Transman (Pty) Ltd entered into a written contract with the South African Post Office Ltd (SAPO) and Autenmas Placements CC in terms of which Transman would supply temporary workers to SAPO. SAPO was obliged to pay Transman an hourly fee calculated with reference to comparable SAPO permanent employees, plus ‘an allowance for benefits as prescribed by the Basic Conditions of Employment Act 75 of 1997 (BCEA)’. The agreement was extended and remained in force from April 2000 to March 2005. Disputes arose about the calculation of the allowance for BCEA benefits, whether benefits under bargaining council agreements were included, whether increases were capped by CPI, and whether certain claims had prescribed. After earlier interlocutory proceedings, the parties redefined the issues at pre-trial and agreed on a calculation methodology, leaving interpretation and implementation of the contract for determination. The High Court found against Transman on most issues, including that no allowance was payable absent agreement on its quantum. Transman appealed to the Supreme Court of Appeal.
The appeal was dismissed with costs, including the costs of two counsel.
The case is significant for South African contract law in confirming that vague contractual provisions relating to remuneration or allowances are not enforceable unless their content can be fixed with sufficient certainty. It clarifies that courts will not readily imply a ‘reasonable’ remuneration where parties have agreed on a mechanism but left critical aspects undefined, and that expert evidence must establish an objective and reliable basis. The judgment also affirms principles of contractual interpretation, particularly that specific exclusionary clauses prevail over vague general wording, and that BCEA benefits do not automatically include bargaining council benefits.