Court name
Supreme Court
Case number
SA 68 of 2012
Case name
Hugo v Council of Municipality of Grootfontein
Media neutral citation
[2014] NASC 15
Judge
Shivute J










IN THE SUPREME
COURT OF NAMIBIA








CASE
NO.: SA 68/2012





DATE:
27 OCTOBER 2014





REPORTABLE





In the matter
between





DIRK JOHANNES
HUGO....................................................................................Appellant





And





COUNCIL OF
MUNICIPALITY OF
GROOTFONTEIN....................................Respondent





Coram: SHIVUTE
CJ, MAINGA JA and DAMASEB AJA





Heard: 2 July
2014





Delivered: 27
October 2014








APPEAL
JUDGMENT








SHIVUTE CJ
(MAINGA JA and DAMASEB AJA concurring):





Introduction





[1] The appellant
was granted leave to appeal by the Labour Court in respect of
questions of law raised in the application for leave to appeal in
that Court. In the application for leave to appeal the appellant
advanced six grounds, the first of which was abandoned at the
hearing. The remaining grounds of appeal on the basis of which leave
to appeal was granted are as follows:





'1. The court erred
in not finding that the respondent was prohibited by the provisions
of s 27 of the Local Authorities Act 23 of 1992 to unilaterally
change the conditions of employment of the appellant by attempting to
reduce the retirement age from 65 to 60 and that that attempted
change had any legal effect at all.





2. The court erred
in not finding that it was incumbent upon the respondent to resort to
industrial action in terms of the provisions of s 81 of the Labour
Act of 1992 to resolve the dispute of interest, i.e. the desire by
the respondent to unilaterally change the conditions of employment,
and thereby moving the appellant to agree to the change.





3. That the court
erred in finding that it was incumbent upon the appellant to take
steps to challenge the decision by the respondent to unilaterally
change the terms of the contract of employment by reducing the
retirement date to 60 years, and that these steps had to be taken at
the time of the decision.





4. The court erred
in not finding that the appellant was entitled to be appointed, upon
expiry of his last term as Chief Executive Officer, in a post on the
fixed establishment of the respondent on conditions not less
favourable than those he had enjoyed as Chief Executive Officer by
virtue of the provisions of s 27 of the Local Authorities Act 23 of
1992.





5. The court erred
in finding that the actions by the appellant amounted to an election,
to accept the unilateral change of the terms of the employment
contract with the resultant reduction of the retirement age from 65
to 60.'





[2] Grounds 1 and 4
are concerned with the interpretation of s 27 of the Local
Authorities Act read with the judgment of this Court in Cronje v
Municipality Council of Mariental NLP 2005 (4) 129 (NSC). Grounds 2
and 3 address the question of whether the respondent should have
resorted to industrial action in the form of a lockout under s 81 of
the Labour Act 1992. Ground 5 deals with the question of whether the
appellant had elected to acquiesce in the unilateral decision of the
respondent, taken in 2004, to reduce the retirement age of all its
employees from 65 to 60 years. The dispute arose before the Labour
Act 11 of 2007 came into operation, so the relevant provisions of the
Labour Act 1992 are of application.





Background facts





[3] Most of the
facts in this appeal are common cause. The appellant originally
commenced employment with the respondent on 27 January 1972. His
employment was regulated by the then applicable Municipal Ordinance
13 of 1963 (the Ordinance). His appointment was of a permanent nature
with a retirement age of 65. The appellant was promoted to the
position of Town Clerk in 1988. After Independence in 1990, he
retained his position as Town Clerk by virtue of the provisions of
Article 141(1) of the Namibian Constitution.





[4] From 1992, the
position of the appellant was regulated by the provisions of the
Local Authorities Act 23 of 1992 (the Act), which provided for a
continuation of the position of staff members previously appointed in
terms of the Ordinance.





[5] The appointment
of the appellant as Chief Executive Officer was extended from time to
time. The last extension was set out in an agreement dated 25 April
2006. This agreement was extended until 12 May 2009, after the
appellant had reached the age of 60 years.





[6] On 1 March 1992,
a new Retirement Fund for Local Authorities in Namibia was introduced
to replace the previously existing Municipal Pension Fund of South
West Africa/Namibia. In terms of the old retirement fund, the
retirement age was 65. The new pension fund rule provided for a
retirement age of 60. It was, however, possible for an employee to
retire at age 65 provided that the employer had so approved. On 26
October 2004, the respondent’s Council resolved that the
condition of service regarding the retirement age of all employees be
changed to 60 years, and that in future an employee turning 60 would
be compelled to retire at the end of the month of his or her 60th
birthday. This resolution was meant to bring the retirement age in
line with the provision in the new retirement fund. The appellant
objected to the resolution on the ground that it amounted to a
unilateral amendment of his conditions of employment. The respondent
did not accept the objection. To the knowledge of the appellant, the
new resolution was applied in respect of a number of employees who
turned 60 after the resolution had been adopted. The appellant did
not take any steps to challenge the unilateral change in the
conditions of employment until 2009 when he turned 60 years and was
requested to vacate his position. He then lodged a complaint with the
Labour Commissioner.





History of the
litigation





[7] This matter has
its origins from an arbitration award dated 8 April 2010. The
arbitrator found for the appellant and held that based on the
documentary evidence before her, the dismissal of the appellant was
substantively unfair. Furthermore, the arbitrator ordered that the
respondent pay compensation to the appellant in a sum equivalent to
twelve (12) months’ salary, which amounted to N$438 814,92. The
amount was to be paid on or before 30 April 2010 through the Office
of the Labour Commissioner.





[8] The respondent
appealed against the arbitrator's award to the Labour Court and the
matter came before Smuts J, who decided two issues. Firstly, whether
the appellant was unfairly dismissed when his fixed term contract
came to an end upon his turning 60 years. Secondly, whether the
retirement age of the respondent’s employees had been validly
changed from 65 to 60 years. If not, a further question then arose as
to whether the appellant was entitled to be appointed for a further
term on the same conditions of employment at the expiration of his
term as Chief Executive Officer.





[9] Smuts J set
aside the arbitrator's award and found for the respondent after
concluding that the retirement age of 60 years was binding upon the
appellant. It was also held that the appellant was not entitled to
any further appointment on the basis of the binding nature of the
interpretation of s 27 of the Labour Act 1992 in the Cronje case.





[10] For the
purposes of this judgment, the important clauses in the memorandum of
agreement of service entered into between the parties are set out as
follows:





'1. APPOINTMENT AND
POSITION


The employee has
been appointed as the Chief Executive Officer of the Grootfontein
Municipality since 1988 and after this date the employee’s
appointment in terms of section 27(3)(i)(aa) was extended until
September 1999. Thereafter the employee’s appointment as Chief
Executive Officer was again extended from time to time until 25 April
2006 when the employee’s appointment as Chief Executive Officer
was again extended for a further term of three years until he reaches
the age of 60 on 12 May 2009, which extension the employee has
accepted on the terms and conditions set out hereunder.


. . .


4. REMUNERATION


. . .


4.2.7 Compulsory
participation in the employer’s approved Pension Fund to which
fund the employer contributes 21,7%





. . .





7. PENSION AND
MEDICAL AID:





. . .





7.2 Pension Fund
Scheme:





The employee is
obliged to join the pension fund subscribed to by the employer, to
which fund the employer shall contribute 21,7% of the monthly basic
salary of the employee and the employee in return shall contribute
9,5% of his monthly basic salary, which shall be deducted from the
monthly remuneration to the employee.





. . .





9. PERSONNEL RULES





The employee shall
abide by the rules, regulations, codes and procedure of the employer,
as amended from time to time.'





Grounds of appeal 1
and 4





[11] In relation to
grounds 1 and 4, counsel for the appellant submitted that for the
respondent to contend that the retirement age of the appellant had
validly been changed to the age of 60, it was incumbent upon it to
establish that the parties had concluded an agreement to negate the
existing contractual position. Counsel relied on s 27 of the Act and
the Cronje judgment.





[12] In argument
before this Court, counsel for the respondent argued that the
interpretation of s 27 of the Act in the Cronje case was problematic.
Counsel submitted that the whole of s 27(6)(a) is subject to the
provisions of subsec (3)(a)(i)(bb). Furthermore, relying on Black
Range Mining (Pty) Ltd v Minister of Mines and Energy N.O. (SA
09/2011) [2014] 26 March 2014 a (still unreported) judgment of this
Court paras 43 and 44 and Municipality of Walvis Bay v Du Preez 1999
NR 106 (LC) at 113-114, that in the event of a conflict between s
27(6)(a) and 27(3)(a)(i)(bb), the provisions of s 27(3)(a)(i)(bb)
prevail. Section 27(6)(a) is thus subservient to s 27(3)(a)(i)(bb) to
the extent that there is a conflict between the two provisions. As a
result, it was submitted that the Town Clerk deemed to have been
appointed in terms of s 27(6)(a) cannot be deemed to have been
appointed for a period of successive terms of two years, or, as was
held in the Cronje matter, indefinitely. Section 27(6)(b) addresses
itself to a very specific type of Town Clerk who holds office as such
on a date immediately before the date fixed in terms of Article
137(5) of the Namibian Constitution. Quoting Minister of Home Affairs
v Dickson and Another 2008 (2) NR 665 (SC) para 35, counsel submitted
that s 27(3)(b) read with s 27(3)(a)(ii) of the Act by necessary
implication excludes persons whose terms of office have been renewed
or extended. In other words, the Town Clerk’s rights under s
27(6)(b) accrue only when the initial two year period is not
extended.





[13] Counsel for the
respondent contended that from the wording of the relevant sections,
it was clear that the provisions were transitional in their nature as
they applied to persons who were employed in the previous
administration and had to be carried over to the period that followed
after the Act came into operation. The Court in the Cronje case had
erred in its interpretation of those provisions. Counsel was in
agreement with the views expressed in paras 33 and 34 by the court a
quo on the interpretation of the sections.





[14] It should be
observed at the outset that because of the conclusion arrived at by
the Labour Court in this matter, it became unnecessary for that court
to express any views on Cronje. Moreover, the court below was bound
by Cronje. Thus, the views expressed by that court about that
judgment are strictly obiter and unnecessary, as counsel for the
respondent conceded in argument. Furthermore, the views expressed on
Cronje in the court below do not impact the outcome of the appeal. In
my opinion, what is decisive in the present appeal is the
interpretation of the memorandum of agreement signed by the parties.





Two contracts?





[15] Essentially,
counsel for the appellant submitted that the appellant and the
respondent had two binding contracts between them: the original
contract of employment which arose in terms of the provisions of the
Ordinance (as confirmed by the Act) and the written agreement that
counsel characterised as a contract ‘for the extension of
appointment as Chief Executive Officer’ rather than an
agreement for the extension of employment. I am unable to agree.
Although the appellant’s employment may have initially been one
of a permanent nature, the subsequent extension of his employment as
Chief Executive Officer from time to time amounted to a variation of
the previous contractual relationship, thereby changing the nature of
his employment to a fixed term contract.





Caveat subscriptor
rule





[16] It is a trite
principle of the law of contract that a person who has signed a
contractual document thereby signifies his assent to the contents of
the document. Maritz JA in Namibia Broadcasting Corporation v Kruger
and Others 2009 (1) NR 196 (SC) paras 9 - 10 stated the following:





'9. . . . Fagan CJ
remarked in George v Fairmead (Pty) Ltd





"When a man is
asked to put his signature to a document he cannot fail to realise
that he is called upon to signify, by doing so, his assent to
whatever words appear above his signature."





10. Absent any
credible allegation of misrepresentation, subterfuge, dishonest
concealment, duress, fraud or the other exceptions to the general
rule, the second to 22nd respondents are bound by the quantification
of the severance payments reflected in their respective deeds of
settlement with the appellant. They agreed to receive them in full
and final settlement of their respective claims and, in that sense,
their signatures not only sealed the quantum of their severance
entitlements but also the fate of their application."'





[17] The appellant’s
heads of argument do not contain any contention that there was an
instance on the part of the respondent that may have led to an
absence of consensus. As a result, it can be accepted that the
parties were ad idem as to the terms of their agreement and the
appellant was aware of his rights and obligations at the time of the
signing of the memorandum. Furthermore, he intended to be bound by
the terms of the agreement.





[18] The High Court
in Damaraland Builders CC v Ugab Terrace Lodge CC 2012 (1) NR 5 (HC)
discussed the general principles applicable to the contract when
attempting to construe the true intention of the parties in
circumstances where there is some inconsistency or ambiguity. Of
particular importance to this judgment is the parol evidence rule as
discussed in para 11 of the judgment as follows:



'11. A further
aspect that needs consideration in respect of the interpretation of
the contracts is the parol evidence rule.





"The rule is
that when a contract has once been reduced to writing, no evidence
may be given of its terms except the document itself, nor may the
contents of such document be contradicted, altered, added to or
varied by oral evidence. . . ." [Lowrey v Steedman 1914 AD 532
at 543.]





There are some
exceptions to the parol evidence rule, namely whether or not there
was a contract, supplementary and subsequent oral contracts, and to
explain the terms used in the contract. (McKenzie, supra, 23–24.)





In respect of the
exceptions only the second one mentioned above may have application
to this case. As an exception to the parol evidence rule a party is
entitled to show by evidence that apart from the written contract
there has been an independent oral contract. It is permissible to
provide evidence of the subsequent oral agreement which alters the
terms of the written contract. . . .





[19] There is no
allegation or evidence that there are exceptions to the parol
evidence rule in the present case. In deciding the appeal therefore,
the memorandum is the principal evidence to consider. To determine
whether the respondent acted within the terms of the memorandum,
recourse must be had to the ordinary meaning of its provisions. The
clauses of the memorandum cited in para [12] of this judgment are
important for determining this.





Unilateral change


[20] In relation to
whether the respondent legally unilaterally changed the retirement
age, clauses 4.2.7, 7.2 and 9 are relevant. Clause 7.2 of the
memorandum, which provides for a pension fund scheme, explicitly uses
the word 'obliged'. I refer to one of the definitions of word
'oblige' as provided for in the Concise Oxford English Dictionary, 10
ed, Oxford University Press, p 982 which provides as follows:





'compel legally or
morally'.





Mozley &
Whiteley’s Law Dictionary 10 ed, p 316 defines the word
'obligation' as 'a legal or moral duty as opposed to physical
compulsion'. The word ‘obliged’, in clause 7.2 of the
memorandum for the present purposes can be accepted to have the same
meaning as obligation, namely a legal or [moral?] duty to join the
pension fund to which the respondent had subscribed.





[21] It is thus
evident that clause 7.2 of the memorandum of agreement for services
is couched in mandatory terms and is thus distinguishable from clause
7.1. Clause 7.1 provides that:





'The employee may
choose to join the medical scheme subscribed to by the employer, to
which fund the employer will contribute (on behalf of the employee)
70% of the monthly installment levied by the fund, for the
participation by the employee. The remaining 30% shall be deducted
from the monthly remuneration paid to the employee.' (My emphasis)





[22] The language in
clause 7.2, in particular the use of the word ‘obliges’
is mandatory in nature. It places an obligation on the employee. By
contrast, the language of clause 7.1, in particular the use of the
phrase 'may choose to join', is permissive rather than obligatory,
and allows the employee to make a choice.





[23] Clause 7.2
places an obligation on the signatory employee to join the pension
fund scheme to which the employer has subscribed. This is stated
further in clause 4.2.7, which provides for the compulsory
participation of the employee in the employer’s approved
pension fund. No specific pension fund is identified in clause 7.2 or
4.2.7, or indeed in the entire memorandum. It is merely stated that
the employer will provide one.





[24] In respect of
the terms and conditions relating to the pension fund, the memorandum
merely provides the contribution arrangement to the fund as contained
in clause 7.2. As such, the respondent was not required to provide a
specific pension fund, neither was it required to provide a pension
fund with specific rules other than the contribution arrangement
towards such fund. Clauses 4.2.7 and 7.2 of the memorandum make this
obligation clear.





[25] Furthermore,
clause 9, which is couched in mandatory terms, requires the employee
to abide by the rules, regulations, codes and procedures of the
employer, as amended from time to time. As a result, the respondent
was well within its legal rights to amend the rules and regulations
applicable to the pension fund, which also includes the change of the
retirement age. The appellant was required to adhere to these rules
and regulations for as long as he remained the respondent’s
employee.





[26] In terms of the
memorandum, the appellant was not entitled as of right to belong to a
specific pension fund. The respondent as an employer had the right to
renew, cancel or change the identity of the pension scheme provider
without the consent of the individual who had signed an agreement
embodying clauses 4.2.7, 7.2 and 9. Therefore in the circumstances
before the Court, the respondent was entitled to unilaterally change
the retirement age.








Termination of the
contract





[27] In relation to
the issue of whether the appellant was entitled to employment on the
same conditions as provided for in the memorandum following effluxion
of the period, recourse to Parker J's judgment in Overberg Fishing
(Pty) Ltd v Docampo 2012 (1) NR 282 (LC) is necessary. Parker J in
para 3 stated the following in respect of fixed term contracts and
the termination thereof:





'. . . A fixed-term
contract terminates by effluxion of time and the only thing that
remains is whether the employee was given notice within a reasonable
time before the expiration of the contract that the contract would
not be renewed.'





[28] Clause 1 of the
contract explicitly states that the appellant’s term of
employment was to be extended from 25 April 2006 until he reached the
age of 60 on 12 May 2009. This makes it sufficiently clear that the
contract between the two parties was a fixed term, one which would
lapse by the effluxion of the said period. Essentially, in terms of
the memorandum, the appellant was not entitled to or assured of any
further employment with the respondent at the end of the said period.





[29] As was stated
by Parker J, what needs to be determined in cases arising from fixed
term contracts is whether the notice procedure was adhered to in
determining the issue of unfair dismissal. The issue does, of course,
not arise on the facts of this appeal as it was not the appellant's
case that he was not given sufficient notice that the contract would
not be renewed.





[30] It follows from
the reasons outlined above that grounds 1 and 4 cannot succeed.





Grounds 2 and 3 -
Industrial action





[31] Counsel for the
appellant submitted that the respondent had no right in the legal
sense to change the conditions of employment and that its attempts to
do so constituted a dispute of rights as that term was defined in the
Labour Act 1992. Citing Smit v Standard Bank of Namibia 1994 NR 366
(LC) at 371B to 372, counsel contended that when the appellant made
it clear in 2004 that he did not accept the unilateral change in his
conditions of employment, it was incumbent upon the respondent to
resort to the procedures provided for in the Labour Act 1992.





[32] Furthermore,
counsel for the appellant submitted that the respondent bears the
onus to establish that the dismissal was fair and that this onus has
not been discharged.





[33] Counsel for the
respondent on the other hand argued that in the event that the
respondent’s arguments on s 27(6) of the Act regarding waiver
also fail, it would be conceded that the appellant was unfairly
dismissed. It follows that the appellant would have been entitled to
be employed by the respondent in a post on the fixed establishment of
the respondent, or in a post additional to the fixed establishment of
the respondent, and the letter dated 18 February 2009, which informed
the appellant that he must go on retirement effective from 29 May
2009, would therefore amount to unfair dismissal.





[34] As regards the
issue of dismissal, I refer to para [29] where it was found that the
contractual relationship between the two parties was terminated as a
result of effluxion of time as contemplated in clause 1 of the
memorandum.





[35] Strydom JP in
Smit v Standard Bank of Namibia above succinctly discussed the law on
industrial action. Recourse to this judgment is essential for the
determination of whether it was incumbent on the respondent to employ
the mechanisms provided for in s 74 of the Labour Act as argued by
the appellant. In determining when industrial action is appropriate,
the learned judge at 369I in fine – 370A-B stated in relation
to the definitions of 'strike' and 'lock out':





'Although in both
these definitions reference is made to ‘any dispute’
counsel were agreed and correctly so in my opinion, that the wide
wording of the definitions are limited and are subject to the
provisions of s 79(2)(a)(ii)(aa) which lay down that parties may not
resort to a strike or a lock-out if the dispute between them relates
to a dispute of rights. It follows therefrom that only if the dispute
between the parties relates to an interest would a lock-out and a
strike as part of the negotiating process be permissible.





Where the dispute
relates to a right which remained unresolved after conciliation board
proceedings, the parties are permitted by the Act to go to the Labour
Court which can then adjudicate upon the right (s 79(1)) or they may
agree to refer the dispute to arbitration (s 79(1)(b)).'





[36] At 371B-C,
Strydom JP discussed the question of when industrial action would be
appropriate and distinguished between a dispute of interests and one
of rights. He concluded that industrial action was permissible in the
case of a dispute of interests, where either party had no legal right
to change the conditions of employment, and that the only way open
for such party was the route laid down by the Act in order to
persuade the other to agree to the change.





[37] The crux of the
present matter is whether the respondent could unilaterally change
the retirement age. Essentially, this begs the question whether the
respondent had a legal right to act in that manner. As it appears
from the above discussion, the respondent was entitled by the
memorandum binding the parties to change pension funds, even if this
had the effect of unilaterally changing the retirement age because
the new fund scheme so provided. The respondent had a right, in the
legal sense to make these changes simply because the memorandum
assented to by both parties afforded it that right. The present case
is thus a dispute of rights. As such, there was no need for the
change to be effected by way of negotiation and mutual agreement in
the way provided for by the Act. The change of pension fund and its
applicable rules were not matters that were open for negotiation
between the two parties. Therefore, it does not follow that it was
incumbent upon the respondent to employ the mechanisms set out in the
Labour Act 1992.





[38] As already
mentioned, the present matter concerns a dispute of rights. As stated
by Strydom JP in the Smit matter at 370B, a dispute of rights which
remains unresolved after the conciliation board proceedings could be
adjudicated in the Labour Court in terms of s 79(1) or could be
referred to arbitration in terms of s 79(1)(b). This right is subject
to the provisions of s 24 of the Labour Act 1992, which provides a
time limitation of 12 months from the date upon which the cause of
action arose.





[39] It follows that
the appeal on grounds 2 and 3 can also not succeed.





Ground 5 - Election





[40] As regards
ground 5 relating to the question of whether the appellant had
elected to acquiesce in the respondent’s unilateral change of
the retirement age, counsel for the appellant contended that the
respondent could not legislate unilaterally on conditions of
employment, and that therefore any change must be consensually
agreed. Citing Namibia Broadcasting Corporation v Kruger and Others
paras 35 - 36 counsel submitted that the parties in the present
matter were on an equal footing despite the respondent being an organ
of the State.





[41] Counsel for the
appellant relying on Seven Eleven Corporation of SA (Pty) Ltd v
Cancun Trading NO 150 CC 2005 (5) SA 186 (SCA) para 32 and Christie’s
The Law of Contract in South Africa, 6 ed on p 26, submitted that the
doctrine of quasi-mutual assent found no application in the present
matter. Counsel contended that no evidence was adduced on behalf of
the respondent that it had been misled and in fact relied on this
misrepresentation. Furthermore, there was no evidence that the
officials of the respondent had through this misrepresentation
reasonably concluded that an agreement had been reached on the new
terms of employment. Counsel for the appellant contended that the
officials of the respondent could have been under no illusion that
their actions to enforce a unilateral change in conditions of
employment were reasonable.





[42] It was the
appellant’s further submission that estoppel did not apply in
the present case, as no case had been made out that the respondent
had acted to its detriment as a result of the alleged election by the
appellant nor was there any evidence to found estoppel. Counsel
argued that there was no evidence that the respondent understood and
accepted the behaviour of the appellant to constitute a waiver of
rights with the result that a new employment agreement arose which
required the appellant to retire at the age of 60. It was contended
furthermore that the appellant's behaviour was consistent with an
attitude that his existing contract remained in force, and could not
be said to be consistent with an acceptance of the changed conditions
of employment.





[43] Counsel for the
appellant proceeded to argue that the resolution by the respondent on
26 October 2004 to unilaterally change the conditions of employment
amounted to anticipatory breach of the employment contract. The
resolution in 2004 was a notification by the respondent to the
appellant of its intention not to perform when he reached the age of
60, in 2009. Citing Christie op. cit. on p 563 and Geldenhuys and
Neethling v Beuthin 1918 AD 426 at 444 and Machanic v Bernstein 1920
CPD 380 at 381, counsel submitted that the appellant was not obliged
to take legal action immediately and was entitled to keep the
contract alive until the performance was due and then take legal
action.





[44] It was
submitted by counsel for the respondent that if the interpretation of
s 27(6) read with s 27(3) of the Act as contained in para [12] herein
by necessary implication is upheld, the two grounds of appeal
addressing the issue of an election should not stand. In the
alternative, if the interpretation was not upheld, so counsel for the
respondent submitted, the views of the court below contained in paras
37 - 40 of its judgment which spoke to the applicable time limits for
initiating labour dispute resolution are supported and should be
upheld by this Court. Smuts J stated the following in the paragraphs
relied upon by the respondent:





'[37] Subsequent to
that decision, it is common cause that the respondent took no steps
to challenge the change to the conditions of employment. At the time,
s 74 of the then applicable Labour Act of 1992 entitled a person in
the position of the respondent to apply for the appointment of a
conciliation board within 30 days of a unilateral change to
conditions of employment. In that event, an employer would be obliged
to restore the condition in question until the dispute were to be
resolved or settled in accordance with Part X of the 1992 Act.





[38] Furthermore, as
is submitted by Ms Bassingthwaigte, s 24 of that Act provided a
limitation for the institution of proceedings in the Labour Court or
in respect of the lodging of complaints in the District Labour Court
to a period of 12 months from the date upon which the cause of action
had arisen or for such further period upon good cause being shown in
the Labour Court or in the District Labour Court.





[39] It is clear
that the respondent was aware of his rights, including the right to
challenge a unilateral change to a condition of employment, when the
appellant’s council adopted that resolution. It was incumbent
upon him then to take steps if he did not seek to be bound by the
change in conditions of employment. He was thus faced before an
election whether to challenge the change to the conditions of
employment or to accept it by his conduct if taking no action to
challenge it. That was the election which the respondent faced. He
elected not to challenge that change in the retirement age and is in
my view bound by that election.





[40] The courts have
over the years held that a party is bound by an election in these
circumstances.'





[45] Counsel for the
respondent contended that the appellant was aware of his rights,
including the right to challenge a unilateral change to a condition
of employment, when the appellant’s council adopted that
resolution. As a result, it was incumbent upon him to take steps to
challenge the decision if he had no intention to be bound by the
change in the conditions of employment. His failure to mount a
challenge resulted in his being bound by his election to take this
course. In addition, pursuant to the change in conditions of
employment and his knowledge thereof, the appellant subsequently
entered into a contract of employment that extended his term of
employment until its expiration when he attained the age of 60 years,
and not for the duration of a term as in the past. According to
counsel, the appellant was the most senior administrator in the
respondent and was aware of the respondent’s application of the
policy. Counsel concluded by stating that the retirement age of 60
years was binding upon the appellant in the circumstances and that he
would not have been entitled to any further appointment.





[46] In determining
this issue, recourse must be had to the case of Meridien Financial
Services (Pty) Ltd v Ark Trading 1998 NR 74 (HC) at 77B-C in which
Teek J stated the following:





'It is trite law
that, the legal requirement is that where there was a breach of an
agreement by the applicant then the respondent had to elect to cancel
or to enforce the contract and unequivocally communicate such
election to the applicant.'





[47] The nature of
the doctrine of election requires that there should be a breach of a
contractual term by the defaulting party which results in the
innocent party having a choice either to cancel or enforce the
contract. The case before the Court does not present such a
situation. As discussed above, the respondent was within its legal
rights to change the pension fund administrator and adjust the terms
of employment in accordance with the rules of the pension fund as
provided for in the memorandum. The memorandum afforded the
respondent the right to make such necessary changes to the extent
that it did not affect the contribution as contained in clause 7.2.
As such, the appellant needed not have consented to the decision to
change the pension fund scheme.





[48] It follows that
since the respondent acted in a manner contemplated by the
memorandum, the unilateral change of retirement age cannot amount to
anticipatory breach as submitted by the appellant as the nature of
anticipatory breach on the facts of this case requires that one must
act in a manner not consistent with the agreement. On the facts of
this appeal this has not occurred.





[49] It then follows
that the doctrine of quasi-mutual assent or election finds no
application in the present matter. Therefore ground 5 of the appeal
must also fail.





Conclusion





[50] For the reasons
set out herein, I am not persuaded that the Labour Court erred in
dismissing the appeal. The appeal ought therefore to suffer the same
fate in this Court. On the issue of costs, counsel for the appellant
has made no submission concerning costs whereas counsel for the
respondent has submitted that costs for one instructing and
instructed counsel should be awarded in the event of the appeal
succeeding. An order will be made accordingly.





Order





[51] The following
order is made:





1. The appeal is
dismissed.





2. The appellant is
to pay the costs of the appeal, which shall include the costs of one
instructing and one instructed counsel.








SHIVUTE CJ








MAINGA JA








DAMASEB AJA










APPEARANCES:





APPELLANT: P C I
Barnard


Instructed by
Koep & Partners





RESPONDENT: G
Narib


Instructed by
Kwala & Company.