Meyer v Horizon Carpet Manufacturers CC and Others

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IN THE LABOUR COURT OF SOUTH AFRICA

HELD AT CAPE TOWN

CASE NO: C 352 / 07

In the matter between:

DENNIS MEYER …...........................................................  APPLICANT

AND

HORIZON CARPET MANUFACTURERS CC …..........          .FIRST RESPONDENT

VALUWAYS SEVEN CC ….......................................         SECOND RESPONDENT

FUAD WEPENER …......................................................    THIRD RESPONDENT

judgment

STEENKAMP J:

Introduction


1.Does the Labour Court have jurisdiction to pronounce on a claim in respect of sections 64 and 65 of the Close Corporations Act¹?
2.This jurisdictional issue arose in the context of an application for amendment.

background

3.The main dispute in this matter concerns the alleged failure of the respondents to pay the applicant leave pay, arrear remuneration and notice pay after his dismissal. The applicant also claims that the respondents have failed to pay over statutory UIF contributions and PAYE; and that the respondents have not provided him with IRP5 income tax certificates for the tax years 2002 to 2006.

4.The applicant was employed by the first respondent, Horizon Carpet Manufacturers CC, a close corporation registered as such. He was also appointed to act as a salesperson for the second respondent, Valuways Seven CC. After he had been dismissed for operational requirements, he was reinstated to those positions in August 2004. At the time, first and second respondents were represented by the third respondent, Fuad Wepner. Wepner is the described as “the sole member and owner” of Horizon and Valuways.² The employee’s employment was terminated again on 28 November 2006.
 

the cause of action

5.The applicant founds his cause of action mainly in section 77(3) of the Basic Conditions of Employment Act³ (BCEA). He alleges that the dispute concerns his contract of employment.

6.That subsection provides the following:

“The Labour Court has concurrent jurisdiction with the civil courts to hear and determine any matter concerning a contract of employment, irrespective of whether any basic condition of employment constitutes a term of that contract.”


7.The applicant then claims⁴ that:

“It is also a matter in terms of which the Honourable Court has jurisdiction in terms of sections 64(1) and 65 of the Close Corporations Act 69 of 1984. The matter has been referred to the above Honourable Court by the applicant by virtue of the allegation that the respondent has failed to make payment of remuneration in terms of the provisions of the aforesaid Act and/or the terms of the applicant’s contract of employment.”


8.This paragraph is not clearly drafted. The applicant does not state whether he is referring to one, two, or all three of the respondents. Neither is it clear if the “aforesaid Act” refers to the Close Corporations Act or the BCEA.


9.It becomes somewhat clearer when regard is had to the basis upon which the applicant seeks to hold the third respondent (Wepner) personally liable. He says in his statement of claim⁵:

“Applicant furthermore respectfully contends that by virtue of the provisions of s 63(4) and 64(1) of the Close Corporations Act 69 of 1984 that [sic] the third respondent is and should be held to be jointly and personally liable responsible [sic] for the debts and liabilities referred to in 4.17, 4.24, 4.26, 4.27, 4.33 and 4.36 above. ⁶

Applicant contends that the third respondent has joint and personally [sic] liability by virtue of amongst others knowingly and intentionally failing and refusing to appoint an accounting officer as contemplated by section 63(1)(h).

In addition applicant contends that the third respondent in his capacity as sole and managing member carried on the business of first and second respondent recklessly, negligently and fraudulently as contemplated by section 64(1).”
 

“is that the court does not impose its notion of what is absurd on the legislature’s judgement as to what is fitting, but uses absurdity as a means of defining what the legislature could not have intended and therefore did not intend, thus arriving at what it did actually intend.

46. A stringent and literal interpretation of the term “any High Court” in s 7 of the CC Act, when applied in the context of what is primarily a dispute arising from the contract of employment, would, in my view, lead to an absurdity or anomaly. It would have unjust consequences and cause a proliferation of actions that the legislature could not have intended.

conclusion

47. In the context of this case, I am not persuaded that the Labour Court does not have jurisdiction to consider the applicability of ss 64 and 65 of the Close Corporations Act. It follows that the proposed amendment is not good in law and should be refused.

48. The application for amendment is dismissed. Costs are to be costs in the cause of the main referral.

_________________________________

STEENKAMP J

Date of hearing: 22 February 2011

Date of judgment: 11 March 2011

For the applicant: Mr G Marinus

Werksmans Inc

For the respondents: Adv GA Leslie

Instructed by Parker attorneys