Justice Brian Mashile has granted Old Mutual leave to appeal to a full bench of the high court against the ‘reinstatement order’ he made on 30 July 2019 following Peter Moyo’s interim application based on an alleged breach of contract and unlawful dismissal after he was relieved of his appointment on an agreed period of notice.
Leave to appeal is discretionary and should only be granted, especially when the order is interlocutory, when the judge is of the opinion that the appeal would have a reasonable prospect of success, or there is some other compelling reason why the appeal should be heard, and it would lead to a just and prompt resolution of the real issues between the parties.
In the judgment being appealed against, the learned judge decided that despite Mr Moyo’s intention to institute legal action for damages within 60 days, the ‘balance of convenience’ favoured reinstatement based on the reason that “the interim relief is meant to cure the period between the order and the outcome of the action”.
Old Mutual’s employment contract with the CEO, Peter Moyo, was clearly intended to allow either party to end the relationship on written notice of 6 months and without following any procedure and without providing any reason. In other words: ‘just because’. Old Mutual could pay him during the notice period and prevent him from working during the notice period.
It was also agreed in the employment contract that where Old Mutual decided not to relieve him of his duties, but contemplated possible ‘dismissal’ for a valid and fair reason, related to misconduct or incapacity (just cause), it in effect reserved the right to allow Mr Moyo the right to be heard before deciding whether or not to dismiss him for such a reason.
Justice Brian Mashile unexpectedly and surprisingly decided that Old Mutual did not have a contractual right to relieve him of his duties on notice, despite what appears to be the clear wording and intention of the contract.
The appeal judgment is awaited with great interest and if the presiding judge did get it wrong it is very unfortunate that the stakeholders in Old Mutual had to suffer about a 20% loss in the value of the shares in the company.
Relevant contractual clauses
“24.1 This contract of employment may be terminated as follows:
24.1.1 By either party providing 6 (six) months’ notice to this effect, in writing, to the other party, subject to clause 24.3. Where such notice is provided:
24.1.1.1 The Employer may, at its sole discretion, elect whether the Executive should work during this period of notice. Notwithstanding this, the Employer shall pay the Executive for the 6 months’ notice irrespective of whether the Employer has required him to work or not.
24.1.1.2 Should the Executive give notice in terms of clause 24.1.1 and request that the Employer waive the notice period, the Employer may exercise its discretion in this regard. Should the Employer agree to such waiver, the Executive shall be paid only up to and including his last day of actual work.
24.1.2 Upon the Executive reaching the normal retirement age as determined by the Employer, or at an agreed earlier retirement age, at which point this Agreement shall terminate and the Executive shall commence retirement.
24.1.3 By the Employer on the basis of the grounds regarded as valid in the Labour Relations Act Number 66 of 1995, with or without the notice period as set out in clause 24.1.
24.1.4 For any other lawful and fair reason.”
Clause 25 is headed, Arbitration, and it reads:
25.1 “Pre-dismissal arbitration
25.1.1. Where allegations of misconduct or incapacity have been raised against the Executive, the Employer will be entitled, within its sole discretion, to decide whether or not to hold an internal disciplinary enquiry, or to proceed instead via the pre-dismissal arbitration procedure, contemplated in Section 188A of the Labour Relations Act number 66 of 1995, and subject to the Executive’s remuneration at the time being equal to or above that stipulated in section 6(3) of the Basic Conditions of Employment Act, the Executive hereby consents to such pre-dismissal arbitration in terms of section 188A of the Labour Relations Act.
25.1.2.
25.1.3.
25.1.4. “
Clause· 25.2 is headed, ‘Arbitration by a private organisation‘, and it provides as follows:
“25.2.1 The Executive agrees that disputes, which would normally be referred to the CCMA for conciliation and then arbitration, may, in the sole discretion of the Employer, be referred to a private dispute resolution organisation for Arbitration. Alternatively such disputes may, in the sole discretion of the Employer, be referred for Arbitration to one or more specific Arbitrator/s for private dispute resolution. In these circumstances the parties must agree on the specific Arbitrator/s. The Employer will select 3 panellists from a nationally recognised panel of arbitrators. The Executive will choose one of the three to hear the dispute.
25.2.2 The Employer shall inform the Executive of its intention to invoke clause 25.2.1 where the Executive has referred a dispute to the CCMA for conciliation and deadlock has been reached.
25.2.3 Where a dispute is referred to a private dispute resolution body for Arbitration as contemplated in clause 25.2.1, should the parties fail to reach agreement on the Arbitrator, the parties agree that the Director of such Organisation shall nominate an Arbitrator.”
41. Addendum ‘A’ whose provisions I describe below, could or should have triggered the application of Clause 25.2. The addendum reads:
“any conflict resulting from the Executive’s position as a non-executive director of NMT will be dealt with by the Chairperson of the Company and/or in terms of clause 25.2 of the Executive’s contract of employment;”