HIGH COURT OF SWAZILAND
MASWATI (PTY) LTD
Case No 3438/2002
MAPHALALA - J
the Applicants MR. J. MAVUSO
the Respondents MR. GWEBU
Applicants bring an application before court by notice of motion in
the long form for an order declaring the dismissal of Gideon
Mndzebele and Clement Motsa as being
due to lack of authority and due to the absence of a resolution
dismissing the said persons. Alternatively, declaring the
retrenchment of the two Applicants as being unlawful due to lack of
authority to retrench them in their capacities as Directors and costs
two Applicants are adult Swazi males presently residing at Bhunya.
The 1st Respondent is a company registered in terms of the company
laws of Swaziland and carrying on business at Sappi Usuthu, Bhunya,
district of Manzini.
2nd Respondent is Almon Dube an employee of the 2nd Respondent. The
background of this matter can be gleaned from the affidavit of the
respective parties in this matter i.e. the founding affidavit of the
Applicant, the answering affidavit of Almon Dube who is the Managing
Director of the 1st Respondent and the replying affidavit of the
Applicants deposed to by the 1st Applicant. Various annexures are
filed of record to buttress the positions adopted by the two parties.
to the Applicants they are members /
together with the Respondents of the lst Respondent. The 1st
Respondent was formed with the assistance of an Order of this court
in order to prevent the collapse of the Respondent as it was set up
with the intention of empowering Swazi citizens who were on the verge
of losing their source of livelihood with the Sappi Usuthu (Pty) Ltd
as they were being retrenched.
to annexure "A" being a court order by the Chief Justice of
this court dated the 17th April 2002, Applicants who appeared in
annexure "Cl" and the Respondents were declared members of
the 7th Respondent (1st Respondent in the present case).
the matter came for arguments both counsel filed Heads of Arguments.
was contended on behalf of the Applicants that the purported
retrenchment is not a retrenchment but a ploy to remove the
Applicants from the vicinity of the 1st Respondent. The retrenchment
exercise was only in respect of the two Applicants and this prima
facie shows that it was a vindictive exercise against the members who
had tried to call a members' meeting for the 1st Respondent. The
Applicants cannot be dismissed or removed as employment is not by
virtue of a contract but by virtue of being members of the 1st
Respondent. The purpose of establishing the 1st Respondent was to
enable all its members to have a source of living after they were
retrenched by Sappi Usuthu (Pty) Ltd. The agreement was that all
those employees in the loading bay of Sappi Usuthu form the 1st
Respondent and pay subscriptions and the 1st Respondent was to be
sub-contracted by Sappi Usuthu. All those who are members are
guaranteed work for life. No member can be dismissed as work in not
by virtue of appointment but by virtue of being a member of the
Respondent. Once one became a member one was entitled to work.
was contended further that Applicants are lawful Directors by virtue
of a court order dated 17th April 2002.
it was argued on behalf of the Applicants that the receipt of money
by the Applicants from the Respondents does not mean that they have
been retrenched. The documents signed by the Applicants does not
signify an offer of compromise and is not binding. Mr. Gwebu cited
the case ABSA Bank Ltd vs Van Der Vyver 2002 (4) S.A.
to buttress this proposition.
Nxumalo argued per contra. He contended firstly, that in terms of the
Industrial Relations Act, 2000 Section 8 (1), the Industrial court
has exclusive jurisdiction to hear
determine amongst other things the infringement of the Employment Act
(in particular issues of fair or unfair dismissal). The issues in the
present case are that of dismissal and retrenchment. Both fall under
the Employment Act.
it was contended on behalf of the Respondents that in terms of
Section 23 of the Companies and Association Act 7/1912 a certificate
under the hands of two Directors and the Secretary of the company
shall be prima fade evidence of a member (shareholder) to shares.
That in casu the Applicants do not have such certificates in that
same have not been attached to their papers.
it was submitted that in terms of Section 73 of the Companies Act
every company shall send a list of Directors to the Registrar of
Companies and in terms of Section 73 (2) if default is made in
compliance with this Section, a criminal penalty is imposed. In as
much as the Applicants were declared Directors, they failed to comply
with this Section which is necessary for the assumption of the status
of Director in any company.
it was contended that both Applicants signed annexure "B"
beginning at page 35 acknowledging their respective posts and
receipts of their benefits in full and final settlement of all claims
they had against the 1st Respondent.
both Applicants signed annexure "B" on the Respondent's
answering affidavit (found at pages 36 to 37 of the Book of
Pleadings). By so doing and in terms of the
subscripto rule, they assented to the contents of the documents and
as such, if displeased by them, they have no one but themselves to
matter came before me for full arguments on the 4th February 2003,
where I reserved
court's analysis and conclusions thereon
have considered the submissions made for and against the application
before court. It appears to me as it was conceded by Mr. Gwebu for
the Applicants that there is a material dispute of facts on the
papers which may call for viva voce evidence.
Applicants at paragraph 17.1 of the founding affidavit of the 1st
Applicant avers as follows:
2nd Applicant and myself are Directors of the Respondents. Our
purported removal has not been done in accordance with the law. There
is no resolution to remove us as Directors nor was a meeting called
to discuss a resolution to remove us. In effect we (sic) being
removed by our employee the 2nd Respondent who has no such authority.
effective against us as we are not just employee (sic) of the 1st
Respondent but we are Directors of the Respondents. Our status can
only be effective by a company resolution.
the purpose of establishing the lst Respondent was to enable all its
members to have a source of living after they were retrenched by
Sappi Usuthu (Pty) Ltd. The agreement was that all those who were
employees in the loading bay of Sappi Usuthu from the 1st Respondent
and pay subscription and the Respondent was to be subcontracted
by Sappi Usuthu. All those who are members are guaranteed work for
life. No member can be dismissed as work is not by virtue of
appointment but is by virtue of being a member of the Respondent.
Once you become a member you are entitled to work".
Respondents answered to the above averments as follows:
contents of this paragraph are denied. Applicant is put (sic) proof
to do (sic) seem to be able to see the difference between stoppage,
deny that 1st and 2nd Applicants are Directors of the Respondent.
Applicants are put to proof thereof. I wish to state that the court
order (annexure "A") granted the Applicants amongst others
the right to be Directors. Due to their failure to comply with
Section 73 of the Companies and Association Act of 1912, they failed
and/or neglected to exercise
believe that the issue of retrenchment is a closed issue (sic) for
Applicants, who accepted their terminal benefits in full and final
settlement of all claims, they had against the company. The issue of
their Directorship has also been dealt with above.
contents hereof are unknown Applicant is put to proof thereof. I wish
to state that the 1st Respondent is a duly registered company which
can enter contracts with anyone. And if need be, which also terminate
above mentioned extracts puts a dispute of fact to the fore where the
Respondent denies that there was an agreement that all those who were
employees in the loading bay of Sappi Usuthu form the 1st Respondent
and pay subscriptions and the Respondent was to be sub-contracted by
Sappi Usuthu. The Respondents further put it in issue that all those
who are members are guaranteed work for life. Further the Respondent
denies that no member can be dismissed as work is not by virtue of
appointment but is by virtue of being a member of the Respondent. The
Respondent denies the Applicants' assertion that as per the agreement
once one becomes a member one was entitled to work.
appears to me that the need to lead viva voce evidence becomes
apparent in view of what I have outlined above. Counsel for the
Applicants readily conceded this fact as being crucial to the
determination of this case. It would also appear to me that even the
issue of jurisdiction hinges on this point.
the dicta in the South African celebrated case of Room Hire Co. (Pty)
Ltd vs Jeppe Street Mansions (Pty) Ltd 1949 (3) S.A. 1155 (T) I would
refer the matter for oral evidence in so far as to prove the
existence of the agreements and the terms thereto.
to be costs in the cause.