National Health Laboratory Service v Mariana Lloyd-Jansen van Vuuren

(20044/2014) [2015] ZASCA 20 ; [2015] JOL 32992 ; (2015) 5 SA 426 (SCA) (19 March 2015) per Mhlantla JA.

To become a specialist pathologist a medical practitioner entered into a training agreement and then an employment contract.  The training contract obliged her to complete her studies within 5 years.  She also had to work for two years after her training and qualification, failing which the training agreement obliged her to repay R2m, being the agreed cost of training.  She was duly employed as a specialist pathologist in terms of an employment contract but without mentioning the 2 year period or the R2m.  Having resigned before the expiry of the 2 years she was requested to repay the money in terms of the training agreement.  The High Court rejected the claim.

The appeal was allowed after the SCA dealt with the proper interpretation of employment contracts and the legal requirements for a valid novation of a contract.

It was stressed that there is a ‘presumption against novation because it involves a waiver of existing rights. When parties novate they intend to replace a valid contract with another valid contract. In determining whether novation has occurred, the intention to novate is never presumed’ at para [15].

Comment

The judgment is extremely important because it is not unusual for large organisations to have more than one agreement that applies to employees.  Interpreting the agreements and trying to determine the true intention of the parties will not always be an easy matter.

Mhlantla JA (Shongwe and Wallis JJA and Dambuza and Mayat AJJA concurring):

Heard: 25 February 2015      Delivered:       19 March 2015

On appeal from: Gauteng Local Division, Johannesburg (LJ van der Merwe AJ sitting as court of first instance):

1 The appeal is upheld with costs.

2 The order of the high court is set aside and replaced with:

‘(a) It is declared that the obligation recorded in clause 3.4 of the contract concluded on 4 January 2006 continued to exist notwithstanding the conclusion of the subsequent employment agreement dated 16 April 2010 between the plaintiff and the defendant.

(b) It is declared that the defendant is liable to the plaintiff pursuant to the provisions of clause 3.4 of the initial contract.

(c) The defendant is ordered to pay the costs of suit as between party and party.’