Societe Seychelloise De Navigation Limited v Barreau & Anor (CA 5 of 2021) [2022] SCSC 851 (16 March 2022)

PILLAY J

1. By way of a Notice of Appeal filed on 29^th April 2021 the Appellant appealed against the decision of the Learned Senior Magistrate delivered on 16^th April 2021.
2. The brief facts of the case are that the Appellant filed a Plaint before the Magistrates Court of Seychelles dated 3^rd August 2020 alleging that it is a Limited Company engaged in the business of being a Shipping Agent. The Appellant claims that the first Respondent was employed by the Appellant as a Shipping Supervisor. On 25^th October 2017 the Appellant and the first Respondent entered into a bonding agreement whereby the Appellant agreed to sponsor the first Respondent for an online Masters of Business Administration course with Middlesex University London for the duration of 18 months. The second Respondent was the guarantor of the first Respondent. The bonding agreement made provision for breach of the agreement and liability of the employee in the event of breach. The first Respondent resigned from the employment of the Plaintiff on 17^th September 2019 which the Appellant claims resulted in loss and damage to the Appellant for which the Respondents are liable.
3. On 14^th October 2020 the Respondents raised a plea in limine to the effect that

The Plaint is bad in law as it concerns an Employment related matter for which only the Employment Tribunal has the jurisdiction under Rule 3 (1) of Schedule 6 of the Employment Act.

4. Following submissions filed by both sides the Learned Senior Magistrate ruled on 20^th April 2021 to the effect that:

[21]     …this Court finds that the bonding agreement in the present case is employment related and arose out of the employment of the First Defendant with the Plaintiff…

[22]     …I find that the bonding agreement forms part of the contract of employment of the First Defendant and as such is an employment related matter which falls within the jurisdiction of the Employment Tribunal as per the provisions of Schedule 6 Rule 3 (1).

5. On that basis the Learned Senior Magistrate proceeded to grant the plea in limine raised by the Defendants/Respondents and dismissed the Plaint against both Defendants.
6. The Appellant appealed against the said decision on the following grounds:

(a)       The Learned Magistrate erred when he found at paragraph 18 of the Ruling       that it was incorrect for the Appellant to have state that there is no dispute       as to a breach of the employment contract of the First Defendant.

(b)       The Learned Magistrate erred when he found at paragraph 18 of the Ruling       that it is the Respondents who have to raise the contention that there is no            issue between the Appellant and the First Respondent in relation to his resignation from the employ of the Appellant.

(c)       The Learned Magistrate erred when he found at paragraph 20 of the Ruling       that a breach of the bonding agreement can only be established if there has           been a breach of the employment contract.

(d)       The Learned Magistrate erred when he found at paragraph 22 of the Ruling       that the bonding agreement forms part of the contract of employment of the       First Respondent.

(e)       The Learned Magistrate failed to consider at all, the role of the Second            Respondent as guarantor under the bonding agreement and that there was      no employer-employee relationship between the Appellant and the Second       Respondent.

(f)        The Learned Magistrate erred when he found that this matter is one which        falls within the exclusive jurisdiction of the Employment Tribunal.

7. Rule 3 (1) of Schedule 6 of the Employment Act reads as follows:

 The Tribunal shall have exclusive jurisdiction to hear and determine employment and labour related matters.

8. The Learned counsel for the Appellant submitted that it is incorrect to say that the bonding agreement can only be breached if the employment contract is breached.
9. It was further his submission that the case of Seychelles Petroleum Company Limited v Robert Morel & Another (Civil Appeal SCA 11/2015) [2017] SCCA 30 (11 August 2017) was decided on different facts wherein there were live employment issues that had to be determined whereas in the present matter the first Respondent resigned from employment. According to him the case of Morel is not a blanket to be thrown on all cases involving bonding agreements.
10. Learned counsel for the Appellant further submitted that if indeed there were employment issues to be determined, then, in the interests of justice, the proper action should have been for a referral to the Employment Tribunal as was done by the Chief Justice in the case of Junia Albert and Ors v Hill View Resort Seychelles instead of a dismissal on a jurisdictional argument as the Learned Senior Magistrate did.
11. It was his submission that there is no employment issue between the parties. He invited the Court to depart from the findings in the case of Seychelles Petroleum Company Limited v Robert Morel & Another (Civil Appeal SCA 11/2015) [2017] SCCA 30 (11 August 2017).
12. The Respondents submitted that the Learned Senior Magistrate was correct to find that the resignation of the First Respondent within the bind period was a breach of contract as this was clearly stipulated in the agreement at Clause 4.4. It was their submission that by virtue of the first Respondent’s resignation “the employment has terminated the bonding agreement, as the two are inter-related.”
13. With regard to grounds 3, 4, 5 and 6 the Respondents submitted that the critical points are “whether the Appellant and the two Respondents were involved in an employment related dispute; the breach of the bonding agreement in relation to the employment contract; the inter-connection between the bonding agreement and the employment contract; the role of the second Respondent and the exclusive jurisdiction of the Employment Tribunal to hear cases of this nature.”
14. The Respondents accepted that the provisions of the Employment Act does not apply to the bonding agreement because it does not constitute a contract of employment under the Act. However they submit that “the point in this present case is whether or not the alleged breach of the bonding agreement is a matter related to Employment under Rule 3 (i).” It was their submission that the matter is employment related because the first Respondent was in an employee and employer relationship with the Appellant.
15. The Respondents relied on the case of Seypec v Darryl Belle and Christianne Belle CA 45/2018 dated 24^th July 2019.
16. In the case of Seychelles Petroleum Company Limited v Robert Morel & Another (Civil Appeal SCA 11/2015) [2017] SCCA 30 (11 August 2017) the Court found that:

In the instant case, the breach of the Bonding Agreements can only be established if there has been a breach of the contract of employment.  This is evidently a matter that falls clearly within the ambit of the Rule 3(1) of Schedule 6 of Employment Act 1995 as amended and it is the Employment Tribunal which has exclusive jurisdiction to adjudicate on such matters, in the first instance.

The enforcement of the term of the Agreements by claiming back the expenses incurred, as a money claim arising out of a potential breach of the contract, where the 2^nd Respondent can rightly be joined as a party, can only be pursued once the breach of the contract of employment is first established.

17. The decision in Belle above was rendered on the basis of that in Morel, for those reasons I do not propose to go through the decision in Belle.
18. It is not in doubt that there was an employer and employee relationship between the Appellant and the first Respondent. The caption of the agreement in the matter at hand reads thus ‘Bonding Agreement for employee of Societe Seychelloise de Navigation (SSN)’ similarly to the case of Morel above. However this is where the similarity ends. In the case of Morel there was a fundamental issue of employment related matters to be decided in that the Respondent Morel argued that he was not an employee of Seypec. It was the Respondent’s position that Seypec itself was in breach of the agreement by not employing him in his field of study. There necessitated a finding on the employment related issue before the matter could proceed further. Hence the finding of Renaud JA that the breach of the bonding agreement could only be established once the issue of a breach of the contract of employment was decided.
19. My understanding of the above is that this rule was not the yardstick to be used for all matters relating to bonding agreements. In that particular case, before the breach of the bonding agreement could be proved, a breach of the contract of employment had to be proved. Effectively the Appellant had to start the process before the Employment Tribunal, showing that there was a breach of the contract of employment, and only after the Employment Tribunal had made such determination could the Appellant then file his money claim with the guarantor joined as a party.
20. The facts of the current matter are different. There is no allegation of any breach of the employment contract. The first Respondent resigned and his resignation was accepted by the Appellant. No employment issues were raised by the first Respondent other than the bonding agreement is an employment related matter. There was no elaboration on how the jurisdiction of the Employment Tribunal is activated.
21. I note that in the submissions to the Learned Magistrate, Learned counsel for the first Respondent stated that the “first Defendant Richard Barreau was an employee of the Plaintiff”. He further went on to state that “the point in the present case is whether or not the Plaintiff and the two defendants are involved in an employment related dispute. The bond agreements were agreements entered into between the Plaintiff and the first and second Defendants whereby the Plaintiff agreed to guarantee the availability of funds to permit the first Defendant to undertake studies and the first Defendant agreed upon completion of his studies to work for the Plaintiff for a period not exceeding three years…essentially for the duration of the bond period.”
22. To my mind the issues for determination would be whether or not the first Respondent being an employee of the Appellant was in breach of the bonding agreement by resigning before the period of bond had expired. On the facts the Learned Magistrate would not be required to make any findings with regard to the employment of the first Respondent which could encroach on the jurisdiction of the Employment Tribunal. The bonding agreement though it emanated as a result of the employment relationship between the Appellant and the first Respondent is not part and parcel of the employment contract which would activate the jurisdiction of the Employment Tribunal as being an employment and labour related matter. In my humble opinion the bonding agreement is in the manner of a debt that the Appellant is alleging that the first Respondent owes to the company, which debt was guaranteed by the second Respondent.
23. For the above reasons the appeal succeeds.
24. Section 20 (2) of the Appeal Rules provides in part that:

.. the Judge shall consider the record and if necessary hear the respondent and may allow the appeal, in whole or in part, or vary the judgment and may make any order as to the merits or as to costs which the justice of the case requires.

25. Therefore, the matter is remitted to the Magistrates Court for filing of defence on the merits and hearing.

Signed, dated and delivered at Ile du Port on 16^th March 2022

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Pillay J