Employment law update – Employer seeking order of specific performance

July 1st, 2012
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Johnson Matthey (Pty) Ltd v Numsa and Others (LC) (unreported case no J515/2011, 24-4-12) (Gush J)

By Moksha Naidoo

In terms of an arbitration award, the applicant employer, Johnson, was ordered to re-employ the second to fourth respondent employees. Johnson brought this application for an order that the respondents, as part of the terms and conditions of their re-employment, sign all documentation that would facilitate them joining the Discovery Health medical aid (Discovery), alternatively for an order empowering the relevant sheriff to sign all documents on behalf of the respondents should they not do so.

Background

Johnson, when hiring the respondents, required all of its employees to join one of the two medical aid schemes it subscribed to as a term and condition of employment. Employees, including the respondents, complied with this condition, which saw the second and third respondents joining Sizwe Medical Fund (Sizwe), while the fourth respondent joined Discovery. Sometime in 2008, after the respondents commenced their employment, Johnson decided to subscribe to Discovery only but allowed those employees who were already members of Sizwe to remain such members.

Johnson embarked on a restructuring process that ended with the respondents, among others, being retrenched. A ‘section 189A agreement’ entered into by Johnson and the first respondent union, the National Union of Metalworkers of South Africa (Numsa), of which all the respondents were members, held that Johnson would give preference to retrenched workers for the next 36 months should vacancies arise. It became clear to Numsa that Johnson was not honouring this agreement and, as a result, referred a dispute to the relevant bargaining council.

As part of an award in favour of the respondents, the arbitrator held the following:

‘[The applicant] is ordered to re-employ … Madlangu [second respondent], Motluong [third respondent] and Mohapi [fourth respondent] … in the operator positions formerly occupied by them at the prevailing rates of pay and other conditions of employment attached to these posts on date of re-employment as herein specified. The re-employment is ordered … to take effect on 10 January 2011 when the applicant shall report for duty in terms hereof.’

The dispute

The parties accepted the award and, on presenting themselves for duty, the respondents were given a new employment contract to sign.

Central to this dispute was the following term, under the heading ‘Medical aid’:

‘The employee shall be required to join Discovery Health medical aid scheme. Exemption from joining the medical scheme would only be granted in the event of an employee being a member of a medical scheme of which [h]is spouse/partner is the principal member or if he/she has private membership to a medical scheme …’.

The respondents refused to sign the contracts and, in an answering affidavit deposed to by Numsa on their behalf, the following reasons were provided –

  • the respondents’ previous employment contracts afforded them the choice of a medical aid scheme, being Discovery or Sizwe;
  • the bargaining council’s main agreement did not compel the industry to belong to a medical aid scheme, particularly one of the employer’s choice; and
  • the respondents could not afford the monthly subscriptions.

The court held that, while it was correct that the main agreement did not provide for employees belonging to medical aid schemes, nothing prevented an employer from including this requirement in its employment contracts.

Gush J went on to say the following:

‘There is no doubt that the arbitration award ordered the applicant to re-employ the second to fourth respondents (not reinstate them) and, in particular ordered that they be re-employed on the prevailing terms and conditions of employment at the time of their re-employment. The prevailing terms and conditions at the time of their re-employment included a clause in the contract of employment that they were required to join the Discovery Health medical aid scheme. The second to fourth respondents accepted re-employment. They had the option of declining re-employment when they became aware of the prevailing terms and conditions specifically regarding the medical aid or challenging the award. This they did not do.

I am satisfied that, having accepted re-employment, whether they have signed the contract of employment or not, the terms and conditions that are applicable to their employment require them to join the Discovery Health medical aid scheme.’

In view of the above, the court held that the respondents were bound by Johnson’s terms and conditions of employment that prevailed at the time, which included joining Discovery. As such, the respondents were ordered, within 21 days from the date of judgment, to sign all documents that would facilitate their membership to Discovery, failing which the sheriff of the court would do so on their behalf. Numsa was ordered to pay the costs occasioned by the application.

Moksha Naidoo BA (Wits) LLB (UKZN) is an advocate at the Johannesburg Bar.

This article was first published in De Rebus in 2012 (July) DR 56.