Ospitiota Chihande v Eaglesvale School

### Preamble
IN THE LABOUR COURT OF ZIMBABWE
JUDGMENT NO LC/H/20/2016
HARARE, 15 OCTOBER 2015 &
CASE NO LC/H/509/2015
22 JANUARY 2016
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IN THE LABOUR COURT OF ZIMBABWE	           JUDGMENT NO LC/H/20/2016

HARARE, 15 OCTOBER 2015 &				         CASE NO LC/H/509/2015

22 JANUARY 2016

In the matter between

OSPITIOTA CHIHANDE						APPELLANT

Versus

EAGLESVALE SCHOOL						RESPONDENT

Before the Honourable R F Manyangadze J

For the appellant	R Zimudzi (Legal Practitioner)

For the Respondent     J G Mupoperi (Legal Practitioner)

MANYANGADZE J:

This is an appeal against an arbitral award handed down on 15 May 2015, in terms of which it was ruled that the appellant’s contract of employment was lawfully terminated, as she had reached the retirement age of sixty years.

The facts of this matter are common cause. The appellant was employed by the respondent as an Accounts Clerk in 2002. In October 2014, the appellant was given notice that she was going to retire on 31 December 2014, on the basis that she had attained the retirement age of sixty. This retirement age was in terms of the respondent’s Pension Scheme.

The appellant lodged a complaint of unfair labour practice, her contention being that she was supposed to retire at the age of sixty-five, not sixty. This was in terms of the National Social Security Act, [Chapter 17:04] (“NSSA Act”) as read with the National Social Security Authority (Pension and Other Benefits Scheme) Statutory Instrument 393 of 1993 (NSSA Scheme) and the Public Service Regulations, Statutory Instrument 1 of 2000.

The matter was referred to arbitration after attempts at conciliation were unsuccessful. The arbitrator ruled in favour of the respondent, leading to this appeal.

The grounds of appeal are stated as follows:

“1.	The Honourable Arbitrator erred in fact and law by failing to consider the retirement age in terms of the National Social Security Authority (Pension and other Benefits Scheme S I 393 of 1993) as read with relevant statutes is sixty five years and not sixty years and therefore the appellant was unlawfully dismissed by being forced to retire at the age of sixty years.

2.	The Honourable Arbitrator erred at law and fact by relying on the respondent’s parallel scheme (Eaglesvale School Pension Fund) that was not complied with by the respondent in that it was not being managed by Old Mutual Pension Fund and that the appellant was not retired on the last day of the month of the term in which she reached the alleged retirement age as per the mandatory requirements of the (Eaglesvale School Pension Fund). The Arbitrator made a serious misdirection by relying on a parallel scheme that was not complied with by the respondent and was therefore a legal nullity.

3.	The Honourable Arbitrator erred at law and fact by failing to consider the fact that the appellant’s member benefit statement for 2013 prior to her dismissal in 2014 clearly states that the appellant’s date of retirement is 30 June 2019 when she would have turned sixty-five years and therefore dismissal in 2014 when the appellant turned sixty years was unlawful. The arbitrator erred by disregarding the 2013 statement on the basis of the alleged unilateral error by the respondent and admitting the revised statement through a letter that was only tendered in February 2015 when the matter was already pending before the arbitrator and which letter was not procedurally obtained.”

In the first ground of appeal, the appellant is placing reliance on the NSSA Scheme, which stipulates sixty-five as the retirement age.

The appellant averred that in terms of the NSSA Scheme, which is the law that governs the issue of pensionable age, the mandatory retirement age is sixty-five. She contended that she could only be retired prior to attaining the age of sixty-five by her consent. In this regard, the appellant made reference to the case of Mashambanzou Care Trust v Rosemary Magagula LC-H-132-15, were it was held that it is the employee who elects to retire at the age of sixty. Mandatory retirement only occurs when the employee reaches the age of sixty-five. The appellant, in paragraph 9 of her heads of argument, cited a passage from that case which reads:

“Section 29 (2) of the National Social Security Authority (Pensions and other Benefits Scheme) Statutory Instrument 393 of 1993 (S I 393/93) as amended provides:

‘(2)  Subject to this section, any employee may retire on attaining the age of sixty years of age or at any time thereafter but shall in any case retire on attaining the age of sixty-five’

The above provides for an employee to choose to retire at sixty or at any time after attaining that age. However upon attaining the age of sixty-five the employee will have no choice to make but to retire. The learned arbitrator interpreted this to mean that the appellant herein had no obligation or right to terminate the respondent’s employment since she had not attained the age of sixty-five. I agree with that interpretation in terms of S I 393/93. Further it is the employee who may retire at sixty. This gives an employee the option to, at the age of sixty, approach the employer and indicate their intention to retire. In the same vein, if an employee remains in employment until they reach the age of sixty-five, the employer is obliged to retire them because at that stage it becomes mandatory. I am therefore of the respectful view that when the appellant decided to retire the respondent, it should have consulted her first.”

The appellant, on the basis of the statutes referred to, and the interpretation thereof made in the Mashambanzou case, supra, contended that she was prematurely retired. That premature retirement amounted to an unlawful termination of her employment.

In countering the appellant’s averment, the respondent contended that the law permitted it to operate its own pension scheme, parallel to the NSSA Scheme. The pension scheme it operated specifically provided for the retirement age of sixty. This scheme had rules, (the Pension Fund Rules) which provided, in section 21 thereof:

“Normal Retirement Age shall mean the age on the last day of the calendar month in which a member attains the age of sixty years.”

The section further provides:

“A member who has attained normal retirement age shall retire from the service of the employer provided that if he and his employer both agree, he may continue in service for a further period…..”

Thus, the respondent’s Pension Fund Rules provide for a reverse scenario of what is provided for in the NSSA Scheme. The employee shall retire at sixty, and any retirement after this age has to be agreed to with the employer. In the NSSA Scheme, the employee shall retire at sixty-five, and any retirement before that age has to be agreed to with the employee.

The respondent made reference to section 74 of the NSSA Scheme, which provides for the institution by the employer, of a pension scheme parallel to the NSSA Scheme. It matters not whether the benefits in the parallel scheme are similar, greater or less than the benefits in the NSSA Scheme.

My reading of the submissions made by the parties, both written and oral, is that there is really no contention that the retirement age in national legislation is sixty-five, as provided for in the NSSA Scheme. There is also no contention that an employer may provide for a parallel scheme, whose benefits may not be the same as those in the NSSA Scheme. This is precisely what the respondent provided for, in its Pension Fund Rules. This legal position is buttressed by case authority. In Athol Evans Hospital Home v Monica Maruta SC 66-05, ZIYAMBI JA stated, at p 5 of the cyclostyled judgment, that:

“It is clear that both schemes can lawfully co-exist by virtue of the provisions of s 74 which recognizes the existence of other pension schemes with benefits greater or lesser than that provided by the NSSA Scheme.

There is, therefore, merit in the appellant’s submission that the respondent, by joining the Southampton Scheme, chose to retire at the age of sixty as both schemes were lawfully in operation at the time of her joining the Southampton Scheme; and that since the NSSA Scheme had, at that time, already been promulgated, the respondent was deemed to know of its existence.”

The legal position is therefore clear, that the employer can have a parallel pension scheme, whose retirement age may be lower than the one stipulated in the NSSA Scheme. In the instant case, the employer’s parallel scheme stipulated a mandatory retirement age of sixty years.

What the appellant however, sought to challenge was the respondent’s compliance with the requirements of the parallel scheme. The appellant averred that the respondent’s parallel scheme was not in full compliance with the conditions relating to its establishment and operation. She raised this issue on two main grounds. Firstly it was on the basis that the parallel scheme was not being managed by Old Mutual Pension Fund. The appellant contended that the regulations of the respondent’s scheme specifically required that such scheme be administered by Old Mutual. The respondent placed administration of the scheme under Minerva (Pvt) Ltd. It should have first amended its regulations before migrating to Minerva (Pvt) Ltd. This irregularity rendered the scheme a nullity.

The respondent, on the other hand, argued that the migration to Minerva (Pvt) Ltd was inconsequential to the application of the scheme. The appellant joined the respondent’s pension scheme, and was therefore bound by it. Submitted the respondent, in paragraph 4.5 of its heads of argument:

“4.5	The court held that National Legislation had clearly provided in terms of section 74 of the NSSA Scheme that private pension Schemes would co-exist with the NSSA Scheme. Hence where one joins a Pension Fund which provides that retirement shall be sixty (60) years, it shall be taken that such person is bound by the Rules of the said Pension Scheme. The rules of the private scheme should therefore prevail and the employee would be precluded from seeking to rely on the NSSA Act and Regulations.”

The respondent further contended that the terms and conditions of the scheme, in particular the retirement age of sixty, remained the same whether the scheme was under Old Mutual or Minerva. There was therefore no prejudice caused by the migration to Minerva.

There is in my view, considerable merit in the respondent’s contention. Migration to Minerva, which did not in any way affect the terms and the conditions of the pension scheme in question, becomes no more than a technical point. It does not detract from the fact that the appellant joined that scheme, and bound herself to the terms and conditions thereof.

The second point raised by the appellant, on the issue of compliance, was that:

“… the appellant was not retired on the last day of the month of the term in which she reached the alleged retirement age.”

In this respect, the appellant averred that her retirement on 31 December 2014, instead of 30 June 2014, the date on which she attained the age of sixty, was irregular and rendered the whole process defective.

Again, this comes through as an inconsequential technical point. Once the appellant reached sixty, the respondent could retire her at any time thereafter. The respondent made reference to the case of Dombo Chibanda & Ors v City of Harare, HH 737/15.

The remarks by MAFUSIRE J, at page 5 of the cyclostyled judgment, are apposite:

“Having gone past the normal age of retirement, namely sixty years, the applicants were now serving at the pleasure of the employer. The employer was entitled to dispense with their services at any time. It had given them three months’ notice of termination.”

Having regard to the foregoing, the issues of compliance raised by the appellant are devoid of merit. The decisive factor, at the end of the day, is that the appellant is bound by the pension scheme instituted by the respondent, which pension scheme she joined and was consequently part of. The first ground of appeal cannot be upheld in the circumstances.

The issues in the second ground of appeal have been comprehensively dealt with in my analysis of the issues raised in the first ground of appeal. The second ground of appeal is raising issues to do with the validity of the parallel pension scheme run by the respondent. It is raising the challenges that have already been adverted to in the foregoing analysis. For the same reasons, the second ground of appeal cannot be upheld.

The third and last ground of appeal refers to the member benefit statement for 2013, sent to the appellant prior to her dismissal in 2014. The statement states the appellant’s retirement date as 30 June 2019, when she would have reached the age of sixty-five. The appellant’s contention is that this communication correctly reflects that her retirement age was sixty-five.

The respondent’s explanation for this statement is that it was done in error. It should not be taken to mean that the respondent changed its position that the retirement age was sixty, as per its pension scheme.

The appellant contended that the mistake alleged by the respondent was not a reasonable one. The respondent should not be allowed to rely on its own mistake in setting aside the contract. The appellant cited a number of authorities in advancing this position. One such authority was renowned author on business law, R H Christie. He is quoted in paragraph 12.5 of the appellant’s heads of argument, wherein the appellant contends as follows:

“R H Chistie, Law of Contract in South Africa 3rd ed. (1996) states at 353:

Unless the mistake can prove that the other party knew of his mistake, or that as a reasonable man ought to have known of it, or that he caused it, the onus of showing that the mistake was a reasonable one justifying release from the contractual bond will not be easy to discharge.’

The learned author continues at p 354:

‘However material the mistake, the mistaken party will not be able to escape from the contract if his mistake was due to his own fault. This principle will apply whether his fault lies in not carrying out the reasonably necessary investigations before committing himself to the contract… and in fact in any circumstances in which the mistake is due to his own carelessness or in attention, for he cannot claim that his error is iustus.’

In casu, it is submitted that there is no basis to set aside the 2013 member benefit statement showing retirement date to be 30 June 2019 for the respondent’s unilateral mistake which mistake is not reasonable.”

In countering this assertion, the respondent pointed out that statement prior to December 2013 clearly showed the appellant’s retirement age as sixty. That assertion was not controverted by the respondent. The record shows the statement for 2012, where the retirement age is stated as sixty. The first section of that statement contains the member’s details. These details are quite significant, and are recorded as follows:

“Member Details

Member Number			4

Member Name			Chihande O

Date of Birth				24/06/1954

Category				All Members above NSSA Salary Cap

Pay point				Head Office

Cost Code

Date Joined Fund			01/09/2002

Date Joined Company			01/09/2002

Pensionable Service Date		01/09/2002

Normal Retirement Date		30/06/2014

Pensionable Salary			$25,542,00

Risk Salary				$25,542,00”

The statement shows that the appellant was a contributor since 2002. She had thus been a member for twelve years, during which she was made aware of the terms, conditions and benefits applicable. The contract was not formed in December 2013. The 2013 statement cannot, in the circumstances, be treated as an offer to form or establish the contract, which had all along been in existence.

The respondent further pointed out the explanation at the end of the statement, with the sub-heading “NOTES”. It reads, in paragraph 1 and 2:

“1.	This benefit statement advises the benefits available by the fund. We suggest that this statement be read in conjunction with the member guide that was previously issued.

2.	If any information on this statement differs from the Rules of the Fund or Insurance Policies purchased, the rules and/or policy rules and conditions will prevail.”

From this, it is clear the statements sent to a member are advisory in nature. There are essentially updates on the status of the member’s contributions and the benefits payable. The statements cannot be treated, as the appellant sought to do, as the basis for the pension scheme contract.

In the circumstances, I am unable to uphold the third ground of appeal.

What remains on record is evidence of the appellant’s membership of the respondent’s pension scheme, to which she contributed over a decade. She cannot, on reaching the stipulated retirement age, turn around and claim that she is being unfairly dismissed from employment. In Dombo Chibanda & Ors v City of Harare supra, the court stated on pages 3 to 4:

“The applicants’ argument whether the pension scheme applied to them or not had no merit. The National Social Security Authority Act [Chapter 17:04] authorises the establishment of compulsory social security schemes for the benefit of all employees, or such class of employees as might be specified. One such social security scheme established in terms of that Act is the National Social Security (Pension and Other Benefits Scheme) Notice, 1993, S I 393 of 1993, as amended (“the NSSA scheme”). In terms of it, the normal retirement age is fixed at sixty years, although allowance is made to extend the date to not beyond sixty-five years. However, the NSSA scheme, in s 74 does not preclude any employer from operating any other scheme for its employees with benefits similar to, or greater or lesser than, its own…..

In Athol Evans Hospital Home v Monica Maruta the retirement age specified in the employer’s pension scheme was sixty years. The Supreme Court held that by joining the employer the employee had accepted to be bound by the employer’s pension scheme that specified a retirement age of sixty years. It is the same in the present matter. The applicants are bound by the respondent’s pension scheme the normal retirement age of which is sixty years.

The applicant’s other arguments such as that the respondent was precluded from retiring the applicants in between the segments of fifty-five years, sixty years and sixty-five years, or that they had a legitimate expectation that they would be retired at sixty-five years, also lack merit.”

In the circumstances, the arbitrator cannot be faulted for holding that “the complainant’s contract was terminated when she had reached the age of sixty.”

There were no further grounds of appeal. The issues considered were the ones that arose from the appellant’s grounds of appeal. For the reasons stated, each of the grounds lack merit and cannot be upheld.

The appellant sought to raise another issue that was not part of his grounds of appeal. It was the issue that the appellant did not fall under the category of employees eligible for membership of the respondent’s pension scheme. This constituted another instance of non-compliance with the requirements of the respondent’s pension scheme.

The respondent contended that this point was never argued in the court a quo. It was being raised for the first time on appeal. It was therefore grossly unfair and prejudicial to the respondent to raise such an issue at this stage.

My perusal of the submissions made before the arbitrator, and the arbitrator’s summary and analysis thereof, clearly shows that this issue was never argued before the arbitrator. It was not the basis of the arbitral award. It was not even part of the reasoning in the arbitral award. This was for the simple reason that it was never argued before the arbitrator. The issues argued are the ones raised in the grounds of appeal. These are the issues this court duly considered. There was no application to amend the grounds of appeal to include this aspect, of the appellant’s eligibility to the scheme in question.

One wonders why the appellant, all these years, subscribed to a scheme to which she now argues she was not eligible. There is nothing that precluded the appellant from bringing the issue right from the commencement of litigation. It seems she is developing her case as litigation progresses, up to the appellate stage. This seriously prejudices the conduct of the other party’s case, whose response would have been based on the issues argued in the court a quo.

In Austerlands (Pvt) Ltd v Investment Bank & Ors SC 92-05, CHIDYAUSIKU CJ stated:

“Secondly, the issue of the sale being imperfecta was being raised for the first time on appeal. Is this permissible? The general rule, as I understand it, is that a question of law may be advanced for the first time on appeal if its consideration then involves no unfairness to the party at whom it is directed. See Estate Lala v Mohamed 1994 AD 324.

The principles applicable to the raising of a point of law for the first time on appeal were succinctly set out by KRIEGLER J in the case of Donelly v Barclays National Bank Ltd 1990 (1) SA 375 at 380 H – 381 B, where the learned judge had this to say:

‘Secondly, it is clearly a wholly new line of defence now being taken. It was not mentioned in the summary judgment proceedings nor in the plea. It was never referred to in evidence or argument at the trial. It’s mere novelty, of course is no ground pe se for rejecting it. However, generally speaking, a court of appeal will not entertain a point not raised in the court below and especially one not raised on the pleadings in the court below. In this regard I need do no more than to refer to Herbstein & Van Winsen The Civil Practice of the Superior Courts in South Africa 3rd ed at 736 – 737. In principle, a Court of Appeal is disinclined to allow a point to be raised for the first time before it. Generally it will decline to do so unless-

The point is covered by the pleadings;

There would be unfairness to the other party;

The facts are common cause or well-nigh incontrovertible

There is no ground for thinking that other or further evidence would have been produced that could have affected the point.

See Cole v Government of the Union of South Africa 1910 AD 263; Van Ryn Wine & Spirit Co v Chandos Bar 1928 TPP 417 at 421, and Paddock Motor’s Pty) Ltd v Igesund 1976 (3) SA at 23.”

In the light of this, I am of the view that the appellant has brought up “a new line of defence” on appeal. It does not meet the criteria for admission at this stage of the proceedings.

As the grounds of appeal have not been upheld, the appeal fails in the circumstances. It is accordingly ordered that:

The appeal be and is hereby dismissed.

The arbitral award granted in favour of the respondent on 15 May 2015 be and is hereby upheld.

The appellant shall bear the respondent’s costs.

Zimudzi & Associates, appellant’s legal practitioners

Saratoga Makousi L aw Chambers, respondent’s legal practitioners