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Telecom Lesotho (Pty) Ltd v Leche (C OF A (CIV) N0.20/2010 )
IN THE COURT OF APPEAL OF LESOTHO
C OF A (CIV) N0.20/2010
In the matter between:
TELECOM LESOTHO (PTY) LTD …..............................APPELLANT
SEEISO LECHE …....................................................RESPONDENT
CORAM: RAMODIBEDI, P
HEARD: 11 OCTOBER 2010
DELIVERED: 22 OCTOBER 2010
Labour Law – Appeal from Labour Appeal Court sitting as a court of first instance – Jurisdiction of the Court of Appeal conferred by s 5 of the Labour Code (Amendment) Act 2010 – Exemption under s 79 (9) of the Labour Code (Amendment) Act 1997 – Whether a hearing is required before the exemption is granted – Appeal dismissed with costs.
 This is an appeal from the Labour Appeal Court sitting as a court of first instance. It is no doubt necessary to point out that on 2 March 2010 and in terms of s 4 of the Labour Code (Amendment) Act 2010, s 38A(4) of the Labour Code Act 1992 was deleted. Section 5 of the Amendment in question conferred jurisdiction on this Court in the following terms:-
“38 A4 (1) An appeal shall lie to the Court of Appeal from all final judgments and orders of the Labour Appeal Court sitting as a court of first instance.
(2) A person aggrieved by any judgment or order of the Labour Appeal Court in its appellate jurisdiction may appeal to the Court of Appeal with leave of the Court of Appeal or upon a certificate of the judge who heard the appeal
on any ground of appeal which involves a question of law, but not a question of fact.”
 The parties are on common ground that this Court has jurisdiction by virtue of the fact that the Labour Appeal Court sat as a court of first instance. See in this regard Lerotholi Polytechnic And Another v Blandina Lisene C of A (CIV) No 25/09.
 The facts show that, by letter annexure “C” dated 24 January 2005, the appellant, a company carrying on telecommunication business throughout Lesotho, was granted an exemption by the Labour Commissioner in the following terms:-
“The Chief Human Resource Officer
P.O. Box 1037
RE: APPLICATION FOR EXEMPTION FROM THE EFFECTS OF SECTION 79 OF THE
LABOUR CODE 1992
Reference is made to your letter dated 17th January 2005 in which you requested to be exempted from complying with the provisions of Section 79 (1) of the Labour Code Order 1992.
We have looked at the regulations of the pension fund scheme and have satisfied ourselves that it offers more advantageous benefits than severance pay.
Telecom Lesotho is therefore exempted from the effects of Section 79 (1) of the Labour Code Order 1992 subject to the condition that should in any event severance pay prove to be more advantageous than benefits under the scheme the provisions of Section 79 (1) shall be invoked and the exemption shall not apply. In such events therefore, the employers shall be entitled to severance pay and their contributions to the scheme.
LABOUR COMMISSIONER a.i.”
 It is common cause that the respondent was not given a hearing before the exemption in question was granted. As will be seen shortly, this then became the basis for the respondent’s main complaint in the matter.
 Meanwhile, it is further common cause that at all material times since 26 February 1992 to 18 December 2007 when he resigned the respondent was in the appellant’s employ earning a salary of M9,442.43 gross. It is not disputed that at the time of his resignation, but for the exemption, he would have been entitled to M57,143.08 severance pay as well as M60,644.87 net under a pension scheme then being operated by the appellant, i.e. a total of M117,787.95.
 The appellant relies on annexure “C” referred to in paragraph 6 of the answering affidavit of ‘Matli Lesitsi for its defence that it was exempted by the Labour Commissioner from paying the respondent severance pay.
 Now, in relevant parts, s 79 of the Labour Code Act 1992 as amended by s 8 of the Labour Code (Amendment) Act 1997 reads as follows:-
“79. (1) An employee who has completed more than one year of continuous service with the same employer shall be entitled to receive, upon termination of his or her services, a severance payment equivalent to two weeks’ wages for each completed year of continuous service with the employer.
(7) Where an employer operates some other separation benefit scheme which provides more advantageous benefits for an employee than those that are contained in subsection (1), he may submit a written application to the Labour Commissioner for exemption from the effect of that subsection.
(9) If upon considering an application under subsection (7) the Labour Commissioner is satisfied that the scheme operated by the employer offers better advantages to the employee, the Labour Commissioner shall exempt the employer from the effect of subsection (1).”
 In this Court counsel for both parties made diametrically contrasting submissions. The submission of Adv Teele KC for the appellant on the one hand was in effect based on the assumption that the pension scheme operated by the appellant replaced severance pay. As I understood his submission, there could not, therefore, be any prejudice to the respondent. Accordingly, a hearing was not necessary before the exemption under s 79 (9) was granted to the appellant. Adv Mohau KC for the respondent, on the other hand, submitted that appellant’s refusal to effect severance pay to the respondent was prejudicial to the latter’s property rights. As such the audi alteran partem rule should have been observed before the exemption in question was granted insofar as the respondent is concerned. Counsel is indeed supported by such cases as South African Roads Board v Johannesburg City Council 1991 (4) SA 1 (A); Rakhoboso v Rakhoboso LAC (1995 – 1999) 331 at 335 – 336. In the South African Roads Board (supra) case Milne JA expressed himself in these apposite terms at pages 10 – 11:-
“The question as to whether a legislative act, or the decision which precedes and gives rise to it, is subject to the rules of natural justice, including the audi principle, is, in my opinion, not one which admits of a simple and unqualified answer. Before essaying an answer I would emphasise certain developments which have recently taken place in our law in this sphere.
In the first place, this Court has expressed a preference for the view which regards the audi principle as a rule of natural justice which comes into play whenever a statute empowers a public official or body to do an act or give a decision prejudicially affecting an individual in his liberty or property or existing rights, or whenever such an individual has a legitimate expectation entitling him to a hearing, unless the statute expressly or by implication indicates the contrary; as opposed to the view which requires the audi principle, if it is to apply, to be impliedly incorporated by the statute in question. (See in this regard Attorney-General, Eastern Cape v Blom and Others 1988 (4) SA 645 (A) at 660H – 662I; Staatspresident en Andere v United Democratic Front en ‘n Ander 1988 (4) SA 830 (A) at 871H-872E; and, as to legitimate expectation, Administrator, Transvaal, and Others v Traub and Others 1989 (4) SA 731 (A) at 754 ff.)
Secondly, this Court has now moved away from the classification of powers as, for example, judicial, quasi-judicial or purely administrative in order to determine whether the audi principle applies. These classifications and their application in administrative law to questions such as the justiciability of acts or decisions on the ground of a failure to observe the dictates of natural justice were originally derived from English law, which itself has now discarded them (Traub’s case supra at 759A-C, 762F-763J; Wade Administrative Law 6th ed at 518-20; Craig Administrative Law 2nd ed at 204-5).”
 For my part I desire only to add that whether or not a hearing is necessary will depend on the facts of each particular case. On the facts of the instant case I have not the slightest hesitation in concluding that a hearing was necessary before an exemption was granted insofar as the respondent is concerned. Indeed it is common cause that before the exemption in question the respondent stood to get both pension and severance pay. It follows that the exemption in question meant that he was now worse off. Following the exemption he would have been paid M57,143.08 plus his contribution under the pension scheme of M33,628.06 (including interest), amounting to M90,771.14 in total. In other words, he would have been paid M27,016.81 less than he would have been paid prior to the granting of the exemption (M117,787.95 less M90,771.14). What this then means is that the exemption in question prejudicially affected the respondent in his property rights. In any event, I consider that the appellant supported the respondent’s case in paragraph 5 of the answering affidavit of ‘Matli Lesitsi. Crucially, the deponent said this:-
“(a) The pension benefit as clearly appears in annexure ‘B’ consists of both the employees and the employees contributions.
(b) Severance pay on the other hand is the employer’s sole contribution. The correct position therefore is to compare the employer’s contributions only and decide, for the purpose of the exemption, which is more beneficial.
(c) Looked at in that manner it is clear that severance payment is more beneficial to the extent that it exceeds the employer’s contribution in terms of the pension fund.”
 The court a quo appeared to decide the matter in the employee’s favour on the assumption that in all cases it would be necessary for the Commissioner to afford the employee a hearing before granting an exemption. It is not necessary for us to decide that point in this appeal. It is sufficient for us to conclude that in this case inasmuch as the respondent’s membership of the pension fund had preceded the grant of the exemption, the order of the court a quo should be confirmed.
 In all the circumstances of the case I am satisfied that the appeal cannot succeed. It is accordingly dismissed with costs.
PRESIDENT OF THE COURT OF APPEAL
I agree: ________________________
JUSTICE OF APPEAL
I agree: _________________________
JUSTICE OF APPEAL
For the Appellant: Adv. M.E. Teele KC
(with him Adv. S. Ratau)
For the Respondent: Adv. K.K. Mohau KC
(with him Adv. E.T. Potsane)