Agric Bank ex-employees lose appeal

RELEBOHILE TSOAMOTSE

MASERU – Former employees of the now defunct Lesotho Agricultural Bank will get no penny from government after the Court of Appeal ruled government does not owe them a cent. The Appeal court has also set aside the October 2020 High Court judgment that ordered government to pay the ex-employees their terminal benefits.  They had approached the High Court sometime in 2019 requesting a declaratory that they had a legitimate expectation that government would pay all their terminal benefits and pension benefits.

They had also asked the court to review, correct and set aside the decision by government not to pay both their terminal and pension benefits and declaring the non-payment as unfair and abuse of power. Further, they asked the court to direct government to facilitate payment of all they alleged was owed to them. High Court judge, Justice Moroke Mokhesi, partly ruled in their favour when he delivered the judgement on October 15, 2020. He declared the government’s decision not to pay the ex-employees’ terminal benefits as an abuse of power and violation of their legitimate expectation.

The judge went ahead to order government to pay their terminal benefits but declined to order payment of pension benefits. Justice Mokhesi also ordered that interest be paid at the rate of 5 percent from December 2016. Their victory was short-lived as the Apex Court on May 14 cancelled the High Court judgment. The Appeal Court says no case has been made out for a substantive legitimate expectation that government would pay the benefits in the wake of its winding.

Acting Judge of the Appeal Court Petrus Damaseb, who wrote the judgement, says it would be irrational for government to assume liability or debt owed either by the Lesotho Agricultural Development Bank (LADB) or the pension fund which he maintains are separate from government. The employees had relied on former Finance Minister, Leketekete Ketso’s statements that employee terminal benefits and pension rights would be honored.

“The government wishes to make it clear that despite the financial condition of the bank, the government undertakes to ensure that all employee salary leave termination and pension rights will be honoured,” Ketso had written. Also “in recent months, the government has endeavoured to find a purchaser of the LADB. However this has been unsuccessful and now government finds itself faced with the option of closing the bank as a last resort.”

But the Judge Damseb in his judgement said “Minister Ketso’s statement relied upon is so terse and unspecific that one is left to guess whether it related to the dissolution of the first Fund or unpaid benefits restructured fund.”

The judge also ruled that the legitimate expectation made or alleged to have been made by the minister ought to have been accompanied by the legal basis. “It is not enough to say as the employees do that a guarantee was made, they ought to have shown the legal basis upon which Minister Ketso made such a guarantee when the LADB Act made clear that government of Lesotho was not liable for the debts of the bank.

Assuming the minister purported to assume to assume the Pension Fund’s or LADB’s debts he would be acting contrary to the law of the land. He would have had to return to the legislature and amended the LADB Act to render the government of Lesotho liable”

Consequettly the three stitting judges (Mosito J and Chinhengo AJ) agreed the High Court misdirected itself  when it concluded that minister Ketso’s statements and governmet’s preparototy steps to pay what was allegedly owed to the ex employees amounted to legitimate expectation.