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Recent Decision by the Labour Court of South Africa Recent Decision by the Labour Court of South Africa

Bronze medal Reporter Adv. Alex Posted 22 May 2019 Read More News and Blogs
Recent Decision by the Labour Court of South Africa


 

                                                                                                Not Reportable

                                                                                         Case No: 255/2017

 

In the matter between:

 

SOUTH AFRICAN SOCIAL SECURITY SERVICES

AGENCY (SASSA)                                                  Applicant                                                                   

 

 

and

 

PUBLIC SERVICE ASSOCIATION (PSA)                        1stRespondent                                                                                                  JEFTHA & 18 OTHERS                                                    2nd Respondent

 

Heard: 14 & 15 March 2019

Delivered: 2 May 2019

JUDGMENT

 

NIEUWOUDT, AJ

 

Introduction:

 

[1] The second and further applicants are employed by the first respondent as managers and assistant managers. In broad terms, their claim is to be placed in grading level 10 for assistant managers and grading level 12 for managers, the consequent adjustment in their salaries and retrospective payment. Although they formulated their claim as one for a declaratory order, in essence they claim specific performance. The claims of certain of the second and further applicants have been settled. Those of them who are still involved in the matter will be referred to as the individual applicants. They were employed on levels 8, 9 and 11 in the period from 1 September 2012 to 26 January 2015.

[2]The applicants base their claim on section 77(3) of the Basic Conditions of Employment Act (BCEA) which provides that this Court has concurrent jurisdiction with civil courts to hear and determine any matter “concerning a contract of employment”.

[3]In their particulars of claim the applicants contend that that certain rights had accrued to the individual applicants during August 2012 when Resolution 1/2012 was made applicable to them. 

Facts

[4]In order to understand the context of the claim, it is necessary set out the background.

[5]The first respondent commenced operating in 2006. In anticipation, and during 2005, positions were created and evaluated in order to ensure the appropriate staffing of the first respondent. The posts that were evaluated to be on manager level 12 scored 664.11 in the job evaluation exercise and those to be on assistant manager/specialist level 10 were (with one exception) scored to be 603.28. The job evaluation system in place at the time was Equate.

[6]Resolution number 3/2009 of the Public Service Co-ordinating Bargaining Council (the PSCBC) is a collective agreement. Its objective is threefold:

6.1 To give effect to an earlier resolution of the PSCBC by introducing a revised salary structure for all occupational categories graded on salary levels 1-12 not covered by any occupation specific dispensation.

6.2To introduce a career pathing model.

6.3To introduce grade progression.

[7]It is the last objective that is relevant to these proceedings. The collective agreement has a number of provisions under the heading “Grade Progression Model”. In respect of salary levels 9-10 and 11-12, there are provisions that provide for automatic progression after fifteen years of service on a salary level and accelerated progression for good performers. In this context, clause 3.6.3.2 reads as follows:

“The commencing salary for all employees on post not covered by any OSD as per PSCBC Resolutions 1 of 2007 and 3 of 2008, and appointed as Assistant Directors and Deputy Directors shall, with effect from 1 July 2010, be on salary levels 9 and 11 respectively.”

[8]This clause took effect from 1 April 2010.

[9]On 12 November 2011 the director-general of the Department: Public Service and Administration (DPSA) issued a directive relating to job weight ranges for the Equate job evaluation system. The purpose of this was to do away with the overlap between grades that had existed at that time. In terms of this directive, the minimum and maximum job weights for salary grades 10 and 12 were as follows:

10 560 and 611

12 664 and 716.

[10]Resolution 1/2012 of the PSCBC is also a collective agreement. Its objective is twofold:

10.1To provide for a multi-year salary adjustment and improvements to conditions of employment for employees in a specific period.

10.2 To amend particular PSCBC resolutions.

[11]Clause 18 deals the second objective and with amendments to resolution 3/2009. Clause 18.1reads:

“Clause 3.6.3.2 of PSCBC Resolution 3 of 2009 is hereby amended to allow employees whose posts are graded on salary levels 10 and 12 to be appointed and remunerated on salary levels 10 and 12 respectively.”

[12]The first respondent issued a staff circular on 17 August 2012. The subject line reads “ [I]mplementation of Resolution 1 of 2012: Agreement on Salary Adjustments and Improvements on Conditions of Service for the Period 2012/13 to 2014/5.” The circular deals with the implementation of the first objective of the resolution and the period recorded accords with the period of operation of resolution 1/2012. Clause 2 of the circular provides that: “

“The implementation of the salary adjustment will be paid retrospectively from 1st May 2012 on 24 August 2012 to Staff that is normally paid on 15 and 30 of each month.”

 

[13]The first of the individual applicants was only appointed on 1 September 2012.

[14]On 1 April 2014 a new job evaluation system, styled Evaluate, was introduced in the whole of the civil service (and included the first respondent).

[15]On 5 August 2014 the director-general of the DPSA issued circular 4 of 2014. It provided that:

15.1Jobs in corporate services that appear to be transverse in all departments must be graded similarly. It required that departments must consult with the Minister of the DPSA on the grading of jobs on salary levels.

15.2 All posts that were graded on salary levels 10 and 12 between 1 July 2010 and 31 July 2012 and whose incumbents were appointed on salary levels 9 and will be automatically upgraded to salary levels 10 and 12 respectively with effect from 1 August 2012, subject to the availability of supporting job evaluation results.

15.3 If new jobs are graded or existing jobs are regraded within the corporate services environment at salary levels 9-12 the grades must be consulted with and approved by the Minister of the DPSA before a final decision on the grade is taken.

15.4 In posts where job evaluation has not been conducted or where there is no record of them being conducted, such posts must be evaluated and consulted on with the Minister of the DPSA. A full motivation should be provided why these jobs should not be regraded from a running date. (This means the date of the next civil service payroll run.)

[16]On 21 August 2015 the director-general of the DPSA addressed a letter to the first respondent. This letter dealt with the grading of corporate services posts at salary levels 9 to 12. In essence it contains the grades of corporate services posts and provides that core posts (being posts specific to the first respondent) should be graded by the first respondent. It reminded the first respondent that Resolution 1/2012 does not determine that all level 9 and 11 posts should be upgraded, that line function posts should be graded with circumspection and that the main aim with the verification exercise is to establish consistency in the grading of similar posts. The letter concluded by saying that the initial salary grades determined for these posts could not be maintained indefinitely due to the fact that the grading decisions were amongst other things influenced by non-job evaluation issues.

[17]On 6 January 2016 the director-general of the DPSA issued circular 1 of 2016. It stated that where departments had already upgraded employees who were appointed from 1 August 2012 on jobs graded at levels 10 and 12 in corporate services without consultation with the Minister of the DPSA, these must be reversed and overpayments must be recovered.

[18]On 7 March 2016 the CEO of the first respondent addressed a letter to the director-general of the DPSA. It records that the first respondent had fully complied with paragraph 5 of circular 4 of 2014 and stated that anticipated that the valuation of core business posts would be finalised by the end of March 2016.

[19]In an internal memorandum dated 20 April 2016 the Department: Human Capital Management of the first respondent reported to the CEO on the results of various job evaluations. This included the core posts.

[20]The parties accepted that the implementation date of these job evaluations would be June 2016.

Jurisdiction

[21]At the outset of the matter, the Court enquired as to whether the cause of action was not based on the interpretation and application of a collective agreement and this issue has to be addressed.

[22]The applicants have pleaded their case as a contractual claim. Does the fact that the contract in question might be in the nature of a collective agreement mean that they had to proceed in terms of section 24 of the Labour Relations Act (LRA) and that this Court would accordingly not have jurisdiction to entertain the matter?

[23]In Ekurhuleni Metropolitan Municipality v SA Municipal Workers Union on behalf of Members (2015) 36 ILJ 624 (LAC) the respondent claimed that shop stewards were entitled to the payment of wages during the strike. They relied on the fact that the terms of a collective agreement were incorporated into their contracts of employment and contended that they were thus entitled to approach the Labour Court in terms of section 77(3) of the BCEA to enforce their claim. In para [30], the Labour Appeal Court (LAC) held that the section does not purport to give this Court jurisdiction or power that it does not have in terms of the LRA. This Court is thus not empowered either under the LRA or the BCEA to interpret and apply collective agreements, particularly in circumstances where the interpretation is pivotal and fundamental to the resolution of the dispute between the parties.

[24]In Rukwaya & others v Kitchen Bar Restaurant (2018) 39 ILJ 180 (LAC) the LAC dealt with a claim by employees for the payment of minimum wages. They were subject to the Bargaining Council for the Restaurant, Catering & Allied Trades and the collective agreement entered into at that council had been extended to them. They contended that their claim was in terms of their employment contracts and that they were thus entitled to approach this Court for relief under section 77(3) of the BCEA. This Court found that the legal basis for the claim was founded on the employer’s non-compliance with the collective agreement (to which it was subject). On appeal, the LAC followed the decision in Ekurhuleni and found that the claim of the employees had to be enforced in terms of the dispute resolution provisions of the collective agreement.

[25]The Court considered whether the decision of the Supreme Court of Appeal in Makhanya v University of Zululand (2009) 30 ILJ 1539 (SCA) should not be applicable. In paragraph 11 the SCA held as follows:

“The LRA creates certain rights for employees that include 'the right not to be unfairly dismissed and [not to be] subjected to unfair labour practices'. I will refer to those rights interchangeably as 'LRA rights'. Yet employees also have other rights, in common with other people generally, arising from the general law. One is the right that everyone has (a right emanating from the common law) to insist upon performance of a contract.”

[26]If this dictum was to be applied, this Court would have the jurisdiction and power to determine the matter. However, Makhanya did not deal with the interpretation or application of collective agreements and this Court considers itself bound by the decisions in Ekurhuleni and Rukwaya, which expressly dealt with the question.

[27]The applicants contend that the individual applicants are entitled to have their posts graded on levels 10 and 12 respectively for the period from their respective dates of appointment until the end of May 2016 and to payment for the difference between the remuneration attendant to such grades and that which they actually were paid.

[28]It is clear that the foundation of the claim by the applicants lie in the interpretation or application of a collective agreement, namely Resolution 1/2012. If that agreement, and in particular clause 18.1 thereof had not been concluded, the applicants would not have been able to formulate a claim. Further, that agreement provides that any dispute about the interpretation or application of the provisions thereof should be referred to the PSCBC for resolution in terms of its dispute resolution procedure.

[29]The applicants contended that Resolution 1/2012 had already been interpreted and handed up four arbitration awards about its interpretation. The Public Servants Association was involved in all four. These awards are of little assistance to the court in deciding whether Resolution 1/2012, properly interpreted, entitles the individual applicants to the relief they are seeking. They do, however, confirm that the interpretation and application of Resolution 1/2012 has been the subject of a number of disputes and that those four matters were referred to the right forum for determination in terms of section 24 of the LRA. This matter was not referred to the right forum.

[30] This Court does not have jurisdiction to determine the claim and it must be dismissed.

Costs

[31]Both parties submitted that costs should follow the result. However, the Court is not inclined to award costs. The issue of jurisdiction was not raised by either party, but by the Court. The Constitutional Court in Zungu v Premier of the Province of Kwa-Zulu Natal quoted with approval the reasoning of the Labour Appeal Court in Member of the Executive Council for Finance, KwaZulu-Natal v Dorkin N.O., which held that:

 

“The rule of practice that costs follow the result does not govern the making of orders of costs in this court.  The relevant statutory provision is to the effect that orders of costs in this court are to be made in accordance with the requirements of the law and fairness.  And the norm ought to be that costs orders are not made unless those requirements are met.  In making decisions on costs orders this court should seek to strike a fair balance between, on the one hand, not unduly discouraging workers, employers, unions and employers’ organisations from approaching the Labour Court and this court to have their disputes dealt with, and, on the other, allowing those parties to bring to the Labour Court and this court frivolous cases that should not be brought to court.”

 

[32]Had the respondent alerted the applicants to the jurisdictional issue, it might have been in a position to argue that the case was frivolous, but it had not.

[33]In the premises, I make the following order:

Order

  1. The claim is dismissed.
  2. There is no order as to costs.

                                                                                  _______________________

                                                                                                        H. Nieuwoudt

                                                     Acting Judge of the Labour Court of South Africa

Appearances:

 

For the applicant : Mr Elco Geldenhuys

Instructed by : Macgregor Erasmus Attorneys

 

For the respondent : Ms P Melapi

Instructed by : State Attorney



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