THE SUPREME COURT OF APPEAL
REPUBLIC OF SOUTH AFRICA

JUDGMENT

Case number : 392/06
Reportable

In the matter between :

ER24 HOLDINGS

APPELLANT

and

SMITH NO

1ST RESPONDENT
COMPENSATION COMMISSIONER

2ND RESPONDENT

CORAM :
SCOTT, CAMERON, CLOETE, MAYA JJA et THERON AJA

HEARD :
4 MAY 2007

DELIVERED :   18 MAY 2007

Summary:  Compensation for Occupational Injuries and Diseases Act, 130 of
1993: remuneration ‘in kind’ as contemplated in the definition of ‘employee’
means the provision of something that has an objectively ascertainable value
which can serve as the basis for the assessment of an employer in terms of s
83 and for the calculation of compensation payable in terms of Chapter VI read
with Schedule 4 of the Act.

Neutral citation: This judgment may be referred to as ER24 Holdings v Smith
NO [2007] SCA 55 (RSA).
_________________________________________________________

JUDGMENT

CLOETE JA/

CLOETE JA

[1] On 10 August 2003 Ms Romy Staracek (‘Romy’) was a passenger in a vehicle
driven by Ms Natasha Swanepoel (‘Natasha’). The vehicle was involved in an
accident caused by the negligence of Natasha and Romy was seriously injured. At
the time of the accident Natasha was acting in the course and scope of her
employment as a shift leader with Emergency Room Company (Pty) Ltd, trading as
ER24, which operates an emergency service. Romy was a volunteer worker
undergoing vocational experience that was essential to enable her to qualify
ultimately as a paramedic, and she and Natasha were on their way to an accident
scene.

[2] Adv Irvin Smith was appointed as curator ad litem to Romy. In that capacity
he sued ER24 for damages in excess of R7 million allegedly suffered by Romy in
consequence of the accident. ER24 delivered two special pleas in answer to the
claim. In the first, ER24 alleged that Romy was an ‘employee’ as defined in the
Compensation for Occupational Injuries and Diseases Act, 130 of 1993 (‘the Act’);
that the damages claimed by her were in respect of an ‘occupational injury’; and that
in terms of s 35 of the Act, no action lay against it for the recovery of the damages
claimed. Section 35(1) of the Act provides:
‘(1)
No action shall lie by an employee . . .  for the recovery of damages in respect of any
occupational injury . . . resulting in the disablement . . . of such employee against such employee’s
employer, and no liability for compensation on the part of such employer shall arise save under the
provisions of this Act in respect of such disablement . . .’.
In s 1 of the Act, ‘occupational injury’ is defined as ‘a personal injury sustained as a
result of an accident’ and ‘accident’ is defined as ‘an accident arising out of and in
the course of an employee’s employment and resulting in a personal injury . . . of the
employee’. In the second special plea, ER24 pleaded that it had concluded a
contract with Romy in terms of which its liability for the injuries suffered by Romy was
excluded; and in the alternative, that the contract fell to be rectified so as to exclude
such liability. ER24 also joined the Compensation Commissioner as a third party. In
those proceedings it sought an order declaring that Romy was an ‘employee’ as

defined in the Act and that the claim brought on her behalf accordingly lay against
the Compensation Commissioner in terms of s 35 of the Act. The court a quo
(Bashall AJ) dismissed both special pleas and the relief sought by ER24 against the
Compensation Commissioner, but granted leave to appeal to this court.

[3] The essential question raised by the first special plea and the third party
notice is whether Romy was an ‘employee’ as defined in s 1 of the Act, the relevant
part of which reads as follows:
‘”employee” means a person who has entered into or works under a contract of service or of
apprenticeship or learnership, with an employer, whether the contract is express or implied, oral or in
writing, and whether the remuneration is calculated by time or by work done, or is in cash or in kind
…’.

[4] The court a quo found that Romy had executed a contract with ER24, the first
paragraph of which provided that she
‘will not be regarded as an employee and is not entitled to any statutory protection, remuneration or
fringe benefits.’
If Romy is entitled to benefits under the Act, the exclusion of ‘statutory protection’
cannot apply to such benefits inasmuch as s 33 of the Act provides:
‘Any provision of an agreement existing at the commencement of this Act or concluded thereafter in
terms of which an employee . . . relinquishes or purports to relinquish any right to benefits in terms of
this Act, shall be void.’

[5] Some of the witnesses called to give evidence expressed the opinion that
Romy was not an employee and reference was made to correspondence from the
office of the Compensation Commissioner which was to the same effect. These
opinions are irrelevant. The question whether Romy was an employee as defined in
the Act, is a question for the court.

[6] The definition of ‘employee’ covers remuneration ‘in cash or in kind’. It was
not submitted ─ in my view, correctly ─ that a person who has entered into or works
under any of the three categories contract mentioned in the definition, would qualify
as an employee if that person received no remuneration. The evidence established

that Romy was not paid. It was however submitted on behalf of ER24 that it
remunerated Romy in kind by allowing her to travel in its vehicles, to be exposed to
actual accident scenes and to obtain vocational guidance and experience from its
more experienced personnel, all with the view to enabling her to gain the necessary
experience to qualify as a paramedic. I cannot agree with this argument.

[7] Remuneration ‘in kind’ to my mind means the provision of something that has
an objectively ascertainable value which can serve as the basis for the assessment
of an employer in terms of s 83 and for the calculation of compensation payable in
terms of Chapter VI read with Schedule 4, of the Act. Section 83(1) provides:
‘Subject to the provisions of this section, an employer shall be assessed or provisionally assessed by
the Director-General according to a tariff of assessment calculated on the basis of such percentage of
the annual earnings of his, her or its employees as the Director-General with due regard to the
requirements of the compensation fund for the year of assessment may deem necessary.’
Schedule 4 deals with the manner of calculating compensation and in each case
(save in regard to funeral costs) the benefit is calculated having regard to the
‘monthly earnings’ of the employee. Thus, for example, the compensation for
temporary total disablement payable in terms of s 47(1)(a) of the Act is periodical
payments representing 75 percent of an employee’s monthly earnings at the time of
the accident (subject to a maximum); and the compensation payable in terms of s
49(1) for permanent disablement of 30 percent, is a lump sum being 15 times the
monthly earnings of the employee at the time of the accident (subject to a minimum
and a maximum).

[8] If the argument on behalf of ER24 were correct, some monetary value would
have to be placed on the experience gained by employees for the purpose of
determining the employees’ annual earnings; and such experience would have to be
taken into account in determining the ‘monthly earnings’ of an employee for the
purposes of calculating the compensation payable ─ because there can be no
distinction in principle between a person such as Romy and an employee of ER24
properly so called who is paid a monthly salary. Both tasks are for practical purposes
impossible and neither is in my view required by the Act.

[9] Nor does s 51, referred to in argument, assist ER24. That section provides:
‘(1)
If as a result of an accident an employee sustains permanent disablement and at the time of
the accident ─
(a)
was an apprentice or in the process of being trained in any trade, occupation or profession; or
(b)
was under 26 years of age,
the Director-General shall determine the earnings of such employee in accordance with subsection (2)
for the purpose of the calculation of compensation in terms of section 49.
(2)(a)
In the case of an employee referred to in subsection (1)(a), his earnings shall be calculated
on the basis of the earnings to which a recently qualified person or a person in the same occupation,
trade or profession with five years more experience than the employee would have been entitled at
the time of the accident, whichever calculation is more favourable to the employee.
(b)
In the case of an employee referred to in subsection (1)(b), his earnings shall be calculated
on the basis of the earnings to which a person of 26 years of age would normally have been entitled if
at the time of the accident he had been performing the same work as the employee or a person in the
same occupation, trade or profession with five years more experience than the employee, whichever
calculation is more favourable to the employee.’
The purpose of this section is to benefit a person who is ex hypothesi an employee
(one in training or under 26 years of age) by providing for an increased benefit. This
section does not assist in determining whether a person being trained or under 26
years of age, is an employee.

[10] I therefore conclude that as Romy was not remunerated, whether in cash or in
kind, she was not an employee for the purposes of the Act. It follows that the first
special plea and the relief sought by ER24 against the Compensation Commissioner
were correctly dismissed by the court a quo.

[11] The principal contention by ER24 in its second special plea was that it had
contracted out of liability to Romy. The contention was based on the following clause
in the contract which the court a quo found that Romy had signed:
‘[Romy] indemnifies ER24 of any claim in respect of any loss, damage or injury howsoever caused
which may be sustained during the course of assisting with the operational requirements of the
Company.’

Scott JA in Durban’s Water Wonderland (Pty) Ltd v Botha and Another1 stated the
approach to be followed in construing such an exemption clause as follows:
‘If the language of a disclaimer or exemption clause is such that it exempts the proferens from liability
in express and unambiguous terms, effect must be given to that meaning. If there is ambiguity, the
language must be construed against the proferens. (See Government of the Republic of South Africa
v Fibre Spinners & Weavers (Pty) Ltd 1978 (2) SA 794 (A) at 804C.) But the alternative meaning upon
which reliance is placed to demonstrate the ambiguity must be one to which the language is fairly
susceptible; it must not be “fanciful” or “remote” (cf Canada Steamship Lions Ltd v Regem [1952] 1 All
ER 305 (PC) at 301C-D).’

[12] It was conceded on behalf of ER24 that the clause is ambiguous inasmuch as
it is not clear whether Romy indemnified ER24 for injuries caused to a third party or
to herself. It is only in the latter case that the clause could provide a defence to
ER24. The clause is, however, fairly susceptible to the former interpretation; apart
from anything else, if ER24 wished to exclude liability on its part to Romy, why, it
may be asked, would it limit such exclusion to loss, damage or injury sustained
during the course of her assisting with the operational requirements of the company?
Such a qualification makes far more sense if what is intended to be excluded is loss,
damage or injury caused by Romy to a third party while she was assisting in the
operational requirements of the company. The concession on behalf of ER24 was
accordingly well made. The ambiguity is fatal and the contra proferentem rule must
be applied against ER24.

[13] ER24 pleaded in the alternative in its second special plea that the exclusion
clause should be rectified so as to exclude any liability on its part to Romy. Counsel
representing ER24 did not abandon the point, although he did not press it in
argument either ─ and rightly so. It is trite that a party relying on rectification has to
show that the contract as rectified reflects the common continuing intention of the
parties thereto. Although the author of the contract who was employed by ER24
gave evidence as to what he intended the clause to mean, there was no evidence

1 1999 (1) SA 982 (SCA) at 989G-I; see also Johannesburg Country Club v Stott 2004 (5) SA 511
(SCA).

from which Romy’s intention could legitimately be inferred. It follows that ER24’s
second special plea cannot succeed either.

[14] The appeal is dismissed. ER24 is ordered to pay the costs of the curator ad
litem and the Compensation Commissioner including, in each case, the costs of two
counsel.

______________
T D CLOETE
JUDGE OF APPEAL
Concur:   Scott JA

Cameron JA

Maya JA

Theron AJA
THE SUPREME COURT OF APPEAL
REPUBLIC OF SOUTH AFRICA

MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL

From:
The Registrar, Supreme Court of Appeal
Date:
18 May 2007
Status:
Immediate
Please note that the media summary is intended for the benefit of the
media and does not form part of the judgment of the Supreme Court of
Appeal

ER24 HOLDINGS v I SMITH NO & ANOTHER

1.
The SCA today delivered judgment in a matter affecting part-time
volunteers who receive on-the-job training without remuneration. The
SCA held that in order to qualify for benefits as an employee under the
Compensation for Occupational Injuries and Diseases Act (COIDA), a
person has to be paid in cash or in kind; and payment in kind means the
provision of something that has an objectively ascertainable value. The
issue was determined in a case that arose when an unpaid volunteer,
injured while helping, sued the emergency relief company ER24.

2.
On 10 August 2003 Ms Romy Staracek was a passenger in a
vehicle driven by Ms Natasha Swanepoel. The vehicle was involved in
an accident caused by the negligence of Swanepoel and Staracek was

seriously injured. At the time of the accident Swanepoel was acting in
the course and scope of her employment as a shift leader with
Emergency Room Company (Pty) Ltd, trading as ER24, which operates
an emergency service. Staracek was a volunteer worker undergoing
vocational experience that was essential to enable her to qualify
ultimately as a paramedic, and she and Swanepoel were on their way to
an accident scene. Adv Irvin Smith was appointed as curator ad litem to
Staracek. In that capacity he sued ER24 for damages in excess of R7
million allegedly suffered by Staracek in consequence of the accident.

3.
ER24 argued that Staracek’s claim could not be brought against it,
but lay against the Compensation Commissioner because she was an
employee as defined in COIDA and the damages claimed on her behalf
were in respect of an occupational injury. ER24 argued that although
she received no cash, it remunerated Staracek in kind because it
allowed her to gain experience necessary for her to qualify as a
paramedic. This argument was rejected. The court held that it is
impossible to place a value on experience gained by a volunteer to
determine contributions payable by an employer to the Compensation
Fund or benefits payable to an employee under COIDA. The court held
that because Staracek was not remunerated in cash or in kind, she was
not an employee. COIDA was therefore not a bar to a claim against
ER24 for the negligence of Swanepoel which caused Staracek’s injuries.
The decision of the Johannesburg High Court was upheld, and ER24’s
appeal dismissed.

--ends--