New Clicks South Africa (Pty) Ltd v Neliswa Pumla Bulose

In July 2020, the plaintiff offered the defendant a position as Inventory Manager, requiring relocation from Cape Town to Johannesburg. On 22 July 2020, they signed two agreements: a Sign-on Bonus Agreement (R500,000.00) and a Relocation Cost Agreement (up to R250,000.00). Both contracts stipulated that if the defendant's employment ended for any reason other than death, disability, or redundancy within 36 months, she must repay the amounts received. The defendant commenced employment on 01 September 2020 and received the full amounts totaling R750,000.00. On 01 November 2021, the defendant resigned within the 36-month period, triggering the repayment obligations. The plaintiff deducted R212,705.00 (notice and leave pay) it owed the defendant, leaving a balance of R537,295.00. The plaintiff sought summary judgment for this balance.

• Whether the defendant disclosed a bona fide defence to the summary judgment application
• Whether the defendant's claimed set-offs (pension fund contribution of R188,913.49 and SARS tax liability of R112,500.00) met the legal requirements for set-off
• Whether a performance incentive claim raised for the first time in an affidavit (not pleaded) could be considered in summary judgment proceedings

1. Summary judgment is granted in favour of the plaintiff. 2. The defendant is ordered to pay the plaintiff the sum of R537,295.00 plus interest at a rate of 11.25% per annum from the date of demand to the date of final payment. 3. The defendant is ordered to pay the costs of the application on a party and party scale B.

For a set-off defence to succeed in summary judgment proceedings, the defendant must prove: (a) the indebtedness of the plaintiff to the defendant; (b) that the debt is due and legally payable; (c) that both debts are liquidated (based on liquid documents, admitted, or with ascertainable money value); and (d) that the reciprocal debt is owed by the plaintiff to the defendant. A contingent liability to a third party (such as SARS) does not constitute an immediately enforceable debt for set-off purposes until actually paid and causally established. Material facts relied upon in defence must be properly pleaded and cannot be raised for the first time in affidavits resisting summary judgment. Contractual repayment obligations triggered by early resignation from employment are enforceable where clearly stipulated in written agreements.

The Court observed that even if a representation by an HR officer regarding tax treatment of relocation payments were proven, such a representation made by a non-tax expert may not be sufficient to establish a legally enforceable obligation on an employer to indemnify an employee for subsequent tax consequences. The Court also noted that the tax treatment of payments is ultimately a matter between the taxpayer and SARS, governed by the Income Tax Act, rather than a straightforward matter of employer liability. The Court emphasized that a liability does not constitute a loss until it is actually paid.

This case reinforces important principles in South African employment and procedural law: (1) the enforceability of contractual repayment obligations in sign-on bonus and relocation agreements when employees resign within a specified period; (2) the strict requirements for establishing a valid set-off defence, particularly that debts must be liquidated, due, and legally payable; (3) the distinction between contingent liabilities (such as potential tax obligations to SARS) and actual enforceable debts for set-off purposes; (4) the fundamental pleading rule that defences not pleaded cannot be raised for the first time in affidavits resisting summary judgment; and (5) that pension fund benefits are ordinarily recoverable from the fund itself, not the employer, absent specific legal basis.