Du Preez v Durban University of Technology

• Jurisdiction: South Africa
• Judge: Msimang J
• Judgment Date: 19 August 2009
• Docket Number: 13452/2007
• Hearing Date: 08 August 2009
• Counsel: CE Watt-Pringle SC for the appliacant. AA Gabriel for the respondent.
• Court: Natal Provincial Division

Msimang J:

This is an application for an order directing the respondent to reinstate the applicant's post-retirement medical-aid subsidy equivalent to 60% of the applicant's monthly medical-aid subscription to Discovery Health F (the PRMA subsidy) with effect from a date to be determined by the court and directing the respondent to pay:

'2.1

An amount equivalent to the PRMA subsidy (after tax, as the subsidy would have been tax free) which the respondent would have paid in respect of the applicant over the period commencing G on 1 September 2006 up to the month in respect of which the subsidy is reinstated pursuant to paragraph 1 above; and

2.2

Interest at the rate of 15,5% per annum on each amount equivalent to the monthly PRMA subsidy calculated from the first day of the month following the month in respect of which the PRMA subsidy was payable to the date of payment of the amount in terms H of paragraph 2.1 above.'

The applicant is a retired academic, previously in the employ of the respondent which is a State-funded university and a public higher-education institution as contemplated in the Higher Education Act. [1] The applicant was previously employed as a Deputy Vice-Chancellor: I Academic by Technikon Natal, which academic institution existed alongside another institution called the ML Sultan Technikon. Amongst the conditions of his employment with Technikon Natal, was that the

Msimang J

A applicant was entitled to retire upon attaining the age of 60 and that he was obliged to do so at the age of 65, and that upon his retirement and provided he elected to remain on a medical-aid scheme recognised by Technikon Natal, the latter would continue to pay 60% of his monthly medical-aid subscription until his death and/or his wife's death, whichever B event took place later. On or about 1 April 2002 the ML Sultan Technikon merged with Technikon Natal and from that date they formed one institution called the Durban Institution of Technology, a name which was later changed to Durban University of Technology, the respondent in this matter. It is not disputed that, despite the said merger C and the resultant formation of the respondent, applicant's aforesaid conditions of service at retirement remained in force and legally binding.

One of the unintended consequences of a merger of these institutions is a sudden and inevitable surplus of staff. When the merger in the present matter brought about this consequence, the respondent's interim council D (council), on 20 July 2002, instituted and approved of a policy named the Special Voluntary Exit Policy (the Exit Policy) which was designed to reduce respondent's staff members and in terms of which the staff members were permitted to apply for voluntary severance packages. The Exit Policy prescribed, inter alia, the procedure for handling the E applications as well as compensation and benefits payable in terms thereof. In terms of the minutes of the council meeting held on 30 August 2002, the then Vice-Chairman of the respondent, Prof Ncayiyana, reported to the council that he had informed the applicant that due to operational reasons he would not at that time release him on the basis of the Exit Policy. It was only on 27 February 2003 that the F council resolved that the Deputy Vice-Chancellor: Academic and the Deputy Vice-Chancellor: Operations could be allowed an option of a voluntary exit package.

At the beginning of February 2003 the applicant formed an opinion that G he had given his assistance with a view to bedding down the merger and that it would, at that stage, be appropriate for him to consider an early retirement. It was for this reason that he commenced negotiations for his exit from respondent's employment, and for that purpose on 4 February 2003, he despatched a memorandum to Prof Ncayiyana placing it on H record that he was considering taking an early retirement to take effect as from 30 June 2004, and attached two conditions to such an intended retirement, one of which was that the merger severance package should apply. It would appear that thereafter negotiations between the applicant and Prof Ncayiyana, regarding the former's retirement, then ensued and I correspondence on the subject was exchanged between them. This culminated in a memorandum addressed by the applicant to Prof Ncayiyana dated 16 September 2003, in which the applicant set out to record the agreement which he understood he and Prof Ncayiyana had concluded should form a basis for his retirement. In that memorandum he also invited Prof Ncayiyana to approve of or to add amendments to J the same. Paragraph 1 of the memorandum reads as follows:

Msimang J

'1.

I will take the normal but early retirement on 30 June 2004 (effective A 1 July 2004) with all the conditions as would normally be applicable to me in terms of my present conditions of service. . . .'

Thereafter para 2 is added, commencing with the following introductory paragraph:

'2.

In lieu of the negotiated early part of my retirement (I am entitled B to only retire at 65 years old i.e. in 2009), the following will additionally apply

(a)

. .

(b)

The principles of the Merger Severance Package, including the NTRF contribution shortfall part, as it applied to Mr A Cheddie and Mr U Purmasir, will apply to me on 30 June C 2004. . . .'

The respondent's finance department accordingly calculated the amount of the financial package that would be paid to the applicant in terms of the Voluntary Exit Package, which calculations were approved by Prof Ncayiyana on 26 September 2003. On 27 October 2003 the applicant D informed the respondent's human-resource section, in writing, that he would be retiring at the age of 60 in terms of his conditions of service, such retirement to take effect on 30 June 2004. He also placed it on record, that in separate negotiations between himself and the council, it had been agreed that he would elect to retire at 60 in terms of a mutual E agreement. The matter was referred to a Dr Thabede who, at the time, held the position of Deputy Vice-Chancellor: Human Resources and Corporate Services and who was therefore entitled to deal with an employee of applicant's seniority. A letter of reply addressed by Dr Thabede to the applicant and dated 10 December 2003 reads as follows:

'Thank...