Vodacom to appeal Makate’s Please Call Me compensation in Constitutional Court

Vodacom announced today that it will apply for leave to appeal the Supreme Court of Appeal’s (SCA) judgement on Kenneth Nkosana Makate’s Please Call Me Case at the Constitutional Court.

On 6 February 2024, the SCA upheld a High Court ruling regarding compensation to Makate.

The SCA backed the High Court’s ruling that Vodacom must pay Makate between 5% and 7.5% of the total voice revenue generated by the Please Call Me product over 18 years, plus interest.

Makate’s legal team calculated that Vodacom generated R205 billion over 18 years through PCM. Adding interest, Makate wants around R20 billion from Vodacom.

Today, Vodacom confirmed that it has lodged its application for leave to appeal this judgment and order to the Constitutional Court.

“As a responsible corporate citizen, Vodacom is respectful of the judicial system and abides by the laws of South Africa,” the company said.

“Having considered the SCA judgment and order, it is Vodacom’s view that there are key aspects of this matter which do not accord with the spirit of the law and that the judgment and order are fundamentally flawed.”

“It is apparent from the dissenting judgment of the SCA that the majority judgment overlooked or ignored many of the issues between the parties and their evidence and submissions relating to those issues.”

Therefore, in its application for leave to appeal to the Constitutional Court, Vodacom makes inter alia the following submissions:

• The SCA’s order impinges on the Rule of Law in terms of section 1 of the Constitution and deprives Vodacom of its right to a fair trial under section 34 of the Constitution.
• The SCA misdirects itself by considering and deciding on issues which had not been placed before it for adjudication by either Vodacom or Makate.
• The SCA selectively chooses to only have regard to Makate’s evidence, as in the case of models for computing compensation payable to Makate, while ignoring swathes of evidence in this regard presented by Vodacom contesting Makate’s version.
• The SCA orders are unintelligible, incomprehensible, and vague, rendering them incapable of implementation and enforcement.

“The impact of the SCA Judgment, should it be upheld, would be vast and wide-ranging on both Vodacom South Africa and Vodacom Group, as well as the attractiveness of South Africa as an investment destination,” the company claims. 

“It would negatively impact our employees, shareholders and Vodacom’s contribution to public finances. It would also have an impact on our network investment, coverage, and social programmes.”

Vodacom said it has previously negotiated with Makate in an attempt to agree on reasonable compensation payable to him.

“These efforts, to date, unfortunately, have failed.”

Vodacom said it remains open to constructive dialogue and good faith negotiations to agree to a fair and reasonable amount as compensation for Makate’s idea that led to the development of the PCM product. 

“It is Vodacom’s desire that the matter be amicably resolved and brought to a timely conclusion.”

Background

In line with a 2016 Constitutional Court order, Vodacom’s CEO determined reasonable compensation of R47 million to Makate, a former employee of Vodacom, for a “buzz idea” which was developed and launched by Vodacom as a free service to its customers in 2001. 

Makate rejected this determination and brought an application to the Gauteng division of the High Court to have the CEO’s determination judicially reviewed and set aside. 

On 8 February 2022, the High Court set aside the CEO’s determination and ordered him to reconsider the settlement offered to Makate. 

Vodacom launched an application for leave to appeal against the judgment on 25 February 2022 and the order of the High Court.