Victory for thousands of Transnet pensioners

Transnet logo outside their offices.
Transnet logo outside their offices.

Thousands of Transnet pensioners achieved victory at the Constitutional Court on Wednesday when the court gave their claim to recover billions owed to pensioners a go-ahead.

In 2013‚ the 60 000 pensioners instituted a class action against the Transport Pension Fund‚ the Transnet Second Defined Benefit Fund and Transnet.

Their claim was 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 South African Transport Services (SATS) and its two pension funds.

The promise 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‚ when 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 R80-billion by March 2013.

However‚ Transnet filed an exception to the pensioners' claims filed in the Pretoria high court.

In 2016‚ Judge Francis Legodi upheld the exception 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’ application to seek leave to appeal to the Supreme Court of Appeal against Legodi’s upholding of exceptions by Transnet failed in the high court and in the Supreme Court of Appeal. In a unanimous judgment‚ the court upheld the pensioners’ appeal with costs‚ including the costs of two counsel.

In his judgment‚ Constitutional Court Justice Johan Froneman said on Wednesday 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.

Froneman 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.

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