Cost application in Bonitas labour spat may set precedent

Wiseman Khuzwayo

A Bonitas subsidiary locked in a dispute with a former managing director over a labour matter has made an unprecedented application for security of costs for the case, prior to even filing its heads of argument.

Legal experts said yesterday that if the precedent was set, it would in future jeopardise applications by unemployed litigants taking on their well-resourced employers.

The expert, who spoke on condition of anonymity because Bonitas Marketing might be a client of his firm, said the division was trying to stifle Raymond Mkhize’s application by demanding a cost guarantee.

Mkhize, the former managing director of Bonitas Marketing, said he had offered an empty stand worth R200 000 as security but Bonitas’s lawyers had declined, saying they wanted a bankable security.

Security of costs is commonly demanded if a litigant is a foreigner and therefore a flight risk.

Mkhize said the lawyers for Bonitas had not filed the heads of argument on the basis that the security of costs had not been provided.

Mkhize was dismissed in December 2010 on the grounds of misconduct for two VAT audit payments of R6 million made in November 2009 without board approval. The tax was incurred before Mkhize’s appointment.

In his defence, Mkhize said the payments were made on the basis of a board minute of July 22, 2009, which recorded: “The VAT amount owed to the SA Revenue Service should be paid as a matter of urgency.”

Mkhize referred his dispute for unfair dismissal to the Commission for Conciliation, Mediation and Arbitration (CCMA).

The matter was set four times for arbitration but Bonitas objected on the basis of jurisdiction even though commissioner Stephen Ntombela had ruled that the CCMA did have jurisdiction.

Eventually, the matter was heard by a private arbitrator, senior advocate Mark Antrobus, who found that Mkhize’s dismissal was procedurally and substantively fair.

However, Antrobus said he would not oppose Mkhize’s application for a review of his decision, and he would accept whatever ruling was made by the Labour Court.

Bonitas’s lawyer, Anel Gray, was not available yesterday.

The business of Bonitas Marketing is to market, grow and enhance the membership of the Bonitas medical fund.

Bonitas is the country’s third-biggest open medical aid scheme. It was placed under curatorship by the South Gauteng High Court between May 2011 and August 31, 2012, after a statutory investigation by the Council for Medical Schemes.

Before and during the investigation, Bonitas remained stable and financially sound, the council said at the time.

This followed a dossier given to the council by Mkhize, which alleged that Bonitas’s acting principal officer, Gerhard van Emmenis, concluded sponsorship deals worth R15m on behalf of Bonitas Marketing without the board’s approval or Mkhize’s authorisation.

The regulatory body found the board was “neither fit nor proper to manage or control the affairs of the scheme” and did “not appreciate the extent of their duties”.

The council also found the board did not act with the “necessary care, diligence and skill required by the Medical Schemes Act” and failed to protect members’ interests.