Court name
Labour Court
Case number
26 of 2011
Case name
Kavekotora v Transnamib Holdings Ltd and Another
Media neutral citation
[2012] NALC 1
Judge
Smuts J





IN THE HIGH COURT OF NAMIBIA







REPORTABLE







CASE NO: LCA 26/2011


IN THE
LABOUR COURT OF NAMIBIA





In the
matter between:





MIKE
RATOVENI K KAVEKOTORA
…..................................
APPELLANT


and


TRANSNAMIB
HOLDINGS LIMITED
…........................1ST
RESPONDENT


LABOUR
COMMISSIONER
….....................................2ND
RESPONDENT





CORAM:
SMUTS, J





Heard on:
20 January 2012


Delivered
on: 3 February 2012



______________________________________________________________________







JUDGMENT



______________________________________________________________________


SMUTS,
J






  1. This
    is an appeal against an arbitrator’s dismissal of the
    appellant’s unfair dismissal complaint. The arbitrator
    essentially found that the appellant had not been dismissed and had
    in fact resigned from his employment with the first respondent.







  1. Many
    of the facts which gave rise to the complaint are common cause. The
    appellant was employed as General Manager: Marketing and Sales of
    the first respondent, a large parastatal, at remuneration of
    N$728,000.00 per annum. He was appointed to this position on
    18
    April 2008 for a period of 5 years pursuant to an employment
    agreement between the parties.







  1. On 14
    September 2009 the appellant addressed a written request to the
    Chief Executive Officer of the first respondent. In it, he requested
    that he be granted unpaid leave for 2 months as he had accepted
    nomination as a candidate in the forthcoming national elections for
    the National Assembly of the Republic of Namibia. The appellant
    further stated in this request that if he were to be successful in
    his quest for election, he would relinquish his position with the
    first respondent but would wish to return to his position after the
    2 month period of unpaid leave should his efforts prove to be
    futile.







  1. The
    Chief Executive Officer responded to the request for unpaid leave on
    14 September 2009. He stated that it had been discussed by the first
    respondent’s Board on the previous day and that the Board had
    resolved that clarification should be obtained from the appellant as
    to whether he had accepted nomination for election to the National
    Assembly and whether he was aware of Transnamib Policy SPIA1025
    dealing with Transnamib employees accepting candidacy as public
    office bearers and requesting an urgent response from the appellant.
    The policy was attached. It was on a heading of Transnamib Limited
    and provided that whenever an employee is either appointed to fill a
    seat in the National Assembly or has accepted nomination as a
    candidate for election to the National Assembly, that employee would
    be deemed to have resigned from the employ of Transnamib with effect
    from the date of such appointment or acceptance of such nomination.







  1. The
    appellant responded to this enquiry and confirmed that he had
    accepted nomination as a candidate for election to the National
    Assembly. He also stated that he had read the attached policy,
    SPIA1025, and expressed the view that it did not apply to him. This
    he explained in the following terms:







A cursory look at my employment contract
signed on April 18, 2008 indicates that the SPIA1025 was never
incorporated into my contract of employment. If Transnamib so
intended it should have done so as it did with the grievance and
disciplinary procedure in clause 12 of the employment contract.”





He
concluded:






In the light of the above, I submit that
I do not need to resign and am hereby reiterating my application for
unpaid leave.







I reserve all my rights herein.”






  1. Significantly
    the appellant referred to his employment with Transnamib, even
    though his contract of employment is with the respondent, Transnamib
    Holdings Limited.







  1. The
    Chief Executive Officer responded to this letter on
    5 October
    2009. He referred to the Policy SPIA1025 and quoted the relevant
    portion to the effect that upon nomination as a candidate or
    appointment to the National Assembly, an employee is deemed to have
    resigned from his / her employ with Transnamib. The Chief Executive
    Officer proceeded to point out that the appellant’s employment
    contract in clauses 2 and 19 indicated that the policy applied to
    him. The letter further stated:







  • You
    are therefore considered to have resigned from the employment of
    Transnamib Holdings (Ltd) effective from
    25 September 2009,
    which nullifies your request for unpaid leave.








  • The
    company accepts your resignation effective
    25 September 2009.







  • You
    will be entitled to your 3 (three) months notice payment and any
    other further benefit as calculated by the Human Resource Office.







Kindly ensure that all company properties as provided for in

clause 17 of your contract of employment in your possession are
returned to the company by close of business on 7 October 2009.







Allow me to thank you for the contribution you have made to
Transnamib Holdings Ltd in your role at GM: Marketing and Sales, and
wish you all the success in your future endeavours.”






  1. Clause
    2 of the employment contract provided:







The parties agree that all the terms and
conditions of employment are:








    1. specified
      in this agreement; and










    1. those
      conditions of employment not specified in this agreement shall be
      in terms of the Employer’s Rules, Regulations and Procedures
      and the Labour Act, Act No 6 of 1992 or as amended from time to
      time.”








  1. Clause
    19.1.1 of the agreement, also referred to in the Chief Executive
    Officer’s letter, provided:







It is agreed that the employee will,
upon assumption of duty, acquaint himself with the remaining rules of
employment not covered in this agreement, but equally applicable to
all Transnamib Holdings Ltd staff members.”






  1. The
    employment contract thus contemplated that there were further rules
    of employment not expressly referred to or specified in the
    agreement and which were applicable to the first respondent’s
    employees.







  1. The
    appellant’s application for unpaid leave having thus been
    turned down, he proceeded to campaign for election. Unfortunately
    for him, he was unsuccessful in his bid for election to public
    office. Although not fully canvassed in the proceedings or the
    pleadings, I enquired as to whether the appellant had tendered his
    services after receipt of the Chief Executive Officer’s letter
    of 5 October 2009 and the response on his behalf was in the
    negative. The appellant instead proceeded to file an unfair
    dismissal complaint in January 2010, contending that he had been
    unfairly dismissed and claimed reinstatement alternatively
    remuneration for the remaining duration of his contract in a sum
    exceeding N$2,2 million and costs. In both his particulars of
    complaint and in his evidence, the appellant claimed that he had
    been constructively dismissed. He contended that SPIA1025 did not
    apply to his employment relationship with the first respondent.







  1. In
    the alternative, he claimed in his particulars of claim that
    SPIA1025 had been superseded by a different policy which had applied
    to one of the first respondent’s subsidiaries prior to the
    restructuring of the first respondent which had resulted in the
    subsidiaries becoming dormant companies and the first respondent
    taking over all of their operations. This alternative basis was not
    relied upon when he gave evidence in the arbitration proceedings.







  1. The
    appellant’s claim instead shifted to claiming that the then
    Chief Executive Office of the first respondent Dr P. Shipoh had not
    been authorised to apply SPIA1025 to employees of the first
    respondent when the restructuring and amalgamation of the operations
    had occurred under the first respondent.







  1. There
    was reference to a circular which had been issued by the then Chief
    Executive Officer of the first respondent on 3 February 2000, more
    than 8 years before the appellant had entered into the employ of the
    first respondent. This circular was addressed to senior managers and
    managers and was entitled “validity and interpretation of
    SPIs”. It stated the following:







During the process of consolidating the
management structures and operations of the subsidiary companies into
Transnamib Holdings Ltd the following guidelines will apply to the
application of Standard Practice Instructions (SPIs) in the company:-







  1. Validity
    of SPIs








Transnamib Holdings Ltd adopted all Transnamib Ltd SPIs at the
time of its transition from Transnamib Ltd to Transnamib Holdings Ltd
on 1 April 1999. Unless superseded by a later amendment approved by
the Chief Executive Officer these SPIs remain valid and in force.”






  1. The
    circular then referred to certain specific SPIs of the subsidiary,
    TransNamib Transport (Pty) Ltd which were adopted and then stated
    that all other SPI’s of Transnamib Transport (Pty) Ltd would
    no longer be valid.







  1. The
    circular also referred to the new job titles which had been
    introduced to the management structure and set out certain delegated
    authorities for management at different levels.







  1. The
    appellant during the arbitration contended that this circular had
    not been authorised by the first respondent’s Board at the
    time the then Chief Executive Officer had issued it. He contended as
    a consequence that SPIA1025 was invalid and a nullity and did not
    apply to him.







  1. The
    appellant accepted that he had not been employed by Transnamib Ltd
    but by its successor, Transnamib Holdings Ltd. It was also not
    disputed that the subsidiary companies no longer operated after the
    amalgamation and restructuring which had occurred in 1999 / 2000 and
    that all of their operations were conducted under the first
    respondent in these proceedings and the appellant’s employer.
    The appellant also did not dispute that the consolidation resulted
    in the rights, benefits and conditions of employment of employees of
    Transnamib and the subsidiaries being taken over by the first
    respondent. The appellant did not call any other witnesses.







  1. The
    first respondent called 2 witnesses. There was firstly its General
    Manager: Human Resources and Administration,
    Mr Albertus
    Naruseb. He testified that if the appellant had decided not to
    proceed with his candidacy, he would have remained in the employ of
    the first respondent. He also referred to the circular of April 2000
    as providing for the continuation of employment conditions for
    employees of Transnamib Ltd and the continuity of the employ of
    employees of the subsidiaries, subject to adjustments to certain
    conditions. He also testified that two other employees had also
    applied for unpaid leave at about the same time as the appellant for
    the same purpose (of running for national office). After these
    employees had been referred to the same policy, SPIA1025, they had
    elected not to run for office but rather to continue their
    employment with the first respondent. His evidence in that regard
    was unchallenged.







  1. The
    erstwhile Chief Executive Officer of the first respondent,
    Dr P
    Shipoh, also testified for the first respondent. He referred to his
    circular of April 2000 and explained it in the context of the
    restructuring and consolidation of the operations which had
    previously been conducted by the first respondent’s
    predecessor and some subsidiaries which were thereafter consolidated
    under the first respondent. He oversaw that process. He was
    questioned about the continuation of SPIs after the consolidation
    and amalgamation and he referred to his circular. He further stated
    that he was authorised at the time to issue that circular which thus
    provided for the continuation of conditions of employment for
    employees of what was formerly TransNamib Limited and its
    subsidiaries with Transnamib Holdings Ltd which took over such
    employees. He was repeatedly asked in cross-examination as to
    whether he could provide a resolution which authorised him to issue
    and send out the circular. He was thus unable to refer to one but
    repeatedly reiterated that he was authorised to do so. He was unable
    to pinpoint a specific resolution passed some 10 years before but
    expressly stated that he was authorised to have issued the
    memorandum in question. He reiterated that he, in his erstwhile
    position gave effect to the overall restructuring by informing
    employees of their transfer with the retention of employment
    conditions and benefits to the first respondent.







  1. Despite
    the fact that the appellant’s representative in the course of
    those proceedings would appear to have accepted that the memorandum
    or circular was giving effect to the transfer of employees from the
    3 entities the first respondent, the appellant’s
    representative contended that the circular stating that the SPIs
    would continue to apply to employees was not authorised and that it
    was invalid on the grounds of the Chief Executive Officer having
    exceeded his authority. That was essentially the appellant’s
    case, namely that SPIA1025 was invalid vis a vis the
    appellant and that he had been constructively dismissed as a
    consequence.







  1. The
    arbitrator in this instance was the Labour Commissioner. He found
    that the appellant had not established that he had been
    constructively dismissed and he dismissed the appellant’s
    complaint.







  1. The
    approach of the appellant would seem to me to be flawed in a number
    of different respects. Firstly, the contention that the circular of
    Dr Shipoh was unauthorised and was invalid because he exceeded his
    authority, would not seem to me to be sound. This is quite apart
    from the fact that this was not the basis set out in the appellant’s
    letter to the first respondent in contending that the policy did not
    apply to him. His basis then was that it had not been expressly
    included in his employment contract, unlike the reference to the
    disciplinary and grievance procedure to which there was express
    reference. Therefore, he said it did not apply to him. That approach
    was correctly not persisted with subsequently, given clauses 2 and
    19 of the contract which referred to a further range of employment
    rules and the like which were not included in the employment
    contract but which would also apply to the appellant’s
    employment with the first respondent.







  1. On
    the issue of the authorisation of the circular to management, the
    appellant, some 10 years later, contends that it is invalid because
    the signatory, the erstwhile Chief Executive Officer at the time is
    not able to pinpoint a resolution which specifically authorised it.
    This resort to formalism, quite apart from the other difficulties
    with the appellant’s case which I refer to below, does not in
    my view avail him. The appellant had in the course of the
    proceedings, accepted that there had been a restructuring of 3
    entities, namely Transnamib Ltd and its subsidiaries, Transnamib
    Property and Transnamib Transport. Their operations were then
    consolidated and amalgamated into the first respondent with the
    subsidiary companies then becoming dormant. This exercise preceded
    his employment by more than eight years.







  1. The
    appellant did not question whether that the restructuring and
    amalgamation was or was not authorised. Having correctly not done
    so, I fail to see a basis upon which he could question the authority
    of the erstwhile Chief Executive Officer of Transnamib Ltd and
    thereafter Transnamib Holdings Ltd to have informed employees
    concerning the continuation of their conditions of employment and
    employment benefits. Once it is accepted that the entities were
    restructured and the employment of employees taken over by the first
    respondent, it would in my view follow that the employment
    conditions and benefits would continue to apply unless otherwise
    stated. It would seem to me that the erstwhile Chief Executive
    Officer would have been authorised to have sent such a circular.
    When he gave evidence, he confirmed that. The fact that he could not
    pin point a resolution which expressly authorised this would not in
    my view assist the appellant. Once employees were so transferred and
    their conditions of employment continued, a chief executive officer
    would plainly be authorised to inform them.







  1. But
    there is a further difficultly which faces the appellant in this
    regard. When he applied for unpaid leave, the current Chief
    Executive Officer informed him that the Board had resolved to
    enquire whether the appellant was aware of SPIA1025 which applied to
    the position of employees running for national office. The Board
    thus in any event by resolving to direct the Chief Executive Officer
    to make that enquiry clearly accepted the application of that policy
    to its employees when accepting nomination to run for election to
    the National Assembly. Even if there were to be any substance in the
    point that the circular was not at the time authorised, which in my
    view was not even remotely established, then the Board by directing
    its enquiry, accepted its application as a the policy in respect of
    its employees. It thus enjoyed the Board’s authority.







  1. More
    fundamentally however, the appellant did not establish that he had
    been constructively dismissed in the circumstances. He had the onus
    to do so. This Court has followed South African authority which in
    turn had adopted employer induced termination as a species of
    dismissal. 1
    This concept was eloquently explained by Cameron
    JA in the South African Supreme Court of Appeal in the following
    way:
    2







[8] … In employment law,
constructive dismissal represents a victory for substance over form.
Its essence is that although the employee resigns, the causal
responsibility for the termination of service is recognised as the
employer's unacceptable conduct, and the latter therefore remains
responsible for the consequences. When the labour courts imported the
concept into South African law from English law in the 1980s, they
adopted the English approach, which implied into the contract of
employment a general term that the employer would not without
reasonable and proper cause conduct itself in a manner calculated and
likely to destroy or seriously damage the relationship of confidence
and trust with the employee: breach of the term would amount to a
contractual repudiation justifying the employee in resigning and
claiming compensation for dismissal.”





And:






[12] In detailing this right, the
parties freely invoked the carefully considered jurisprudence the
labour courts have evolved in dealing with unfair employer-instigated
resignations under the labour relations legislation of the past three
decades. These cases have established that the onus rests on the
employee to prove that the resignation constituted a constructive
dismissal: in other words, the employee must prove that the
resignation was not voluntary, and that it was not intended to
terminate the employment relationship. Once this is established, the
inquiry is whether the employer (irrespective of any intention to
repudiate the contract of employment) had without reasonable and
proper cause conducted itself in a manner calculated or likely to
destroy or seriously damage the relationship of confidence and trust
with the employee. Looking at the employer's conduct as a whole and
in its cumulative impact, the courts have asked in such cases whether
its effect, judged reasonably and sensibly, was such that the
employee could not be expected to put up with it.







[13] It deserves emphasis that the mere fact that an employee
resigns because work has become intolerable does not by itself make
for constructive dismissal. For one thing, the employer may not have
control over what makes conditions intolerable. So the critical
circumstances 'must have been of the employer's making'. But even if
the employer is responsible, it may not be to blame. There are many
things an employer may fairly and reasonably do that may make an
employee's position intolerable. More is needed. The employer must be
culpably responsible in some way for the intolerable conditions: the
conduct must (in the formulation the courts have adopted) have lacked
'reasonable and proper cause'. Culpability does not mean that the
employer must have wanted or intended to get rid of the employee,
though in many instances of constructive dismissal that is the case.”

3






  1. This
    approach of Cameron JA was recently reaffirmed by the South African
    Constitutional Court. 4







  1. The
    appellant in this matter applied for unpaid leave for
    2 months
    for the purpose of fighting an election. His application was
    essentially turned down on the basis of the first respondent’s
    policy to the effect that employees who wished to do so would need
    to resign and that unpaid leave would not be granted for that
    purpose.







  1. The
    appellant did not challenge or even question that policy on the
    basis of any incompatibility with Article 17 of the Constitution or
    on grounds of unfairness but instead contended that it did not apply
    to him. (I express no view as to whether it would necessarily
    conflict with Article 17 of the Constitution, even though the first
    respondent is a parastatal and appellant occupied a senior position
    within that parastatal, and expressly leave that question open.) The
    appellant was thus alive to the terms of the policy provided to him
    at the instance of the first respondent’s board, which stated
    that unpaid leave for that purpose would not be granted and that
    employees who did not render their services on the basis of
    accepting a nomination for the purpose of running for an election to
    the National Assembly are thus deemed to have resigned. The
    appellant was thus placed before an election to either proceed with
    his nomination and be deemed to have resigned or withdraw and
    continue his employment. He elected to proceed with his nomination
    and is bound by that election.







  1. In
    this context, there is the evidence of Mr Naruseb. It was not
    controverted that the other employees had also sought unpaid leave
    for the purpose of running for office in that same election but when
    apprised of the policy embodied in SPIA1025, had rather elected to
    continue their employment.







  1. It
    cannot thus be said that the first respondent had engaged in conduct
    which rendered the further employment of the appellant intolerable.
    It had relied upon a policy which it had applied to other employees.
    The first respondent was thus not culpably responsible for the
    appellant’s resignation in the sense explained by Cameron JA.







  1. The
    arbitrator was in my view accordingly correct in finding that the
    appellant had not discharged the onus to establish that he had been
    constructively dismissed in the circumstances. It follows that the
    appeal is dismissed.
















_________________



SMUTS, J



ON BEHALF OF APPELLANT G Hinda


Instructed
by: Hengari, Kangueehi &



Kavendjii Incorporated







ON BEHALF 1STRESPONDENT S Shikongo



Instructed by: Shikongo Law Chambers






1Cymot
(Pty) Ltd v McLoud
2002 NR 391 (LC) at
393, following
Jooste v Transnet Ltd
t/a SA Airways
(1995) 16 ILJ 629 (LAC)
at 638B which in turn cited English authority.




2Murray
v Minister of Defence
2009 (3) SA 130
(SCA) at par [8]




3Supra
par [12] and [13]




4Strategic
Liquor Services v Mvumbi N.O.
2010 (2)
SA 92 (CC) at 94