Transnet clock ticks after court win for pensioners

State-run transport and logistics company Transnet and two of its pension funds have 20 days within which to file a plea in answer to the class action claim by about 60‚000 pensioners.

This came as the pensioners achieved victory at the Constitutional Court on Wednesday when it upheld their claim to recover billions owed to them.

In 2013‚ the 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 benefits under a commercial entity‚ Transnet‚ as 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 they failed to grant any increases above the minimum 2% a year. The pensioners had calculated that the debt owed to them stood at R80bn in at March 2013. However, Transnet filed an exception to the pensioners’ claims filed in the High Court in Pretoria.

In 2016‚ Judge Francis Legodi upheld the exception by Transnet that the claim by the pensioners was vague and embarrassing. He said the claim did not contain sufficient particularity as to 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 ruling failed in the high court and in the Supreme Court of Appeal.

In a unanimous judgment on Wednesday‚ the Constitutional Court upheld the pensioners’ appeal with costs.

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. Froneman said the promise was repeated in writing in a SATS brochure distributed to all SATS employees and pensioners later in 1989.

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. The terms of the contract were expressly and clearly set out. The parties were bound by those terms.