Prescription: Absa Bank v Keet (817/13) [2015] ZASCA 81

In common parlance, the prescription seems to be the first line of defense when a debt is in issue. In context, the word has a sacrosanct meaning and is not easily understood or applied. Confusion and vexed judgments have arisen in recent times due to the intricacies of prescription, the scope of which is beyond this article which will confine itself to the concept of ownership in relation to prescription. The latter, as in colloquial language, means ownership as we know it to make matters easier. This article is thus premised on an example and facts of the aforesaid case to make the matter easier to grasp.

Suppose, for all intents and purposes, you have seen that shiny motor vehicle on the dealership floor. Your inner urge gets the better of you, enough to propel you towards a salesperson and strike up a conversation. You don’t stop there, you go further and apply for finance and your loan application is approved by a bank to buy the car with all its bells and whistles. You are thus invited a few days later to come sign the “paperwork” and drive away (insurance etc. is in place) and you oblige. You drive away in your spanking new wheels, you are even greeting neighbors with their first names and surname, long enough to be seen. Legally speaking, what just happened?

Legally, the following transactions have taken place:

  1. the dealership has agreed to sell their vehicle to the financier (your bank) and the dealership will receive full value for the car;
  2. the financier has agreed to the price of purchase and the dealer is generally paid out in full a few days later after you have driven out with your new vehicle. The contract in point 1 and 2 disappear on full payment of the contract value and features no more after that. So, ownership passes to the financier upon registration of the vehicle;
  3. the financier has therefore simultaneously agreed to assign a right of use of the vehicle to you for 60 (sixty) months, that you must pay a specified amount every month thereafter at a certain interest rate for this unrestricted use of their car. They are NOT telling you where to go and where not to go, you have the freedom to use the vehicle as you wish, as long as you keep to the scheduled payments every month. Point 3 is synonymous with Hire Purchase Agreements, if you do not pay, they repossess the goods;
  4. you have simultaneously agreed to the terms and conditions in point 3, remember those many papers you signed?
  5. lastly, the fnancier agrees to transfer ownership to you once you have kept to the scheduled payments and have settled your debt towards them.

Prescription is one of the oldest methods of acquiring ownership, with other words a method of acquiring or extinguishing rights through the inaction of the legal owner. For example, if you settled on a piece of land openly and without interruption for protracted periods of time, you own the piece of land. The latter must have evolved through the passage of time, it is now codified at 30 years according to the Prescription Act 68 of 1969. For debts, the inaction of the legal owner will vests their rights onto the possessor after 3 years.

The true owner has a remedy called a rei vindicatio which they may used to claim back their possessions. This remedy is still in use. The legislature has codified prescription in the Prescription Act of 68 of 1969 and divided the act in two: firstly it deals with immovable property in section 1 and secondly it deals with debt in section 2. In terms of section 2, if I owed money for protracted periods of time; the debt falls away due to prescription – the usual period being 3 years after the debt became due and payable.

Suppose that you did not keep to the schedule and failed to pay for a while, what would happen? As we know, the financier would send the repo-man, as commonly known, to collect the car to sell in order to recover their debt. Suppose, through drunken driving you collided with a tree and the insurer refused to replace the vehicle or repair it, what happens then? You are held liable to pay for the vehicle you do no longer derive a benefit from. At the heart of it, if you are an owner, you possess certain rights like a right to dispose of the asset etc. In our example, you possess ONLY a right of use (usus), you do not possess such rights as those of an owner.  Correctly so, but in Absa Bank v Keet (817/13) [2015] ZASCA 81 something interesting happened.

Briefly, Andre Keet bought a tractor that he failed to pay for after some time. Absa Bank took about 7 years to claim the tractor back and when that happened, Mr. Keet opposed the proceedings citing that the debt had prescribed. The initial court judge agreed that Absa Bank took too long to claim their tractor and that their claim against Keet in fact prescribed. Absa sought to claim the tractor not the debt repayment. (If you convoluted the issues, you would merge ownership into debt and prescribe the matter.) Absa appealed the decision and the Supreme Court of Appeal correctly held that there were two issues involved, a debt and a tractor. Ownership towards the tractor cannot prescribe to Mr. Keet and that it must be returned. The court did not venture into whether a debt had prescribed, it was immaterial since a debt was not in issue.

Imagine if after 3 years, ownership vested in different hand every time if the owner did not make a claim, would that not leave a legal uncertainty? What about commercial deals, imagine the chaos. Perhaps we would be forced to buy things cash and not on higher purchase, even if things were to be bought cash; the economy of South Africa hinges a great deal on debt, what would happen there? It is quiet important to have these matters settled, despite the noise and confusion; legal certainty is key in any society and I am glad in the aforementioned case, the matter seems to be settled.

By Phelan Selibi
phelan@dyason.co.za

Accountability of clinical laboratories

Patients and medical practitioners often “trust the system” when it comes to clinical laboratory testing and test reports to make diagnoses and decide on further medical treatment. But when laboratory tests involves a rapid developing field such as genomics, test results, and more specifically the classification thereof, risk being outdated by the time treatment decisions are made due to new research findings. If the medical practitioner then prescribes ineffective or fatal treatment to a patient based on the laboratory’s report, who will be accountable for harm suffered as a result thereof?

Williams v Quest Diagnostics

A case in point is the matter of Williams v Quest Diagnostics, Inc. et al. which is currently pending in the federal court of Columbia (USA), and although the court has not yet decided on the issue of accountability, the legal questions raised by this matter should serve as a serious wake up call to all clinical laboratories, especially involved in genomics for clinical purposes.

In this matter Williams’s son, Christian, began having seizures when he was only 4 months old. Doctors ineffectively treated his seizures with sodium channel blocking medication and subsequently suspected that Christian may have Dravet syndrome, also known as Severe Myoclonic Epilepsy of Infancy (SMEI). At the time Christian suffered from these seizures SCN1A was known to be one of the most important genes involved in epilepsy. Mutations in this gene caused a spectrum of epilepsy phenotypes of which the most severe was Dravet syndrome. Of importance was the fact sodium channel blocking medications are to be avoided in patients with a mutation of this gene as this treatment could exacerbate the seizures.

Athena laboratory (which is a subsidiary of ADI Holdings which is itself a subsidiary of Quest Diagnostics) issued a report 6 months after genetic testing was ordered. This report clearly indicated that Christian had a SCN1A mutation and classified the mutation as a “variant of unknown significance”, with other words not specifically known to be pathogenic or benign. This report further failed to indicate any specific treatment or any treatments that had to be avoided.

Tragically doctors continued to treat Christian for an unspecified mitochondrial disorder with increasing doses of sodium channel blocking medications – standard for epileptic seizures, but contraindicated for patients suffering from Dravet syndrome – and Christian died, aged 2 years.

Revised laboratory report

Eight years after issuing their initial laboratory report, Athena and Quest Diagnostics jointly issued a “revised report” that listed Christian’s SCN1A gene variant as a “known disease-associated mutation” and specifically directed the recipient of the report to “disregard the previous report”. The revised report did not list any new references or information to support a reclassification of this gene variant from the previously “unknown” to the current “known” classification, nor did it identify the date on which the new classification occurred or who directed such a decision. There was further no indication of any attempt by Athena or Quest Diagnostics to notify either the treating doctor who has ordered the original test or the patient affected by the new classification.

In the pending matter between Williams, Christian’s mother, and Quest Diagnostics, Williams argues that the latter report seems to be an attempt to correct an error in the original classification, rather than to serve as an update or reinterpretation resulting from recent scientific developments and understanding since the issuing of the original report, and further alleges that Quest Diagnostics:

  1. failed to provide genetic confirmation that Christian had Dravet syndrome;
  2. failed to adhere to their own post analytical classification system;
  3. failed to notify anyone of the reclassification of the variant the lab had identified;
  4. failed to identify the contraindicated treatments (sodium channel blocking medications).

Legal considerations

Although this matter is still sub judicae, it raises interesting and important legal questions:

  1. To what extent can a laboratory be held accountable to adhere to their own variant classification system, and when a mistake is made, that they identify and correct it?
  2. May ordering medical practitioners blindly rely on reports issued by laboratories conducting genetic testing, or do they have an individual professional obligation to also be competent in genomics?
  3. Whose responsibility is it to stay up to date on the latest scientific developments and literature to ensure accurate interpretation in laboratory reports of genetic test results, including making medical treatment decisions on the basis of these reports?
  4. Whose responsibility is it to revisit medical decisions based on test results that may have become outdated in the meantime?

Medical negligence

Delictually speaking a laboratory (or a medical practitioner) can only be held liable for damages resulting from its negligent acts or omissions. The matter of     Kruger v Coetzee 1966 (2) SA 428 (A) provides the classic test for determining negligence as follows:

  • (a) a diligens paterfamilias in the position of the defendant –
    • (i) would foresee the reasonable possibility of his conduct injuring    another in his person or property and causing him patrimonial loss; and
    • (ii) would take reasonable steps to guard against such occurrence; and
  • (b) the defendant failed to take such steps.”

Considering the conduct of Athena Laboratory in Christian’s case, it is obvious to foresee that the ordering medical practitioner would strongly rely on their report and is it thus reasonably foreseeable that an incorrect classification of Christian’s genetic mutation will have serious implications on the patient’s health, resulting from the medical practitioner’s treatment recommendation based on the incorrect classification. Athena Laboratory should further have foreseen the “reasonable possibility of (their) conduct injuring another” by failing to notify any of the involved parties of their reclassification of the specific gene mutation due to the fact that the ordering medical practitioner may have changed his medical treatment prescription in view thereof, which will have direct and serious impact on the patient .This, however, begs the question to what extent an ordering medical practitioner must take responsibility for the correct interpretation of genetic test results and whether a medical practitioner must have a reasonable understanding of genomics to enable him or her to critically evaluate laboratory reports before prescribing medical treatment. Considering that genomics is a fast developing and highly specialised biotechnology field, it seems unreasonable to expect that, as in Christian’s case, a paediatrician must keep up to date with the latest genomic developments to be able to question laboratory report results. With such a tsunami of research papers in genomics it seems almost unreasonable (and impossible) to expect laboratories to keep abreast of the latest developments for classification purposes. In this regard it should be noted that although Athena apparently correctly identified Christian’s gene variant, they review the scientific literature incorrectly, as there were already two publications that associated this specific mutation with Dravet syndrome (Berkovich et al, 2006 and Harkin et al, 2007) and should Christian’s variant have been classified as a “known disease associated mutation.” It is also noteworthy that one of Athena’s own directors, Dr Sat Dev Batish was a co-author of the Harkin et al paper which was published prior to the issuance of Christian’s above report.

The Consumer Protection Act

Although the Consumer Protection Act 68 of 2008 does not apply retrospectively, it has changed liability in respect of the above dramatically since its enactment on 1 April 2011. Section 54(1)(b) specifically stipulates that consumers, which includes patients making use of laboratory test services, are entitled to the performance of services in a manner and of a quality that persons are generally entitled to expect. Should these services fall short of consumers’ expectation and causes them harm, section 61 introduces a no-fault liability regime which determines that the provider of such services will be held liable “irrespective of whether the harm is the result of negligence on the part of any of these parties.” Not only does a patient no longer needs to prove negligence on the side of the laboratory, but the Consumer Protection Act further stipulates that the whole chain of supply, thus including the ordering medical practitioner will be held liable when harm is suffered.

Under these circumstances it is advisable that patients obtain a copy of their laboratory test result and seek a second or updated opinion; that medical practitioners seek training in genomics, although it is questionable whether even ongoing training in this regard will provide meaningful competence; and that laboratories keep literature scans up to date and strictly adhere to their internal classification schemes and importantly, immediately notify ordering medical practitioners and patients of any reclassifications relating to previous reports done or at least attend to mass notifications on a public-facing website, which would be preferable to mere silence.

By Marietjie Botes
marietjie@dyason.co.za

The in duplum rule explained

The in duplum rule was an time-honored and accepted principle of our law for many years, well that was until the Western High Court matter of Paulsen & Another vs Slip Knot Investments 777 (Pty) Ltd 2014 (4) SA 253 (SCA) (“The Paulsen matter”) radically changed our idea of what the maximum permissible interest could be.

The in duplum rule

From Roman law, which our common law is mostly based upon, comes the in duplum rule and has been accepted into our common law as long ago as 1860. The rule deals with the permissible amount of interest which may be charged on any outstanding capital amount. In accordance with this rule, the interest charged on any outstanding debt may never exceed the initial capital debt amount.

Background to the Paulsen-matter

In 2006, Winskor 139 (Pty) Ltd (“Winskor”), was a Company who was involved in purchasing portfolios of properties, in the greater Brooklyn area in Pretoria, and reselling them at a substantial profit. The shares of Winskor were held by the Paulsen Family Trust. On a particular property portfolio purchased, they were able to raise capital, save for a shortfall of R12 000 000.00. The loan then was funded by a Company known as Slip Knot who were in the business of supplying “bridging” or “mezzanine finance” to large property developers. The basis of the agreement was that Slip Knot would advance Winskor the amount of R12 000 000.00 on 10 July 2006. This R12 000 000.00 was then repayable within 12 months. Winskor were only liable for interest, at 3% per month on the outstanding capital from the 7th month after the commencement of the date of payment (10 July 2006). The interest was to be capitalized monthly. The economic downturn, especially in the property market, that occurred from 2007 severely affected Winskor and they were placed in Liquidation as they were unable to repay their loan to Slip Knot amongst other debts they could not service.

Slip Knot’s legal proceedings in the Western Cape High Court

Slip Knot instituted legal action and claimed the following:

  1. the capital sum of R12 000 000.00;
  2. interest on the capital sum which, as at date of commencement of litigation, had accumulated to R12 000 000.00 and had been limited to that amount by the in duplum rule;
  3. further interest on the capital at the rate of 3% per month, from the date of instituting proceedings to date of judgment; and
  4. interest on the sum of the amount set out in 1 and 3, at the rate of 3% per month from the date of judgment to date of payment, subject to the interest being limited by the in duplum rule to an amount equal to that sum.

Western Cape High Court Judgment

Judgment was given in this matter in the amount of R72 000 000.00. This amount was made up of an amount of R12 000 000.00 and the remainder was accrued interest. Such interest was 5 times the capital amount, being a substantial deviation from the in duplum rule.

Appeals

Not surprisingly, this matter was then taken on appeal to the Supreme Court of Appeals, but what was extremely shocking, was that the Supreme Court of Appeal upheld the judgment of the Western High Court.

This matter was then taken on Appeal to the Constitutional Court. The amendment by the Constitutional 7th Amendment Act 72 of 2012 allows the Constitutional court to hear constitutional matters and

“Any other matter, if the Constitutional Court grants leave to appeal on the grounds that the matter raises an arguable point of law of general public importance which ought to be considered by the Court.”

Constitutional Court judgment

The Constitutional Court set aside the Western Cape High Court decision and only the portion of the Supreme Court of Appeal’s judgment, which was concurrent with the Constitutional judgment was to stand. The Constitutional Court ruled that the interest could not exceed the capital and ordered as follows:

  1. payment of the capital sum of R12 000 000.00;
  2. payment of interest on the above amount at the rate of 3% per month, calculated from 21 July 2007 to 10 January 2010, up to a total of R12 000 000.00;
  3. payment of interest on the above sum of R24 000 000.00, being the total of the amounts of (1) and (2) above, at the rate of 3% per month, from date of judgment on 24 March 2015 to date of finale payment, limited to R24 000 000.00.

Reasons for this judgment

In the majority judgment, Madlanga J, looked at both the rights of the debtors and creditors and balanced same in this matter.

Madlanga J also dealt with the question whether the in duplum rule should operate pendente late, meaning from date of service of the process instituting the legal action until date of judgment and the drastic consequences, if same is not.

Madlanga J said by suspending the application of the in duplum rule pendente late, will have the effect of indiscriminatingly targeting all debtors, whether they are defending the claim in good faith or not. It also allows for interest to sky rocket the original debt amount and be far in excess of such, which the in duplum rule specifically prohibits.

Thankfully Constitutional Court restored this valuable corner stone of our law known as the in duplum rule.

By Natalie Bailey

The doctrine of ostensible authority with reference to “Nkosana Makate v Vodacom (Pty) Ltd

The point of departure in this article has to be a brief outline of the law of agency, which is the branch of law from which the doctrine of ostensible authority find its roots and application. The law of agency refers to the relationship between an agent that acts on behalf of another natural person or juristic person usually called the principal. An agency is formed when a principal names someone as an agent through a contract leading to the responsibility of the principal for actions made by the agent while the agent’s actions are akin to those of the principal. This form of agency can be and often is enforced by written agreements made through a power of attorney.

The reciprocal rights and liabilities between a principal and an agent reflect commercial and legal realities. A business owner often relies on an employee or another person to conduct a business. In the case of a corporation, since a corporation is a fictitious legal person, it can only act through human agents. The principal is bound by the contract entered into by the agent, so long as the agent performs within the scope of the agency.

The agent’s authority may be actual or ostensible (apparent) authority. If the principal deliberately advises express and implied powers to the agent to act for him or her, the agent has actual authority. When the agent exercises actual authority, it is as if the principal is acting, and the principal is bound by the agent’s acts and is legally responsible for them.  If the principal either knowingly or mistakenly, authorizes the agent or others to assume that the agent holds authority to carry out specific actions when such authority does not exist, this is known as ostensible authority. If other persons believe in good faith that such right exists, the principal remains liable for the agent’s actions and is unable to rely on the defense that no actual authority was established. The scope of an agent’s authority, regardless of whether it is apparent or actual, is considered in determining an agent’s legal responsibility for his or her actions.

In the matter of Nkosana Makate v Vodacom (CCT52/15) [2016] ZACC 13 (26 April 2016) the court dealt with the doctrine of ostensible authority amongst other things.

Factual background

Makate was employed by Vodacom in the finance department as a trainee. During his tenure at Vodacom Makate was involved in a long distance relationship, as a result he experienced difficulties communicating with his companion who was a student at that time due to lack of finances. In endeavoring to find a solution to his problem, Makate came up with an idea where one Vodacom user without airtime can send a message to the other user requesting them to call back. He shared this idea with one of his seniors Muchenje. The latter informed Makate to pitch his idea to Geissler Director of Product development and Management at Vodacom. Makate reduced his idea in writing and pitched same to Geissler.

Geissler liked Makate’s idea very much. They discussed amongst other things how Makate will be remunerated for his idea which was to be called “please call me”, Makate suggested that he wants 15% of the profits. The idea was launched pending the approval of the board as it trite at Vodacom to test drive before the board’s approval. The product received a warm welcome and it has since raked in billions for Vodacom. Once the   product was a success, the board sent out e-mails to staff applauding what Makate had done.

However Makate never received any compensation form Vodacom as result he approached the High court as well as the Supreme Court of Appeal. Makate found no remedy in both courts and as a result he approached the Constitutional court.

Legal issue

The Court held as follows “…two main issues arise here. The first is whether the ostensible authority relied on by the applicant was established.” In view of the High Court’s approach, two subsidiary questions also occur. These are whether ostensible authority was properly pleaded and whether the common law ought to be developed in present circumstances.

The trial Court had held that “…the applicant must have pleaded ostensible authority in replication.” The Court regarded as insufficient the allegation in Makate’s particulars to the effect that Geissler had ostensible authority. But, the Court proceeded to hold that on the evidence placed on record, the applicant had failed to show a representation by Vodacom itself, giving rise to an impression that Geissler had authority to conclude the agreement on its behalf.

In addressing the above the court further held that “…the trial Court here adopted an incorrect approach to pleadings.” That Court held that Makate should have pleaded estoppel in replication. It will be recalled that Makate had alleged in his particulars of claim that Geissler had ostensible authority. Vodacom denied this fact in its plea. Consequently, ostensible authority became one of the issues to be determined at trial, as properly defined by the pleadings. In the circumstances the trial Court erred in holding that apparent authority was not pleaded, because it was not introduced by means of replication.

Court findings

In making its founding the court further held “…that Geissler had authority to negotiate all issues relating to the introduction of new products at Vodacom. Those issues included agreements under which the new products would be tested before approval by him and once approved, the agreement in terms of which the new product would be acquired by Vodacom and the amount to be paid for it. After all, owing to his technical skills, he was best placed to determine the worth of a new product.”

I am of the opinion that Makate had established that Geissler had apparent authority to bind Vodacom. This finding makes it unnecessary to consider whether the common law should be developed.

Why Doctrine of Ostensible Authority

To protect parties like Makate in the above matter and to facilitate commercial trade, the law recognizes the doctrine. Ostensible authority can operate both in enlarge actual authority and to create where none exists. It is important to note that a third party is however barred from claiming ostensible authority if the circumstances reasonably called for greater investigation of the actual authority of the agent. Claims on ostensible authority are sometimes denied when the third party is found to have put the agent to enquiry. And goes without saying that there are agents and principals who will attempt to overreach themselves like in the above matter and a prudent third party can always find remedy in this doctrine.

by Sada Raulinga
sada@dyason.co.za

Stricter Regulation of A – typical forms of Employment

A–typical employment is any form of employment that is not permanent and that is covered by a fixed term contract, a part term contract or temporary employment services.

In particular this article will focus on the introduction of the stricter regulations that the Labour Relations Act 66 of 1995 (LRA) places on A–typical forms of employment and specifically with reference to the fixed term contract.

A fixed term contract is exactly what the name implies. It is a contract of employment which runs from one specified date to another specified date. Upon the second date being realized the employment contract and thus the employment relation between the employee and the employer will cease. Put differently, it is a contract, the duration of which is agreed in advance between the employer and employer. The fixed term element can also be not a specified date or dates but can be specified as the completion of a specific project.

The danger in fixed term contracts comes in when the employer continues to renew the contract every time it expires. This is known as “rolling over” the contract. It is not forbidden for an employer to roll over a fixed term contract. Once or at the most twice is acceptable. However, if a contract has been rolled over for a third or fourth time, the employee now has what is known as “the right of expectation”.

This means that because the employer has introduced the practice of “rolling over” the employment contract every time it expires, the employer has the right to expect that such situation will continue. When the employer suddenly fails to roll over the contract for the umpteenth time and the employee is dismissed the employee now has strong grounds to take his or her employer to the CCMA on the grounds of unfair dismissal.

Many employers were utilizing the fixed–term contract purely as a means of evading their statutory obligations in terms of the Basic Conditions of Employment Act 75 of 1997 and LRA and also to save money by denying their employees the opportunity of pension or provident funds and medical aid benefits. This practice is reprehensible as it amounts to nothing less than exploitation of the helpless employee.

Due to the fact that fixed term contracts were being misused and abused by employers, stricter regulations were introduced to A-typical forms of employment in January 2015. In particular section 186(1)(b) of the LRA specifically states that an employee, irrespective of their level of remuneration or seniority, may not only have an expectation of being employed for anther limited duration but that expectation may be for an indefinite term. In other words an employee bringing a claim that the employers reliance on the agreed end date to terminate the fixed term contract amounts to a “unfair dismissal” must prove that he subjectively had the expectation of continued employment (either for another fixed term or indefinitely). As mentioned earlier if the fixed term contract is rolled over more than twice it will be accepted that the employee has a right of expectation of continued employment. The employment relationship becomes more permanent each time the employment contract is renewed. Section 186(1)(b) endeavors to protect employees from employers who seem to believe that they can employee a person on a fixed term contract and continue to roll over or renew the contract each time it expires without placing the employee onto permanent staff.

Section 198B of the LRA now specifically provides for formal requirements of the fixed term contract. An offer to employ an employee on a fixed term contract must be reduced to writing and must state the reason for fixing the term. The employer must also have a justifiable reason for fixing the term of the contract and the employee must also agree to the fixed term. Furthermore, if the employee is employed on a fixed term contract the nature of the work for which the employee is employed must be of a limited nature, otherwise the employer must again show justifiable reasons for fixing the contract. If the employer cannot provide a justifiable reason for fixing the term of the contract of employment, the employee will be deemed to be employed indefinitely.

Another amendment of note from section 198B of the LRA is the right to equal treatment. This section ensures equal treatment between permanent and temporary staff. The section states that an employee on a fixed term contract for more than three months must not be treated less fairly than an employee on a permanent basis performing the same or similar work unless there is a justifiable reason for the different treatment. A justifiable reason could include seniority, experience, length of service etc.

Section 198B also ensures that employers must provide employees on fixed term contracts and permanent contracts with equal access to opportunities to apply for vacancies at the employer.

In summary section 186(1)(b) of the LRA prevents employers form disguising what is actually permanent employment in the form of a fixed term contract whilst section 198B ensures equality and democracy between permanent and temporary employees.

by Pariksha Moodley
pariksha@dyason.co.za

Paternity leave in the context of same sex relationships with reference to The Civil Union Act 17 of 2006

Until recently a father could not take paternity leave, but was granted family responsibility leave of three days following the birth of his child. However, in light of the Labour Court Judgment delivered on 26 March 2015 in the matter of MIA v State Information Technology Agency (Pty) Ltd 2015 (6) SA 250 (LC) some fathers will now be able to take paternity leave.

In this matter, the Applicant, a partner in a same-sex marriage, in terms of the Civil Union Act 17 of 2006 (“the Civil Union Act”), applied to his employer, the Respondent, for paid “maternity” leave of four months following the birth of their child by a surrogate.

In terms of the surrogate agreement, which was made an order of court on 13 July 2011, the surrogate mother was to hand over the child to the commissioning parents at birth and from that time onwards the commissioning parents would be deemed to be the parents of the child and are responsible for the child as regulated in the Children’s Act 38 of 2005 (“the Children’s Act”).

The Respondent declined the Applicant’s application for four months paid maternity leave on the grounds that he is not the biological mother of his child and that maternity leave only applies to female employees, as stated in the Basic Conditions of Employment Act 75 of 1997 (“BCEA”). The Respondent’s policy provided for paid maternity leave for a maximum of four months. In addition, the Respondent granted two months “maternity” leave on full salary to permanent employees adopting a child younger than 24 months. The Applicant was initially offered “family responsibility leave” or “special unpaid leave”. Later, the Respondent granted the Applicant two months paid adoption leave and two months unpaid leave.

The Applicant brought an application on the grounds of unfair discrimination in terms of section 6 of the Employment Equity Act 55 of 1998. The Respondent denied that its policy was discriminating and relied on the word “maternity” as being the defining character of the leave, namely that it was only due to, and a right to be enjoyed by female employees who had to physically recover after childbirth. The Court found that this reasoning did not take into account the best interests of the child, and by not allowing the Applicant to take such leave infringes on a child’s right to family care or parental care, as envisaged in section 28 of the Constitution of the Republic of South Africa 1996 (“the Constitution”) and section 9 of the Children’s Act. The Court went on to state that given the circumstances of the surrogate agreement and that the child needs to be handed to the commissioning parents after birth and that the Applicant was such a parent, there should be no reason as to why an employee in the position of the Applicant should not be granted maternity leave for the same reason as a natural mother is granted such leave.

The approach of the Respondent ignores the fact that the right to maternity leave as created in the BCEA in the current circumstances is an entitlement not linked solely to the welfare and health of the child’s mother but must of necessity be interpreted to and take into account the best interests of the child. Not to do so would be to ignore the Bill of Human Rights in the Constitution and the Children’s Act.

Furthermore, as our law recognises same-sex marriages and regulates the rights of parents who have entered into surrogacy agreements, the Court suggests that any policy adopted by an employer likewise should recognise or be interpreted or amended to adequately protect the rights that flow from the Civil Union Act and the Children’s Act. In order to deal properly with this matter it would be necessary to amend the legislation and in particular the BCEA.

The court subsequently ordered that the Respondent’s policy, by refusing the Applicant paid maternity leave, is declared to constitute unfair discrimination; that the Respondent is directed to recognise the status of parties to a Civil Union; and not to discriminate against the rights of commissioning parents who have entered into a surrogacy agreement. The Respondent was also ordered to pay the Applicant an amount equivalent to two months’ salary

This judgment is definitely a step in the right direction in fighting discrimination and ensuring equality in the work place. It also reiterates that the best interests of a child will always be taken into account – even by the Labour Court.

By Lizelle Marx
lizelle@dyason.co.za