The Constitutional Court yesterday gave thousands of Transnet pensioners welcome relief when approving their claim to recover billions owed to them, notes Legalbrief.

In 2013‚ 60 000 pensioners instituted a class action against the Transport Pension Fund‚ the Transnet Second Defined Benefit Fund and Transnet based on a promise made to them in 1989 that they would receive the same pension benefits under a commercial entity‚ Transnet‚ as they did under the state entity that employed them until then‚ the SA Transport Services (SATS) and its two pension funds.

The promise, which wasn’t adhered to, was that the practice of annually increasing members’ pensions by at least 70% of the rate of inflation would continue.

The pension funds kept the promise until 2002‚ after which the funds failed to grant any pension increases beyond the minimum of 2% per year. The pensioners had calculated that the debt owed to the two pension funds stood at R80bn by March 2013.

In 2016‚ Judge Francis Legodi, of the Gauteng High Court (Pretoria), upheld an exception application by Transnet that the claim by the pensioners was vague and embarrassing. Legodi said the claim did not contain sufficient particularity regarding who would decide the rate of the pension increase‚ who would benefit from the promise‚ the period that the promise would endure and if the promise was in perpetuity.

The pensioners were unsuccessful on appeal in both the High Court and the SCA.

In a unanimous judgment‚ the Constitutional Court upheld the pensioners’ appeal with costs‚ including the costs of two counsel, says the TimesLIVE report. In his judgment‚ Justice Johan Froneman said the pensioners – in their particulars of claim – pleaded that the 1989 promise was made orally by the general manager of SATS. It was also made by the Minister of Transport at meetings throughout the country with some 80 000 SATS employees in May and June 1989. Froneman said the promise was repeated in writing in a SATS brochure distributed to all SATS employees and pensioners later in 1989. He said the material terms of the contract pleaded was that the old pension funds made a promise to all their employees and members that the funds would continue to increase their pensions as before. ‘The pleaded contract is simple and straightforward‚ but its simplicity is elegant‚ rather than vague‚’ Froneman stated.

He said the terms of the contract were expressly and clearly set out and so were the parties bound by those terms. ‘There is nothing vague and embarrassing that prevents (the pension funds and Transnet) from knowing what case they have to meet‚’ Froneman said. The upshot of the judgment is that Transnet and the two pension funds now have 20 days within which to file a plea in answer to the pensioners' class action. However, according to a Beeld report, class action expert Theo Broodryk, of Stellenbosch University, said the judgment would force Transnet into settlement negotiations. He said research shows 95% of class actions are settled and the Transnet matter could follow the same path. The matter is more pressing due to the age of the applicants, but Transnet could try to stall the proceedings further.  

Full TimesLIVE report

Pretorius and another v Transport Pension Fund and others

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