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IN THE INDUSTRIAL COURT OF BOTSWANA

HELD AT GABORONE

CASE NO. IC. 225/2005

IN THE DISPUTE BETWEEN

 

RAVINDRAN RAMASAMY
………………………. APPLICANT

AND

 

TTCS CONSULTING ENGINEERS
………………………. RESPONDENT

————————————————————————————————-

CONSTITUTION OF THE COURT

D. J. de VILLIERS
INDUSTRIAL COURT JUDGE

P. D. CHENGETA
NOMINATED MEMBER (UNION)

L.
T MATSHEKA NOMINATED MEMBER (BOCCIM)

FOR
THE APPLICANT:

MR B. J. KHAO LABOUR CONSULTANT FROM BEROKHA
INVESTMENTS, GABORONE

FOR
THE RESPONDENT

MR J. N. NDABA LABOUR CONSULTANT OF NDABA, BOKO AND
ASSOCIATES, GABORONE

PLACE
AND DATES OF PROCEEDINGS

GABORONE 10
MARCH 2005

26
OCTOBER 2005

JUDGMENT

Contract
of employment provides for 3 months notice to terminate contract of
employment – employee gave only 1 month’s notice
– liable to
pay to employer notice pay in lieu of notice equal to 2 months of his
basic pay – employer entitled to deduct such
notice pay from any
payments due to the employee.

Introduction

[1] This matter
was set down as a matter of urgency on 10 March 2005 as the applicant
and his family wanted to return to Australia.
On that day the court
was satisfied on the applicant’s version, that the applicant’s
application papers and the notice of setdown
was served on the
managing director of the respondent company. As there was no
appearance for the respondent on that date, the court
sitting with
two assessors, then proceeded to determine this dispute in the
absence of the respondent. The court heard evidence
from the
applicant and then reserved judgment. The court delivered a detailed
judgment on 15 March 2005 and made the following default
determination:

“1. In
terms of section 20 (1) of the Trade Disputes Act, read with section
77 (1) of the Employment Act, the respondent is hereby

directed
to pay to the applicant the amount of P24,472.00, being salary
unlawfully withheld.

2. In
terms of section 20 (1) of the Trade Disputes Act, read with section
98 (6) of the Employment Act, the respondent is hereby
directed to
pay to the applicant the amount of P2469.44, being accrued leave pay
unlawfully withheld.

3. In
terms of section 20 (1) of the Trade Disputes Act, read with section
79 (1) of the Employment Act, the respondent is hereby
directed to
pay to the applicant the amount of P4248.00, being an unlawful
deduction from his salary.

4. In
terms of section 20 (1) of the Trade Disputes Act, read with section
27 (1) of the Employment Act, the respondent is hereby
directed to
pay to the applicant the amount of P75,640.28, being a severance
benefit payment unlawfully withheld.

5. In
terms of section 20 (1) of the Trade Disputes Act, the respondent is
hereby directed to pay to the applicant the amount of P1090.50,
being
medical aid contributions deducted and unlawfully not paid over to
the medical aid society.

6. The
respondent is hereby further directed to pay the amounts, referred to
in paragraphs [30] 1,2,3,4 and 5, totalling P107,920.22,
to the
applicant, through the office of the registrar of this court, on or
before Friday, April 2005.

7. No
order is made as to costs.”

[2] Shortly after
having received a copy of the aforesaid judgment and determination,
the respondent filed for an urgent application
for the rescission of
the said default judgment, setting out its defence to the applicant’s
claims and its counterclaim, which
was payment of two month’s
notice pay in lieu of notice, as the applicant resigned, giving only
one month’s notice instead of
3 as per their contract of
employment, which is for the amount of P48,000.00 (2 x P24000), and a
claim for compensation based on
the applicant’s breach of contract.

[3] In the
managing director’s founding affidavit to the application for
rescission he, inter
alia, stated the following:

“19.2 The
Applicant is a foreigner and will leave the country once it (sic) has
been paid and it would be impossible to recover what
is lawfully due
to the Respondent.

20 The
Respondent seeks for a partial rescission of judgment. It does not
dispute the following entitlements;

20.1 That
a months salary of P24,000.00 is due and payable to the
Applicant;

20.2 That
severance benefit of P75,640.28 and leave pay of P2469.44
are also due to the Applicant.”

[4] This
application was set down for argument on 1 April 2005. Having heard
Mr Ndaba, for the respondent in the main case and having
heard the
applicant in the main case and having read the papers filed of
record, the court, being satisfied that good and sufficient
cause had
been shown for the partial rescission of the said default judgment,
made the following order:

“1. This
court’s judgment and determination, save paragraphs 1 and 2 of the
determination, dated 15 March 2005, are hereby rescinded
and set
aside.

2. The
determination in paragraph 1 is hereby amended by substituting for
the amount P24,472.00, the amount of P24,000.00.

3. The
respondent is hereby directed to pay the amounts referred to in
paragraphs 1 and 2 of the determination, totalling P26469.44
(P24,000.00 + P2469.44) to the applicant Ravindram Ramasamy, through
the office of the Registrar of this court, on or before Monday,
4^th
April 2005.

4. The
respondent is hereby directed to file and serve its statement of
defence and counterclaim, if any, within 14 days of today.

5. The
Registrar is hereby directed, on receipt of the respondent’s
statement of defence and counterclaim, if any, to re-enroll
this
matter for a hearing.”

The amendment
granted in paragraph 2 of this order, was granted as it was not
opposed by the applicant.

[5] The matter was
re-enrolled for a hearing on 26 October 2005. Having heard evidence
from the applicant, the managing director
and one further defence
witness, the court directed, because of the late hour of day, that
both parties should submit written heads
of argument. The court has
now received both sets of heads of argument.

Applicant’s
evidence

[6] The applicant
stated that he confirms the evidence he gave at the default hearing
on 10 March 2005. The introduction of that
evidence reads as
follows:

“The
applicant testified that he started working for the respondent as a
resident engineer on 1 November 1999 in terms of a renewable
two year
written expatriate employment contract. This contract was renewed
after every two years and was still in force on 30 December
2005,
when the applicant handed to the respondent, his letter of
resignation. This letter indicated that the applicant was giving
the
respondent one month’s written notice that he is terminating his
contract of employment on 31 January 2005. He worked his
notice
month and left the respondent’s employment on 31 January 2005.”

[7] The
applicant’s original claims were as follows – he was claiming his
salary for January 2005, a severance benefit payment,
accrued leave
pay, payment of unlawful deductions and 2 month’s notice pay. In
the default judgment the court had dismissed his
claim for notice
pay. The applicant stated that in terms of this court’s order for
partial rescission, dated 1 April 2005, he
has received from the
respondent the amount of P26469.44, being P24000 for withheld salary
and P2469.44 for accrued leave pay. Payment
to the applicant of a
severance benefit of P75,640.28, is no longer in dispute as the
respondent has conceded that it owes that amount
to the applicant.
The reason why the court did not also rescind paragraph 4 of the
default judgment, which was for payment of a
severance benefit, was
because of the respondent’s two counterclaims and there being a
real possibility that the applicant would
have left the country,
should he have received the said big severance benefit amount. The
only claim the applicant still has against
the respondent is for
payment of P4248.00 for alleged unlawful deductions from his salary.
With the severance benefit payment in
his pocket he could easily have
decided to forfeit his claim of P4248.00 and leave the country and
then not have to face the respondent’s
two counter claims. As
stated above the respondent’s first counterclaim is for P48000.00,
being two months’ notice pay in lieu
of notice. Its second
counterclaim is for six months’ compensation for alleged breach of
contract by the applicant. The maximum
amount that can be awarded
for such breach, in terms of subsections 24 (5) and (6) of the Trade
Disputes Act, no.15 of 2004, is an
amount not exceeding six months
monetary wages of an employee, which in this case is P144,000.00 (6 x
P24,000.00).

Alleged
unlawful deductions

[8] As regards the
applicant, this is the only disputed claim which remains for
determination. At the default hearing the applicant’s
evidence as
to this claim was as follows, as summarised by the court in its
default judgment:

“The
applicant testified that the respondent, without his consent,
deducted the amount of P4248.00 from his December 2004 salary.
He
said he does not know what this is for, as he does not owe the
respondent any money and therefore the said deduction must be an
unauthorised deduction.”

[9] The applicant
testified at this hearing that it was only after he had received a
copy of the respondent’s statement of defence
and its counterclaim
that he became aware that the respondent is alleging that the said
deduction relates to medical aid contributions,
which the respondent
alleges it paid over to the medical aid fund on behalf of the
applicant. As paragraph 5 of the default determination
also relates
to medical aid contributions, the applicant did not pursue this
claim.

[10] The applicant
stated that in terms of clause 6 of their written contract of
employment he had to contribute 50% towards the medical
aid fund and
the respondent had to contribute 50%. During 2004 the applicant’s
contribution was P354 per month. He said that
the respondent
deducted this amount from his salary every month from January to
November 2004 but never paid it over to the medical
aid fund and in
December 2004 the respondent deducted P4248 from his salary, which is
contributions for 12 months (12 x P354). He
said he made enquiries
at the medical aid fund and was told that for the whole year of 2004
the respondent had paid in nothing on
his behalf. He now wants a
refund of the said P4248.

[11] The managing
director testified and explained this deduction of P4248 from the
applicant’s salary in December 2004. He said
due to a clerical
error in their accounts office, from January 2004 to November 2004
the full amount of the medical aid contribution,
being P708 (2 x
P354), was paid by the respondent to the medical aid fund on behalf
of the applicant. As a result of this clerical
error the amount of
P354 was never deducted from the applicant’s salary for the said 11
months. The respondent produced copies
of the applicant’s pay
slips, which proved that no medical aid deductions were made from his
salary during the said 11 months.
The respondent also produced a
statement from the medical aid fund which indicates that for the said
11 months the full amount of
the contribution had been paid in every
month in respect of the applicant and that there were no arrears.
The managing director
said that this clerical error did not only
affect the applicant but documents were produced to show that other
employees also had
no medical aid fund contributions deducted from
their salaries and respondent also paid the full contribution on
their behalf for
the said months.

[12] The court
found the applicant an unreliable and dishonest witness. On several
occasions he tried to mislead the court. The
court accepts the
evidence of the managing director as to the aforesaid deductions and
rejects the applicant’s evidence that monthly
deductions were made
from his salary in respect of the said 11 months. He lied about a
salary increase to try and prove the said
deductions, while the pay
slips showed the contrary.

[13] The managing
director said that when the P4248 was deducted in December 2004 from
the applicant’s salary, it was inadvertently
calculated over a
period of 12 months instead of 11 months. The respondent therefore
owes the applicant the amount of P354. He
further stated that from
the applicant’s December 2004 salary a further amount of P932.30
was erroneously deducted for P.A.Y.E.
Respondent has tendered to pay
both these amounts, totalling P1286.30 to the applicant.

[14] The court
consequently finds that the applicant is not entitled to payment of
the said amount of P4248, but only to P354, in
respect of medical aid
fund deductions and also to payment of P932.30 for a P.A.Y.E
deduction.

[15] In the
default judgment, the court has already determined that the
respondent is directed to pay to the applicant the amount
of
P75,640.28, being a severance benefit payment. As the respondent has
not disputed this claim, the said order still stands. The
respondent
therefore owes the applicant the amount of P76926.58 (P75,640.28 +
P354.00 + P932.30).

The
respondent’s counterclaims

[16] As stated
above the respondent has filed 2 counterclaims. This first was for
notice pay in lieu of notice as the applicant when
he resigned, gave
only one month’s notice instead of 3 months in terms of this
written contract of employment. The respondent’s
second
counterclaim is for 6 month’s compensation for wrongful termination
by the applicant of his contract of employment.

[17] In its
written heads of argument, the respondent submits that both
counterclaims are based on the applicant’s breach of contract.
For
the first counterclaim the respondent is relying on the provisions of
section 22 of the Employment Act (Cap.47:01), to which
section the
court will revert here below.

For its second
counterclaim the respondent is relying on the provisions of
subsections 24 (5) and (6) of the Trade Disputes Act, no.15
of 2004,
which provide as follows:

“(5)
Where a contract of employment is wrongfully terminated by an
employee, the Court may make such order of compensation in favour
of the employer as it considers just.

6. An
   order for compensation made under subsection (5) shall not exceed
   six months’ monetary wages.” (The court’s underlining)

[18] The court
agrees with the aforesaid submission on breach of contract and finds
that the cause of action in both counterclaims
are identical, namely
that the applicant breached clause 9 of his written contract of
employment by terminating his contract of employment
on one month’s
notice instead of on three months’ notice. As the cause of action
in both counterclaims are identical the court
finds that the
respondent is here duplicating claims. The respondent should
therefore be allowed only one claim based on breach
of contract with
the cause of action being failing to comply with the provisions of
clause 9 of his contract of employment, in that
he only gave one
month’s notice instead of 3 months’ notice to terminate his
contract of employment.

[19] Without going
into the merits of the second counterclaim, the court finds that the
first counterclaim is the more appropriate
claim for the said cause
of action and will therefore deal with the first counterclaim only.

Notice pay in
lieu of notice

[20] The court
will first set out the applicable agreement between the parties and
the applicable legislation and then deal with the
evidence regarding
this notice period. The said clause 9 of the applicant’s written
contract of employment provides as follows:

“9. TERMINATION
OF SERVICE

Service
may be terminated by Three – (3) calendar month’s written notice
by either the employee or the employer after satisfactory
completion
of a three-month probation period. Otherwise this contract will
terminate on completion of the Mochudi Phase 2 Project.”

As to such longer
period of notice, section 18 (3) of the Employment Act provides as
follows:

“(3) Notwithstanding
subsection (2), where the contract of employment provides for a
minimum length of any notice such as is referred
to in subsection (1)
(b) which is longer than the appropriate minimum length prescribed by
subsection (2), the minimum length of
any such notice shall be that
for which the contract of employment provides.”

It is common cause
that the applicant’s letter of resignation, dated 30 December 2004
states that he would like to complete his
service with the respondent
on 31 January 2005, which is one month’s notice of termination of
his contract of employment. Should
the court find that such notice
is in breach of his contract of employment, then the provisions of
section 22 of the Employment Act
will apply, which section provides
as follows:

“22 Subject
to any agreement to the contrary, the party in breach of a contract
of employment whereby or as a direct result of which
employment under
the contract ceases shall be liable to pay to the other party a sum
equal to the amount he would have been liable
to pay to the other
party in order to terminate the contract in accordance with section
19 (a) or (b), as is appropriate.”

In this case the
provisions of section 19 (a) will then apply, which provides that
instead of giving the prescribed notice a party
may –

“(a) terminate
the contract without giving such notice by paying to the other party
a sum equal to the amount of basic pay which would
otherwise have
accrued to the employee during the minimum lawful period of such
notice;”

[21] At the
default hearing the court asked the applicant why he had given the
respondent only one month’s notice instead of 3 months’
notice.
His reply was that the managing director had agreed that he could
give only one month’s notice. To prove this he produced
a letter,
dated 24 January 2005, which he had written to the managing director
in which he inter
alia stated:

“I
write this letter to confirm our discussion of 21 January 2005. You
have agreed that my notice period is one month and not three
calendar
months.”

The court accepted
this letter at the default hearing as there was no evidence from the
respondent to contradict it.

[22] At this
hearing the managing director categorically denied that he had ever
agreed to only one month’s notice. He produced
a letter dated 27
January 2005 which was his reply to the applicant’s letter of 24
January 2005 in which he inter
alia stated:

“It
is not true that we agreed that your notice period is one month and
not three calendar months during our meeting of 21 January
2005.”

This is just
another example of the applicant’s untruthfulness and that he tried
to mislead the court. At the default hearing he
conveniently kept
very quiet about this aforesaid denial by the managing director about
this alleged agreement. In the light of
the managing director’s
evidence and his aforesaid letter, the court rejects the applicant’s
version and finds that there was
no agreement to shorten the 3
months’ notice period.

[23] At this
hearing the applicant did not rely on his aforesaid letter to prove
that he was entitled to give only one month’s notice.
He tried
another ploy. He stated that the aforesaid clause 9 of his contract
of employment clearly states that “this
contract will terminate on completion of the Mochudi Phase 2
Project.” He said the said project had
long been finished by the end of 2004 when he handed in his
resignation and therefore his said written
contract was automatically
terminated. He stated that thereafter he kept on working for the
respondent on the Mahalapye Arbitration.
He said he was then working
on a month to month basis which required only one month’s notice.

[24] The managing
direct testified that after the applicant had left, the Mochudi
project had still not been completed. He produced
documents which
clearly show that long after the applicant had left he was still
trying to get reports from the applicant on the
Mochudi project so
that the said project could be finalised. The court accepts this
corroborated evidence of the managing director
and rejects the
applicant’s evidence that he was working on a month to month basis
because the Mochudi had been completed and finds
that the said
Mochudi project had not been completed when the applicant handed in
his resignation.

[25] The applicant
also tried another ploy to show that his written contract of
employment had been terminated by the respondent on
28 February 2003.
He referred the court to a staff memo dated 28 February 2003, which
was addressed to all staff members starting
that “due
to the continuing decline in the cash flow situation of the company,
your contracts of employment are hereby terminated.”

[26] The applicant
was constrained to concede that there was no break in his employment
as he continued working the next day, i.e.
on 1 March 2003, because
of the following letter he received on 1 March 2003, signed by the
managing director:

“Mr
R Ramasamy

P.
O. Box 1520

Gaborone March
1, 2003

RE:
EMPLOYMENT CONTRACT

Dear
George,

This
is to confirm that your Contract of Employment with TTCS Consulting
Engineers continues on the same terms and conditions with
effect from
March 1, 2003. This confirmation of your continued employment with
TTCS superceeds the redundancy Memorandum to all
staff dated
February 28, 2003.”

The court agrees
with the managing director that this letter of 1 March 2003 cancelled
the termination letter of the previous day
and the applicant just
kept on working without a break in terms of his original written
contract of employment. No new contract
of employment was entered
into on or after 1 March 2003.

[27] Having found
that the applicant’s original written contract of employment was
still in force when the applicant resigned, the
court further finds
that, in terms of the said section 22 of the Employment Act, the
applicant, by giving only 1 month’s notice
of termination of his
contract instead of 3 months, as required by clause 9 of his said
contract of employment, was therefore in
breach of his contract of
employment. This breach was the direct result of his employment
under the said contract being terminated
prematurely.

[28] There is a
dispute between the parties as to when the applicant actually stopped
working for the respondent. The managing director
said that the
applicant started working for his new employer on or about 12 January
2004, which is before his notice month ended.
To prove this he asked
the court to draw inferences from circumstantial documentary
evidence, because he was not in a position to
say that the applicant
was not at work till the end of his notice period which was 31
January 2004.

[29] The applicant
denied that he left the respondent’s employment before 31 January
2004. He said he started working for his new
employer on 14 February
2004 and he produced his letter of appointment, dated 14 February
2004, to prove this. The court accepts
this direct evidence of the
applicant in preference to the said circumstantial evidence tendered
by the respondent. The court therefore
finds that the applicant did
in fact serve one month’s notice till 31 January 2004 in terms of
his letter of resignation dated
30 December 2003.

[30] Having found
that the applicant’s original written contract of employment was
still in force when he resigned, the court finds
that in terms of the
said clause 9 he failed to give proper notice. He should have given
3 months’ notice of intention to terminate
his said contract and
not only one month as he did. The court consequently finds that by
invoking the provisions of the aforesaid
sections 18 (3), 19 (a) and
22 of the Employment Act, the applicant is liable to pay to the
respondent an amount equal to two month’s
of his basic pay in lieu
of the further two months’ notice he should have given the
respondent. The court has already found that
at the time of his
resignation the applicant’s salary was P24,000.00 per month. The
respondent is therefore entitled to payment
of P48,000.00 (2 x
P24,000.00), being notice pay in lieu of two months’ notice.

[31] This court
has already made similar orders, directing an employee to pay notice
pay in lieu of notice to an employer, in inter
alia
the following two cases – Venus Hair Salon
v. B. Modimoopelo, case no. IC.F 45/04, dated
2 April 2005 and Business Graphics (Pty) Ltd
v. Mercy Conlon, case no. IC. 113/99 (J.
721), dated 8 August 2002.

[32] Section 77 of
the Employment Act provides for payment of wages and other payments
to an employee by the employer where the employee
has terminated his
contract of employment. Subsection (ii) of the proviso to section 77
(2) provides as follows:

“ (ii)
the employer may deduct, subject to any order made by a court or

the
Commissioner to the contrary, from the total wages and any other

payments
which may be due to the employee such sum as the

employee
is liable to pay by virtue of section 19 (a) or (b).”

This means that
from the amount of P76,926.58 which the respondent still owes the
applicant, as set out in paragraph [15] hereof,
the respondent is
entitled to deduct the said P48,000.00 notice pay. The respondent is
therefore liable for payment to the applicant
in the amount of
P28,926.58

Determination

[33] The court
consequently makes the following determination:

1. In terms of
section 25 (1) of the Trade Disputes Act,

read with section
27 (1) of the Employment Act, the court finds that the respondent is
liable for payment to the applicant of the
amount of P75.640.28,
being a severance benefit payment unlawfully withheld.

2. In terms of
section 25 (1) of the Trade Disputes Act,

the court finds
that the respondent is liable for payment to the applicant of the
amount of P1286.30, being erroneous deductions from
the applicant’s
salary.

3. In terms of
sections 18 (3), 19 (a) and 22 of the

Employment
Act, the court finds that the applicant

is liable for
payment to the respondent of the amount of P48,000.00, being notice
pay in lieu of notice.

4. In terms of
section 77 (2) (ii) of the Employment Act, the respondent is entitled
to deduct from the amounts set out in paragraphs
[33] 1 and 2 hereof,
totalling P76,926.58, the said amount of P48,000.00.

5. The respondent
is therefore hereby directed to pay to the applicant, Ravindran
Ramasamy, the amount of P28.926.58 (P76,926.58 –
P48,000.00),
through the office of the registrar of this court, on or before
Friday, 13 January 2006.

6. No order is
made as to costs.

Dated at Gaborone
this day of December 2005.

_________________________

D. J. de
Villiers

INDUSTRIAL
COURT JUDGE

We agree on the
facts:

____________________________

L.
T. Matsheka

NOMINATED
MEMBER (BOCCIM)

______________________________

P. D.
Chengeta

NOMINATED
MEMBER (UNION)

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