Mbabane – The Industrial Court of Eswatini has issued a ruling that states that the United States currency, the Dollar, is not recognised as legal tender in the Kingdom of Eswatini.
The court of Judge Zelaphi Dlamini held this position in the application of an Australian national, Vaclav Vanek under case number 144/2020.
The Australian is suing Lomati Mine (Pty) Ltd a sum of US$377 335 which is equivalent to E7 million for alleged contractual breaches.
“This Court has found that the US Dollar denomination stipulated in the contract of employment as the currency of choice for the payment of the Applicant’s salary is not legal tender in Eswatini; hence, that provision violates section 46 (1) of the Employment Act,” the judgement reads in part.
Vanek filed the lawsuit in 2020 but the matter is still pending in court.
Vanek who is in Australia lived in Piggs Peak while in Eswatini from 2017.
He was hired as the mine manager until 20202.
Court documents reflect that on April 1, 2017, Vanek was given a five year fixed contract which was to expire on March 31, 2022.
His salary, the court said, was first US$15 000 (E278 831.14) per month payable fortnightly before it was increased to US$25 000 (E464 718.57) per month as at April 1, 2018.
However, Vanek said the mine announced changes in the same month.
He said on April 10, 2020, he was advised by Lomati Mine that the company would be outsourcing its mining operations to a contract miner which would mean that the role of mine manager would cease.
In the current matter, Vanek filed his application under a certificate of urgency in June 2020.
He said he could not follow the matter physically as he was in Australia and it was during COVID-19 restrictions on movement.
Vanek said when he was notified by Lomati Mine of his redundancy, the remained unresolved the issue of his unpaid salary arrears which he said accumulated to E7 million from May 2019 to May 2020.
In his prayers he sought a directive order for the respondent to forthwith pay him the sum of US$377, 335.00 (E7 million) being sums in respect of salary arrears which were not paid for the months, May 2019 to May 2020, and all tax payments that are due in that respect to the Eswatini Revenue Service, including any further sums that may fall due until the matter has been determined.
Lomati Mine did not take the matter lying down and vigorously opposed on points of law.
The mine said that the contract of employment was unenforceable and the order incompetent “therefore unenforceable because one of its material terms was contrary to the provisions of section 46 (1) of the Employment Act, 1980.”
The company further argued that in terms of the King’s Order-in-Council No.6 of 1973 [1974], which gave effect to a monetary agreement between Eswatini, Lesotho and South Africa, no currency other than the local currency and the Rand shall be legal tender in Eswatini.
“According to the Respondent, the doctrine of ex turpi causa applies in casu; hence, the contract is unenforceable and the order sought is incompetent. Moreover, it was submitted that Clause 4 of the contract of employment, which provides for the payment of the Applicant’s salary in US Dollars is an integral part of the agreement without which the contract cannot be enforceable,” the judgment reads.
The judge said the principle of statutory interpretation of Section 46 of the Employment of 1980 was held.
The section of the Act reads: “(1) Subject to subsection (2) and to section 48 all wages due to an employee under his contract of employment shall be paid to him in legal tender and not otherwise and if any such contract contains a provision whereby the whole or any part of such wages is made payable in any other manner, that provision shall be illegal. (2) Notwithstanding subsection (1) the wages of an employee under his contract of employment may with the consent of that employee, be paid to him by cheques drawn on a bank, or by postal order or money order.”
The court cited other cases including the High Court case of Rex v Elvis Vusie Mazibuko and Ano Cri. Trial No. 93/1996 and Elvis Vusie Mazibuko and Ano v Rex Cri. Appeal No. 16/1998 where the court ruled that the dollar was not legal tender in Eswatini.
“Even assuming that the Applicant received his salary in the foreign currency that would not have prejudiced him in view of his personal circumstances. Unlike an employee who is a citizen of Eswatini and who has never travelled nor has he any desire to travel or use for US Dollars, the Applicant’s position make it possible for him to readily exchange the foreign currency into goods of his choice. In effect, clause 4 of the contract of employment advanced the Applicant’s status and interests as opposed to constricting them; in the premise, the provisions of clause 4 were not inimical to the spirit of section 46 of the EA and article 3 of Convention No. 95.”
“The essence of Respondent’s argument is that, while the aforesaid subsection provides that wages due to an employee under a contract of employment shall be paid in legal tender and if an employment contract provides otherwise, that term shall be illegal, the contract of employment in issue stipulates that the Applicant’s salary was payable in US Dollars, currency that is not legal tender in Eswatini,” Judge Dlamini said.
The court said it is yet to hear the matter holistically when both parties have filed their papers.
The court said that ‘the par delictum rule should be relaxed in order to bring justice between the parties, in particular because the said clause in the contract of employment does not prejudice the Applicant in respect of whose salary section 46 was enacted to protect.’
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