The labour appeal court, in Workerslife Direct (Pty) Ltd v Maloka (2018) 29 SALLR 7 (LAC), considered the following important issue: according to the labour appeal court in casu, in the scenario where an employee signs a contract that entitles him or her to commission for a certain period after he or she leaves the company and the employer fails to honour such obligation, does the labour court have jurisdiction in terms of s77(3) of the BCEA to compel specific performance?
appeal against LC judgment – appellant ordered to pay respondent commissions he had earned on policies sold during his employment as well as post-employment commissions for the period stipulated in his alleged ‘GSB’ contract
This is an appeal against the judgment of the labour court of 25 August 2017 in which it ordered the appellant to pay the respondent various commissions he had earned on policies he sold during his employment as well as post-employment commissions for the period stipulated in his alleged ‘GSB’ contract.
PERTINENT FACTS OF THE CASE
employer sells insurance and related products
The appellant sells insurance and related products. The respondent commenced working for the appellant’s predecessor in 1997. The predecessor went through various name changes and converted to a private company. The respondent’s contractual rights were ultimately transferred to the appellant in terms of s197 of the Labour Relations Act 66 of 1995, as amended (‘the LRA’).
employee’s initial contract of employment (1997) provision for salary and payment of commission for products sold
The respondent had started work in the business as an administrative clerk for which he received a salary. However, he had also been entitled to sell insurance products for which he received a commission. His initial contract of employment (concluded on 2 September 1997) had made provision for both his salary and for the payment of commission for products sold.
common cause: employee subsequently signed an admin contract: provision for the payment of salary as administrative clerk – no provision for commission for the sale of insurance products
The respondent alleged that, a few years later, on 20 November 2000, during the restructuring of the business, he had signed two contracts. The first contract (referred to by the labour court as ‘the admin contract’) had made provision for the payment of a salary in respect of the respondent’s employment as an administrative clerk. This contract, unlike the initial contract, had made no provision for commission for the sale of insurance products. The alleged second contract, however, had appointed the respondent as a sales broker and provided for the payment of commission – this contract was a group scheme broker contract (‘the GSB contract’). The appellant disputed the existence of this latter contract.
dispute: whether or not employee signed the GSB contract – appointed as a sales broker and providing for the payment of commission
Clause 5.5.1 of the GSB contract provided:
GSB contract: if the group scheme broker leaves the company after 5 years from the date of the signing of the agreement (or dies, or retires as a result of ill-health), payment of the commission continues for a period equal to his term of service
‘Should the GSB leave the service of the company after five years from the date of signing this agreement or should the GSB die or retire as a result of ill health (the condition to be certified by two medical practitioners that he/she is permanently unable to continue with employment as GSB), payment of the Provida commission will continue for a period equal to his term of service.’
employee resigned: employer refuses to honour the obligation to pay him post-employment commission
The respondent resigned from his employment with the appellant on 13 March 2013. He did so because he had been unhappy with changes to the commission arrangement proposed by the appellant. After the respondent left the appellant’s employment, the appellant had refused to honour the obligation to pay him post-employment commission.
application ito s77(3) of the BCEA to compel specific performance
The respondent had then brought an application in terms of s77(3) of the Basic Conditions of Employment Act 75 of 1997 (‘the BCEA’) to compel specific performance.
FINDINGS OF THE LABOUR APPEAL COURT
The reasoning of the labour court, in rejecting the appellant’s version, was sound and unassailable. It had correctly accepted the evidence of the respondent and his wife as clear, consistent and more probable. Their testimony had not been damaged in any material respect under cross-examination. Their version, moreover, had accorded with the probabilities.
The payments made to the respondent had accorded precisely with the provisions of the GSB contract. The labour court’s conclusions, that the contract had probably been concluded on 20 November 2000 and annexure EM1 was thus, in fact, authentic, had thus been correct. Moreover, the labour court had not erred in rejecting the appellant’s version as implausible and riddled with contradictions. The appellant’s failure to take issue with the allegation that the respondent had been a GSB in the initial correspondence, its admission that he had been a GSB in the answering affidavit in the main application and its subsequent changing version had all raised doubts about the credibility and reliability of its account. If the respondent had not been a GSB, the appellant would have raised that earlier.
LAC: employee had proven his claim and was entitled to the relief sought
In the premises, the labour court had not erred in its conclusion that the respondent had proved his claim and was entitled to the relief he sought. The appeal had to be dismissed. There was also no reason why costs should not follow the result in a case such as this.
order of the LAC
The appeal was accordingly dismissed with costs.
In the scenario where an employee alleges that, as a result of a misrepresentation by his or her employer, a termination agreement was concluded, why, according to the labour appeal court in Baise v Mianzo Asset Management (Pty) Ltd (2019) 30 SALLR 158 (LAC), would it be the wrong approach to seek a declarator that the agreement is void and what should be the correct approach?