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GODISANG v VANGUARD SECURITY 2008 3 BLR 240 IC
Citation: 2008 3 BLR 240 IC
Court: Industrial Court, Gaborone
Case No: IC 592 of 2007
Judge: De Villiers J
Judgement Date: October 8, 2008
Counsel: The applicant in person.rnNo appearance for the respondent.rn
Flynote
Employment - Contract of employment - Termination of services - Accrued leave pay Calculation of - Compulsory leave not taken to be forfeited - Employment Act (Cap 47:01), s
98(3).
Employment - Contract of employment - Termination of services - Wages F withheld Employee's wages withheld for period of notice - Employee giving short notice - Amount due by
employer to employee set off against amount due by employee to employer.
Employment - Contract of employment - Termination of services - Severance benefits - Second
and subsequent periods of 60 months' continuous employment - Pro rata severance benefits
payable - Employment Act (Cap 47:01), s 27. G
Headnote
The applicant sought payment of his severance benefit, wages withheld for his period of notice
and accrued leave pay following his resignation, on 14 days' notice, from his employment as a
security guard with the respondent. In terms of his contract of employment, he was obliged to
have given the respondent one month's notice of his resignation. The matter was heard H in
default of appearance of the respondent.
Held: (1) The respondent owed the applicant wages for 14 days and the applicant owed the
respondent wages as notice pay in lieu of notice for giving the respondent only 14 days' notice
instead of one month. Those amounts were identical and would be set off against one another.
(2) Relevant to the calculation of the applicant's accrued leave pay was
A that, by implication of s 98(3) of the Employment Act (Cap 47:01), compulsory leave not
taken in any 12 months was forfeited.
(4) Under s 27 of the Employment Act (Cap 47:01), a severance benefit was payable at the
conclusion of each period of 60 months' continuous employment with the same employer. In
respect of second and subsequent periods of 60 months, the severance benefit was payable pro
rata. B Ben and Another v Green Industrial Enterprises Corporation (Botswana) (Pty) Ltd
[1995] B.L.R. 859, IC and Green Industrial Enterprises Corporation (Pty) Ltd v Ben and
Another [1997] B.L.R. 99, CA applied.
(5) The applicant was therefore entitled to a severance benefit in respect of the whole of his
period of employment of almost 10 years.
Case Information
Cases referred to:
C Ben and Another v Green Industrial Enterprises Corporation (Botswana) (Pty) Ltd [1995]
B.L.R. 859, IC
Green Industrial Enterprises Corporation (Pty) Ltd v Ben and Another [1997] B.L.R. 99, CA
APPLICATION for payment of severance benefit, accrued leave pay and
upon resignation. The facts are sufficiently stated in the judgment.
D
wages withheld
The applicant in person.
No appearance for the respondent.
Judgement
E
DE VILLIERS J:
Introduction
The applicant testified that he served a copy of his statement of case on Mr Mantho Maruping,
the managing director of the respondent company, F on 1 June 2007. The court was satisfied that
this was proper service of the applicant's statement of case on the respondent.
The respondent did not comply with the provisions of para 9 contained in the said statement of
case, in that it failed or refused to file a statement of defence in response to the applicant's
statement of case. As a result of this failure or refusal this dispute was set down for a default
hearing on 16 May 2008 G at Gaborone. The respondent was notified of this date of hearing by
registered post on 14 April 2008, which registered letter was not returned by the post office. The
court was not obliged to send this notice of setdown to the respondent, as it had failed to file a
statement of defence. The court merely did so in fairness to the respondent. Despite this directive
and notice of setdown, the respondent has not as yet filed its statement of defence nor H was
there any appearance for or on behalf of the respondent at court on 16 May 2008 at Gaborone.
Sitting with two assessors, the court then proceeded to determine this dispute in the absence of
the respondent. The said determination is based solely on the evidence of the applicant and on
documents in the court file, as there are no documents or evidence from the respondent to
contradict such evidence.
DE VILLIERS J
The applicant's evidence
A
The applicant testified that he started working for the respondent as a security guard on 22
December 1996. He said after having worked for the respondent for several years the working
relationship between him and the managing director became sour, as a result of which he
resigned in the middle of March 2006. He gave the respondent only 14 days' notice that he was
leaving its employment on 31 March 2006. B
He said the respondent never paid him a severance benefit payment so he is now claiming
severance benefit for the whole period he had worked for the respondent. He said the respondent
also failed to pay him for the 14 days he worked his notice and he is also claiming accrued leave
pay.
The applicant submitted a handwritten note written on the respondent's letter head and the
applicant stated that it was written by the managing C director. The heading of this note reads
'Terminal benefits in respect of J Godisang'. The managing director calculated the applicant's
terminal benefits as follows:
Severance benefit first five years
Severance benefit second period (48 months)
Accrued leave pay — 47 days
Less one month's notice pay
Less part-payment
Balance outstanding
Subtotal
P1 050.00
P1 450.00
P1 731.00
P3 876.48 D
P1 897.86
P7 505.35
P2 500.00
P5 005.35 E
The applicant stated that he does not agree with the aforesaid calculations of the managing
director. He said his severance benefit and his accrued leave pay are not properly calculated. The
said 14 days' withheld wages are also not included. The managing director should have deducted
only 14 days' notice as the applicant had already given him 14 days' notice. The applicant F said
that he agrees that he has received P1 500 as part-payment of his terminal benefits. He agreed
that this amount of P1 450 plus half a month's wages could be deducted from whatever the
respondent still owes him.
The court will now deal with the applicant's aforesaid three claims under separate headings.
G
Withheld wages
The court accepts the undisputed evidence of the applicant that he had in fact given the
respondent 14 days' notice that he intended to terminate his contract of employment and that the
respondent had not paid him for these 14 days he had worked as notice. In the light of the
aforesaid finding the H court consequently finds that the respondent owes the applicant wages
for 14 days and the applicant owes the respondent 14 days' wages as notice pay in lieu of notice
for giving the respondent only 14 days' notice instead of a month's notice.
As the amount owed to the applicant by the respondent and the amount owed to the respondent
by the applicant are exactly the same, namely
DE VILLIERS J
P525.00, the court will set off the one amount against the other. The court will therefore not
deal any further with these two amounts.
A
Accrued leave pay
The applicant testified that, at the time he left the respondent's employment, the respondent still
owed him payment for 47 accrued leave days. This B is common cause because the managing
director also calculated the applicant's leave pay based on 47 accrued leave days. The applicant
stated that he did not know how many paid leave days he was entitled to per year. In such
circumstances the provisions of the Employment Act (Cap 47:01) will apply. Section 98(2) of
the said Act provides that an employer shall grant to each of his employees leave with basic pay
of not less than 1.25 days per C month, which is 15 days per year.
In terms of s 98(6)(a) of the Employment Act, where a contract of employment is terminated by
either party, the employer 'shall' pay to his employee his/her basic pay in respect of all
accumulated leave. In terms of s 98(6)(b), when calculating accrued leave, a part of a month will
be reckoned as a full month.
The applicant was quite correct by saying that his accrued leave pay had also been calculated
incorrectly. It was, in fact, calculated incorrectly to his benefit by the managing director. The
court will now rectify that. As it is obvious that neither the applicant nor the managing director
have a clue how accrued leave pay should be calculated, the court will now set it out in detail.
D
E The leave calculation is, however, not as easy as it appears, as certain leave days not taken are
forfeited. Section 98 of the Employment Act provides for leave with pay. Section 98(3) provides
that of the number of leave days earned in respect of 12 months, the employee shall take not less
than eight days not later than six months immediately after the end of the said F period of 12
months. This means that any such eight days' compulsory leave not taken shall be forfeited.
In terms of s 98(4) any balance of leave not taken as compulsory leave may be accumulated year
by year, but such leave shall not be accumulated for longer than three years after the said first
year in which leave was first earned, which gives you a cycle of four years. At the end of each
such four-year G period all the accumulated leave, together with all the leave earned in respect
of the immediately preceding period of 12 months shall be taken. That means that if leave is
accumulated over a period of four years, all such accumulated leave must be taken at the end of
each period of four years or else it is also forfeited. That further means that at the beginning of
every fifth year an employee starts with a clean slate, ie he starts with no H accumulated leave.
The reason for saying that eight days' compulsory leave and all accumulated leave after four
years not taken shall be forfeited is because of the use of the imperative word 'shall' in the
aforesaid s 98(3) and (4). See s 45 of the Interpretation Act (Cap 01:04).
The Employment Act also makes no provision for payment of leave pay in lieu of taking leave
during the course of an employee's contract of
DE VILLIERS J
employment. Section 98(6) only provides for such leave pay when a contract
is terminated.
A
of employment
The applicant's period of employment with the respondent was from 22 December 1996 to 31
March 2006. The applicant's first four years of employment ended on 21 December 2000. In
terms of the abovementioned provisions of the Employment Act, all accrued leave not taken by
21 December 2000 was forfeited. The applicant therefore started with no B accrued leave to his
credit on 22 December 2000. His second four years of employment ended on 21 December 2004.
Similarly all accrued leave not taken by 21 December 2004 was forfeited and he started his ninth
year on 22 December 2004 with no accrued leave to his credit.
Starting with a clean slate on 22 December 2004, the applicant's first 15 days' paid leave were
therefore earned 12 months later on 21 December 2005. C In terms of s 98(3) he should have
taken not less than eight days' compulsory leave no later than six months after the said leave was
earned, which meant that it had to be taken before 21 June 2006. He, however, terminated his
contract of employment before that date, namely on 31 March 2006, so he forfeited none of the
15 days' paid leave which he had earned up to 21 December 2005. His undisputed evidence was
that he D had taken no leave during 2005 and 2006, so these 15 days' accrued leave were carried
over to his next year.
The applicant's last period of employment was from 22 December 2005 to 31 March 2006,
which was for a period of three months and nine days. As stated above, in terms of s 98(6)(b) of
the said Act, his accrued leave days must therefore be calculated over a period of four months,
which gives him E five (4 x 1,25) accrued leave days. His total accrued leave days are therefore
20 (15 + 5).
It was common cause that, at the time his contract of employment was terminated, the applicant's
monthly wages were P1 050.00 and that he worked six days a week. In terms of s 95(8) of the
Employment Act a six-day working week converts to a 26-day working month. To calculate
an F employee's daily rate of payment his monthly rate of payment must therefore be divided by
26, which gives the applicant a daily rate of payment of P40.38 (P1 050,00 ö 26). The applicant
is therefore entitled to accrued leave pay in the amount of P807.60 (20 x P40.38).
In terms of s 98(9) of the Employment Act, an employer who fails to pay such accrued leave pay
when a contract of employment is terminated shall G be guilty of a criminal offence and upon
conviction may be sentenced to a fine not exceeding P1 000 or to imprisonment for a period not
exceeding six months or to both such fine and imprisonment. The respondent therefore had no
right to withhold the applicant's aforesaid accrued leave pay.
Severance benefit payment
H
The court will first set out the relevant provisions of s 27 of the Employment Act, which sets out
when and how severance benefit payments should be paid and the court will then re-calculate the
applicant's severance benefit payments, based on the aforesaid provisions. The relevant
provisions of the said s 27, for purposes of this judgment, as the respondent is not disputing that
the applicant is still owed a severance benefit payment, are as follows:
DE VILLIERS J
'(1) Without prejudice to section 30, on termination of a contract of employment, whether
by reason of the death or retirement of the employee or for any other reason, the employer shall
pay to the employee who has been in continuous employment with him for 60 months or more, a
severance benefit at the rate prescribed:
A
Provided that (i)
severance benefit shall be payable at the conclusion of each period of 60 months'
continuous service by the employee, or at the termination of his employment, at the option of the
employee;
B
(ii)-(iii) ...
(2) For the purposes of calculating the severance benefit payable in accordance with this
section C
(a)
in subsection (1) -
(i)
"month", in relation to the first 60 months of continuous employment, means
a complete month and, in relation to continuous employment thereafter, means a complete month
or any fraction thereof; and
(ii)
"basic pay" means the basic pay payable to the employee at
the termination of the contract of employment; and
D
the time of
(b) where, at the time of the termination of the contract of employment, any leave is
due to the employee or he has any other right of absence under this Act, the period of that leave
or other right of absence shall be deemed to be part of this period of E continuous employment.'
Subsection (2)(b) means that any accrued leave which is due to an employee must be added on to
his/her continuous employment. Subsection (2)(a)(ii) means that all outstanding severance
benefits must be calculated on an employee's basic pay as it was at the time of the termination of
his F employment.
The rate prescribed for a severance benefit is to be found in reg 3 of the Employment
(Miscellaneous Provisions) Regulations, published in the Gazette of 20 November 1992, which
provides as follows:
'3
For the purposes of section 27(1) of the Act the severance benefit to G be paid on the
termination of a contract of employment shall be at the rate of one day's basic pay in respect of
each of the first sixty months of continuous employment and two days' basic pay in respect of
each additional month of continuous employment.'
In the case of Ben and Another v Green Industrial Enterprises Corporation H (Botswana) (Pty)
Ltd [1995] B.L.R. 859, IC the court found that a severance benefit shall be payable at the
conclusion of each period of 60 months' continuous employment with the same employer. The
court also found that, although s 27 does not specifically state that a severance benefit shall be
paid pro rata in the second or further five-year periods, on an analysis of s 27, it is clear that the
legislature intended that a severance benefit shall also be paid on a pro rata basis for one, two,
three and more
DE VILLIERS J
additional months in the second or further periods of 60 months. These A findings were
confirmed by the Court of Appeal of Botswana in the appeal case of Green Industrial
Enterprises Corporation (Pty) Ltd v Ben and Another [1997] B.L.R. 99, CA.
As stated above, the applicant's period of employment with the respondent was from 22
December 1996 to 31 March 2006. The applicant's first five years of continuous employment
ended on 21 December 2001, for B which period he was entitled to 'one day's basic pay in
respect of each of the sixty months of continuous employment'. The applicant's daily basic pay
has already been calculated as being P40.38. For his first five years of continuous employment
the applicant is therefore entitled to a severance benefit payment of P2 422.80 (60 x P40.38).
The applicant's second period of continuous employment commenced on C 22 December 2001
and ended on 31 March 2006, which was for a period of 51 months and nine days. In terms of the
said s 27(2)(b) of the Employment Act the applicant's 20 accrued leave days must be added to
the above, which gives him 51 months and 29 days. In terms of the said s 27(2)(a)(i) a fraction of
a month should be taken as a complete month. His second period for a severance benefit
payment must therefore be calculated over a period of D 52 months at 'two days basic pay in
respect of each additional month of continuous employment'. The applicant, for this second
period, is therefore entitled to a further severance benefit payment of P4 199.52 (P40.38 x 2 x
52).
In total the applicant is therefore entitled, to a severance benefit payment of P6 622.32 (P2
422.80 + P4 199.52). From this amount must, however, E be deducted the agreed part-payment
of P1 450. The applicant is therefore entitled to a severance benefit payment of P5 172.32 (P6
622.32 - P1 450). Where an employer fails to pay a severance benefit payment in terms of the
said s 27(1) of the Employment Act, he shall, in terms of s 27(6) be guilty of a criminal offence
and on conviction may be sentenced to a fine not exceeding P1 500 or to imprisonment not
exceeding 12 months or to both such fine F and imprisonment. The respondent therefore had no
right to withhold the applicant's aforesaid severance benefit payment.
Determination
The court consequently makes the following determination:
G
1.
As the applicant owes the respondent P525.00, being notice pay in lieu of the notice
balance, and as the respondent owes the applicant P525.00, being withheld wages, the court has
set off the one amount against the other.
2.
The respondent is hereby directed to pay to the applicant, Jensen Godisang, the amount of
P807.60, being accrued leave pay unlawfully withheld. H
3.
The respondent is hereby directed to pay to the applicant the amount of P5 172.32, being a
severance benefit payment unlawfully withheld.
4.
The respondent is hereby further directed to pay the aforesaid amounts, totalling P5
979.92, to the applicant, through the office of the Regional Labour Officer, Lobatse on or before
Friday, 31 October 2008.
DE VILLIERS J
A
5.
No order is made as to costs.
We agree on the facts:
I M Motlaleng
B
Nominated member (Union)
M K Nteta
Nominated member (BOCCIM)