Pretoria - Good news for SA Post Office (Sapo) workers is that the Supreme Court of Appeal has ordered that the postal giant cannot shy away from its obligations towards its employees.
It has to pay its monthly contributions on behalf of the workers towards the Post Office Retirement Fund.
In a scathing judgment, Judge Clive Plasket said the postal giant was in breach of this obligation in that it had not made the required payments since May last year.
While the Post Office cited its dire financial situation and Covid-19 as reasons for not paying its pension contributions, the judge said the Post Office was merely using scare tactics by citing its dire financial position as a reason to escape from its obligations.
The SCA judgment, delivered on Thursday, also ordered the already cash-strapped Post Office to pay the legal costs of the appeal. Four judges concurred with Judge Plasket’s judgment.
The Post Office Retirement Fund turned to the SCA to appeal against an earlier Gauteng High Court ruling that Sapo did not need to contribute at this stage due to its financial problems brought on by Covid-19.
Judge Plasket, ruling in favour of the retirement fund, said these claims were unsubstantiated.
He said: “It (Sapo) attempted to use the scare tactic of predicting its collapse (if it has to contribute towards the retirement fund).
“If the consequence of the law taking its course is the demise of Sapo, that is a factor that cannot influence us when the law is clear: Sapo is under a statutory obligation to pay its employees’ contributions,” the judge said.
It has emerged that Sapo has not made the required payments – R40 million each month – since May last year.
Sapo explained that due to its dire financial position it had to decide at the end of each month whether to contribute towards the pension fund or its members’ in-house medical aid fund. It said that it was prioritising payments and as the cash came in, it attempted to bring any arrears to zero.
Nondumiso Ngonyama, a non-executive member of Sapo’s board, told the court that it was unclear what the fund was trying to achieve by trying to get the postal giant to pay up.
“It seeks payment of over R80m and an order that Sapo must continue timeously to pay R40m a month. However, it does so while readily conceding that Sapo’s financial position is dire and that each month Sapo has to prioritise its most critical financial obligations,” she said in court papers.
She explained that as a result of the “current economic environment and the impact of Covid-19”, Sapo chose to pay medical aid contributions rather than pension fund contributions. She reasoned that it was “more important to pay its employees’ salaries (rather than any fringe benefits) so that those employees may continue to provide for themselves and their families while the pandemic ravages South Africa’s health and wealth”.
Ngonyama said Sapo would pay the fund as soon as it was able to, but said that it was not possible to predict with certainty when that would be.
She said due to the pandemic and the lockdowns, as at July 31, only 55 of Sapo’s 1 416 post offices were operating profitably. In July, Sapo incurred a net loss of R97m. This was nearly triple the net loss of R34m at the corresponding time in 2019.
Judge Plasket said while the post office blamed the pandemic, very little evidence was placed before the court about Sapo’s financial position prior to Covid-19.
“The evidence as to the cause of Sapo’s failure to honour its obligations to the fund are, at best, ambiguous,” the judge commented.
“Not only was Sapo’s approach to this matter opportunistic, but it was also cynical: while claiming to be concerned about the fundamental rights of social grant beneficiaries and its customers, it infringed the rights of its employees,” the judge concluded.