Sechele v Public Officers Defined Contribution Pension Fund and Others (6/2010) (NULL) [2010] LSHC 94 (13 December 2010);

CONSTITUTIONAL CASE NO.6/2010

 

 

IN THE HIGH COURT OF LESOTHO

 

 

In the matter between:-

 

 

BULANE ANDREW SECHELE …..................................................APPLICANT

 

 

and

 

 

PUBLIC OFFICERS’ DEFINED

CONTRIBUTION PENSION FUND …................................1ST RESPONDENT

BOARD OF TRUSTEES …...................................................2ND RESPONDENT

PRINCIPAL OFFICER PUBLIC OFFICERS’

DEFINED CONTRIBUTION PENSION FUND …............3RD RESPONDENT

COMMANDER OF THE LESOTHO

DEFENCE FORCE …............................................................4TH RESPONDENT

ASSISTANT CHIEF OF STAFF

LOGISTICS AND FINANCE …...........................................5TH RESPONDENT

MINISTER OF DEFENCE &

NATIONAL SECURITY …...................................................6TH RESPONDENT

MINISTER OF FINANCE AND

DEVELOPMENT PLANNING ….........................................7TH RESPONDENT

MINISTER OF PUBLIC SERVICE …................................8TH RESPONDENT

MINISTER OF LAW CONSTITUTIONAL

AND PARLIAMENTARY AFFAIRS …..............................9TH RESPONDENT

ATTORNEY GENERAL ….................................................10TH RESPONDENT

 

 

Headnote

 

Constitution of Lesotho 1993Section 2 of the Constitution – Test

of inconsistency – A balancing process – Constitutionality of sections 3, 5 and 27 of the Public Officers’ Defined Contribution Pension Fund Act No.8 of 2008 – whether consistent with section 150 of the Constitution.

 

Held: Where a public officer’s membership is made mandatory and his/her

monthly contribution compulsory in terms of the provisions (sections 3,5 and 27) of the Public Officers Defined Contribution Pension Fund Act for the sole purpose of sustaining his or her pension benefits upon retirement, a purposive interpretation of the Act can be made which is consistent to the objective of section 150 of the Constitution of Lesotho.

 

Held: The Public Officers’ Defined Contribution Pension Fund Act No.8 of 2008 is intrinsically a social security legislation whose objective is to secure pension benefits of retired public officers. This objective must be balanced with the importance and reasonableness and fairness of the manner in which the social objective of the Act is achieved. The compulsory and mandatory provisions of the Public Officers’ Defined Contribution Pension Fund Act are far outweighed by the objective of the Act.

 

The ratio decidendi in Nyambirai v National Security Authority – 1996 (1) SA 636 (ZSC) followed.

 

 

JUDGMENT

 

 

CORAM : JUSTICE T. MONAPATHI

JUSTICE S.N. PEETE

JUSTICE N. MAJARA

(sitting as a Constitutional Court)

 

 

DATE OF HEARING: 8TH NOVEMBER, 2010

 

DATE OF JUDGMENT: 13TH DECEMBER, 2010

 

 

 

 

The Court:

 

 

[1] In his “NOTICE OF CONSTITUTIONAL MOTION”, the applicant prays for an order couched in the following terms:-

 

1. Declaring Section 3 (1) o the Public Officers’ Defined Contribution Pension Fund Act No.8 of 2008 unconstitutional for it establishes the Constitution Fund for purposes of providing pension benefits contrary to Section 150 (4) of the Constitution of Lesotho of 1993 which has already established Consolidated Fund for such purpose.

 

  1. Declaring Section 5 (1) (a) of the Public Officers’ Defined Contribution Pension Fund Act No.8 of 2008 unconstitutional for it binds the Applicant to be the member of the Contribution Fund without giving him an option to choose the Defence Force (Regular Force) (Officers) Regulations No.26 of 1998 and the Public Officers’ Defined Contribution Pension Fund Act No.8 of 2008 contrary to section 150 (3) of the Constitution of Lesotho of 1993.

 

  1. Declaring Section 27 of the Public Officers’ Defined Contribution Pension Fund Act No.8 of 1998 unconstitutional for it would provide the Applicant with pensions benefits far less favourable to what regulation 53 of the Defence Force (Regular Force) (Officers) Regulations No.26 of 1998 would provide him with upon retirement contrary to Section 150 (1), (2) and (3) of the Constitution of Lesotho.

 

  1. Declaring the Public Officers’ Defined Contribution Pension Fund Act No.8 of 2008, in toto, unconstitutional and null and void ab initio for it is meant solely for the establishment of the Contribution Fund contrary to the Consolidated Fund already established by the Constitution of Lesotho of 1993 for purposes of providing pensions benefits to the Applicant in retirement.

 

  1. Declaring the act of deducting and depositing, into the bank account of the Fund, some monies from the Applicant gross salary by 1st, 2nd, 3rd, 4th , 5th, 6th, 7th and 8th Respondents since the 20th December 2008 to date pursuant to the provisions section 4 of the Public Officers’ Defined Contribution Pension Fund Act No.8 of 2008 unconstitutional, unlawful and null and void ab initio.

 

  1. Ordering the 1st, 2nd, 3rd, 4th, 5th, 6th, 7th and 8th Respondents to cease deducting and depositing, into the bank account of the Fund, some monies from the Applicant gross salary pursuant to the provisions of the Public Officers’ Defined Contribution Pension Fund Act No.8 of 2008.

 

  1. Ordering the 1st, 2nd, 3rd, 4th 5th, 6th, 7th and 8th Respondents to refund all the Applicant’s monies deducted and deposited into the bank account of the Fund, from the Applicant’s gross salary since 20th of December 2008 to date.

 

  1. Ordering the 1st, 2nd, 3rd, 4th, 5th 6th, 7th and 8th Respondents to refund such monies with the compound interest accrued while still in that bank account at the bank’s rate.

 

  1. Ordering the Respondents to pay the costs of the suit.

 

  1. Further and/or alternative relief.”

 

 

[2] In support of his motion, the applicant informs the court that he is a captain (officer) in the Lesotho Defence Force with thirteen years of service and in command of the Charlie Company of the Second Battalion of the First Light Infantry Brigade (C12 Inf Bn) of His Majestry’s Armed Forces. He says “I am a duly admitted advocate since 2nd day of August 2004.”

 

 

[3] Applicant appears in person.

 

[4] He further states at Para 5 of his founding affidavit that:-

 

5.

 

On the 20th day of December 2008 when I examined my pay-slip, I found that some money titled ‘Contributory Pension’ had been compulsorily deducted from my gross salary. This has continued to date. Prior to that compulsory deduction, none of the Respondents’ officers, especially the 1st, 2nd, 3rd, 4th, 5th and 6th Respondents ever sought my representation. In essence, I was never afforded a hearing before the commencement of such compulsory deduction. As a proof of such compulsory deduction, I have attached herein under the certified copies of the print-out of my salary payments commencing from the 20th day of October 2008 to date and, marked them ‘BAS1’.”

 

[5] He goes on to allege that his investigation revealed that “the compulsory deductions were done pursuant to sections 4 and 5 of the Public Officers Defined Contribution Pension Fund Act No.8 of 2008.”

 

[6] He contends that his “mandatory” membership under section 5 and his compulsory contribution under section 4 of the 2008 Act (supra) were “done contrary to one of the fundamental principle of natural justice, namely audi alteram partem.”

 

 

 

[7] Seriatim sections 3, 4, 5 and 27 of the Public Officers’ Defined Contribution Pension Fund Act No.8 of 2008 read thus:-

 

PART II – THE FUND

 

Establishment of the Fund

 

3. (1) There is established a fund to be known as the Public

Officers’ Defined Contribution Pension Fund, for the purpose of providing pension benefits to the public officers referred to in section 5 (1) and (2).

 

  1. The Fund shall be a legal entity, capable of-

 

    1. suing and being sued in its own name;

 

    1. acquiring, owning and disposing movable and immovable property; and

 

    1. acquiring rights and incurring liabilities.

 

 

Contributions

 

  1. The employer and a member of the Fund shall each make a monthly contribution to be paid into bank account of the Fund at a rate to be determined by the Minister on the advice of the Board and the Minister shall publish the rate in the Gazette.

 

PART III – MEMBERS OF THE FUND

 

Members of the Fund

 

  1. (1) A public officer or a person, as the case may be, who:-

 

    1. is employed on permanent and pensionable terms and is aged 40 years or below at the commencement of this Act; or

    2. joins the public service, after the commencement of this Act, on permanent and pensionable terms 10 years or more prior to attaining the prescribed compulsory retirement age as set out in the relevant laws governing the retirement of public officers, is a member of the Fund,

and membership is mandatory.

 

(2) A public officer who, at the commencement of this Act, is employed on permanent and pensionable terms may, subject to subsection (3), become a member if he or she still has at least 10 further years of service prior to attaining the prescribed retirement age as set out in the relevant laws governing the retirement of public officers.

 

  1. The Minister shall, in a phased manner or in such a manner as he or she may deem fit, by notice published in the Gazette, classify public officers referred to in subsection (2) into categories and appoint a date on which a category referred to in subsection (2) may qualify for membership of the Fund.

 

  1. A public officer who does not qualify to be a member under subsection (1) or ceases to be a public officer before being categorized under subsection (3), may qualify for the benefits provided under the Pensions Proclamation 1964 or the Teachers Pensions Act 1994 or the Defence Force Regulations 1998, as the case may be.” (our underlining)

 

PART VII BENEFITS

 

Retirement benefit

 

27. On retirement, a member shall be entitled to a portion of his or her fund credit to the maximum of 25% as cash benefit. The remaining percentage shall be used to purchase an annuity for him or her.”

 

[8] En passant, it is perhaps important to recite the preamble to the 2008 Act. It reads:-

 

An Act to provide for the establishment of Public Officers’ Defined Contribution Pension Fund, for the benefit of permanent and pensionable Public Officers, and for related matters.”

 

[9] The Memorandum of Objects and Reasons attached to the text of the Act read:-

 

“…The object of the Act is to provide legal framework for the establishment of a stand alone independent defined contribution fund with minimal financial risk to the Government that will create and provide benefits for all pensionable officers in the service of the Government of Lesotho…. The Act provides for the Fund to be a separate legal entity ….. membership is mandatory to the public officers below the age of forty….” (our underlining

 

 

The Preamble and Memorandum often explain the main object and purpose of an Act of Parliament.

 

 

***

 

 

The Constitution of Lesotho – 1993

 

[10] The Constitution of Lesotho of 1993 establishes a “Public Service1 which consists of (a) civil servants in Ministries and Departments,

(b) officers in the Lesotho Defence Force, (c) police in the Police Service, (d) prison officers in the Correctional Service and (e) teachers in the Teaching Service. All these services perform certain essential functions to serve the public.

 

[11] Upon attainment of a prescribed age, a public officer in any of these Services can retire from the public service in terms of the relevant law, and thereupon he or she is entitled to certain pension benefits under the law and these benefits are protected under provisions of the Constitution of Lesotho. These are section 150 and section 151.

 

Section 150 of the Constitution reads:-

 

[12] “(1) The law to be applied with respect to any pension

benefits that were granted to any person before the coming into operation of this constitution shall be the law that was in force at the date on which those benefits were granted or any law in force at a later date that is not less favourable to that person.

 

(2) The law to be applied with respect to any pension benefits (not being benefits to which subsection (1) applies) shall:-

 

 

(a) in so far as those benefits are wholly in respect of a period of service as a public officer that commenced before the date on which this Constitution came into operation, be the law that was in force immediately before that date; and

 

(b) in so far as those benefits are wholly or partly in respect of a period of service as a public officer that commenced after the date on which this Constitution came into operation, be the law in force on the date on which that period of service commenced,

 

or be any law in force at a later date that is not less favourable to

that person.

 

(3) Where a person is entitled to exercise an option as to which of two or more laws shall apply in his case, the law for which he opts shall, for the purposes of this section, be deemed to be more favourable to his than the other law or laws.

 

(4) All pensions benefits shall be a charge on the Consolidated Fund.

 

(5) In this section “pension benefits” means any pensions, compensation, gratuities or other like allowances for persons in respect of their service as public officers or for the widows, children, dependants or personal representatives of such person in respect of such service.

 

(6) References in this section to the law with respect to

pension benefits include (without prejudice to their

generality) references to the law regulating the

circumstances in which any such benefits that have been

granted may be withheld, reduced in amount or suspended

and the law regulating the amount of any such benefits.”

(our underline)

 

***

Sections 150 and 151 of the Constitution – (rationale of)

 

[13] The main object of section 150 and section 151 is “to entrench” the rights to pension benefits due to public officers upon their retirement from public service. Their overall purpose is intended to benefit the public officers and protect the pension benefits of retired public officers.

 

[14] Pension is a regular (usually monthly) payment made by the government (state) to people who have officially retired from public service or to widows or to old aged people or to the disabled. The right to pension is recognized under many laws governing the Army, the Public Service, the Police, the Correctional Services and the Teachers in the Public Service in Lesotho.

 

[15] Pension is a benefit (or stipend) for services rendered in the past; a retired public officer ordinarily no longer earns a regular salary. As senior citizens, their very lives depend upon meagre pensions that should not be arbitrarily withheld, withdrawn, suspended or reduced. The expression “not less favourable” is used to guarantee this status quo and it is perse a form of social security.

 

[16] This Court takes judicial notice of worldwide economic recession that has certainly depleted the state coffers especially the Consolidated Fund and that need for supplementation in the form of contribution –

 

is not unjustified. The 2008 Act does not supplant the Consolidated Fund but is in addition to it. More about this later in the judgment.

 

***

 

[17] It is common cause that the applicant – a captain still below 40 in age in the Lesotho Defence Force – is a public officer as defined under the Public Officers’ Defined Contribution Pension Fund Act No.8 of 2008.

 

[18] It is also common cause that the Minister of Defence subsequently made certain Regulations in exercise of his powers vested in him by section 192 of the Lesotho Defence Force Act No.8 of 1996 in order to regulate allowances, pensions and gratuities and also to determine the rate of payment of pensions and gratuities [Regulation 53] and these formulae were determined thus:-

 

1. Pension1/600 x Pensionable Emolument x Completed

months.

 

2. Gratuity1/12 x Pensionable Emoluments x Completed

years of Pensionable Service.

 

[19] These formulae were approved by the Honourable Minister of Defence on 15th February 2007.

 

[20] This was done before the passing of the Public Officers’ Defined Contribution Pension Fund Act No.8 of 2008 which only came into operation sometime in August 2008 per Notice in the Gazette.

 

***

 

[21] The main thrust of the applicant’s case is that section 3 (1) of the Public Officers Defined Contribution Pension Fund Act is inconsistent with the clear provisions of Section 150 (4) of the Constitution in so far as the section 3 (1) purports to establish a Fund separate and distinct from the “Consolidated Fund” – a Fund whose purpose is also to provide pension benefits.

 

[22] He submits that in so far as it purports to establish a stand alone fund “…for the purpose of providing pension benefits to the public officers…”, this establishment is inconsistent with the provisions of section 150 of the Constitution of Lesotho.

 

Section 150 (4) reads:-

 

All pension benefits shall be a charge to the Consolidated Fund.”

 

 

 

 

Consolidated Fund is defined under section 8 of the Finance Order No.6 of 1988 which reads:-

 

Consolidated Fund

 

8. “All public moneys however raised or received by the

Government shall be paid into and form a Consolidated

Fund.”2 (our underlining)

 

It is important to stress the words “however raisedfor the reason that the phrase “however raisedshould be given a liberal and purposive meaning3 which should include other moneys raised through other Fund or Funds created by an Act of Parliament. Promulgation of the 2008 Pension Act is clearly foreseen under both section 150 and section 151 of the constitution.

 

***

Constitutionality of section 3 (1)

 

[23] Section 3 (1) of the Public Officers’ Defined Contribution Pension Fund Act No.8 of 2008 reads:-

 

3. (1) There is established a fund to be known as the Public

Officers Defined Contribution Pension Fund, for the

purpose of providing pension benefits to public officers

referred to in section 5 (1) and (2).

 

  1. The Fund shall be a legal entity, capable of

 

    1. suing and being sued in its own name;

 

    1. acquiring, owning and disposing movable and immovable property; and

 

    1. acquiring rights and incurring liabilities.”

 

 

[24] Under our law, the constitutionality of any statutory instrument is to be decided by the Court under section 2 of the Constitution of Lesotho. Section 2 reads:-

 

The Constitution

 

  1. This Constitution is the supreme law of Lesotho and if any other law is inconsistent with this Constitution, that other law shall, to the extent if the inconsistency, be void.”

 

[25] “Inconsistent” is defined in the Oxford Dictionary as “…containing logical contradictions … incompatible or antithetical …”

 

[26] Canons of constitutional interpretation dictate that when faced with the issue of constitutionality of a statutory instrument, the following principles should guide the court:-

 

 

 

  1. There exists a rebuttable “presumption of constitutionality4 of a statutory instrument which in turn places an onus on the challenger to prove that the Act is inconsistent with the provisions of the Constitution.

 

  1. The Court should always interpret the provisions of the Constitution (a grundnorm sui generis) purposively5, benevolently and generously; and if the statutory instrument can be interpreted in a manner not inconsistent with the provision of the Constitution, then it should not be declared unconstitutional.

 

[27] Dr Mosito KC in his helpful submissions argued that in this exercise the court is also guided by (a) whether the challenged law infringes the chapter II Rights of our Constitution, (b) whether the procedural or substantive provisions of the Constitution have been violated.

 

[28] The applicant submits that the establishment of the separate and independent Defined Contribution Pension Fund for purpose of providing pension benefits to public officers, flies in the face of clear provisions of Section 150 (4) which state that “…All pension benefits shall be a charge on the Consolidated Fund.”

 

 

[29] Section 5 (1) of the Public Officers’ Defined Contribution Pension Fund Act No.8 of 2008 reads:-

 

5. (1) A public officer or person, as the case may be,

who –

 

(a) is employed on permanent and pensionable terms and is aged 40 years or below at the commencement of this Act; or

(b) joins the public service, after the commencement of this Act, on permanent and pensionable terms 10 years or more prior to attaining the prescribed compulsory retirement age as set out in the relevant laws governing the retirement of public officers, is a member of the Fund,

and membership is mandatory.”

 

[30] Membership however is optional under Section 5 (2) of the Act. It reads:-

 

(2) A public officer who, at the commencement of this Act, is employed on permanent and pensionable terms may, subject to subsection (3), become a member if he or she still has at least 10 further years of service prior to attaining the prescribed retirement age as set out in the relevant laws governing the retirement of public officers.”

 

[31] Section 27 of the Public Officers Defined Contribution Pension Fund 2008 reads:-

 

27. On retirement, a member shall be entitled to a portion of his or her fund credit to the maximum of 25% as cash benefit. The remaining percentage shall be used to purchase an annuity for him or her.” (our underline)

 

[32] It is clear that under Part VII – Benefits – the member upon retirement receives certain pension benefits and if he or she is dismissed, the member shall receive cash benefit of his or her contributions.

 

[33] It is clear therefore even though membership is mandatory under the 2008 Act (at least for the applicant) and contribution compulsory, all these are for “his benefit” and for his advantage.

 

[34] It is the view of this court that no real or potential prejudice or loss has been shown on any balance of probabilities by the applicant who has as yet not retired from the LDF.

 

***

[35] There is a presumption that legislature does not intent that which is harsh or unjust6 and the court can safely assume that the establishment of the fund is intended to ensure maximum pension and gratuity benefits for the retired public officers; and that the administration of this fund guarantees safety of these contributions, their investment and expeditious disbursement. Maxwell7 states that statutes which encroach on rights of the subject whether as regards persons or property are subject to a strict construction ….It is a recognized rule that they should be interpreted, if possible, so as to respect such rights.

 

Answering affidavit (of Respondents)

 

[36] In his answering affidavit Mr Tsukutlane Au – the Principal Secretary in the Ministry of Public Service – states:-

 

“…The reality is that the deposits into the Contribution Pension Fund are from the Consolidated Fund. The Government contributes 11.2% and public officer contributes 5% (of gross salary)….”

 

He denies that this compulsory contribution is arbitrary as it is done according to law and for the benefit of the public officer.

 

[37] He states that the applicant stands to get even much more than he would otherwise get under the Defence Force (Regular Force) (Officers) Regulations No.26 of 1998.

 

[38] If the Government contributes 11.2% of the member’s gross salary and member contribute only 5% - it means the member gains a 6.2% contribution to the Fund. This is a clear benefit to the public officer from whose salary a contribution in deducted monthly for his or her benefit.

 

[39] In so far as pension benefits are concerned, the Constitution stipulates that after 1993, the applicable law shall be the law in the force at a later date that is not less favourable to that person; and that pension benefits include pensions, compensation, gratuities or other ….allowances.8

 

[40] Since the applicant has not as yet retired, or resigned or been dismissed, it is not possible to determine whether his entitlement under the 1998 Regulations would more favourable than under 2008 Act. Whether his pension benefits are determined under the 1998 Regulation or under the 2008 Act, the applicant cannot be treated less favourably under any circumstances.

 

[41] Furthermore section 150 (4) is drafted in mandatory but directive terms; and to the question whether it is unconstitutional to pay pension benefit out of a Fund “separate” and “distinct” from the Consolidated Fund, the answer must be in the negative.

 

***

 

Audi Alteram Partem” principle

 

[42] “Audi alteram partem” is a trite principle of natural justice to ensure fairness under law. Stated generally the principle requires that a person whose rights are likely to be prejudiced by an executive or administrative decision, should always be afforded an opportunity to make representation before the decision is made. The audi principle is hardly invoked in cases involving legislative Acts of Parliament. A person cannot ask the Court to strike down an Act of Parliament as unconstitutional on the sole ground that he was not afforded a hearing before the Bill was passed as law by Parliament. It is also an aspect of the separation of powers.

 

***

 

[43] If section 150 (4) of the Constitution enjoys supremacy, it means that the applicant’s pension benefits shall continue to be a “…charge upon the Consolidated Fund…” and any other benefits he derives as a member of the Fund shall be in addition to section 150 (4) benefits and their computation should not render his position or of the public officers any less favourable. This position ought to have been made clear under the 2008 Act and it is important here to state en passant that elegance and circumspection in the drafting of this law were as important as its clarity; it needs no emphasis that the draftsman must always be fully conscious of the provisions of the Constitution when using words that affect human rights and other rights under law or under the Constitution.

 

[44] It is our view that prevailing economic recession, which condition we take judicial notice of, certainly affects the country’s Consolidated Fund and other sources of revenue and as a result pension benefits of the public officers may not be made without austere contribution from the public officers themselves and for their own benefit. This is especially the case when the relevant constitutional provisions are read together with section 8 of the Finance Order 1988. By its wording, section 8 puts to rest any doubt as to how the Consolidated Fund is to be financed and sourced.

 

[45] The fair reading of sections 150 and 151 of the Constitution also supposes that a pension law may be passed by Parliament but such law always must be interpreted in such a manner that it does not place the pension beneficiary in a position “less favourable”. It is assumed that the amount of pension formula will change form time to time but without diminishing.

 

[46] Contrary to the ingenious submissions of the applicant, the 2008 Act is certainly capable of being interpreted in an equitable manner and be given effect to without violating section 150 (4) of the Constitution. Contributions to the Fund by the Government are still sourced from the Consolidated Fund and are to be paid monthly into the newly created Fund for the benefit of the pensioners upon their retirement. It would fly in the face of logic to preempt prejudice before applicant retires.

 

[47] Though not irrebuttable, the “presumption of constitutionality” requires that the challenger of the law must show that the law is unconstitutional ex facie and in its effect. We are of the view that applicant has not succeeded to discharge this onus on a balance of probabilities of this case.

 

 

[48] Dr Mosito KC submitted that constitutionality of a statutory instrument is principally a conceptual issue and what has to be determined is whether the Act impinges on the Bill of Rights in Chapter II of the Constitution or whether it violates other procedural or substantive provisions of the Constitution.9 He further submitted that from a fair reading an interpretation of section 150 of the Constitution, no right is created but that the section is merely directive or declaratory regarding the sourcing of the pension benefits from the Consolidated Fund. There is merit in this submission.

 

***

 

[49] A pension benefit is not created by the Constitution per se but by an Act of Parliament. It is the pension benefit thus created that is protected by section 150 of the Constitution. Applicant is not claiming for his pension benefits – he has as yet not retired. All he is claiming is for a declarator that the 2008 Act should be declared unconstitutional upon the ground that the Act compels his contribution and makes membership to the Fund mandatory. In our view, the applicant has not been despoiled of his salary or his salary reduced permanently to his disadvantage. The contribution is in our view is merely a form of compulsory saving.

 

 

 

 

[50] A fair interpretation of section 150 (4) of the Constitution is that payments or disbursement of pension benefit are guaranteed by the Constitution without imposing any exclusivity and a legislation is in place to direct a source of like benefit from elsewhere other than from the Consolidated Fund; in fact the sources of funds into the Consolidated Fund can be raised elsewhere.

 

[51] The Zimbabwe Supreme Court case of Nyambirai vs National Social Security Authority is very similar to, if not on all fours with, the case before this Court. In that case Gubbay CJ held that a compulsory contribution imposed by the National Social Security Act 1989 did not violate the property clause under the Constitution of Zimbabwe if such mandatory participation was dispensable to the fiscal success of the Scheme10 and that the fact that a Scheme is intended to provide social and financial security to public officers justifies the compulsory and mandatory provisions of the Act11

 

[52] This Court is in agreement with the approach of Gubbay C.J. in recognizing the justification for the compulsory and mandatory provisions of this type of social security law because optionality would jeopardize the scheme. “…There must be a balancing process …” the importance of the objective and the reasonableness of the manner in which it is achieved must be measured against the gravity of the infringement of the private right protected by the Constitution. He poses a crisp question: “Is it too high a price to pay for the benefit of the law…?12 The learned Judge further continued to say at p.649 To my mind, the limitation on the applicant’s right – that is the compulsion to contribute to a national pension scheme is far outweighed by the objective to which the limitation is directed”

 

***

 

[53] In the case of Nyambirai, (supra) the Supreme Court noted that many developed and developing countries, which most people would consider democratic, have chosen to enact and sustain social security legislation for provision of benefits such as for medical care, for pension benefits to its retired citizens during their old age, in case of their sickness and invalidity. Right to social security and social insurance is also embodied in several international instruments.13

 

[54] Before concluding our judgment, we feel that it is perhaps pertinent to state that before drafting a social security legislation such as the Public Officers Contribution Pension Fund Act it was wise and necessary to issue and circulate a white paper and sensitize to all the public officers at all levels who were likely to be affected by the mandatory membership and compulsory contributions that would reduce their meagre monthly salaries – rather that convincing these public officers about the beneficial effects of the Act after it has been passed by Parliament. This is all the more necessary because in Lesotho today trade unionism in the public service is somewhat nonexistent.

 

[55] In adopting the ratio decidendi in the Zimbabwean case of Nyambirai, we would endorse the approach of Gubbay CJ’s balancing process. Whereas this Court recognises that certain compulsory deductions are being made upon applicants’ salary every month and are being paid into the Public Officers’ Defined Contribution Pension Fund and that his membership in the Fund is mandatory, this Court must also be fully conscious of the international obligations Lesotho has under international Covenants and Protocols. These are:-

 

  1. Universal Declaration of Human Rights 1948 (Art. 22)

 

  1. International Covenant on Economic, Social and Cultural Rights 1966 – (Art.9)

 

[56] There exists a presumption that a statute will not be interpreted so as to violate a rule of international law or an international obligation.14

 

[57] The Court must also take cognizance of the fact that a social security legislation like the 2008 Act usually imposes certain pecuniary but affordable burdens on the individuals to contribute to their pension benefits; as Gubbay CJ pointed out that “optionality” of such a scheme would defeat the very purpose of the social security legislation.

 

[58] In interpreting any social security legislation the Court must always balance the pecuniary burden with the primary social objective of the legislation and finally to decide whether the social objective outweighs the pecuniary burden in utilitarian sense. We hold the view that in the circumstances of the case, the compulsory and mandatory provisions are outweighed by the advantageous provisions in the 2008 Act.

 

[59] A 5% deduction from a public officer’s salary for his or her benefit is not an unaffordable or unreasonable one as would a 40% or 50% deduction. At 11.2% of the salary, the contribution from government is generous and compensatory at the end of the day.

 

[60] Social security in modern times is very essential and is an important pillar for social stability, and one that can be described and recognized today as a socio-economic right. For example, the constitutions of Brazil, of Canada and of the Republic of South Africa15 state clearly that everyone has a right to have access to social security and that the state must take reasonable legislative and other measures within its available resources, to achieve the progressive realization of this right. It is a right which must be mutually sustained by the state and the individual on affordable terms.

 

[61] Lesotho of today is facing acute problems brought about by worldwide economic recession such as poverty and lack of employment opportunities. For the retired, the rainy days later worsen into stormy ones and the end result is that the lifespan of the retired men and women are cut brutally short under conditions of destitution.

 

[62] Payment of cash benefits and of annuity to retired public officers (a fixed sum of money paid annually to the retirer for the rest of his/her life) is indeed a great advantage which, state resources permitting, should soon be extended to and enjoyed by every Mosotho.

 

[63] Autonomising the administration of the Pension Fund has an added advantage of removing the disbursement of benefits from the bottlenecks of bureaucratic redtape. The Act further provides for the investment of the contributions and for other financial matters to ensure sound financial position of the Fund. Rules of the Fund further provide for the computation and payment disability benefits, deferred pension benefits and death benefits.

 

[64] Although the Public Officers’ Defined Contribution Pension Fund Act 2008 is not a perfect piece of legislation, the social security it offers the retired public officers far outweighs the pecuniary burdens occasioned by monthly deductions from the salaries of the public officers. Utilitarian benefit outweighs the compulsory and mandatory and austere provisions of the Act.

 

 

Conclusion

 

  1. We are therefore of the view that although its primary purpose is also to provide pension benefits to public officers, sections 3 (1), 4 and 5 (1) and 27 of the Public Officers Defined Contribution Pension Fund are not inconsistent with the section 150 (4) of the Constitution.

 

  1. Described as a “stand alone independent defined contribution pension fund”, the fund should in future be taken as a Fund additional to and not supplanting the Consolidated Fund.

 

  1. A fortiori – the rest of the prayers cannot stand and are dismissed.

 

  1. No order as to costs.

 

  1. The Court wishes to express its appreciation to the professional manner in which the applicant – a Captain in the Lesotho Defence Force – made his submissions while sailing unchartered waters of our law. Same laudation goes to respondents’ Counsel Dr Mosito KC and Advocate Motsieloa for their invaluable submissions.

 

 

_________________________

JUSTICE MONAPATHI

JUDGE

 

 

___________________________

I concur JUSTICE PEETE

JUDGE

 

___________________________

I concur JUSTICE MAJARA

JUDGE

 

 

For Applicant : In Persona

For 1st, 2nd and 3rd Respondents : Dr Mosito KC

For 4th to 10th Respondents : Mr Motsieloa

1Chapter XIII of the Constitution.

2Section 8 of the Finance Order No.6 of 1988.

3Section 15 of Interpretation Act 1977 reads:-

15. Every enactment shall be deemed remedial and shall be given such fair, large and liberal

contraction and interpretation as best ensures the attainment of its object.”

4GE Devenish – Interpretation of Statutes – p-210

5Khathang Tema Baitšokoli - Const/C/1/2004; Devenish (ibid) p.35

6Devenish (ibid) p.161

7MaxwellInterpretation of Statutes 251.

8Section 150 of the Constitution.

9Doctors for Life International v Speaker of the National Assembly – 12 BCLR 1399.

101996 (1) SA 636 (ZSC).

11At 646 and 648 at C – J – 649 A – B.

12Ibid p.648 E –G

13Article 22 of the Universal Declaration of Human Rights 1948; Art 9 of International Covenant on

Economic, Social and Cultural Rights 1966 – Section 27 (c) of the Constitution of the Republic of

South Africa.

14Devenish Intepretation of Statutes p.212, and at p169 – 171 for the presumption regarding provisions

that impose pecuniary burdens (contra fiscum)

15Section 27 (c) of the Constitution of South Africa.