In many cases, financial distress can be caused by operational inefficiencies caused by poor management or oversight by the company’s top leadership.
This is different to gross mismanagement. However, it is a significant issue as employees are the heart and soul of a business.
This issue was dealt with in a recent court determination involving Netcare.
On 8 July 2024 the High Court of South Africa, Free State Division, Bloemfontein delivered judgment in the decade-long case of Louw v Fourie NO and Another (3074/2016) [2024] ZAFSHC 137.
The matter involved Tilana Alida Louw, a theatre manager at Netcare Universitas Hospital in Bloemfontein who was pursuing a claim for damages under the actio iniuriarum in the amount of R627,000 (with interest and costs) against Dr S P Grobler, the first defendant, and Netcare Universitas Hospital, the second defendant. Grobler had conducted a private practice at Netcare and had performed surgeries at the hospital’s surgical theatres, making use of its staff
Relevant facts
The CDH article points out that Louw alleged that she endured severe verbal abuse from Grobler, a surgeon alleged to be known for his aggressive behaviour. Despite numerous complaints, Netcare purportedly failed to adequately address the alleged abuse. Louw alleged that this was because Grobler was a “money spinner” for Netcare.
Louw alleged further that several scrub nurses declined to work with Grobler, and other staff members were not permitted to file complaints against a medical doctor.
The article adds that Grobler had passed away and the dispute between Louw and Grobler’s late estate (Fourie N.O.) was resolved via a confidential settlement agreement. Louw’s delictual claim against Netcare proceeded to trial.
Relief sought
Louw contended that Netcare’s lack of action violated its obligation to maintain a safe work environment, leading to psychological trauma, including post-traumatic stress syndrome and a major depressive disorder. Netcare refuted any breach of its duty to Louw and claimed that it had taken steps against Grobler.
In addition to monetary damages, Louw inter alia sought a public apology from Netcare, to be published in the Volksblad newspaper, together with a punitive costs order.
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Netcare’s open tender
The CDH article points out that Netcare maintained its alleged defence against Louw’s delictual claim for seven days of trial, after which Netcare presented an open tender for settlement of the matter (a with prejudice offer). The tender included a public apology, R300,000 in damages, for inter alia Louw’s past and future medical expenses, together with a contribution to Louw’s legal costs.
Louw accepted Netcare’s tender to pay her damages and the 50% contribution to legal costs up to the date of settlement being reached with Grobler’s late estate (Fourie N.O.). However, Louw rejected the apology in the tender due to her dissatisfaction with the wording. She also rejected Netcare’s proposed contribution to her legal costs incurred after the settlement with Grobler’s late estate (Fourie N.O.).
Therefore, all that remained for the court to decide was whether (i) Louw made out a case for the relief relating to an apology; and (ii) the scale of costs to be awarded from the date of settlement between Louw and Grobler’s late estate (Fourie N.O.).
Apology as a remedy
The article adds that, in considering Louw’s delictual claim against Netcare, the court considered what a reasonable employer in Netcare’s position would have done and held inter alia that Netcare did not meet that standard.
In reaching this conclusion, the court considered Netcare’s failure to implement and review its policy that doctors’ use of the hospital’s facilities may be revoked for, among other things, “abusive behaviour or harassment”. The court reasoned further that given Netcare’s zero-tolerance approach to harassment, a reasonable employer in Netcare’s position would have warned Grobler about his conduct on the first occasion and would have terminated its contract with him on at least the third occasion.
Having found that Netcare failed to comply with the requisite standard of care, the court was tasked with deciding whether the actio iniuriarum remedy, which grants relief for impairment of the person, dignity or reputation, may extend to require a public apology. The court found that this remedy focuses on monetary considerations and may not be extended to require a public apology.
The article points out that, although our courts have re-introduced a court-enforced apology for actions based on the actio iniuriarum as damages in defamation cases, the court found that Louw’s argument for broadening this remedy to encompass a public apology in cases unrelated to defamation, lacked adequate justification. The court cautioned that expanding the remedy in this way could open the door for plaintiffs to demand apologies in a wide range of unrelated situations, such as wrongful detentions or insults, which deviates from its original purpose.
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Punitive costs
This notwithstanding, the court considered the content of Netcare’s apology to determine whether to award a punitive costs order. The court agreed with Louw that the apology did not convey genuine regret and remorse.
The article adds that the court exercised its judicial discretion and held that Netcare’s conduct warranted a punitive cost order. As a result, Netcare was ordered to pay Louw’s taxed or agreed costs incurred after the settlement date up to arguments, together with two expert witness fees.
Reasonableness is tough to determine
Setting a benchmark for reasonable behaviour is tough because every person and company has different metrics to measure this. Therefore, using it as a method to determine legal cases will always cause confusion and feelings of animosity.
Employers cannot ignore their duty of care to create an environment in which employees can perform optimally. This proactive approach can lead to a work environment where fewer companies become financially distressed due to employee animosity, fostering a sense of hope and optimism.
