Zwane Vs Good Shepherd Mission Hospital (116 of 2020) [2021] SZIC 94 (1 December 2021)

# Zwane Vs Good Shepherd Mission Hospital (116 of 2020) [2021] SZIC 94 (1 December 2021) [ __](https://api.whatsapp.com/send?text=https://eswatinilii.org/akn/sz/judgment/szic/2021/94/eng@2021-12-01) [ __](https://twitter.com/intent/tweet?text=https://eswatinilii.org/akn/sz/judgment/szic/2021/94/eng@2021-12-01) [ __](https://www.facebook.com/sharer/sharer.php?u=https://eswatinilii.org/akn/sz/judgment/szic/2021/94/eng@2021-12-01) [ __](https://www.linkedin.com/sharing/share-offsite/?url=https://eswatinilii.org/akn/sz/judgment/szic/2021/94/eng@2021-12-01) [ __](mailto:?subject=Take a look at this document from EswatiniLII: Zwane Vs Good Shepherd Mission Hospital \(116 …&body=https://eswatinilii.org/akn/sz/judgment/szic/2021/94/eng@2021-12-01) [ Download DOCX (42.0 KB) ](/akn/sz/judgment/szic/2021/94/eng@2021-12-01/source) Toggle dropdown * [Download PDF](/akn/sz/judgment/szic/2021/94/eng@2021-12-01/source.pdf) Report a problem __ * Share * [ Download DOCX (42.0 KB) ](/akn/sz/judgment/szic/2021/94/eng@2021-12-01/source) * [Download PDF](/akn/sz/judgment/szic/2021/94/eng@2021-12-01/source.pdf) * * * * * Report a problem __ ##### Zwane Vs Good Shepherd Mission Hospital (116 of 2020) [2021] SZIC 94 (1 December 2021) Copy citation * __Document detail * __Related documents * __Citations 1 / - Citation Zwane Vs Good Shepherd Mission Hospital (116 of 2020) [2021] SZIC 94 (1 December 2021) Copy Media Neutral Citation [2021] SZIC 94 Copy Court [Industrial Court of eSwatini](/judgments/SZIC/) Case number 116 of 2020 Judges [Dlamini AJ](/judgments/all/?judges=Dlamini%20AJ) Judgment date 1 December 2021 Language English Court Roll [Download PDF](/akn/sz/judgment/szic/2021/94/eng@2021-12-01/attachment/zwane-vs-good-shepherd-mission-hospital-2021-szic-94-1-december-2021.pdf) (626.9 KB) Summary Read full summary * * * Skip to document content _**IN THE INDUSTRIAL COURT OF ESWATINI**_ **HELD** **AT** **MBABANE** Case No.l 16/2020(D) In the matter between: **MANDLENKOSI****C.****ZWANE** And **GOOD** **SHEPHERD** **MISSION** **HOSPITAL** In Re: **MANDLENKOSI C. ZWANE** And **GOOD** **SHEPHERD** **MISSION** **HOSPITAL KENNETH SIMELANE** **N.O.** Applicant Respondent Applicant 1st Respondent 2nd Respondent **Neutral Citation:** Mandlenkosi C. Zwane vs. Good Shepherd Mission Hospital In re: Mandlenkosi C. Zwane vs. Good Shepherd Mission Hospital and Another (116/2020 (D) [2021] SZIC 94 (01 December 2021) **Coram:****V.Z. DLAMINI- ACTING** **JUDGE** _(Sitting with A. Nkambule_ _and_ _MT E Mtetwa_ - _Nominated_ _Members of the Court)_ **LAST HEARD: JUDGMENT DELIVERED:** 07 September 2021 01 December 2021 _SUMMARY: Applicant instituted an application claiming gratuity and medical aid contributions ji·om the Respondent in terms of the provisions of the employment contract. Respondent opposed the application and contended that a subsequent offer by the Applicant which was unequivocally accepted by her culminated in a compromise agreement, which extinguished the terms of the initial contract of employment. Principles of offer and acceptance of the law of in contract_ _considered._ _HELD: On the facts, the Applicant's offer was rejected by the Respondent through a counter-offer, which was itself rejected by the Applicant by means of a fresh offer. Applicant entitled to payment of gratuity in terms of the provisions of the_ _contract_ _of_ _employment,_ _but_ _obliged_ _to_ _reimburse_ _the_ _Respondent_ _the_ _salaries paid to him in error. Medical aid claim dismissed as no legal basis_ _established._ **JUDGEMENT** _**INTRODUCTION**_ 1. The Applicant is an adult liSwati male ofKaHlatsi area in the Shiselweni region who was employed by the Respondent on a three (3) year contract as Human Resources Manager on the 27th October 2017. 2. The Respondent is a category A public enterprise and health institution duly established in terms of the laws ofEswatini, having its principal place of business in Siteki in the Lubombo region. 3. In April 2020, the Respondent instituted a disciplinary process against the Applicant and during the course of that enquiry the parties were involved in litigation before the Court, which had been initiated by the Applicant apropos events that unfolded during the disciplinary process. 4. Following the aforesaid litigation and while the disciplinary process was pending finalization, on the 6th August 2020 through his attorneys the Applicant made a written offer to the Respondent proposing that he be paid the remainder of his term and the parties part ways amicably. At the time of the offer, the Applicant was left with less than three (3) months before the expiry of his contract. 5. On the 19th August 2020, the Respondent accepted the Applicant's offer and stated that it should be in full and final settlement of his employment I contract; the Respondent subsequently paid three (3) months' salary to the Applicant and the employment contract was terminated. Other than the letters exchanged between the parties' attorneys conveying the offer and acceptance, no deed of settlement was signed encapsulating the terms of agreement. 6. A dispute then ensued with respect to the exclusion of gratuity and medical aid as part of the benefits due to the Applicant at the termination of the contract. Despite demand by the Applicant for gratuity and medical aid, the Respondent refused to pay these benefits contending that by its acceptance of the Applicant's offer a new compromise agreement contract with distinct rights and obligations was created resulting in the novation of the original contract of employment with its terms. 7. On the 4th December 2020, the Applicant filed an application to the Court seeking the following orders: _"1. Directing, ordering and compelling the Respondent to release to the Applicant gratuity, medical aid and_ _pay-out._ 2. _Declaring that the Respondent's conduct of withholding the Applicant's gratuity and medical aid contribution unlawful and illegal._ _Alternatively_ 2. _Directing and compelling the Respondent to pay the Applicant his gratuity and medical aid contribution in terms of clause 4 and 5 of the Employment_ _Contract._ 3. _Costs of suit at attorney and own client_ _scale._ 2. _Such further and /or alternative_ _remedy._ _**ARGUMENTS**_ **APPLICANT** 8. The Applicant's counsel Mr. Magagula submitted that the Applicant was entitled to claim gratuity and medical aid contributions in terms of **Clauses****4** and **5** of contract of employment because the parties never concluded a compromise agreement in terms of which he waived his right to claim those benefits. According to counsel, the Applicant's offer that was made through annexure _**"MCZ**_ ___**4"**___ to the Founding Affidavit was never accepted by the Respondent so as to create a new agreement, instead the Respondent contended that it accepted the offer presented in annexure _**"MCZ**_ _3";_ consequently, there was a mistake as to the nature of the contract that was concluded _(error in_ _negotio)._ 9. On the principles of the law of contract in general and compromise agreement incorporating the phrase _"full and final settlement",_ Mr. Magagula referred the Court to the following authorities: **Simon Mbhamali v Teaching Service Commission and Others (13/15)[[2016] SZIC 04](/akn/sz/judgment/szic/2016/04); Kerr AJ: The Principles of the Law of Contract (2002); Patrick Magongo Ngwenya v Swazi Bank (679/2009) [2014] SZIC** **14** and **Job** **Matsebula** **and** **Others** **v** **lntercon** **Construction** **(Pty) Ltd Case No** **16/94.** 10. Mr. Magagula further argued that since the Applicant's employment contract was terminated prior to its expiry date, in terms of **Clauses 4, 4.2** and **5** the Applicant was entitled to be paid gratuity at the rate of 25% of the annual basic salary per month and medical aid as benefits that accrued at the time of its termination. It was also contended by Mr. Magagula that while gratuity and severance allowance served the same purpose, the former was governed by contract whereas the latter was regulated by statute. In support of the aforegoing proposition, Counsel referred to the case **ofManana and Others v Acting President of the Industrial** **Court** **and Others (56/13)[[2015] SZSC 14](/akn/sz/judgment/szsc/2015/14).** 11. The Applicant's counsel _furthered_ submitted that on account of the fact _k_ that the gratuity and medical aid benefits were contractual entitlements, withholding them was unlawful. **RESPONDENT** 12. The Respondent's counsel Mr. Manyatsi submitted that the question for decision by the Court was whether the consequences of the termination of the Applicant's employment contract was governed by the initial contract in annexure _**"MCZ 1"**_ as alleged by the Applicant or by the compromise agreement whose terms were encapsulated in annexures _**"MCZ 2"**_ and _**"MCZ**_ _**3"**_ respectively as claimed by the Respondent. 13. According to Mr. Manyatsi, it was common cause that in order to avoid prolonged litigation emanating from the disciplinary proceedings, the parties entered into negotiations for purposes of reaching an amicable settlement of the Applicant's employment contract. Counsel further contended that the parties reached a compromise, which was first articulated clearly and unambiguously in an offer by Applicant in annexure _**"MCZ 2"**_ and subsequently unequivocally accepted by the Respondent through annexure _**"MCZ**_ ___**3".**_ 14. The Respondent's counsel further elucidated that the terms of the compromise agreement entailed that the Applicant be paid the remaining three (3) months of his contract and that the parties part ways amicably. It was also argued by Mr. Manyatsi that the acceptance of the offer of compromise had the effect of novating and/or extinguishing the terms of the initial contract. On the exposition of what constituted a compromise agreement, Mr. Manyatsi referred the Court to the case of **Patrick Magongo Ngwenya v Swaziland Development and Savings Bank (04/2014) [2014] SZICA** **03.** 15. Mr. Manyatsi further submitted that it was a rigid and dogmatic approach to the principles of the formation of a contract for the Applicant to contend that for the compromise agreement to be valid, it ought to have been encapsulated in a signed Deed of Settlement as opposed to the letters of offer and acceptance respectively. Counsel added that the Applicant's contention was inconsistent with the trite principles of offer and acceptance of the law of contract. Exceptions only exist where the law prescribes certain formalities for execution of a contract. In support of the above proposition Counsel referred the Court to an extract of the learned authors **Huyssteen** _**.et al**_ in their text **Contract: General Principles 5th edition (2016).** (16] The Respondent's counsel further argued that the Applicant's claim for the medical aid contribution lacked merit as it was not founded in the initial contract of employment nor was it substantiated in his founding affidavit; consequently, for that reason alone without even considering the compromise agreement, that claim should fail. 17. Mr. Manyatsi implored the Court to consider the unfair conduct of the Applicant who successfully negotiated a payout of his salary for the remaining three (3) months, which resulted in him avoiding the disciplinary hearing that might have led to his dismissal for misconduct culminating in forfeiture of the gratuity. Counsel added that by now resurfacing to claim gratuity, the Applicant hoodwinked the Respondent into believing that the offer was for purposes of settling the matter and the parties thereafter parting ways amicably. 18. The Respondent's counsel therefore urged the Court to exercise its equitable jurisdiction in terms of **Section 4** of the **Industrial Relations Act, 2000 (as amended)** to promote fairness and equity in labour relations by dismissing the Applicant's claim for the latter's display of unfair conduct cited in paragraph 17 above. _**ANALYSIS**_ 17. The Respondent's counsel correctly identified the issues for determination vexing the Court, which is whether the consequences of the termination of the Applicant's employment contract was governed by the initial contract as alleged by the Applicant or the compromise agreement as claimed by the Respondent. 18. In determining the above issue, it behooves the Court to interpret the Applicant's offer in annexure _**"MCZ 2"**_ and the Respondent's acceptance in annexure _**"MCZ 3".**_ In our earlier ruling in the same matter where we dismissed preliminary points raised by the Respondent, we held that the interpretation of documents is a matter of law and therefore a question for the Court to decide as opposed to witnesses. We cited with approval the following authority and dictum: **KPMG Chartered Accountants (SA) v Securefin (644/07) [2009] ZASCA** 7 at **paragraph 39,** where the Court said the following: "... _Second, interpretation is a matter of law and not fact and, accordingly interpretation is a matter for the court and not for witnesses (or as said in the common law jurisprudence,__it_ _is not a jury question) ..._ " 17. On account of the fact that the issue to be decided turns on the interpretation of the wording of annexures _**"MCZ**_ _2"_ and _**"MCZ**_ _3"_ this warrants the quotation of the contents thereof _verbatim._ The Applicant made the following offer per _**"MCZ**_ __**2":** " _6_ _th_ _August_ _2020_ _MANYATSI_ _& __ASSOCIATES_ _Office no: 8, second floor Enguleni House_ _Mahleka Street_ __MANZJNJ__ _Dear Sir,_ __RE MANDLENKOSI__ __C__ _.___ZWANE/GOOD__ __SHEPHERD__ __MISSION__ __HOSPITAL__ 1. _Reference is made to the above matter_ _herein._ 2. _You have raised an issue that our proposal was silent. As you may appreciate that our client is only left with three months before_ _his_ _contract_ _lapse,_ _our_ _client_ _proposes_ _that_ _yours_ _pay_ _him the remaining months and the parties part ways_ _amicably._ 3. _We_ _hope_ _you_ _will_ _consider_ _our_ _proposal. Yours_ _Faithfully_ _SITHOLE & MAGAGULA ATTORNEYS"_ 17. **The** Respondent responded to the offer per _**"MCZ 3"**___ as follows: " _19_ _th_ _August_ _2020_ _SITHOLE & MAGAGULA Attorneys 6_ _th_ _Floor, Office No.69B_ _Mbandzeni House Libandla Street Mbabane_ _Dear Sir,_ __RE: MANDLENKOSI C. ZWANE!GOOD SHEPHERD MISSION__ __HOSPITAL__ 1. _Your correspondence dated the_ _6_ _th_ _August 2020_ _refers._ 2. _We have taken instructions from our client regarding yours' offer._ _We_ _are_ _pleased_ _to_ _advise_ _that_ _our_ _client_ _accepts_ _yours'_ _offer_ _of settlement as contained in paragraph 2 of_ _your_ _correspondence dated the_ _6_ _th_ _August_ _2020._ 3. _Therefore our client hereby accepts to pay your client salaries for the remaining three (3) months of his contract,___in full and final settlement o(his employment contract__ _and that the parties part ways_ _amicably._ _Yours Faithfully_ _MANYATSI_ _& __ASSOCIATES"_[Emphasis added]. 17. Two days after receiving _**"MCZ 3",**_ the Applicant's attorneys wrote annexure _**"MCZ 4"**_ to the Respondent's attorneys. Annexure _**"MCZ 4"**_ reads as follows: " _21_ _st_ _August_ _2020_ _MANYATSI AND ASSOCIATES_ _CID MAKHOSI VILAKATI ATTORNEYS_ _2_ _nd_ _Floor, Office 204 Corporate Place, North_ _Block_ __MBABANE__ _Dear Sir,_ __RE: MANDLENKOSI__ _C.___ZWANE/GOOD SHEPHERD MISSION__ __HOSPITAL__ _-_ __INDUSTRIAL__ __COURT__ __OF ESWATINI__ _-_ __CASE__ __NO:Il5/20__ 1. _Reference is made to the above matter_ _herein._ 2. _We have taken instructions from client. Our client instructs us that_ _he_ _is_ _happy_ _that_ _the_ _matter_ _is_ _coming_ _to_ _an_ _end._ _He_ _therefore instructed_ _us_ _that,_ _for_ _the_ _avoidance_ _of_ _doubt_ _we_ _record_ _and_ _sign a deed of settlement in the following_ _terms,_ 1. _That, our client be paid the remaining three months salmy of his_ _contract._ 2. _All leave days due as at 31_ _st_ _October 2020. 2.3His pension (statutory benefit) his_ _gratuity. 2.4That a non-disclosure clause be_ _included._ _2.5That the deed of settlement constitute a final and full settlement._ _Reference_ _is_ _made_ _to_ _the_ _correspondence_ _written to your client dated_ _17_ _th_ _July 2020 as annexed_ _herein._ _Yours Sincerely_ _SITHOLE_ _& __MAGAGULA ATTORNEYS CC: MANDLENKOSI ZWANE._ " 17. Before considering contemporary rules of interpretation of document applied by the Courts, it is necessary for the Court to first and foremost make a pronouncement of the legal position regarding the validity of an offer that is accepted either by signing on its face or through a separate document in the absence of a signed memorandum of agreement. 18. In the case of **Goodman Dlamini v Financial Services Regulatory Authority (229/2015)[[2017] SZIC 20](/akn/sz/judgment/szic/2017/20), **his Lordship Mazibuko J, (as he then was) said the following at paragraph 25: _"A contract comes into existence when an offer by one party is accepted by the other. A simple and helpful definition of a contract is provided by Solomon Jin Watermeyer vs. Murray 1911 AD 61 at_ _page_ _70,_ _when_ _he_ _states_ _that:_ _'For_ _every_ _contract_ _consist_ _of_ _an_ _offer made by one party and accepted by the_ _other"_ 17. Regarding an offer and acceptance that creates a valid contract, the eminent scholar and learned author **GIBSON JTR: SOUTH AFRICAN MERCANTILE****& ****COMPANY LAW 8****th****edition, Juta** & **Co., 2003** at pages 29 and 34 states that: _"An offer is a proposal that expresses a person's willingness to become a party to a contract, according to the terms expressed. Its acceptance by another person binds both of them contractually. To fulfil_ _these_ _requirements_ _the_ _offer_ _must_ _have_ _the_ _following_ _attributes:_ _(i)_ _it_ _must_ _be_ _consistent_ _with_ _all_ _the_ _essentials_ _of_ _a_ _contract;_ _and_ _(ii) it_ _must define all the terms on which agreement_ is _sought .....Acceptance_ is _the express or implied signification by the offeree_ _of_ _his_ _intention_ _to_ _be_ _contractually_ _bound_ _in_ _terms_ _of_ _an_ _offer made to him. In order that an acceptance should convert a valid offer_ _into_ _a_ _contract_ _the_ _following_ _requirements_ _must_ _be_ _fulfilled:_ _(i) it must be consistent with the essentials of contract; (ii) it must be unequivocal and in terms of the offer; (iii)___it must be made in the manner, if any, prescribed by the offeror;___and (iv) it must be made during the life of the offer."_[Our emphasis]. 17. It is therefore trite that except where the law or the offeror prescribes certain formalities for validity of the contract, there is no general requirement that a memorandum of agreement encompassing the terms of the offer and acceptance should be signed by the parties to create a legally binding contract. 18. The contemporary principles of legal interpretation were espoused in the case of **Natal Joint Municipality Pension Fund v** **Endumeni** 12 # Municipality (910/2010) [2012) ZASCA 13 (15 March 2012) at **paragraph 18** in the following terms: _"The present state of the law can be expressed as follows: Interpretation is the process of attributing meaning to the words used in a document, be it legislation, some other statutory instrument, or contract, having regard to the' context provided by reading the particular provision or provisions in the light of the document as a whole and the circumstances attendant upon its coming into existence. Whatever the nature of the document, consideration must be given to the language used in light of the ordinary rules of grammar and syntax; the context in which the provision appears; the apparent purpose to which it is directed and the material known to those responsible for its production. Where more_ _than_ _one_ _meaning_ _is_ _possible_ _each_ _possibility_ _must_ _be_ _weighed in the light of all these factors. The process is objective not subjective._ _A_ _sensible_ _meaning_ _is_ _to_ _be_ _preferred_ _to_ _one_ _that_ _leads_ _to insensible or unbusinesslike results or undermines the apparent purpose_ _of_ _the_ _document. Judges_ _must_ _be_ _alert_ _to,_ _and_ _guard_ _against, the_ _temptation_ _to_ _substitute_ _what_ _they_ _regard_ _as_ _reasonable,_ _sensible or businesslike for the words actually used. To do so in regard to a statute or statuto1y instrument is to cross the divide between interpretation and legislation. In a contractual context it is to make a contract for the parties other than the one they in fact made. The inevitable point of departure is the language of the provision itself, read in context and having regard to the purpose of the provision and the background to the preparation and production of the document._ " 13 (29] Similar sentiments were expressed by the Court and Industrial Court of Appeal respectively in the following cases: **Magalela Ngwenya v National Agricultural Marketing Board (IC Case No. 59/2002); Martha Buyile Mdluli v The Swaziland Government****& ****another (IC Case No. 304/2002)** and **Swaziland Nurses Association v Ministry of Public Service and Two Others (16/18)[[2019] SZICA 02](/akn/sz/judgment/szica/2019/02) ****(2****nd****May 2019).** (30] When contrasting the words used in both annexures _**"MCZ 2"**_ and _**"MCZ 3",**_ we find a significant distinction. While the Respondent in _**"MCZ 3"**_ unequivocally accepted the Applicant's offer that he be " _paid the remaining three (3) months of the contract and the parties part ways",_ the Respondent added a condition that the payment of the remaining three (3) months should be _"in fall and final settlement of his employment contract"._ The Applicant never expressly used those words nor can they be implied from _**"MCZ 2".**_ It is probably for that reason that the Applicant replied through _**"MCZ 4"**_ and clarified what terms in his view would constitute a _"final and full settlement"_ of the matter. (31J It is common cause that the context within which the offer was made was the protracted disciplinary hearing at a time when the Applicant was only left with three (3) months of his employment contract. Evidently from the contractual and factual background, both parties must have been aware of the following issues: 1. That in terms of the employment contract, the Applicant was entitled to gratuity whether or not the contract was terminated prior to its expiry date. 2. That the Applicant was not entitled to a salary he had not earned. 3. That they were uncertain that the disciplinary inquiry would be completed prior to the expiry of the contract by effluxion of time. 4. The possibility of an adverse or favourable outcome of the disciplinary hearing to the Applicant and the consequences to his claim for gratuity. 32. In our view, the Respondent introduced the words _"in full and final settlement of his employment contract"_ to avoid finding itself having to pay the Applicant a salary for remaining three months (not eamed) as well as the gratuity on the termination of the contract prior to its expiry date. **Clauses 4, 4.1** and **4.2** of the contract read as follows: _"TERMINATION OF CONTRACT PRIOR TO EXPIRY DATE_ _It_ is _specifically recorded that this agreement may be terminated at any tage prior to the expiry date of the' contract for misconduct, incapacity or the operational requirements of Good Shepherd Mission Hospital_ _& __College of Nursing or for any other reason justified in law._ _Should_ _this_ _agreement_ _be_ _lawjitlly_ _terminated_ _prior_ _to_ _the_ _expiry_ _date in terms of 4.1, the Employee shall be entitled to benefits accruing at the time of termination and to severance pay in terms of the Employment laws of Swaziland._ " 32. The use of the phrase _"in full and final settlement"_ during negotiations in the context of a dispute between parties has been explained by the Comis in a number of cases. In the case of **Patrick Magongo Ngwenya v Swaziland Development and Savings Bank (04/2014)[[2014] SZICA 03](/akn/sz/judgment/szica/2014/03), **at paragraph 18, the Industrial Court of Appeal observed as follows: _"It remains for us to say something on the concept of payment 'in full and final settlement' by a creditor in so far as the law of compromise is concerned. But first, it is necessary to bear in mind that_ _a_ _compromise_ _itself_ _is_ _generally_ _an_ _agreement_ _in_ _terms_ _of_ _which the parties settle their dispute. This is usually an out-of-court settlement._ _A_ _compromise creates_ _new_ _obligations_ _and_ _existing_ _ones are extinguished. In effect, a compromise is a form of waiver or estoppel. Where payment is made in full and final settlement following a firm offer of compromise, then existing obligations fall away. In such a situation, the creditor is precluded from_ _suing"_ [34) In the case **ofDlarnini N.O. and others v Dlarnini and others** **(19/2005)** **SZSC** at pages 9-10, the Supreme Court remarked that: _"The use of the phrase 'in full and final settlement' has been the subject of discussion and determination in several cases decided in the_ _South_ _African_ _Courts._ _What_ _seems_ _to_ _be_ _clear_ _from_ _the_ _decisions to_ _which_ _I_ _have_ _been_ _able_ _to_ _refer_ _is_ _that_ _the_ _phrase_ _is_ _correctly_ _used, and_ _is_ _binding_ _on_ _the_ _creditor,_ _where_ _it_ _accompanies_ _a_ _tender_ _in_ _the form of compromise in an attempt to settle a dispute. By accepting the_ _amount_ _so_ _tendered_ _the_ _creditor_ _willingly_ _abandons_ _the_ _balance of his claim. The matter is then settled and the creditor cannot pursue his original claim, But where there is no dispute, and each party believes that the correct amount has been paid and accepted, the words 'in full and final settlement' have no effect. If the creditor then discovers that he has not been paid the full amount due to him he can sue for the balance._ " 35. In the Court's view, if the words _"in full and final settlement of his employment_ _contract"_ that were introduced by the Respondent in _**"MCZ 3"**___ were accepted by the Applicant without additional terms in _**"MCZ**_ ___**4",**_ this would have resulted in the extinction of the latter's right to claim gratuity because the words" _settlement of his employment contract"_ meant a waiver against claiming any benefits provided by the existing employment contract. This is clearly the position because both parties used the words _"and that the parties part ways amicably"_ to signify an event that was to succeed the novation of the terms and conditions of the employment contract and payment of the remaining period. 35. The introduction of the expression _"in full and final settlement of his employment contract"_ by the Respondent in _**"MCZ 3",**_ which was never mentioned by the Applicant in _**"MCZ 2"**_ simultaneously constituted a rejection of the latter's offer and a counter-offer by the former. In **Wayne Parsons v Palfridge Limited t/a The Fridge Factory (475/2015) [2016) SZIC 09** at paragraphs 30 and 30.3, the Court said the following: _"The learned author, Gibson explains the principle of rejection as follows: 'The offer comes to an end_ _if_ _it is rejected by the offeree.___Reiection can occur in two ways: either by an express reiection__ __communicated to the offeror or by the making ofa counter-o(fer. In__ __either__ ______case__ ______the__ ______reiection__ ______brings__ ______the__ ______offer__ ______to__ ______an__ ______end__ ______and__ ______it__ ______is__ ______no__ ______longer__ __open for acceptance__ _....A classical case on the subject is that of Watermeyer vs. Murray 1911 AD 61. W offered to sell his farm to M_ _W_ _demanded_ _a_ _down_ _payment_ _on_ _signing_ _of_ _the_ _written_ _agreement_ _of_ _sale._ _M_ _counter-offered_ _to_ _make_ _a_ _down_ _payment_ _on_ _a future date. Held per Solomon J·_ _'If_ _then, the defendant's offer to sell_ _on_ _certain_ _terms_ _was_ _rejected_ _by_ _the_ _plaintiff making_ _a_ _counter­ offer to buy on different terms, it follows that the defendant's offer was no longer open for_ _acceptance."_ 35. It bears emphasizing that the Applicant did not accept the Respondent's counter-offer; instead he made a fresh offer, which he believed would result in _"a final and full settlement"_ of the ma.tter. This fresh offer included the payment of the remaining three months, leave pay and gratuity. The Court was not shown the Respondent's reply to the Applicant's fresh offer, but Mr. Manyatsi argued that the Applicant's fresh offer was inconsequential because it was made after the Respondent had accepted the Applicant's initial offer. 35. For the avoidance of doubt, the Court finds that annexures _**"MCZ 2"**_ and _**"MCZ 3"**_ did not create an agreement because the Applicant's offer was rejected by the Respondent's counter-offer which was itself rejected through annexure _**"MCZ 4"**_ by the Applicant. Despite the aforegoing, the Applicant was paid a salary for the remaining three months and the employment contract was terminated. The Court sought clarity from counsel as to when the payment was made and the contract terminated; no precise dates were proffered, but there is no doubt that both events occurred prior to the contract's expiry date. [39) In the Court's view, since the Applicant's fresh offer was made two days after the Respondent's counter-offer, it may be reasonably inferred that the Respondent paid the Applicant for the remaining months with full knowledge that the Applicant had rejected the counter-offer. This may also be deduced from the fact that payment was not acknowledged in annexure _**"MCZ 4".**_ We therefore find no merit in the Respondent's contention that the Applicant hoodwinked it. 40. When the Applicant rejected the counter-offer, both parties were at liberty to withdraw from negotiations and continue with the disciplinary hearing to its finality. The fact that this never happened is a clear indication that what was paramount in the parties' minds was the mutual termination of the contract of employment; the only conundrum was the terms and conditions that would accompany that termination. 41. Since the _**"MCZ 2"**_ and _**"MCZ 3"**_ never resulted in the extinction of the employment contract, when it was prematurely terminated albeit amicably, the provisions of **Clause 4**(quoted _verbatim_ above) were activated. While **Clause 5 (Remuneration and Benefits)** makes provision for payment of gratuity at the rate of _"25% of annual basic salary per month._ " 42. In the Court's view, **Clause** **5** was not elegantly drafted. It does not specify the conditions under which gratuity would be paid. Notwithstanding that position, in the case of **National Union of Workers v. Scottish Ceylon Tea** **Co,** **Ltd** **NLR** **133** **of** **78** **[1975]** **LKHC** **10,** the Court remarked that: _" ...In Independent Industrial_ _& __Commercial Employees Union v_ C. _W.E_ _(74_ _NLR_ _344)_ _Justice_ _Alles_ _said:_ _'The_ _word_ _'gratuity' is_ _used in common parlance as a retirement benefit available for long and meritorious service rendered by the employee. A gratuity has now become a legitimate claim, which a workman can make ...and is intended to help a workman after his retirement, whether the retirement is due to the rules of superannuation or physical disability or otherwise. It is a benefit which an employee who has worked faithfully and loyally for his employer can look forward to in the evening of his life and which a generous and conscientious employer considers it just and equitable to offer for loyal and meritorious service ...A gratuity differs from a Provident Fund inasmuch as_ _it_ _is a benefit provided entirely by the employer, whereas a provident fund is one to which the employee himself contributes a part of his wages ..._ " 40. In the peculiar circumstances of this case, the Applicant was entitled to gratuity since the benefit was accruing at the time of the termination of the contract prior to its expiry date. The Court is loath to speculate whether the Applicant would have been found guilty of the disciplinary charges leveled against him. What matters is that the parties terminated the contract amicably prior to its expiry date. 40. Even though the Respondent paid the Applicant after being aware that he rejected its counter-offer, the Applicant is liable to reimbursing the Respondent after rejecting the counter-offer. In exercising its equitable jurisdiction, the Court finds that a just and equitable resolution of the matter is for the Applicant to reimburse the Respondent the three (3) months' salary already paid in error. (45] In the event the Applicant is unable to reimburse the Respondent, the latter will be entitled to set-off the salaries paid against the amount due to the Applicant as gratuity and the balance outstanding be paid over to the Applicant. The Court made a similar order, but on different facts in the case of **Phyllis Phumzile Ntshalintshali v Small Enterprise Development Company (IC Case No.88/2004).** In that case, the Court found that the termination of the Applicant's services on grounds of redundancy was substantively and procedurally unfair, but ordered reinstatement as oppose to awarding compensation. At paragraph 46, the Court said the following: _"The Applicant must refund the statutory terminal benefits paid to her by way of notice, additional notice and severance allowance. This amount is to be set-off against the remuneration payable to_ _h_ _er_ _..._ " (46] Regarding the medical aid contribution claimed by the Applicant, there is no legal or factual basis to substantiate it. In terms of **Clause 5** of the employment contract, as part of the Applicant's remuneration and benefits the Respondent offered as follows: _"Medical_ _Aid_ _with_ _Swazi_ _Med_ _fully_ _paid by the employer"._ The Applicant does not allege that the Respondent breached this provision during the course of employment up to and including his last day of service. Put differently, the Applicant is not claiming for unpaid medical aid, but appears to be claiming it as a te1minal benefit. 47. In terms of the contract, medical aid was due to the Applicant during his employment, when that service was terminated medical aid ceased to be an entitlement. Medical aid should not be confused with gratuity; the latter became due on termination while the former was due as part of the Applicant's gross salary. Even if the Applicant was claiming medical aid contribution for the remaining three (3) months, based on our finding that the salary was erroneously paid because annexures _**"MCZ 2"**_ and _**"MCZ 3"**_ never created any legal obligations, the Applicant would still not be entitled to medical aid for that period. _**CONCLUSION**_ 47. We have found that the employment contract was never extinguished by armexures _**"MCZ 2"**_ and _**"MCZ 3";**_ consequently, on the termination of the contract prior to its expiry date, the Applicant was entitled to be paid gratuity in terms of **Clauses 4, 4.1, 4.2** and **5** of the contract. Nevertheless, the Applicant is obliged to reimburs the Respondent the salaries already paid in error. [49) In the result, the Court orders as follows: 1. The Applicant's claim for gratuity succeeds. The Respondent is therefore directed to pay the Applicant gratuity in terms of **Clauses 4, 4.1, 4.2** and **5** of the contract of employment, but shall set-off the three (3) months salaries paid to the Applicant in error. 2. The Applicant's claim for medical aid contribution is dismissed. 3. Each party to pay its own costs. The Members agree. **V.Z. DLAMINI** **ACTING JUDGE OF THE INDUSTRIAL COURT** # For Applicant: **For Respondent:** Mr. K.Q. Magagula (Sithole & Magagula Attorneys) Mr. L. Manyatsi (Manyatsi & Associates) 1 #### __Related documents ▲ To the top >