parties. The right
to accumulate leave is distinguishable from the right to payment in
lieu of leave. That this is so was succinctly articulated thus by
Franklin, A.J. in Jooste v Kohler Parking Ltd (2004) 25 IJL
121 (LC), at 126J-127A:







Furthermore, a distinction
must be drawn between the right to accumulate leave and the right to
payment in lieu of leave. The existence of the former does not imply
the existence of the latter. Agreement is required in relation to
both.”



(Emphasis provided.)



And at 126D, he remarked that:







[P]arties
to an employment contract are entitled to regulate by agreement any
leave (or other) entitlement in excess of the statutory minimum.”







See: also 126H where the court
expressly held that it was perfectly permissible for parties to agree
that leave in excess of the statutory minima may be accumulated and
that the employer is obliged to pay remuneration in lieu of any such
leave accumulated, but not taken at the date of termination of
employment (subject only to a contractual limit).







Hence, the statutory obligation
created by section 39(4)(a) is coextensive with the applicant’s
obligations in terms of Rule 21(2). See: Dhanser and Others v
Nugshoes (Pty) Ltd
, 1966(2) SA 424 at 429A and E. In other words,
the statutory expression (section 39(4)(a): “any leave accrued---”,
is a reference to the contractual conditions of employment between
the parties. In the premises, Rule 21(2) and section 39(4)(a) are not
in conflict but, rather, they are complementary.







In casu, it is not in
dispute that, notwithstanding the respondent’s full knowledge of
the condition of employment stipulated in Rule 21(2), to which he was
a party, he still failed, by design, to reduce his accumulated leave
days to 130 days by the time that he went into retirement. It would
appear that the respondent’s wilful disregard of his contractual
term of employment was premised on a bona fide (but mistaken) belief
that his claim was regulated by section 39(4)(a) of the Act, and
that, as such, Rule 21(2) of the Rules was in conflict with the said
section, leading him to the conclusion that the rule was of no
application to him.







In the circumstances, the
applicant’s condition of employment “limiting the number of
accumulated vacation leave days payable upon termination of service
to 130 days” is not in conflict with the Labour Act. Accordingly,
the declaratory relief sought by the applicant in paragraph 1 of the
Notice of Motion is granted.







As I consider that the
respondent neither acted frivolously nor vexatiously, in opposing the
application, I make no order as to costs.


















________________





SILUNGWE,
J.



ON BEHALF OF THE
APPLICANT: Advocate D. F. Smuts, SC







Instructed
By: Lorentz & Bone











ON BEHALF OF THE
RESPONDENT: Advocate L. C. Botes







Instructed By:
André Louw & Partners