CR386 Termination of contract/ retrenchment claim

by with No Comment Case ReportsRetrenchmentTopics & Cases

CR386

Termination of contract/ retrenchment claim

Termination of long-standing contract/retrenchment benefit claim/consideration of form of employment.

The background of the matter is as follows:

1. Mr W was employed at a State Department as an independent contractor, through a consulting agency, from 1 April 2010 up to 30 March 2017, at which time his contract was not renewed.  In a letter dated 6 November 2017 from the agency, addressed to Mr W, the contract was not renewed due to budget cuts.

2. He had taken out a Salary Protection policy: Retrenchment and Injury cover only, commencing on 1 October 2012, and terminating on 30 September 2021. The cover was R75 000 per month, at a premium of R1 141, which had escalated at 6% per annum.

3. In the sales call Mr W stated that as he was a contractor, he needed to cover himself if he loses his income. The consultant did advise him later on that he does not provide advice, only information. During the call the consultant informed him on the retrenchment cover as set out below in paragraph 6.

4. The complainant advised that he submitted a retrenchment claim later in 2017 which was eventually declined on 6 December 2017. He provided some details to our office on the liaison with the bank and unfortunate circumstances endured from the termination of the contract up to the time that he submitted his complaint to our office.

5. Mr W was aggrieved due to the insurer‘s stance that the claim cannot succeed as he was not considered a permanent employee and a formal retrenchment process was not followed in the termination of his contract.

6. The policy under the heading “Retrenchment” states:

“About retrenchment

 * Bank will provide a monthly payout for a maximum of six months, provided that the following conditions are met:

• Your employer must have followed a formal retrenchment process.

• You cannot be self-employed or employed by any of your family members in any capacity whatsoever.

• The salary protection insurance must have been in force for at least six months before the retrenchment process started.”

*Full name of Bank not provided

7. The retrenchment claim was declined as (a) Mr W was not permanently employed (b) the employer did not follow a formal retrenchment process in the termination of his services and (c) his contract came to a natural end.

8. We asked the insurer to consider that a contract that is renewed over several years creates the expectation of contract renewal and points to permanent employment and that one could not hold the insured to the fact that the employer did not follow a formal or legitimate retrenchment process. In this case, Mr W had stated that there had in fact been several consultations between him and the agency (effectively his employer), before the contract was terminated. The insurer responded that the claim could not succeed because:

  • The agency confirmed Mr W was an independent contractor and not an employee.
  • His contract came to a natural end.
  • He was paid an hourly rate and there were no deductions for UIF or employee benefits.
  • The nature of the budget cuts at the State Department, where Mr W was contracted to, was not stipulated and adverse conditions had not been confirmed.
  • There was no indication of a retrenchment process being followed by the employer.
  • The minimum criteria had not been met and the claim cannot succeed.

9. Mr W responded by emphasizing:

  • He cannot be penalised if there is no information about the reasons for the budget cuts, but he can inform that when the agency loses an income from a client, there are budget cuts and he and two other contractors were affected.
  • His contract was renewed over 12 years at the agency until budget cuts affected him.
  • He paid PAYE.
  • The agency extended his contract for (only) another month which indicates there was a consultation process when the company experienced adverse conditions.
  • At a minimum, he worked 8 hours a day times the number of workdays per month.

10. This matter was submitted to the adjudicators’ meeting.

Meeting’s consideration and decision:

11. The meeting considered the policy requirements, as set out in paragraph 6 above. The criteria do not include the requirement for the insured to be “permanently employed” as suggested by the insurer. The meeting focused on the exclusion of “self-employed” persons. The question that arose was whether Mr W, in the circumstances and taking cognisance of “employee” definitions and the understanding of the factual employment relationship, could be considered an “employee”.  An “employee” enjoys retrenchment cover as opposed to a contractor that offers his services through his own enterprise.

12. Section 213 of the Labour Relations Act, 1995 (LRA) defines an employee as:

“(a) any person, excluding an independent contractor, who works for another person or for the state and who receives, or is entitled to receive, any remuneration, and (b) any other person who in any manner assists in carrying on or conducting the business of an employer, and ‘employed’ and ‘employment’ have meanings corresponding to that of employee.”

13. However, the above must be read with Section 200A of the LRA and section 83A of the Basic Conditions of Employment Act, 1997 (BCEA), which provide that until the until the contrary is proved, a person who works for, or renders services to, any other person, is presumed, regardless of the form of the contract (emphasis added), to be an employee if any one or more of the following factors are present:

“i)The manner in which the person works is subject to the control or direction of another person;

ii)the person’s hours of work are subject to the control or direction of another person;

iii)in the case of a person who works for an organisation, the person is a part of that organisation;

iv)the person has worked for that other person for an average of at least 40 hours per month over the last three months;   

v)the person is economically dependent on the other person for whom that person works or renders services;  

vi) the person is provided with tools of trade or work equipment by the other person;

vii) or the person only works for or renders services to one person.”

 14. It is evident from the above provisions that our labour legislation presumes that a person is an employee notwithstanding what a contract may be called or the form it takes. The law effectively looks at the substance of the relationship/agreement.

15. Mr W’s contract had rolled over for a period of 12 years with the agency and he worked for at least 40 hours per week. He did not provide his services to any other entity and was under the control and instruction of this company. The factual employer/employee relationship between him and the agency had brought him within the four corners of the definition of “employee”. The meeting was of the view that he ought to enjoy the protection the policy affords to an employee in terms of retrenchment.

16. The other criterion in the policy relates to the requirement that the employer must have followed a formal retrenchment process. We reiterated that it was not Mr W’s fault that his employer did not provide details of the consultations or the “budget cuts”.  From the information at our disposal, the logical conclusion is that his position became redundant when his employer could not pay his salary due to budget cuts and that these followed from adverse, structural, economic or operational factors, suffered by the employer, and this impact, affected future work for him. He is adamant that he and two other contractors had formal consultations with the employer prior to termination, in any event.

17. The format of “a formal retrenchment process” may not necessarily mean the legislative process or documented by the employer. It may take the shape of meetings with the employer where the termination is considered. It was our view, from the information provided to us, that Mr W was dismissed due to operational requirements after consultations with his employer, and notice provided to him that his contract would not be renewed.

18. After due consideration of the factual employment relationship and the reason for the termination of the contract, the meeting concluded that a recommendation be made to the insurer to consider admitting this claim for the retrenchment benefit.

Insurer’s response:

19. The insurer responded that it had noted the recommendation by this office and that it had concluded that it was willing to make an exception to its business rules and pay the retrenchment benefit. They asked for Mr W’s banking statements to prove unemployment.

 Conclusion:

20. Mr W was paid the retrenchment benefit as set out in the policy. The file was closed.

CR388 Retrenchment/ interpretation/ contra proferentum

by with No Comment Case ReportsInterpretationRetrenchmentTopics & Cases

CR388

Retrenchment/ interpretation/ contra proferentum

Policy excluding any retrenchment claim “where the retrenchment was announced within the first 6 months” – on the specific facts of this case, employer letter giving notice of proposed restructure and inviting consultation not an announcement of insured’s retrenchment – his actual retrenchment announced after expiry of the six month period

Background:

1. The complainant had retrenchment cover commencing on 1 January 2019.  On 31 July 2019 he lodged a claim.  He attached relevant supporting documentation: an email from his employer dated 4 June 2019 with the subject Notice of Restructure; a Notice of Invitation to Consult in terms of Section 189, also dated 4 June 2019, copies of the proposed new organisational structure and proposed timeline (indicating names of those employees who could be affected, including the complainant’s name); and a Notice of Termination letter dated 4 July 2019 addressed to the policyholder specifically, stating that after consultation in terms of Section 189 of the Labour Relations Act, his employment would terminate on 31 July 2019.

2. The insurer declined the claim, invoking a clause in the policy which stated:

“No retrenchment claim will be paid where the retrenchment was announced within the first six months of Retrenchment Protector cover commencing”.

The insurer was of the view that the retrenchment was announced by the employer on 4 June 2019, within the six month exclusion period.

3. The complainant was unhappy, stating that he was only officially retrenched on 4 July 2019 (outside the six month period), and that the documentation dated 4 June 2019 related to a general notice of restructure in terms of Section 189, the very nature of which in his view was to protect the employee, and to do everything possible to avoid retrenchment, before it would legally be permitted to announce any specific retrenchments.  He stated his view that the insurer’s “decision to decline my claim is based on an attempt to interpret the company’s implementation of the Section 189 legislation, as an intention to retrench me specifically, which is not the case”.

Discussion:

4. We examined the policy and the retrenchment documentation.  The scope of the cover was set out in the following clause:

“The Retrenchment Protector benefit covers the Life Insured for an initial period if they are formally retrenched from full-time employment in terms of a legal process in accordance with labour legislation.”

5. As mentioned above, the policy had an exclusion clause reading as follows: 

“No retrenchment claim will be paid where the retrenchment was announced within the first six months of Retrenchment Protector cover commencing”.

6. “The retrenchment” in this clause, referring to the insured event, must refer to the formal retrenchment of a policyholder from full-time employment in terms of a legal process in accordance with labour legislation. 

7. The complainant had received a letter dated 4 June 2019 addressed to “Dear Employee”, giving him formal notice of the company’s “proposal of a restructure that may result in possible redundancies of positions and subsequent retrenchments as a result thereof”.  He was “invited to participate in a joint consensus-seeking consultative process in terms of section 189 of the LRA” for consultation on possible alternatives, including avoiding of retrenchments, minimizing the number of retrenchments, and changing the timing of retrenchments, and for the method of selecting employees to be dismissed in the event of retrenchment.  He was told at the conclusion of the letter that “the company wishes to advise that no final decision has or will be taken on the final structure and/or any possible retrenchments until input of all affected parties has been considered”.

8. In our view this was clearly not an announcement to the complainant of his formal retrenchment from full-time employment in terms of a legal process in accordance with labour legislation.  It was a letter informing various employees of possible restructuring, with an invitation to consult.  It was an announcement of an intention to start a process of consultation related to possible retrenchments, not an announcement of “the retrenchment” as a fact, ie the definite occurrence of the insured event, either on that date or in the future.  On 4 June 2019 there was no certainty that the complainant (or anyone else) would be retrenched.

9. The complainant’s retrenchment was in fact announced by letter on 4 July 2019.  This letter was addressed to him specifically by name, it recorded that the parties had “meaningfully consulted” and it was announced that his retrenchment would proceed, with his employment terminating on 31 July 2019.  Details of payments due to him, his retrenchment package, etc were provided.  The date of the announcement of the policyholder’s retrenchment, 4 July 2019, fell outside the 6-month period after commencement of cover on 1 January 2019.

10. An exclusion clause must be interpreted restrictively.  In our view there was no justification for an interpretation that “where the interpretation was announced within the first six months” must refer to the announcement on 4 June 2019 of the employer’s intention to restructure and retrench.  

11. Even if such an interpretation were possible, there was another interpretation that could be attributed to these words, as we outlined.  The meaning would therefore be ambiguous.  In such a situation, the principle of contra proferentem must apply, that is, the provision must be interpreted against the drafter (the insurer), in whose power it lay to draft the provisions clearly, and in favour of the policyholder. 

Result:

12. We recommended that the insurer reconsider the matter. The insurer agreed to pay the claim.

CR381 Loss of income claim – Covid19 – is a TERS/UIF payment considered “income” in terms of the policy definition

by with No Comment Case ReportsCOVID 19/TERSRetrenchmentTopics & Cases

CR381

Loss of income claim – Covid19 – is a TERS/UIF payment considered “income” in terms of the policy definition

Background:

1. The policy commenced on 27 November 2017, after the National Credit Act (NCA) Regulations of August 2017 were promulgated.

2. The Policy stated:

If you become Unemployed or if you are Unable to Earn an Income during the period of insurance, other than as a result of Disability, we will pay all your obligations under the Credit Agreement that become due and payable:

  • For a period of 12 months from the date you became Unemployed or Unable to Earn an income;
  • During the Remaining Repayment Period; or
  • Until you become employed or are able to earn an income, whichever is the shorter period.

3. “Unable to Earn an Income” was defined as:

Unable or Inability to Earn an Income means you are incapable of earning an income from any occupation, work, job or business for any reason other than Disability.

4. Relying on the definition above as read with the NCA Regulations, the insurer contended that there had to have been a 100% loss of income for a claim to succeed.

5. For the months of April 2020 and May 2020, the complainant did not receive her monthly salary from her employer due to the Covid-19 pandemic. As a result, she received a benefit from the Temporary Employee/Employer Relief Scheme (TERS) for the months of April 2020 and May 2020.

6. The insurer argued that the benefit payments received from the TERS for the months of April 2020 and May 2020 constituted income earned and the complainant therefore did not suffer a 100% loss of income as required by the policy for her claim to succeed.  

Discussion:

7. The question that arose was whether the payments which the complainant received in terms of TERS for the months of April 2020 and May 2020 constituted income earned ‘from any occupation, work, job or business for any reason other than disability’.

8. The matter was discussed at an adjudicators’ meeting.

9. The meeting noted that the policy did not define “income” or “income earned”.  The meeting therefore considered the ordinary meaning of “income earned” and/or “earned income”.

10. The Collins English Dictionary defines “earned income” as “income derived from paid employment and comprising mainly wages and salaries”. 

11. The Cambridge Dictionary defines “earned income” as “money that a person or company receives for work they have done, including wages, tips, commissions, and bonuses, but not income from investments”. [Emphasis added]

12. The meeting also considered the TERS Directive issued on 26 March 2020 by the Minister of Employment and Labour, the amendments thereto, as well as legal opinions that had been obtained by the insurer and this office.

13. When one interprets parts of a document, those parts cannot be read in isolation. As Wallis JA said in Natal Joint Municipal Pension Fund v Endumeni Municipality [2012] 2 All SA 262 (SCA) at 271 and 273:

“The present state of the law can be expressed as follows.  Interpretation is the process of attributing meaning to the words used in a document, be it legislation, some other statutory instrument, or contract, having regard to the context provided by reading the particular provision or provisions in the light of the document as a whole and the circumstances attendant upon its coming into existence.  Whatever the nature of the document, consideration must be given to the language used in the light of the ordinary rules of grammar and syntax; the context in which the provision appears; the apparent purpose to which it is directed and the material known to those responsible for its production.  Where more than one meaning is possible each possibility must be weighed in the light of all these factors.  The process is objective not subjective.  A sensible meaning is to be preferred to one that leads to insensible or unbusinesslike results or undermines the apparent purpose of the document.  Judges must be alert to, and guard against, the temptation to substitute what they regard as reasonable, sensible or businesslike for the words actually used.  To do so in regard to a statute or statutory instrument is to cross the divide between interpretation and legislation.  In a contractual context it is to make a contract for the parties other than the one they in fact made.  The “inevitable point of departure is the language of the provision itself”,read in context and having regard to the purpose of the provision and the background to the preparation and production of the document.”

Interpretation of the TERS Directives:

14. The preamble of the TERS Directive issued on 26 March 2020 (hereinafter referred to as “the March TERS Directive”) states:

“During this period of lockdown, companies will have to shut down and employees laid off temporarily.  This means that employees are compelled to take leave, which is not out of choice.  We therefore anticipate that employees may lose income.  Employers are encouraged to continue to pay employees, but where this is not economically possible; we have created a special benefit under the Unemployment Insurance Fund as per the Directive Covid-19 Temporary Employee / Employer Relief Scheme.” [Emphasis added]

The purpose of the March TERS Directive is stated as:

“2.1.1   To make provision for the –

  • Payment of benefits to the Contributors who have lost income due to Covid-19 pandemic;
  • …
  • …
  • Establish the Temporary Employee / Employer Relief Scheme and set out the application process for benefits of the Covid-19 pandemic and to alleviate economic impact of Covid-19;

2.1.2    To make provision for online applications for benefits in order to avoid contact during the national disaster period.” [Emphasis added]

Clause 5 of the March TERS Directive states:

“5.        Application Procedure

            …

            5.3       An employee who is being paid by the employer during this

 period is not entitled to this benefit.” [Emphasis added]

The March TERS Directive does not refer to income earned but instead makes reference to a “benefit” or “benefits” or “special benefit”.

This was significant.

15. Clause 5.3 of the March TERS Directive was then amended by the TERS Directive issued on 11 August 2020 (hereinafter referred to as “the August TERS Directive”) as follows:

“5.3      Subject to the amount of the benefit contemplated in clause 3.5, an employee may only receive Covid-19 benefits in terms of the Directive if the total of the benefit together with any remuneration paid by the employer for work performed by the employee in any period is not more than the remuneration that the employee would ordinarily have received for working during that period.” [Emphasis added]

The August TERS Directive also did not refer to income earned but instead made reference to a “benefit” and “remuneration”.

Significantly, the August TERS Directive distinguished between the TERS benefit and remuneration paid by the employer to the employee by defining “remuneration” to mean:

“ “remuneration” bears the same meaning as the definition of the term in the Basic Conditions of Employment Act, 1997 (Act No. 75 of 1997) read with section 35(5) of that Act and the Schedule to Government Notice 69, GG 24889 of 23 May 2003”

Therefore, the definition of “remuneration” in the August TERS Directive meant, as per the Basic Conditions of Employment Act, 1997 (Act No. 75 of 1997):

“… any payment in money or in kind, or both in money and in kind, made or owing to any person in return for that person working for any other person…” [Emphasis added]

It followed that the August TERS Directive construed the TERS ‘benefit’ separately from the employee’s ‘remuneration paid by the employer for work performed by the employee’.

SARS treatment of TERS:

16. Unlike income earned, TERS benefits are exempt from tax as directed by the South African Receiver of Revenue (SARS), in its memorandum to employers dated 11 September 2020 wherein it was stated:

Income code 3724: Employees must use this code to declare any payments received by their employees from a COVID-19 Disaster Relief Organisation. These payments do NOT include payments received from the Unemployment Insurance Fund (UIF) Temporary Employees Relief Scheme (TERS).

Payment from the UIF TERS are exempt from tax and must not be reflected on the IRP5/IT3(a) certificate issue by employers to their employees.

Sources of funds for TERS payments:

17. The source of funds for the TERS benefit is the National Disaster Benefit Fund and not the employer.  If an employer cannot pay his employees due to the pandemic, it makes application to the National Disaster Benefit via the UIF. The employer is merely a conduit for payment of the TERS benefit.  The payment of TERS by the employer, does not convert the TERS benefit, payable via the UIF, to income paid by the employer for services rendered.

Conclusion:

18. In summary:

  • the TERS benefit is a benefit created by statute and not income earned from any occupation, work, job or business and/or remuneration paid to an employee for services rendered;
  • the source of funds for the TERS benefit is the National Disaster Benefit Fund;
  • the source of funds for the TERS benefit is not the employer in terms of a contract of employment;
  • TERS is a benefit paid via the UIF from the funds of the National Disaster Benefit Fund, not from the employer’s coffers;
  • the employer’s role with regards to TERS is, at best, that of a payment agent;
  • the ordinary meaning of “earned income” and/or “income earned” in the context of income earned for services rendered / work done, cannot mean passive income from TERS.

19. In light of the above, the meeting agreed that the TERS benefit did not constitute income earned and therefore could not be considered in the assessment of the complainant’s claim.

20. The meeting was also of the unanimous view that the conclusion reached above was in accordance with the principles of fairness and equity as applied by the office.

Result:

21. The insurer accepted our view and paid the loss of income claim.

CR353 Credit insurance / Retrenchment / Equity

by with No Comment Case ReportsCredit InsuranceRetrenchmentTopics & Cases

CR353
Credit insurance / Retrenchment / Equity

Credit insurance – claim under credit life policy for retrenchment benefit – insurer repudiating on grounds that termination for misconduct excluded – reason appeared to be incapacity rather than misconduct – whether termination in these circumstances amounted to retrenchment – equity

Background

1. The complainant took out a credit protection policy in July 2011. She worked as a systems manager at an analytical laboratory from December 2007 until her employment was terminated with effect from 31 March 2013. The insurer rejected her claim for a retrenchment benefit, stating that the employer documentation showed she had been “dismissed due to non-performance”.

2. The employer termination letter addressed to the complainant was headed “Incapacity Consultation”. It stated that the employer had met with her on several occasions to discuss her responsibilities and performance. It had been explained to her that “with the implementation of the quality systems we are of the opinion that you will not be able to cope with everything”. The employer stated that it had tried to explore the possibility of transferring her to another business unit within the group but had not been successful; it therefore “had no choice but to terminate your service as a result of incapacity in your current position”. She was told that she would receive 2 weeks’ pay for each completed year of service, and that her CV would be kept on file in case a suitable vacancy came around.

3. The complainant’s final payslip included a lump sum stated as being for “Retrenchment”, and her retirement fund withdrawal notification had the box ticked for “Retrenchment” as the reason for withdrawal.

4. The insurer’s repudiation letter quoted a policy exclusion to the effect that no retrenchment benefit would be paid where “Resignation, normal or early retirement, voluntary retrenchment or dismissal by reason of the Life Insured’s misconduct applies”. The letter then simply stated that as she was dismissed due to non-performance, no claim was payable.

5. In responding to our office the insurer expanded its reasoning. It quoted the policy wording stating that a retrenchment benefit (minimum monthly instalment of the finance agreement for a maximum of three months) would be payable “In the event of the Life Insured suffering loss of employment resulting from the implementation of a staff reduction program by his employer prior to his 69th birthday”. There is no further definition of “retrenchment” anywhere in the policy. The insurer stated: “We submit that the customer did not suffer a loss of employment from the implementation of a staff reduction program but rather that her contract was terminated due to non-performance”.

Discussion

6. We wrote to the insurer arguing that the dismissal was for incapacity, which does not amount to misconduct and there is “no fault”. We suggested that the ultimate reason for the complainant’s incapacity dismissal was the operational requirements of the employer, as they could no longer afford to retain her.
7. The insurer accepted that the termination was “no fault” and not misconduct, but replied that it did not believe the complainant was retrenched, as her loss of employment was not as a result of the implementation of a staff reduction programme. It argued: “The complainant could not fulfil her duties and she was dismissed and the company would employ another to fulfil those duties. The complainant’s service was terminated based on incapacity. Retrenchment is seen as the forced lay-off of employees by a company, usually to cut down its payroll. It is something akin to downsizing. In this case the company was not downsizing or cutting down on their payroll”.

8. The matter was discussed at an adjudicators’ meeting. The meeting took into consideration the fact that there was no definition of retrenchment in the policy beyond “loss of employment resulting from the implementation of a staff reduction program by his employer”. We did not know for certain whether the company would employ another person to fulfil the complainant’s duties, or whether these duties would be subsumed under those of existing employees. It was accepted, however, that the probabilities were that subsequent to the reduction of staff occasioned by the complainant’s dismissal, someone else may well have been employed in her place.

9. The meeting then considered the matter from the point of view of equity, as the office’s Rules enjoin us to do. The meeting took into account the fact that this was a no fault dismissal which took place nearly two years after the policy was taken out; that part of the reason for the dismissal was a change in operations (the implementation of quality systems with which the complainant was not able to cope); that she received a retrenchment-type package from her employer, labelled “retrenchment” on her payslip; that her withdrawal from the provident fund was classified as being for the reason “Retrenchment”; and that the termination of her employment was an unforeseen event, not within her control.

10. The view of the meeting was that in light of these considerations, the claim should be paid, on grounds of equity.

Result

11. A provisional ruling was made to this effect. The insurer agreed to pay the claim.
SM
September 2014

CR354 Credit insurance / Retrenchment

by with No Comment Case ReportsCredit InsuranceRetrenchmentTopics & Cases

CR354
Credit insurance / Retrenchment

Credit insurance – complainant dismissed from employment for alleged misconduct – insurer’s liability excluded in case of “fair dismissal” – complainant proving his dismissal was unfair – exclusion only came into play if policyholder retrenched, or lost income while self-employed or engaged in protected strike

Background

1. The complainant was dismissed from his employment on disciplinary grounds, and was without work for four months. He appealed internally against his dismissal, and the outcome of the appeal was that his dismissal was held to be unfair. He was reinstated in his job.

2. The complainant lodged a claim in terms of his credit protection policy, which covered a loan he had taken. The claim was turned down. The insurer told the complainant that he was not entitled to claim because he had not been retrenched, and had been reinstated.

3. The complainant referred to an extract from the contract which read: “No amount shall be payable in respect of unemployment occurring due to your resignation, retirement or the acceptance of a voluntary retrenchment, the expiry of a non-renewable fixed term contract or a contract of temporary or casual nature; any form of retirement or fair dismissal of your contract of employment.” The complainant stated: “It was therefore clear to me that should I prove my dismissal was unfair, then the insurer would be obliged to honour my claim… Now that I have proved that I had been unfairly dismissed, the insurer ducks the bullet and refuses to accept liability”. He maintained that he had suffered hardship, being without income for four months.

Discussion

1. The complainant’s policy provided a benefit to a policyholder on the happening of three, and three only, defined situations when employment or income was lost, other than for health reasons. These three situations or events were “Retrenchment”, “Loss of Income when Self-employed” and “In the event of a Protected Strike”. To qualify for a benefit the complainant’s situation would have to fall within the definitions of one of these defined insured events.

2. It was clear from the content of the appeal hearing documents that the circumstances of the termination of his employment did not constitute retrenchment as defined (it was a disciplinary matter). His involuntary unemployment was not “as a direct result of new technology being introduced by your employer, re-organisation by your employer or expectation of adverse conditions by your employer and resulting in staff reductions” (the definition of retrenchment in the policy). He himself stated that “it is common cause that I was not retrenched”. He was also not self-employed when he lost income, or involved in a strike. He therefore did not qualify for any of the benefits payable on the occurrence of the defined insured events.

3. The policy lists certain “Exclusions applicable to strike, retrenchment and/or loss of income when self-employed”. If any of these events had in fact occurred, liability would nevertheless be excluded , “in respect of unemployment occurring due to your resignation or the acceptance of voluntary retrenchment; the expiry of a non-renewable fixed term contract or a contract of temporary of casual nature; any form of retirement or fair dismissal in terms of your contract of employment”. In other words, if the insured person’s retrenchment, loss of income when self-employed or in the event of a strike also falls under any of these excluded situations, no benefit is payable. It is necessary in the first instance, however, that the reason for the loss of employment must be one of the three defined insured events, before the exclusion can come into play.

4. Loss of employment for alleged misconduct is not an insured event covered by this policy, and therefore the complainant could not receive any benefit for loss of employment for this reason, whether the termination of his employment was fair or unfair, or whether he was reinstated or not.

5. The exclusion in the case of “fair dismissal in terms of your contract of employment” meant, for example, that if the contract of employment precluded strike, it might be a fair dismissal to terminate an employee who had gone on strike, and the insurer’s liability would be excluded.

6. We made a provisional ruling against the complainant, setting out the above reasoning.

Result

7. The complainant accepted our provisional ruling.

SM
September 2014

CR344 Retrenchment Retrenchment claim – insurer’s liability excluded if life insured

by with No Comment Case ReportsRetrenchmentTopics & Cases

CR344
Retrenchment

Retrenchment claim – insurer’s liability excluded if life insured “self-employed or employed in a family-owned business” – complainant retrenched from employment in a business run by a family trust – whether exclusion applicable

Background

1. The complainant had a credit card balance protection policy. He was employed as a farm manager by a family trust (which had the same name as the complainant’s surname). He was retrenched with effect from 18 March 2011, and submitted a retrenchment claim, including a letter of retrenchment signed by a trustee of the family trust.

2. The insurer repudiated the claim on the grounds that according to the policy the insurer is not liable to pay a retrenchment claim “if the life assured is self-employed or employed within a family-owned business”.

3. The complainant lodged a complaint with our office, maintaining that the family trust was a separate legal entity and that the business was not owned by his family but by the trust. He stated that the trust always kept family members’ interests separate from the trust’s interests by recording resolutions passed at meetings and by the general handling of trust matters separately from family matters.

Discussion

4. We suggested that the insurer obtain a copy of the trust deed from the Master’s office. This was done, and it emerged that the complainant was the founder of the trust, a trustee and a beneficiary. In terms of the trust deed the complainant had during his lifetime the sole right to nominate trustees of his choice for the trust.

5. The matter was discussed at an adjudicators meeting. The following further points were noted:

• The trust ran a business with the object of making a profit in order to benefit the trust beneficiaries.

• In law, a trust is not a separate legal person; a trust itself is unable to perform juristic acts, and these are performed on behalf of the trust by the trustees.

• In the case of the complainant’s family trust there was no true segregation between him as a family member and the affairs of the trust. The family, of which he was a member, was in full control of the trust business.

• As a trustee of the trust the complainant had full control over the insured event ie the retrenchment on which his claim was based.

• In the particular circumstances of the case the family trust had to be interpreted as being a “family-owned business” for the purposes of that term in the policy.

Result

6. A provisional ruling was made, setting out the above and concluding that the exclusion was therefore applicable, and that the insurer was not liable to pay the retrenchment benefit.

7. The complainant reluctantly accepted the provisional ruling.

SM
February 2013

CR344
Credit insurance

Retrenchment claim – insurer’s liability excluded if life insured “self-employed or employed in a family-owned business” – complainant retrenched from employment in a business run by a family trust – whether exclusion applicable

Background

1. The complainant had a credit card balance protection policy. He was employed as a farm manager by a family trust (which had the same name as the complainant’s surname). He was retrenched with effect from 18 March 2011, and submitted a retrenchment claim, including a letter of retrenchment signed by a trustee of the family trust.

2. The insurer repudiated the claim on the grounds that according to the policy the insurer is not liable to pay a retrenchment claim “if the life assured is self-employed or employed within a family-owned business”.

3. The complainant lodged a complaint with our office, maintaining that the family trust was a separate legal entity and that the business was not owned by his family but by the trust. He stated that the trust always kept family members’ interests separate from the trust’s interests by recording resolutions passed at meetings and by the general handling of trust matters separately from family matters.

Discussion

4. We suggested that the insurer obtain a copy of the trust deed from the Master’s office. This was done, and it emerged that the complainant was the founder of the trust, a trustee and a beneficiary. In terms of the trust deed the complainant had during his lifetime the sole right to nominate trustees of his choice for the trust.

5. The matter was discussed at an adjudicators meeting. The following further points were noted:

• The trust ran a business with the object of making a profit in order to benefit the trust beneficiaries.

• In law, a trust is not a separate legal person; a trust itself is unable to perform juristic acts, and these are performed on behalf of the trust by the trustees.

• In the case of the complainant’s family trust there was no true segregation between him as a family member and the affairs of the trust. The family, of which he was a member, was in full control of the trust business.

• As a trustee of the trust the complainant had full control over the insured event ie the retrenchment on which his claim was based.

• In the particular circumstances of the case the family trust had to be interpreted as being a “family-owned business” for the purposes of that term in the policy.

Result

6. A provisional ruling was made, setting out the above and concluding that the exclusion was therefore applicable, and that the insurer was not liable to pay the retrenchment benefit.

7. The complainant reluctantly accepted the provisional ruling.

SM
February 2013

CR350 Credit insurance / Retrenchment Credit insurance

by with No Comment Case ReportsCredit InsuranceRetrenchmentTopics & Cases

CR350
Credit insurance / Retrenchment

Credit insurance – claim under credit life policy for retrenchment benefit – insurer repudiating on grounds of exclusion for voluntary retrenchment – dispute of fact as to whether retrenchment was voluntary – insurer eventually accepting complainant’s version

Background

1. The complainant claimed against his credit protection policy when his employment was terminated. The insurer repudiated the claim, citing a policy exclusion of liability if “the life assured…accepts voluntary redundancy”.

2. The insurer stated that it had telephoned the employer’s Human Resources manager and director, who confirmed that the complainant had opted for voluntary retrenchment. There was also a settlement agreement signed by the parties, stating that “the Employee and the Company have mutually agreed to terminate the employment relationship” on the basis of certain terms of separation. One of the terms of the agreement was that the employee undertook “not to institute any claim, in whatever forum, against the employer regarding the voluntary termination of services”.

3. However, the manager had given the complainant a letter when he left his employment, setting out the dates of his employment and position, and then stating: “This further serves to confirm that Mr X’s service has been terminated due to the Operational Requirements of the Business”.

Discussion

4. We asked the insurer to provide a recording of the telephone conversation between it and the employer. We pointed out that the settlement agreement did not, in our view, constitute proof of the life assured having accepted voluntary redundancy. One would need to know whether he had volunteered to be made redundant, as part of a voluntary severance programme offered by the employer. There was no evidence of this in the employer’s letter indicating that his employment had been terminated “due to Operational Requirements of the Business”. We suggested that it might be that the employer had required employees to sign a settlement agreement to forestall any allegation of alleged unfair dismissal or unfair labour practice.

5. The insurer sent us the recording. On it, the employer explains that the key reason for the retrenchment process it had engaged in was operational reasons, but that as a strategy “to mitigate the risks of retrenchment” it had offered its employees “the option to go for a voluntary retrenchment, which was more attractive than the forced one”. He stated: “The criteria we were going to use was LIFO [Last In First Out], and they exactly knew who they were, so it made sense for them to say give it to me voluntarily… it saves a whole lot of time and you have to move on”.

6. We sent the recording to the complainant for his comment. His response is worth quoting in full:

“After listening to the tape …I find [the employer] economical with the truth. What I know happened is that we had a consultation at the end of October last year with [the employer], he then told me and my other former colleague that the company has decided to do away with sales consultants in Gauteng. He told us that to make it easier for us they will give us a week extra pay more than what the law allows.

I did ask him if I can be placed in other position inside the company, his response was that it’s impossible as the company is restructuring itself. We can either agree on this offer or if we don’t agree the company will get rid of us anyway. He told me that he needs a response by the following day so that he can report back to the directors.

On the set day he said I need not worry because he will write me a retrenchment letter and we will still get our UIF so as to help us financially. I did mention to him that I cannot take that decision as I have young family to look after and have a home loan and other financial commitments to fulfil. His response was that the company is trying to meet me halfway that is why they offering an extra week. He also said once I sign the letter he will speak to his bosses to allow us to be in their books until end of November 2011 so that we can have that extra month pay, which is what happened. I tried to delay the process of signing that letter, but was told that I’m not allowed to see company customers anymore the company will help me with its resources to look for another employment.

I’m really disappointed that he can say what he is saying on the tape and contradict what he told me and wrote on the letter. I’m also amazed by [the insurer] that they can take what he is saying verbally being a truth than what he wrote on the letter with company stamp and letterhead.”

Result

7. We asked the insurer to reconsider the case in the light of the complainant’s submission. The insurer did so, and advised us that it had decided to admit the claim. It appears that it was prepared to give the complainant the benefit of the doubt with regard to the dispute of facts and the contradictory documentation.

SM
September 2014

CR332 Credit insurance Credit insurance – claim under credit life policy for retrenchment benefit

by with No Comment Case ReportsCredit InsuranceRetrenchmentTopics & Cases

CR332
Credit insurance

Credit insurance – claim under credit life policy for retrenchment benefit – exclusion if insured not in full time employment for 6 months before notification date of retrenchment – not applicable on the facts of this case

Background

1. The complainant had an account protection plan policy, commencing on 23 September 2008, covering the outstanding balance on her department store account in the event of her death, disability or retrenchment. She had commenced employment with an accounting firm on 1 August 2011. On 12 December 2011 she received notification from her employer that she would be retrenched, with her last day of service to be 31 January 2012. In February she informed the store thereof. The store lodged a claim on her behalf, but it was repudiated.

2. In its response to our office the insurer defended its repudiation, citing the following exclusion clause in the policy:
“No benefit shall furthermore be payable for retrenchment claims if any of the following apply:
…
The insured has not been in full time employment for the 6 (six) months immediately before the notification date of retrenchment”.

3. The insurer stated that the complainant had only worked for 5 months when she was notified of her retrenchment.

Discussion

4. We wrote to the complainant, noting that she had commenced employment with the accounting firm on 1 August 2011, and asking her whether she had been in full time employment with any other employer in June and July 2011.

5. The complainant replied that she had indeed been employed full time in the accounting department of another company prior to starting her job with the accounting firm in August 2011, and she provided payslips for June and July 2011 as proof.

6. We put it to the insurer that the evidence showed that the complainant had been in full time employment for the six months immediately prior to the notification date of retrenchment. The policy did not require that the insured be in full time employment for six months with the same employer.

Result

7. The insurer accepted this, and paid the claim in the amount of R5156.48, being the outstanding balance on the store card on the date of notification of retrenchment.

SM
February 2013

CR332
Retrenchment

Credit insurance – claim under credit life policy for retrenchment benefit – exclusion if insured not in full time employment for 6 months before notification date of retrenchment – not applicable on the facts of this case

Background

1. The complainant had an account protection plan policy, commencing on 23 September 2008, covering the outstanding balance on her department store account in the event of her death, disability or retrenchment. She had commenced employment with an accounting firm on 1 August 2011. On 12 December 2011 she received notification from her employer that she would be retrenched, with her last day of service to be 31 January 2012. In February she informed the store thereof. The store lodged a claim on her behalf, but it was repudiated.

2. In its response to our office the insurer defended its repudiation, citing the following exclusion clause in the policy:
“No benefit shall furthermore be payable for retrenchment claims if any of the following apply:
…
The insured has not been in full time employment for the 6 (six) months immediately before the notification date of retrenchment”.

3. The insurer stated that the complainant had only worked for 5 months when she was notified of her retrenchment.

Discussion

4. We wrote to the complainant, noting that she had commenced employment with the accounting firm on 1 August 2011, and asking her whether she had been in full time employment with any other employer in June and July 2011.

5. The complainant replied that she had indeed been employed full time in the accounting department of another company prior to starting her job with the accounting firm in August 2011, and she provided payslips for June and July 2011 as proof.

6. We put it to the insurer that the evidence showed that the complainant had been in full time employment for the six months immediately prior to the notification date of retrenchment. The policy did not require that the insured be in full time employment for six months with the same employer.

Result

7. The insurer accepted this, and paid the claim in the amount of R5156.48, being the outstanding balance on the store card on the date of notification of retrenchment.

SM
February 2013

CR330 Credit insurance – claim under credit life policy for retrenchment benefit

by with No Comment Anti-SelectionCase ReportsCredit InsuranceRetrenchmentTopics & Cases

CR330
Credit insurance

Credit insurance – claim under credit life policy for retrenchment benefit – expiry of a renewable contract not grounds for excluding liability

Background

1. The complainant had a “credit card debt protection” policy affording him life, disability and retrenchment cover in respect of his credit card agreement.

2. The complainant was employed under a year-long fixed term contract, which was annually renewed, for four and a half years, commencing on 27 September 2007.

3. On 12 March 2012 the employer gave the complainant a letter, advising him that his fixed term contract was due to end on 31 March 2012, and that the renewal of the contract for the next year would depend on the availability of work from its client. The employer also provided a letter dated 12 June 2012 indicating that his employment had ended on 31 March 2012, ie the contract was not renewed.

4. The complainant thus found himself unemployed and lodged a claim under his policy for a retrenchment benefit.

5. “Retrenchment” was defined in the policy as follows:

“Your forced retrenchment from employment, in terms of the Labour Relations Act, without income from any source as a direct result of:
• New technology being introduced by your employer; or
• Reorganisation by your employer; or
• Expectation of adverse conditions by your employer, which results in staff reductions”.

6. The insurer repudiated the claim on the grounds that non-renewal of a fixed term employment agreement does not constitute a retrenchment in terms of South African law.

7. The insurer apparently relied on an exclusion in the policy which read as follows:

“Exclusions applicable to retrenchment

We will not pay any amount:
…

If your employment ended due to your resignation or if you accepted voluntary retrenchment, if a non-renewable fixed-term contract or a contract of a temporary or casual nature is not renewed, any form of retirement or fair dismissal under your contract of employment”. [Our emphasis]

Discussion

8. We pointed out to the insurer that the complainant’s contract was renewable, the renewal depending on the availability of work from the employer’s clients (according to a letter from the employer). The employer’s letter also confirmed that the complainant’s contract was renewed annually. The complainant had been in employment with the same employer on a full-time basis for four and a half years, and this could not be seen as “a non-renewable fixed-term contract or a contract of a temporary or casual nature”.

9. We pointed out further that the fact that the contract was renewable would remove the possibility of anti-selection that would exist with a non-renewable fixed term contract, where the date of termination of employment would be known in advance.

10. The insurer responded, arguing as follows:

● that when the employer gave notice (in its letter of 12 March 2012) that the renewal of the contract term ending on 31 March 2012 depended on the availability of work from its clients, and that it would keep employees employed as long as it had work available, it changed the nature of the employment agreement from a fixed term contract to a temporary agreement;

● that the employment agreement had been a non-renewable fixed term agreement, and that all contract workers were made aware that they would only have employment with the company as long as the company had work from its client. The insurer argued that “the termination date of the contract was in fact known every year, for a year in advance, upon renewal thereof, and only changed when the employer gave the employee notice of the renewal of the agreement”;

● that the employer’s failure to follow the correct retrenchment procedures as stipulated in Section 189 of the Labour Relations Act constituted an unfair dismissal, and not a retrenchment. The complainant should thus approach the CCMA, bargaining council or Labour Court for relief.

11. The matter was discussed at an adjudicators meeting. It was decided that a provisional ruling should be issued, after dealing with the above arguments as follows:

● that it may be so that the employment agreement changed from a fixed term contract to a temporary agreement, but such a temporary agreement would operate from 1 April 2012, the day after the fixed term agreement ended on 31 March 2012. In fact no temporary agreement came into being, since the complainant did not work again after 31 March 2012. This was not relevant to the fact that the complainant lost his employment when a renewable contract was not renewed.

● that in our view the complainant had a reasonable expectation that his contract would be renewed again, since it had been renewed several times between 2008 and 2012. We cited John Grogan in Workplace Law (7th edition), addressing an aspect of the legitimacy of an employee’s expectation as follows:

“Whether the employer can quash the employee’s claim to a reasonable expectation simply by specifying the termination date each time the contract is entered into is a moot question. The weight to be attached to such advance notice probably diminishes in proportion to the number of successive contracts the parties have concluded”.

● that a retrenchment is in fact a form of dismissal ie it is a dismissal for operational requirements. Section 186(b) of the Labour Relations Act expressly provides that the non-renewal of a fixed-term contract constitutes a dismissal if the employee reasonably expected the employer to renew the contract but the employer did not do so. That in our view was what had happened in this case.

12. We pointed out in the provisional determination that the complainant had lost his job as a direct result of reorganisation by his employer, alternatively the expectation of adverse conditions by his employer, which resulted in staff reductions. The form this took in the complainant’s case was the non-renewal of a renewable fixed-term contract. In our view a policyholder could not be penalised by the insurer if his employer did not follow the legislated retrenchment procedures in retrenching him.

13. We reiterated that the fact that the complainant’s contract was renewable, and was renewed several times, would remove the possibility of anti-selection that would exist with a non-renewable fixed term contract, where the date of termination of employment would be known in advance.

14. Our provisional ruling was therefore to the effect that the insurer was liable under the policy to pay the retrenchment benefit to the complainant.

Result

15. The insurer accepted the provisional determination and paid the claim.

SM
May 2013

CR330
Retrenchment

Credit insurance – claim under credit life policy for retrenchment benefit – expiry of a renewable contract not grounds for excluding liability

Background

1. The complainant had a “credit card debt protection” policy affording him life, disability and retrenchment cover in respect of his credit card agreement.

2. The complainant was employed under a year-long fixed term contract, which was annually renewed, for four and a half years, commencing on 27 September 2007.

3. On 12 March 2012 the employer gave the complainant a letter, advising him that his fixed term contract was due to end on 31 March 2012, and that the renewal of the contract for the next year would depend on the availability of work from its client. The employer also provided a letter dated 12 June 2012 indicating that his employment had ended on 31 March 2012, ie the contract was not renewed.

4. The complainant thus found himself unemployed and lodged a claim under his policy for a retrenchment benefit.

5. “Retrenchment” was defined in the policy as follows:

“Your forced retrenchment from employment, in terms of the Labour Relations Act, without income from any source as a direct result of:
• New technology being introduced by your employer; or
• Reorganisation by your employer; or
• Expectation of adverse conditions by your employer, which results in staff reductions”.

6. The insurer repudiated the claim on the grounds that non-renewal of a fixed term employment agreement does not constitute a retrenchment in terms of South African law.

7. The insurer apparently relied on an exclusion in the policy which read as follows:

“Exclusions applicable to retrenchment

We will not pay any amount:
…

If your employment ended due to your resignation or if you accepted voluntary retrenchment, if a non-renewable fixed-term contract or a contract of a temporary or casual nature is not renewed, any form of retirement or fair dismissal under your contract of employment”. [Our emphasis]

Discussion

8. We pointed out to the insurer that the complainant’s contract was renewable, the renewal depending on the availability of work from the employer’s clients (according to a letter from the employer). The employer’s letter also confirmed that the complainant’s contract was renewed annually. The complainant had been in employment with the same employer on a full-time basis for four and a half years, and this could not be seen as “a non-renewable fixed-term contract or a contract of a temporary or casual nature”.

9. We pointed out further that the fact that the contract was renewable would remove the possibility of anti-selection that would exist with a non-renewable fixed term contract, where the date of termination of employment would be known in advance.

10. The insurer responded, arguing as follows:

● that when the employer gave notice (in its letter of 12 March 2012) that the renewal of the contract term ending on 31 March 2012 depended on the availability of work from its clients, and that it would keep employees employed as long as it had work available, it changed the nature of the employment agreement from a fixed term contract to a temporary agreement;

● that the employment agreement had been a non-renewable fixed term agreement, and that all contract workers were made aware that they would only have employment with the company as long as the company had work from its client. The insurer argued that “the termination date of the contract was in fact known every year, for a year in advance, upon renewal thereof, and only changed when the employer gave the employee notice of the renewal of the agreement”;

● that the employer’s failure to follow the correct retrenchment procedures as stipulated in Section 189 of the Labour Relations Act constituted an unfair dismissal, and not a retrenchment. The complainant should thus approach the CCMA, bargaining council or Labour Court for relief.

11. The matter was discussed at an adjudicators meeting. It was decided that a provisional ruling should be issued, after dealing with the above arguments as follows:

● that it may be so that the employment agreement changed from a fixed term contract to a temporary agreement, but such a temporary agreement would operate from 1 April 2012, the day after the fixed term agreement ended on 31 March 2012. In fact no temporary agreement came into being, since the complainant did not work again after 31 March 2012. This was not relevant to the fact that the complainant lost his employment when a renewable contract was not renewed.

● that in our view the complainant had a reasonable expectation that his contract would be renewed again, since it had been renewed several times between 2008 and 2012. We cited John Grogan in Workplace Law (7th edition), addressing an aspect of the legitimacy of an employee’s expectation as follows:

“Whether the employer can quash the employee’s claim to a reasonable expectation simply by specifying the termination date each time the contract is entered into is a moot question. The weight to be attached to such advance notice probably diminishes in proportion to the number of successive contracts the parties have concluded”.

● that a retrenchment is in fact a form of dismissal ie it is a dismissal for operational requirements. Section 186(b) of the Labour Relations Act expressly provides that the non-renewal of a fixed-term contract constitutes a dismissal if the employee reasonably expected the employer to renew the contract but the employer did not do so. That in our view was what had happened in this case.

12. We pointed out in the provisional determination that the complainant had lost his job as a direct result of reorganisation by his employer, alternatively the expectation of adverse conditions by his employer, which resulted in staff reductions. The form this took in the complainant’s case was the non-renewal of a renewable fixed-term contract. In our view a policyholder could not be penalised by the insurer if his employer did not follow the legislated retrenchment procedures in retrenching him.

13. We reiterated that the fact that the complainant’s contract was renewable, and was renewed several times, would remove the possibility of anti-selection that would exist with a non-renewable fixed term contract, where the date of termination of employment would be known in advance.

14. Our provisional ruling was therefore to the effect that the insurer was liable under the policy to pay the retrenchment benefit to the complainant.

Result

15. The insurer accepted the provisional determination and paid the claim.

SM
May 2013

CR323 Credit Insurance Retrenchment benefit – extent of cover.

by with No Comment Case ReportsCredit InsuranceRetrenchmentTopics & Cases

CR323

Credit Insurance

Retrenchment benefit – extent of cover.

The complaint concerned the extent of the retrenchment benefit payable in terms of a credit life policy. When taking out the policy the complainant had been under the impression that in the event of her retrenchment the balance owing on her vehicle would be settled.

The relevant clause in the policy read, however, as follows:

“In the event of your loss of employment as a result of retrenchment, (the insurer) will permit an advance against your policy in order to cover any additional interest which may become due by you in respect of each instalment deferred, excluding that of the first instalment. This benefit will cease upon your re-employment or after 6 (six) monthly benefits have been granted in terms of this policy, whichever occurs first.”

In terms of this provision retrenchment would therefore only result in an advance against the policy, for a period of six months, to cover the additional interest accruing in respect of each instalment deferred. It did not provide for the settlement of the outstanding balance as the complainant assumed.

This sort of retrenchment benefit, covering as it does only the interest concerned, is rather unusual, and would therefore require that policyholders are suitably warned at sales stage of its limitation. The office therefore focused on this question.

Whilst at the point of sale the telesales consultant had failed to explain the nature of the retrenchment benefit to the complainant, the insurer had subsequently sent the complainant a letter wherein it stated:

“Just as important, if you were retrenched we would defer your instalments for up to six months by the same period and pay the extra interest incurred. This whilst you are looking for employment.”

On the basis of the above letter the office was satisfied that the insurer had adequately explained the nature of the retrenchment benefit to the complainant, and that any prejudice suffered by her was the result of her own failure to read the insurer’s letter or the policy, which would have resulted in her properly understanding the extent of the cover.

LS
January 2012