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September 29, 2004

Rights of former employees dealt with in SABC ruling

Labour law experts have commented on the recent ruling by the Johannesburg High Court that the SABC may not unilaterally withdraw subsidised medical aid contributions to a number of former employees. David Geral and Steven Brasg, of the Sandton law firm, Bowman Gilfillan, explained that the case dealt with a question on medical aid subsidies faced by many SA companies, reports The Star. They say the ruling does not seem to take adequate account of the different relationships between a company and its employees on the one hand, and former employees on the other hand. ‘It also appears to ignore that the law provides specific procedures for the resolution of contractual disputes within an ongoing employment relationship, which may not apply to contractual disputes outside of such a relationship, for example, with pensioners.’ In October 2001, the medical subsidy in favour of the plaintiffs in the case was withdrawn. The plaintiffs had all resigned or been retrenched, but had remained members of the medical scheme. Despite letters issued by the SABC from time to time indicating that the subsidy rate was subject to revision, the court held that the letters ‘did not allow the SABC to unilaterally remove the subsidy’. Geral and Brasg further explained that it was notable that the court had found, as a matter of principle, that the SABC's obligation to pensioners would be the same as that to existing employees.


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