IN THE LABOUR COURT OF LESOTHO LC/REV/97/12
HELD AT MASERU
In the matter between:
TRANSFORMATION RESOURCE CENTRE APPLICANT
and
MOOKHO MPHATS`OE 1st RESPONDENT
DIRECTORATE OF DISPUTE PREVENTION AND 2nd RESPONDENT
RESOLUTION
JUDGMENT
___________________________________________________________________________
DATE: 18/11/15
1. Facts in the matter are common cause. The 1st respondent is applicant’s former employee. On the 29th August, 2011 she was suspended from work to facilitate investigations into allegations of misappropriation of funds on her part. On 30th August, 2011, she received a letter summoning her to a disciplinary hearing to be held on 2nd September, 2011 over two counts of misconduct viz., fraud and theft by false pretences. She, however, resigned on 31st August, 2011 with immediate effect before the hearing could be held. On paying her terminal benefits, the applicant deducted a sum of Seven Thousand and Five Hundred Maloti (M7 500.00) therefrom, an amount equivalent to the money she was purported to have misappropriated together with pay in lieu of notice. The 1st respondent subsequently claimed severance pay and the applicant refused to pay it contending that she was not entitled to it as she had committed a misconduct.
2. This dispute thus arises from applicant’s failure to pay the 1st respondent severance pay. She approached the Directorate of Dispute Prevention and Resolution (DDPR) and it upheld her claim on the basis that since she had not been dismissed for misconduct but had resigned, she was entitled to severance pay. She relied on the provisions of Section 79 (1) and (2) of the Labour Code Order, 1992 (hereinafter referred to as the Code) which provides thus:-
(1) An employee who has completed more than one year of continuous service with the same employer shall be entitled to receive, upon termination of his or her services, a severance payment equivalent to two weeks’ wages for each completed year of continuous service with the employer.
(2) An employee who has been fairly dismissed for misconduct shall not be entitled to a severance payment.
APPLICANT’S GROUNDS OF REVIEW
3. It was applicant’s case that the Arbitrator’s reasoning is a gross misdirection of the law and fact because the withholding of severance pay is a censure for an employee’s unbecoming conduct, and the fact that she repaid the money is insignificant. Secondly, applicant’s Counsel contended that assuming, without conceding, that the severance pay was due, the learned Arbitrator miscalculated the amount of severance pay due in that in her calculation she included the period from 2005 to 2011 when the 1st respondent received gratuity which was payable annually.
1st RESPONDENT’CASE
4. 1st respondent’s Counsel objected to applicant’s grounds of review on the premise that they are an appeal disguised as a review and contended that since they failed to make a case for review, the application stands to be dismissed. She maintained that the learned Arbitrator’s ruling was in full compliance with Section 79 of the Code and that the applicant has failed to advance any justifiable grounds for withholding the severance pay. Applicant’s review application was accompanied by a condonation application to which 1st respondent’s Counsel retorted that it should not succeed as the applicant had failed to establish any prospects of success on the merits.
CONDONATION FOR THE LATE FILING OF THE REVIEW APPLICATION
5. In terms of Section 228 F (1) (a) of the Labour Code (Amendment) Act, 2000 (as amended in 2006) a party seeking to review an arbitration award has to approach the Labour Court within thirty (30) days of its receipt. The applicant intimated to the Court that the award of the DDPR was issued on 16th August, 2012 and only served on them on 13th September, 2012. They filed the review application on 15th October, 2012. The thirty days having lapsed, the applicant sought condonation for the delay in filing this application.
6. Respondent’s Counsel opposed the condonation application on the basis that the applicant had no prospects of success. Whilst we appreciate that Rules are meant to maintain order in litigation and to ensure that disputes are brought to an end as expediently as possible, we feel that the delay was insignificant as it was for only about three days. Inspired by one of the fundamental principles regulating the Court that “… it shall be the chief function of the Court to do substantial justice between the parties before it,”[1] we condoned the delay. We also found the case to be important in that it raises a very critical and rather confusing issue of resignation in the face of a disciplinary enquiry.
WHETHER SEVERANCE PAY WAS DUE
7. Severance pay is one of the several forms of income protection. Under Article 12 (1) of the ILO Convention on Termination of Employment, 1982 (No. 158) accompanied by Clause 18 (1) of Recommendation 166 on Termination of Employment, 1982 “a worker whose employment has been terminated shall be entitled, in accordance with national law and practice, to
(a) a severance allowance or other separation benefits, the amount of which shall be based, inter alia, on length of service and the level of wages and paid directly by the employer or by a fund constituted by employer’s contribution, or
(b) benefits from unemployment insurance or other forms of social security, such as old - age or invalidity benefits, under the normal conditions to which such benefits are subject, or
(c) a combination of such allowance and benefits.”
Lesotho has ratified this Convention and entitlement to severance pay is regulated by Section 79 of the Code. In terms of Subsection (1) thereof, as aforementioned, any employee who has completed more than one year of continuous service with the same employer shall be entitled to receive upon termination of his or her employment a severance payment equivalent to two weeks’ wages for each completed year of continuous service with the employer. However, an employee may lose his or her entitlement to severance pay if he or she commits a misconduct. To this end, Section 79 (2) of the Code provides that:
An employee who has been fairly dismissed for misconduct shall not be entitled to a severance payment.
8. In a nutshell, an employee would be entitled to severance pay as long as he or she has not been dismissed for misconduct. The issue then arises whether the 1st respondent was in the circumstances of this case entitled to severance pay. Applicant’s Counsel contended that she was not entitled thereto by virtue of the misconduct she had committed. He argued that the DDPR ought not to have given Section 79 (2) its literal meaning but invoked the “mischief rule” by looking at the mischief that the Section was aimed at preventing. He argued that in withholding severance pay where an employee had committed a misconduct the Legislature intended punishing an employee for his or her wayward behaviour. He contended that by awarding the 1st respondent severance pay, the Court would be rewarding misconduct.
9. As far as we are concerned, Section 79 (2) is couched in very clear terms. The primary rule in the construction of statutes is that the words and expressions used must be interpreted according to their natural, ordinary or primary meaning. This principle was alluded to in the Court of Appeal case of Alain Andrew v Lesotho Telecommunication Corporation.[2] The language used in a statute must be respected. “If the language used by a lawgiver is ignored in favour of a general resort to values the result is not interpretation but divination”[3]
10. To be “fairly dismissed” as used in Section 79 (2) envisages that a hearing has been held and an employee has been given an opportunity to defend himself or herself against any charge levelled against him or her. In this case, the employee had not been “dismissed” but had resigned. She resigned prior to the holding of disciplinary proceedings. As such the misconduct had not yet been established. The Labour Appeal Court decided in Mahamo v Nedbank Lesotho Limited[4] that the applicant was entitled to severance pay in circumstances that were similar to the ones in this case where the applicant had tendered a resignation whilst on suspension for an alleged fraud.
11. The respondent refused the resignation and the Court relying on a number of authorities from the Region including SALSTAFF obo Bezuidenhout v Metrorail[5] held that the employer had no right to refuse applicant’s resignation. The Court emphasised that in refusing an employee’s resignation, the employer was in effect requiring an employee to remain in employment against his or her will. It was held in the same token, in a decision from the Kingdom of Swaziland that “resignation is a unilateral act which brings about termination of the employment relationship without requiring acceptance…”[6]
12. The Court went further in Mahamo to point that if the employer feels that he or she has any claims against the employee, he or she can have recourse to a claim for damages.[7] This, the Court held is made possible by Section 76 (1) of the Code which provides for accrued rights of parties on termination and reads:
The termination of any contract under the provisions of this Part shall be without prejudice to any accrued rights or liabilities of either party under the said contract at the date of termination.
In our view, the learned Arbitrator properly found the 1st respondent to have been entitled to severance pay.
AMOUNT OF SEVERANCE DUE
13. Without conceding that the 1st respondent was entitled to severance pay, applicant’s Counsel argued in the alternative that the learned Arbitrator had miscalculated the amount of severance pay due in that it had included the years of service from 2005 to 2011 during which the 1st respondent received gratuity. He submitted that this period ought to have been excluded. The amount of severance pay due is two weeks’ wages for each completed year of continuous service.[8]
14. According to Section 8 of the Labour Code (Amendment) Act, 1997, where an employer operates another scheme that is more advantageous than severance pay, he or she may apply to the Labour Commissioner for an exemption certificate from the payment of severance pay. It is common cause that the applicant had not applied for an exemption certificate that would exempt it from the payment of severance pay. Following this Court’s decisions in Ntahli Matete and Another v Lesotho Highlands Development Authority and Another [9] and George Thabo Monaheng v Allied Chemist (Pty) Ltd[10] in which the Court had held that an employee shall not be entitled to both gratuity and severance pay, the law was amended to make provision for exemption where the employer feels he or she operates a more advantageous scheme. The Court held in both cases that to pay both severance pay and gratuity would amount to an unjust enrichment. The Labour Code (Amendment) Act, 1997 was promulgated with an intention of insulating employers from paying both gratuity and severance pay at the same time, but unfortunately the applicant did not take advantage of it. The gratuity due to the 1st respondent was contractual whereas severance pay is a statutory obligation in terms of Section 79 of the Code.
ORDER
15. In the circumstances, the Court comes to the following conclusion that:
i) The review application is dismissed;
THUS DONE AND DATED AT MASERU THIS 18TH DAY OF NOVEMBER, 2015
F.M.KHABO
PRESIDENT OF THE LABOUR COURT
S. KAO l CONCUR
ASSESSOR
R. MOTHEPU l CONCUR
FOR THE APPLICANT : MR K.K MOHAU (KC) - G.G. NTHETHE & CO.,
FOR THE 1st RESPONDENT : ADV., M. CHOBOKOANE - WEBBER NEWDIGATE
ANNOTATIONS
INTERNATIONAL INSTRUMENTS
Article 12 (1) of the ILO Convention on Termination of Employment at the Initiative of the Employer, 1982 (No. 158)
Clause 18 (1) of Recommendation on Termination of Employment at the Initiative of the Employer, 1982 (166)
CITED CASES
Mahamo v Nedbank Lesotho Limited LAC/CIV/04/11
SALSTAFF obo Bezuidenhout v Metrorail [2001] 9 BLLR 926
Ntahli Matete and Another v Lesotho Highlands Development Authority and Another
LC 131/95
George Thabo Monaheng v Allied Chemist (Pty) Ltd LC 95/95
Simon Dludlu v Emalangeni Foods Industries (IC Case No. 47/2004)
Alain Andrew v Lesotho Telecommunication Corporation LLR LB 1993 -1994, p. 22
Attorney General of Lesotho v `Mopa (2002) BLLR 645 at 650 G-H
STATUTES
Section 8 of the Labour Code (Amendment) Act, 1997
Section 27 of the Labour Code Order, 1992
Section 76 (1) of the Labour Code Order, 1992
Section 79 (1) and (2) of the Labour Code Order, 1992
Section 228 F (1) (a) of the Labour Code (Amendment) Act, 2000 (as amended)
Regulation 3 of the Labour Code (Exemption) Regulations, 1995
[1] Section 27 of the Code
[2] LLR LB 1993 -1994 p. 22 at p. 24
[3] Per Gauntlett JA., in Attorney General of Lesotho v `Mopa (2002) BLLR 645 at 650 G-H quoted from S v Zuma 1995 (2) SA 642 CC
[4] LAC/CIV/04/11
[5] [2001] 9 BLLR 926
[6] Simon Dludlu v Emalangeni Foods Industries (IC Case No. 47/2004)
[7] At paragraph 19 of the Mahamo judgment
[8] Section 79(1) of the Labour Code Order, 1992
[9] LC 131/95
[10] LC 95/95
