Tread carefully with employee’s ideas

Tread carefully with another’s ideas

Kenneth Nkosana Mkate is to receive billions from his ex-employer, Vodacom, following the “please call me” judgment that was handed down by the Constitutional Court on 26 April 2016. The court said that “the case concerns payment of compensation for the use of the applicant’s idea in developing a lucrative product which has generated billions of rands for the respondent.”

What is apparent from this judgment, is that ideas might be worth a fortune and that the employee who comes up with that idea is entitled to share in that fortune provided the basis on which the idea is made available to the employer consists of an agreement to that effect.

When Makate came up with the “please call me” idea in 2000, he discussed it with Vodacom’s Director and Head of Product Development and Management, a Mr Philip Geissler. They reached an oral agreement that Vodacom would experiment with the idea and, if it proved commercially viable, that Mr Makate would be paid a share of the revenue generated by it. While the High Court found that there was indeed an agreement between the parties, it further found that Makate failed to plead that Geissler had the necessary authority to bind Vodacom in this manner. The Constitutional Court disagreed and found that Vodacom was bound.

The Constitutional Court had some harsh words for Vodacom for continuing to resist compensating Makate after the High Court had found that the agreement existed. In so doing, the Court said:

“Vodacom associated itself with the dishonourable conduct of its former CEO, Mr Knott-Craig, and his colleague, Mr Geissler”.

The dishonourable conduct referred to relates to the claim in Alan Knott-Craig’s biography that the “please call me” concept was his idea. Knott-Craig has since admitted that he had lied.

• Side note: The ownership of another idea that has made Vodacom a small fortune is presently the subject of a fresh dispute. The “Airtime Advance” product allows subscribers who run out of airtime to get R5 or R10 in prepaid minutes on credit and only pay the next time they recharge. Customers who use the service then pay an extra R1 fee on their next recharge. Businessman John Khaba of Ndabenhle Business Enterprises has gone to court claiming that he had approached Vodacom with the “Airtime Advance” idea a year before Vodacom launched the service in 2011. The matter was set down on the SCA roll to be heard on 2 March 2018:

Ndabenhle Business Enterprises CC v Vodacom (Pty) Ltd 441/2017 (GJ)
Judges: Shongwe ADP, Swain JA, Mocumie JA, Mothle AJA, Hughes AJA