South African Broadcasting Corporation v Fred Peter Coop & Others

Former senior employees of the South African Broadcasting Corporation (SABC) left its employment between 1993 and 2000 using mechanisms described as early retirement, voluntary retrenchment, or resignation to access the full actuarial value of their pensions following amendments to the SABC pension fund rules in 1993. In practice, many were advised by senior SABC officials that resignation was a technical mechanism only, and that they would still be treated as retirees. They were allowed to withdraw full pension values, received a retirement gratuity, retained subsidised membership of the SABC medical scheme (with a 60% subsidy), and were issued concessionary television licences. These benefits were consistently treated by the SABC as post-retirement benefits and budgeted for as long-term liabilities. In 1999 (television licences) and 2001 (medical scheme subsidies), the SABC unilaterally withdrew these benefits from 93 former employees, asserting that the officials who had granted them lacked authority and that the employees were not true retirees. The former employees instituted proceedings challenging the lawfulness of the withdrawal.

The appeal was dismissed. The SABC was ordered to reinstate and continue paying the 60% medical scheme subsidy to the plaintiffs, to reimburse amounts withheld since its withdrawal, and to reinstate concessionary television licences. The punitive attorney-and-client costs order made by the High Court stood.

The case is a leading South African authority on ostensible authority in the context of employment and retirement benefits within public entities. It affirms that a public corporation may be bound by representations made by senior officials where employees reasonably rely on them, even if internal authority was allegedly lacking. The judgment also underscores that long-standing conduct and accounting treatment can evidence the legal status of employees as retirees and constrain unilateral withdrawal of benefits.