REPORTABLE
THE SUPREME COURT OF APPEAL
OF SOUTH AFRICA
Case No. 442/97
In the matter between:
BOARD OF EXECUTORS LTD
Appellant
and
NEIL McCAFFERTY
Respondent
Coram:
MAHOMED CJ, GROSSKOPF, ZULMAN, STREICHER JJA and
FARLAM AJA
Heard:
16 November 1999
Delivered:
29 November 1999
LABOUR - EMPLOYER - WHO IS
JUDGMENT
STREICHER JA/

STREICHER JA:
[1] The respondent applied to the Industrial Court for the determination of
a dispute between himself and The Board of Executors Merchant Bank Limited
(“BOE MB”). He sought an order declaring that his retrenchment from the
employ of BOE MB constituted an unfair labour practice and claimed
compensation from it. BOE MB admitted that it had employed and retrenched
the respondent but denied the alleged unfairness of the retrenchment. However,
before any evidence was led in the Industrial Court, that court, of its own
motion, ordered that the appellant, being Board of Executors Limited, be
substituted for BOE MB. Neither the respondent nor the appellant challenged
the order. The appellant thereupon filed a “statement of case” in which it
denied that the respondent was at any material time employed by it and that it
had dismissed the respondent.  The matter proceeded on the basis that the

respondent was seeking an order declaring that his retrenchment from the
employ of the appellant constituted an unfair labour practice and that he was
entitled to certain compensation. By agreement between the parties the issues
were separated and the Industrial Court initially only determined that the
respondent had, at the relevant time, been employed by the appellant. The
Labour Appeal Court (“the LAC”) dismissed an appeal to it but granted the
appellant leave to appeal to this court. The only issue to be decided in this
appeal is therefore whether the respondent was at the relevant time employed
by the appellant.
[2] In terms of s 17C(1)(a) of the Labour Relations Act 28 of 1956 (“the
Act”) there is no appeal against the LAC’s decisions of fact. In National Union
of Metalworkers of SA v Vetsak Co-operative Ltd 1996 (4) SA 577 (A) at 583J-
584A it was held that findings of fact comprise:

“(1) actual findings of fact made by the LAC and (2) any factual findings
of the Industrial Court which have either expressly or tacitly been
approved by the LAC and consequently been incorporated in its
judgment.”
In addition this Court may also have regard to facts which appear from the
record of the Industrial Court proceedings in so far as they are not inconsistent
with facts found by the LAC (see Performing Arts Council of the Transvaal v
Paper Printing Wood & Allied Workers Union 1994 (2) SA 204 (A) at 214F).
The LAC based its determination on the following facts.
[3] The appellant was incorporated in 1987 and at the relevant time owned
all the issued shares in the Board of Executors (“BOE 1838”) and BOE MB.
BOE 1838 had been established by an Act of the Cape Parliament.  The money
market operations as well as other banking operations such as the corporate
finance division of BOE 1838 were taken over by BOE MB after the name of
an existing company had been changed to “Board of Executors Merchant Bank

Ltd”. All these companies fall within what is referred to as the BOE group of
companies (“the group”).  The group has an executive committee consisting of
the managing director, deputy managing director and financial director of the
appellant and the managing directors of the separate operating companies
within the group such as BOE 1838 and BOE MB.
[4] The respondent was initially, with effect from February 1990, employed
by BOE 1838. According to the salary slip issued to him his employer was “The
Board of Executors” and the date of his engagement was 15 February 1990. The
employees’ tax certificates issued to him similarly indicated that his employer
was “The Board of Executors”.
[5] On 17 May 1991 and in a letter to the respondent, P N Biden wrote to the
respondent on the letterhead of BOE MB:
“I have pleasure in confirming your appointment to the position of
Manager - BOE Merchant Bank Limited with effect from 1 January 1991.

The Conditions of Employment, as discussed with you, are set out
below:
TOTAL REMUNERATION
R120 312,50 per annum . . .
ACCOMMODATION
You will be entitled to the use of
. . .
ENTERTAINMENT ALLOWANCE
BOE shall reimburse you
for any disbursements
made
or
expenses
incurred on behalf of the
Company, which are
authorised or ratified by
BOE.
MOTOR VEHICLE ALLOWANCE
. . . BOE . . . will pay you
a monthly allowance, to
be reviewed annually at
BOE’s sole discretion, to
meet this expense. The
amount of the allowance
will be advised by BOE
to you in writing, from
time to time. No other

claims for motor vehicle
expenses
will
be
entertained by BOE.
PROFIT PARTICIPATION
You will participate in the
profits
of
the
financial
innovation unit. 20% of the
profit after one and a half times
costs have been achieved will be
made available to the staff of the
unit. The division of this profit
amongst the staff will be done
by the Executive Directors of
BOE Merchant Bank and the
profit participation will be
reviewed annually.
. . .
Yours sincerely
P N BIDEN
EXECUTIVE DIRECTOR”
Biden was an executive director of the appellant and the managing director of
BOE MB.

[6] The respondent worked in the financial innovation unit, which was a
one person unit run by himself. He submitted reports and plans to BOE MB
management and he carried out his daily tasks subject to their supervision. The
payslips issued to the respondent continued to reflect BOE 1838 as the
employer and the date of engagement as 15 February 1990. His salary was in
fact paid to him by BOE 1838 who, on behalf of BOE MB, attended to all
administrative matters relating to his employment  and who recovered the
amount paid from BOE MB.
[7] On 3 December 1991 W J McAdam, in his capacity as managing director
of the appellant, on the letterhead of the appellant, wrote to the respondent:
“BOE EXECUTIVE SHARE OPTION SCHEME
As you are aware the company has established an Executive Share
Option Scheme for the purpose of providing an incentive to selected
employees to promote the continued growth of the company.

In accordance with this intention, it is my pleasure to offer you 10 000
share options in the company, at a price of 1250 cents per share.
. . .”
The offer was accepted by the respondent.
[8] In a letter dated 11 August 1992 M A Thomson wrote to the respondent
that he saw no alternative but to close the financial innovation unit, that he did
not believe that there was any other area within the Merchant Bank where the
respondent’s skills could gainfully be employed and that he recommended the
acceptance of a retrenchment package by the respondent. Thomson was the
managing director of BOE MB and a group regional director of the appellant.
[9] The respondent’s employment was terminated on 15 September 1992
with effect from 30 September 1992 by a letter on the letterhead of the appellant
signed by Thomson in his capacity as group regional director. The letter read:
“TERMINATION OF EMPLOYMENT FOR OPERATIONAL

REQUIREMENTS
I refer to the discussions you have had with Richard Derman and myself
and to my letter dated 11 August 1992. Both the letter and discussions
dealt with the Transnet deal which has not materialised.
I confirm that the operational requirements of the organisation are such
that we are compelled to close the Financial Innovation Unit with effect
from 30 September 1992 and that as a result of this, we will not be in a
position to employ you beyond that date.
Barry Masureik’s letter of 28 August 1992 sets out the retrenchment
package we offer.”
Barry Masureik was the personnel manager of the group. The letter was written
after lengthy negotiations with the respondent during which reference was
made to cases decided in the Industrial Court.
[10] According to the evidence of Mr Hyslop, the general manager of BOE
MB, the executive committee of the group, which reported to the appellant,
controlled the running of the operating companies within the group, such as

BOE 1838 and BOE MB. It could decide who should be employed and
dismissed by the operating companies and had “virtually full power” over the
operating companies.
[11] Masureik testified that the appellant was not registered as an employer,
that the respondent was not registered as an employee of BOE MB and that
everyone in the group was employed by BOE 1838.
[12] The LAC concluded:
“69.
At the time of termination of respondent’s employment, BOE
1838 bore administrative responsibility for payment of salary and
benefits; BOE-MB recorded his employment as situate with BOE-
MB and the terms and conditions thereof; these conditions were
administered by 1838: BOE-MB exercised direct powers of
supervision and control over the minutiae of his daily tasks; BOE
Ltd continued to record ongoing employment since 15 Feb 1990;
it was BOE Ltd which facilitated a share incentive scheme for this
employee. Ultimately it was BOE Ltd which determined whether
respondent should remain a party to the bilateral interchange of
employment between employer and employee and decided to
terminate his position as an employee.

70.
I must conclude that respondent had three employers; BOE 1838
paid for the use of respondent’s productive capacity, BOE-MB
supervised the exercise of respondent’s productive capacity, BOE
Ltd encouraged the development of his capacity for its purpose
and then terminated acceptance of respondent’s productive
capacity.”
[13] In terms of s 1 of the Act “employer” “means any person whomsoever
who employs or provides work for any person and remunerates or expressly
or tacitly undertakes to remunerate him or who . . . permits any person
whomsoever in any manner to assist him in the carrying on or conducting of
his business; and ‘employ’ and ‘employment’ have corresponding meanings”.
[14] The respondent’s employment was terminated by means of the letter
dated 15 September 1992, written on the letterhead of the appellant and signed
by M A Thomson in his capacity as group regional director. Interpreted in the
light of the letterhead used, the respondent was advised that his employment
had been terminated by the appellant; that the operational requirements of the

organisation i.e. the group were such that the appellant was compelled to close
the financial innovation unit with effect from 30 September 1992; that as a
result of this, the appellant would not be in a position to employ the respondent
beyond that date; and that details of the retrenchment package offered by the
appellant were set out in a letter by Barry Masureik.  Counsel for the appellant
submitted that one should not attach much importance to the use of the
appellant’s letterhead, especially not in the light of the fact that Thomson was
also the managing director of BOE MB. He submitted that in the group,
letterheads were used indiscriminately. In this regard he referred to the letter of
11 August 1992 which was written on a BOE MB letterhead and which was also
signed by Thomson. He submitted that by reading the two letters together it was
BOE MB and not the appellant who terminated the respondent’s employment.
The letter of 11 August does not purport to terminate the respondent’s

employment. All it does is to recommend to the respondent that he accepts a
retrenchment package. In my view there is no evidence to support the
contention that letterheads were used indiscriminately. In the absence of
evidence to the contrary, the use of another letterhead, when it came to the
actual termination of the respondent’s employment, creates the impression that
deliberate use was made of the appellant’s letterhead. Moreover, there is no
evidence that in this particular instance the wrong letterhead was used or that
Thomson did not have authority to write the letter of dismissal on behalf of the
appellant. As one would expect in the light of the negotiations that preceded the
writing of the letter, the content thereof would seem to have been carefully
drafted. In these circumstances it is rather unlikely that the same care would not
have been taken in the selection of the letterhead.
I am therefore satisfied that
it was the appellant who purported to terminate the respondent’s employment;

who stated that it would not be possible to employ the respondent beyond 30
September 1992; and who offered the respondent a retrenchment package.
[15] Letters terminating an employees' employment are normally written by
or on behalf of the employer. The appellant tendered no evidence to the effect
that there was an explanation for the letter of termination of employment other
than that the appellant considered itself to be the employer of the respondent
and as such entitled to terminate the respondent’s employment. The respondent
accepted that his employment had been terminated by this letter but contended
that his retrenchment and the retrenchment package offered to him were unfair.
On the basis of these facts and in the absence of an express agreement to that
effect, the inference can be drawn that the appellant and the respondent tacitly
agreed that the appellant could terminate the respondent’s employment within
the group. If the appellant could terminate the respondent’s employment within

the group the appellant had ultimate direct control over the respondent’s
activities within the group. Counsel for the appellant conceded that if that was
the case, the appeal had to be dismissed. In my view that concession was
correctly made. If the appellant had direct ultimate control over the
respondent’s activities within the group the appellant was at least a co-employer
of the respondent. Counsel for the appellant, however, contended that in the
light of other facts, it should nevertheless be found that the appellant did not
have ultimate and direct control over the respondent’s activities within the
group and that it was in fact not an employer of the respondent. In this regard
he relied on the letter dated 17 May 1991 on the letterhead of BOE MB
confirming the respondent’s appointment to the position of manager - BOE MB
with effect from 1 January 1991. He also relied on the allegation in the
respondent’s original statement of case against BOE MB in which the

respondent stated that he was employed by and dismissed by BOE MB.
However, both the letter and the original statement of case are not inconsistent
with the appellant having been a co-employer of the respondent.   Moreover,
the allegation in the respondent’s original statement of case was that he had
been employed by BOE MB from about February 1990. That statement was
clearly wrong. He only started working in BOE MB during 1991. The
respondent testified that there was confusion in his mind as to who his true
employer was. He was obviously trying to identify one employer. Having
regard to the fact that the duties he was being paid to perform at the time of his
dismissal fell under the umbrella of BOE MB; that his salary was being paid by
BOE 1838; that his IRP 5 forms and salary slips indicated that BOE 1838 was
his employer; that his employment was terminated by the appellant; and that a
retrenchment package was offered to him by the appellant, it is hardly

surprising that the respondent was confused as to who his employer was.
Eventually he decided that the appellant, in whom ultimate responsibility
vested, was his employer.
[16] On 3 December 1991 the appellant offered 10 000 shares in the appellant
to the respondent as a selected employee as an incentive to promote the
continued growth of the appellant. Counsel for the appellant submitted that this
was a neutral factor. However, the offer was not made on behalf of BOE MB
and it made no reference to employees of subsidiaries. In my view the offer
affords an additional indication that as far as the appellant was concerned the
respondent was considered to be an employee of the appellant.
[17] Counsel for the appellant submitted that the appellant had structured the
affairs of the group in such a manner that it had no employees and that effect
should be given to its intention not to have employees. The appellant may have

purported to so structure its affairs but for the aforegoing reasons I am of the
view that the true relationship between the respondent and the companies
within the group did not accord with that structure.
[18] I conclude that the most probable inference to be drawn from all the
aforesaid facts is that the appellant was an employer of the respondent and that
the appeal should be dismissed.
[19] The appeal is therefore dismissed with costs.
_____________________
P E STREICHER
AGREE:
JUDGE OF APPEAL
MAHOMED CJ
GROSSKOPF JA
ZULMAN JA
FARLAM AJA