Sewsunker v Durban University of Technology

• Jurisdiction: South Africa
• Judge: Van Zyl J
• Judgment Date: 16 September 2013
• Docket Number: 3897/12
• Court: KwaZulu-Natal High Court, Durban
• Hearing Date: 02 September 2013
• Citation: 2013 JDR 2045 (KZD)

Van ZÿL, J.:-

1.

This is an application to review and set aside the decision of the respondent to deny the applicant "post retirement medical aid benefits" in terms of the provisions of the Promotion of Administrative Justice Act 3 of 2000 (PAJA). It is common cause that the applicant had been in the employ of the respondent and that his services were terminated after a disciplinary hearing found him guilty of misconduct. As a result the dispute was referred to mediation and

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ultimately for arbitration by the Commission for Conciliation, Mediation and Arbitration (the CCMA) on 6 December 2010.

2.

Following negotiations at this forum, a settlement agreement was concluded which was reduced to writing and signed by or on behalf of the parties. It is the terms of this agreement which underlies the present dispute.

3.

The relevant portions of the agreement, thus concluded, read as follows:-

"5.

WITHDRAWAL OF DISPUTE

The applicant voluntarily withdraws the referral and abandons the dispute against the respondent in settlement of his/her case at the CCMA with the full knowledge that he/she will not be able to proceed with this dispute at a later stage. Each side will pay its own legal costs.

6.

OTHER

(a)

The respondent agrees that the applicant is entitled to early retirement in terms of the rules of the Pension, and this right is not effected by the outcome of the disciplinary hearing.

(b)

The applicant reserves, his right to make representation to the Chair of Council in respect of this right to post-retirement Medical Aid."

4.

During his term of employment with the respondent the applicant contributed as a member thereof to a pension fund, namely the National Tertiary Retirement Fund (the fund). The normal retirement age in terms of the scheme varies between 60 and 65 years, depending upon the terms of the relevant service agreements as at the commencement date.

5.

Rule 7.1 of the rules of the fund provides that, should a member leave service whilst not entitled to benefits under any other rule, then such member becomes entitled, in the form of a lump sum cash payment, to an amount equal to his or

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her member's share, provided that the fund is not then in deficit. However, should a member at the time have attained the age of 55 years or more, then rule 7.1(b) provides that such member "shall be granted his or her Member's Share", as defined in rule 2.2(1).

6.

Rule 4.2 provides that should a member retire from service after having attained the age of 55 years (as was the case with the present applicant), but before normal retirement age, then such member "… shall receive a pension vesting on the following day and secured by his or her member's share…". A pension is defined as an annual benefit amount payable for the lifetime of the beneficiary.

7.

The word "retire", as used in rule 4 in the context of normal retirement, early age retirement and early ill-health retirement, is not defined in the rules. In relation to rule 7, dealing with cash withdrawal of benefits, the expression "leave service" is used, while in rule 3.2 in relation to withdrawal from membership of the fund there is a provision that membership will cease upon "termination" of his or her service. The only apparent reference to "dismissal" from service appears in rule 7.1(c) in the context of the abolishment of the member's post, or a general reduction of staff and the member would then become entitled to payment of his or her "member's share". In the context of the rules of the pension fund there is therefore no particular significance to the use of the different expressions in relation to the termination of the service of a member of the fund.

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8.

In the light of the above it is apparent that, in the case of a member of the pension fund who is over the age of 55 years (as was the case with the applicant) at the time he or she ceased to be employed, the basis for such termination is of no consequence. Differently put, the actual reason for the termination of the employment relationship or the employee leaving the service of the employer is irrelevant to the benefits accruing to such a member from the fund, once such member leaves service or ceases to be employed. The position is no different where the termination of the employment relationship results from dismissal for misconduct.

9.

By contrast, during 1990 the respondent adopted a policy in terms of which it subsidised the medical aid contributions of its staff members who retired. Here the word "retire" is clearly used and understood as retiring or withdrawing from service at the conclusion of their working years in terms of their contracts of service. It is apparent from the affidavits submitted on behalf of the respondent that this policy has consistently applied only to retirees and not to those employees whose services are terminated due to dismissal.

10.

Indeed, in this regard the supporting affidavit of Ms P A Newman, the respondent's Manager of Benefits and Compensation established that over the past 35 years there has not been a single instance of a dismissed employee being afforded "post-retirement medical aid benefits" and that these benefits are reserved only for those former employees who retired in the ordinary course consistent with their contracts of employment. The contents of her affidavit were not disputed by the applicant in reply, nor did he dispute the

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statements to the same effect in the main answering affidavit deposed to by Professor N. Gawe on behalf of the respondent.

11.

For purposes of the present proceedings the applicant has accepted that dismissal disqualified a former employee from the benefits of medical aid fund subsidisation. The applicant, however, adopted the view that the effect of the settlement agreement concluded at the CCMA arbitration hearing on 6 December 2010 was to convert the dismissal to early voluntary retirement. As a result he then became entitled also to the benefit of the post retirement medical aid subsidy, as reserved by the respondent for its ordinary retirees from the service.

12.

In response to correspondence from the applicant's then attorneys demanding recognition of the applicant's entitlement to the medical aid premium subsidy Dr Reddy, in his capacity as the Chairperson of the respondent's council and by letter dated 4 April 2011, set out the respondent's understanding of the effect of the settlement agreement, as follows:-

"Dear Sir

RE: MR P. SEWSUNKER/MAINTENANCE DEPARTMENT – STEVE BILO CAMPUS

Your letter dated 28 March 2011 refers. I have reviewed the matter and concluded that your interpretation of the settlement agreement at the CCMA is certainly not the same held by the University.

The University is clear on the matter that Mr Sewsunker's entitlement to early retirement in terms of the rules of the Pension Fund is not in any way related to the outcome of his disciplinary hearing. The University has not in the settlement agreement conceded to the dismissal of Mr Sewsunker 'falling away' as you put it, neither did the University 'convert' his dismissal to early retirement. All the University officials did was to acknowledge that, as Mr Sewsunker was over 55 years old the pension fund rules allowed early retirement. Mr Sewsunker however in terms of the disciplinary hearing and appeals outcome remains dismissed. Hence the ineligibility to receive post retirement medical aid benefits in terms of the University policy.

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Your's sincerely

Dr J. Reddy

Chairperson of Council"

13.

It therefore becomes necessary to determine the meaning and effect to be attributed to the settlement agreement of the parties, as encapsulated in the settlement document of which the relevant portions are set out earlier in this judgment. The different approaches to and considerations applicable when interpreting written instruments have a long and varied history. These were comprehensively reviewed by Wallis JA in Natal Joint Municipal Pension Fund vs Endumeni Municipality 2012 (4) SA 593 (SCA) at para 18 et seq., to which counsel for the respondent drew attention in the course of his argument.

14.

I do not consider that any useful purpose would be served in trying to restate the eloquent and wide ranging exposition of Wallis JA. Suffice it to say that multiple considerations apply when seeking the correct interpretation of a written instrument under consideration. But one has to start somewhere and the language used in the instrument under consideration presents a useful point of departure.

15.

Counsel for the applicant sought to emphasise the...