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[2022] ZAECELLC 20
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Gqithekhaya and Others v Amathole District Municipality (EL 601/2021) [2022] ZAECELLC 20; [2022] 4 All SA 106 (ECLD); [2022] 11 BLLR 1066 (ELC); 2023 (2) SA 227 (ECEL); (2023) 44 ILJ 627 (ECL) (5 August 2022)
OF INTEREST
IN THE HIGH COURT OF
SOUTH AFRICA
(EAST LONDON CIRCUIT
LOCAL DIVISION)
Case No. EL 601/2021
In the matter between:
THANDOKAZI AMANDA
GQITHEKHAYA
First Applicant
THEMBEKA MBADLAYANA
Second Applicant
BUSISIWE NZWANA
Third Applicant
NANDI YANTOLO
Fourth Applicant
SIYABULELA
PHINDA
Fifth Applicant
TIZININI MATSHAYA-PITYI
Sixth Applicant
OLIVIA
KELLY
Seventh Applicant
YVONNE MFUKUZO
Eighth Applicant
SIBUSISIWE GUBEVU
Ninth Applicant
SIYASANGA WENDY MBANJWA
Tenth Applicant
LINDA SIMAKUHLE
Eleventh Applicant
and
AMATHOLE DISTRICT
MUNICIPALITY
Respondent
JUDGMENT
HARTLE J
[1]
The
eleven applicants form part of a large group of employees of the
respondent who it is common cause took part in an unprotected
strike
between 9 November and 15 December 2020.
[1]
[2]
The applicants continued on the face of it
to receive payment of their ordinary remuneration (payable monthly in
arrears) after
the strike despite the hiatus in their services
rendered, but five months after the event, between 28 April and 5 May
2021, they
were furnished with notices by the respondent informing
them of its decision to make deductions against their salaries over a
period
of two months (end of May and June 2021 respectively) in order
to give effect to the “no-work no-pay” rule adopted by
them with regard to their participation in the unprotected strike.
Preceding the personal notices received by them the respondent
had
announced its intention in the media on 9 March 2021 to implement the
principle of no-work no-pay against
all
the employees who had taken part in the strike. The media statement
had forewarned that deductions would be spread over four months
effective from 25 March 2021, contrary to the two-month regime
imposed on the present applicants.
[3]
The applicants claim that they were not
afforded any opportunity to show cause why the deductions should not
be made vis-à-vis
each of them or to make representations
concerning how the recovery strategy was to be implemented. To the
contrary they averred
that the recovery plan concerning them was
being undertaken without their consent or judicial process.
[4]
They
initially approached this court (under Part A) for a prohibitory
interdict on the basis that the respondent had not followed
the
provisions of section 34 of the Basic Conditions of Employment Act,
No. 75 of 1997 (“BCEA”) in implementing their
recovery
strategy, alternatively section 67 (3) of the Labour Relations Act,
No. 66 of 1995 (“LRA”), which is the ostensible
premise
upon which the respondent had intimated via the press release it was
relying on to justify its implementation of the no-work
no-pay
principle.
[2]
[5]
The argument advanced in support of the
interim interdict was premised on the applicants’ allegation
that by making the impugned
deductions without following due process,
the respondent was engaging in unfettered self-help which by its very
nature justified
the urgent intervention of this court by the relief
sought.
[6]
They
averred that without any prior engagement with them or their consent
having been obtained, without following legal process,
without
applying the
audi
alteram partem
rule in respect of the application of its practical decision to
implement their recovery strategy or considering whether the amount
of the deductions in relation to their remuneration was allowable
(assuming the provision of section 34 (2) of the BCEA to have
been of
application)
[3]
, without any
contractual entitlement or concession by virtue of a collective
agreement or authority of an arbitration award or
order of court, the
deductions were, simply put, not legally permissible and fell to be
interdicted.
[7]
Inasmuch
as a prior legal process was claimed necessary,
[4]
the applicants alluded to the uncertainty regarding whether in all
the circumstances it had been proper for the respondent to invoke
the
no-work no-pay rule vis-à-vis any of the affected employees at
all (given that it had created a precedent in prior unlawful
industrial action in 2019 not to dock anyone’s salary), the
inexplicable delay in making the decision after the fact to invoke
the principle concerning them, as well as the lack of uniform
treatment of all the striking employees concerning the manner and
practical implementation of its recovery strategy.
[8]
The matter co-incidentally came before me
under Part A on 25 May 2021. After hearing argument, I issued an
interim order on 27 May
2021 in the following terms:
“
1.
The respondent is interdicted from making deductions against the
salaries of the applicants under the
pretext of the “no work no
pay” principle and, where applicable, to pay back any money it
may by the time of the grant
of this interdict already have deducted
against the salaries of the applicants under the mantle of the “no
work no pay”
doctrine, pending the final determination of the
relief sought by the applicants in Part B of the notice of motion.
[5]
2.
The respondent is directed to pay the costs of the application for
interim relief on a party
and party scale.”
[9]
At the time I provided brief reasons for my
ruling, the crux of which I repeat below:
“
[1]
In brief the applicants do not as the respondent suggests simply seek
payment of remuneration they were (not)
paid during the two month
unprotected strike.
[6]
[2]
To the contrary the harm they seek to avert
pro
tempore
by the grant of the interim relief is against the arbitrary
deductions summarily effected or about to be effected against their
salaries, the payment of which they are lawfully entitled to,
[7]
by a method in respect of which they were not consulted and without
following any legal process and in a scenario where the common
law
principles of set off cannot in my view apply (because the issue of
what amounts the respondent is entitled to collect as against
each of
the applicants has not yet been resolved) and remains yet to be
determined.
[8]
[3]
The rights of the applicants affected by the unlawful and arbitrary
deprivation of their present
and future lawful salaries is their
right to have the rule of law enforced or respected, the contention
being that the respondent
has resorted to self-help by taking the law
into its own hands without following any legal process or by the
undermining of the
applicable judicial process.
[4]
In this respect it is contended that the deductions ought to have
been made consistent with the
provisions of section 34 of the Basic
Conditions of Employment Act, No. 74 of 1997 (“BCEA”)
which requires a court
order or arbitration award authorizing the
deductions made by it, rather than a general order of court simply
declaring the strike
in which they were involved as an unprotected
one, or the applicants’ consent in writing to the deductions.
This is particularly
so since on the face of it a settlement
agreement deriving from the earlier unlawful industrial action
suggests that the respondent
would not adopt a one-size fits all
approach with regard to the acceptance of a no work no pay principle
concerning the employees
who participated in the unprotected strike.
There is also the suggestion that some of the days involved over
which the unprotected
strike extended should have conduced to the
benefit of the applicants who would not in the ordinary course have
been required to
report for duty because of a rotation roster system
imposed during the COVID state of emergency. (Whatever disputes exist
between
the parties on the papers in this respect does not detract
from the fact that the
sequelae
to the unlawful industrial
action, giving rise to each employee’s supposed indebtedness to
the respondent by the salary payments
that were not due to them
because of the no work no pay principle, is not reflected in any
final order or arbitration award or
collective agreement.)
[5]
The effect of the respondent’s conduct thus far in the whole
debacle, and the threat of
its unlawful future conduct, lies in the
fact that they have or will be arbitrarily and summarily dispossessed
of their property
(their salaries to which they are contractually
entitled)
[9]
and materially
aggrieved thereby without following the prescribed legal process,
thus rendering the deductions as constituting
self-help.
[6]
The violation of the applicants’ fundamental rights, although
it also co-incidentally entails
an infringement of their rights to
fair labour practices, certainly makes it the business of this court
and clothes it with the
necessary jurisdiction.
[10]
[7]
The current dispute or affliction is further one that is decidedly
between the applicants (who
have individually become indebted in
principle to the respondents) and the respondent and the argument of
a misjoinder of the unions
involved in relation to the unprotected
strike accordingly holds no merit.
[11]
The present relief seeks to address the mischief of the unique impact
to each applicant by the actual or threatened deductions
in each
instance which have arbitrarily been imposed.
[8]
On the issue of urgency, once the true nature of the parties’
individual grievances are
seen for what they are, it becomes
abundantly clear why the matter takes on urgent proportions.
Self-help should not be countenanced
under any circumstances and in
this instance I accept that the applicants fall to be grievously
impacted by the deductions as that
will wreak financial penury for
each of them.
[12]
[9]
In all the circumstances I am satisfied that that the applicants have
established the necessary
requirements for the grant of the interim
relief sought in Part A of the Notice of Motion.”
[10]
The matter came before me again for a
determination under Part B.
[11]
Under this mantle the applicants claim the
following:
“
Subject
to the interim relief in Part A above:
6.
Declaring the Respondent’s decision to implement the ‘No
Work No Pay’ deductions,
ostensibly in terms of Section 67 (3)
of the LRA, against the salaries of the Applicants to be
unlawful.
[13]
7.
Declaring that the deductions to be made from the salaries of the
Applicants are not in accordance
with the provisions of Section 34 of
the BCEA.
8.
Declaring that the Respondent’s decision to implement the ‘No
Work No Pay’
deductions from the Applicant’s salaries
amounts to self-help.
9.
Declaring that it is incompetent for the Respondent to belatedly
(five months later) make
deductions from Applicants’ salaries
in terms of ‘No Work No Pay’.
10.
Directing the Respondent to pay back any money it may have deducted
against the salaries of the Applicants
before the granting of this
Order.
11.
Ordering the Respondent to pay (the) costs of this application, on an
attorney and client scale in the event
of opposition.”
[12]
Although
maintaining that my interim order was “erroneously granted”,
the respondent in the meantime paid back the money
(which it had
deducted on pay day on 25 May 2021) and have held off the
implementation of its recovery plan in respect of the applicants.
The
applicants nonetheless persisted that the relief claimed under Part B
be “confirmed” by way of “final relief”
(sic)
claimed under Part B which the respondent challenged.
[14]
It also raised the same technical objections concerning the
jurisdiction of this court to adjudicate the matter and the supposed
non-joinder of SAMWU (both of which aspects I had dealt with under
Part A), but these points were abandoned at the commencement
of the
hearing on 21 April 2022.
[13]
The simple stance adopted by the respondent
in opposition to the application is that since the applicants by
their own admission
had participated in the strike, which was found
by the Labour Court to have been unlawful, the order of that court
gave it the
green light so to speak to implement the “no work
no pay” rule and hence (as a necessary consequence) to make the
disputed
deductions without the applicants’ consent or any
further legal process because it in effect rendered the payments
which
it did make to the applicants in respect of the disputed period
to have been made in error. This, according to the respondent,
justified its entitlement to act, if not in terms of the common law
by applying the doctrine of set-off, then in terms of section
34 (5)
of the BCEA.
[14]
Any suggestion of self-help and/or
collective agreements which had the effect of rendering the intended
deductions taboo (emanating
from prior industrial action in 2019)
were denied.
[15]
The
respondent threatened in its answering affidavit, ironically since
its claimed justification was expressed in emphatic terms,
to file a
counter-application in terms of which it intended to determine the
period of each employee’s absence from work
without lawful
reason during November/December 2020, the amount owing by each of
them to it, and to seek a direction that it was
entitled to “recover
the payments made to the applicants as remuneration during that
period in instalments over (not two
but) four consecutive months
following the granting of such order”, but evidently did not
follow through in this respect.
[15]
[16]
Concerning the nature of the claimed error
which the respondent sought to rely on as its justification for
simply deducting the
owed monies from the applicant’s salaries
under the mantle of section 34 (5) of the BCEA, the respondent
explained that the
applicants were initially assumed to not have been
involved in the strike. It was only during its investigations into
who had participated
and who not that it was informed by other
employees of their complicity on the basis of which they were then
included after the
fact. But even before this juncture the respondent
averred that it made a conscious election to pay all of their
employees on the
premise that they were entitled to their full
remuneration despite their involvement, until it was proven to the
contrary that
they were indeed among those who had participated.
[17]
The first question is whether the
respondent was entitled, even in principle, to assume a debt owing to
it by the applicants who
had been paid their full salaries (on 25
November and 25 December 2020 respectively) even though they had not
rendered their services
in those two months during the strike.
[18]
As indicated above, the respondent had
intimated in the media notice that was relying on the provisions of
section 67 (3) of the
LRA as a basis for its decision to implement
the no-work no-pay rule.
[19]
This
subsection caters for a situation where there is a
protected
strike.
[16]
“
(3)
Despite subsection (2), an employer is not obliged to
remunerate an employee for services that the employee does
not render
during a protected strike or a protected lock-out, however-
(a) if the employee's
remuneration includes payment in kind in respect of accommodation,
the provision of food and other basic amenities
of life, the
employer, at the request of the employee, must not discontinue
payment in kind during the strike or lock-out; and
(b)
after the end of the strike or lock-out, the employer may recover the
monetary value of the payment in kind made at the request
of the
employee during the strike or lock-out from the employee by way of
civil proceedings instituted in the Labour Court.”
[17]
[20]
Section 68 of the LRA deals with the
situation where there is an
unprotected
strike. It is not necessary to record
what it states except to observe that it does not deal at all with
the issue of the employer’s
obligation to remunerate an
employee for services not rendered during such unlawful industrial
action.
[21]
It follows logically in my view however
that an employee has no legal entitlement to be remunerated in such
an instance and should
in principle pay back the money if he/she was
paid for his/her hiatus in services rendered whilst participating in
an unlawful
strike.
[22]
But
this logical assumption is not easily made in the context of messy
industrial action in the midst of a COVID pandemic when employee’s
comings and goings had to be managed and adjusted to meet the
exigencies of that situation, or even in the cold clear light of
day
in its aftermath because of the vast number of employees who had
participated in the strike.
[18]
The interdict application in the Labour Court was notably also
opposed by SAMWU, which delayed the granting of final relief until
23
December 2020 by when the respondent could claim with absolute
certainty that its employees had engaged in an unprotected strike.
[23]
I
imagine that if the respondent had withheld the
pro
rata
portions of the applicants’ salaries (to which they cannot in
principle claim to have been entitled) on 25 November and 25
December
2020 respectively and contemporaneously with the unprotected strike,
that its act of withholding at these junctures would
probably have
passed without demur by the applicants since they have owned up to
their participation in the strike and acceptance
of its implications.
The complaint here though is that the respondent made its decision
months after the fact that the applicants
were among those who had
participated in the unlawful industrial action and against whose
“remuneration” (as defined
in the BCEA) deductions were
now expected to be effected.
[19]
[24]
There can be no suggestion that the
respondent was not entitled in the aftermath to have embarked upon a
careful inquiry to determine
who participated in the strike and who
not and thereupon to have taken a positive decision (even five months
after the fact) to
implement a recovery strategy to give effect to
the no-work no-pay rule, although I take the applicants’ point
that the delay
might have conduced to the impression that it had
chosen not to implement the no-work no-pay rule after such a lengthy
passage
of time and certainly not vis-à-vis themselves.
[25]
The respondent’s initial diplomacy,
in having given the participating employees the benefit of the doubt
that they had not
so participated and were entitled to their full
remuneration pending such an enquiry, is in my view commendable and
demonstrates
its fair and cautious dealing with a sensitive
situation. But it was certainly not precluded from making the
decision which it
did to recover the overpayments as late in the day
as it did. Indeed, as Mr. Schultz submitted, provided the respondent
sought
to recover the overpayments within the permissible period
allowed for the recovery of a debt, the applicants could have no
quarrel
with its election to insist on being reimbursed at the end of
the day.
[26]
The
complaint by the applicants that in making their decision to
implement the no-work no-pay rule the respondent were precluded
by a
2019 collective agreement from doing so, or did not do so
consistently vis-à-vis other employees, is in my view nothing
but a red herring in the whole scheme of things. I gave the thought
weight in granting the interim relief, but on the basis of
the
Plascon Evans Rule
[20]
I am
obliged under Part B to accept the respondent’s version that
there was indeed consultation with the unions before implementing
the
rule, and that the decision to recover applied uniformly across the
board to all the employees who had taken part in the strike
action.
[21]
The respondent was
therefore entitled, in principle, to have adopted the stance which it
did that those who had participated in
the strike in question would
not be paid for the days on which they had not rendered services by
virtue of their participation
in the strike.
[27]
The question of what days their absence
from work made a difference to the accounting because of the Covid
rotation roster is certainly
a significant one in the context of fair
labour practices. I imagine that it would have caused controversy if
the extent of each
employee’s indebtedness was a product of
assumption rather than agreement possibly requiring a declarator
concerning the
basis for the respondent’s calculations. Not
surprisingly this is an eventuality the respondent seems to have
reconciled
itself with by its suggestion that it intended to file a
counterapplication aimed at settling these rands and cents disputes.
[28]
The issue for determination under Part B is
whether the applicants are justified in their entitlement to a final
interdict so to
speak restraining the respondent from recovering the
amounts for which the applicants are in principle indebted to them
for
without their consent or judicial
process
, in other words automatically
by way of set-off.
[29]
This necessarily entails an
introspection into the provisions of section 34 of the BCEA. The
parties certainly do not hold a common
understanding of the effect of
its provisions.
[30]
The contentious section, which deals with
deductions that are lawfully permissible against the remuneration of
employees, provides
as follows:
“
34
Deductions and other acts concerning remuneration
(1) An employer may not
make any deduction from an employee's remuneration unless-
(a) subject to subsection
(2), the employee in writing agrees to the deduction in respect of a
debt specified in the agreement;
or
(b) the deduction is
required or permitted in terms of a law, collective agreement, court
order or arbitration award.
(2) A deduction in terms
of subsection (1) (a) may be made to reimburse an employer for loss
or damage only if-
(a) the loss or damage
occurred in the course of employment and was due to the fault of the
employee;
(b) the employer has
followed a fair procedure and has given the employee a reasonable
opportunity to show why the deductions should
not be made;
(c) the total amount of
the debt does not exceed the actual amount of the loss or damage; and
(d) the total deductions
from the employee's remuneration in terms of this subsection do not
exceed one-quarter of the employee's
remuneration in money.
(3) A deduction in terms
of subsection (1) (a) in respect of any goods purchased by the
employee must specify the nature and quantity
of the goods.
(4) An employer who
deducts an amount from an employee's remuneration in terms of
subsection (1) for payment to another person must
pay the amount to
the person in accordance with the time period and other requirements
specified in the agreement, law, court order
or arbitration award.
(5) An employer may not
require or permit an employee to-
(a) repay any
remuneration except for overpayments previously made by the employer
resulting from an error in calculating the employee's
remuneration;
or
(b) acknowledge receipt
of an amount greater than the remuneration actually received.”
[31]
Shortly
before the present matter was due to be argued before me, I furnished
counsel with a copy of a recent judgment which I had
delivered in
Zolile Vumazonke v Municipal Manager and Another as I considered that
the approach adopted by me therein concerning
the application of the
provisions of section 34 of the BCEA might hold sway.
[22]
[32]
In that matter the applicant had resigned
from the employ of the Buffalo City Metropolitan Municipality.
Instead of paying resignation
monies that were due to him, the
municipality had applied set-off against his remuneration claiming
that the parties were mutually
obligated to one another, the
municipality to him for his final benefits and he to it since he had
purportedly been paid “in
error” in respect of a prior
acting stint at a higher Task Grade than the position he had acted in
at the time had warranted.
The applicant did not accept that the
grade level on which he had been appointed for the acting stint
period was incorrect. The
offer to pay him on this basis had been
consciously made and accepted by him and the municipality had not
sought by way of a self-review
to correct any claimed illegality in
his appointment on the higher task grade level. Although I found that
the payment might notionally
have been made in error to him on the
basis contemplated in section 34 (5) of the BCEA, I was however not
satisfied that its provisions
could be invoked, at least not without
his consent or an order of court, to justify the retention of the
applicant’s resignation
benefits.
[33]
I concluded in this respect that:
“
[27]
It is apparent from the foregoing submissions that the respondents
misconceived the nature of the mistake and what was
required to be
addressed in the evidence antecedently before it could even be
suggested that there had been an error of the kind
envisaged by
section 34 (5) (a) of the BCEA. The respondents also appear to have
missed the fact that the only way to get to that
point (of justifying
the premise of an erroneous overpayment as envisaged in section 34
(5) (a)), was for the respondents to have
first sought an appropriate
declarator in the counterapplication reviewing and setting aside the
Municipality’s agreement
with the applicant on the basis that
the offer to have paid him on TASK grade 18 was irregular or legally
invalid. The applicant’s
stance though was that the parties
deliberately contracted on the basis that he would be paid on TASK
grade 18. The respondents
appeared to be in agreement with him in
this respect but reading between the lines their standpoint is that
an administrative error
was perpetrated when the offer was made to
the applicant. This stance is unfortunately not pertinently pleaded
in the counterclaim.
Evidently the applicant’s concession that
the offer to him to pay him in the acting position on a pay grade
that may not
have been applicable or administratively correct was at
all times conditional on his view that the respondents ought first to
have
applied to review and set aside his appointment on TASK Grade 18
before they could legitimately call on him to refund the alleged
overpayment.
[28] But even
assuming both errors (in appointing him on the wrong grade and then
the error in consequence by the overpayment),
I am not convinced that
section 34 of the BCEA provides the panacea in the respondents’
contemplation to have withheld the
applicant’s leave benefits
that were due to him when they fell to be paid.”
[34]
I went on to explain why in Vumazonke the
provisions of section 34 (5) of the BCEA could not be of application
without his consent
or an order of court authorizing the deduction:
“
[30]
The BCEA is concerned with fair labour practices. Its object is
stated as follows:
“
To
give effect to the right to fair labour practices referred to in
section 23 (1)
of
the Constitution
by establishing and making provision for the regulation of basic
conditions of employment; and thereby to comply with the obligations
of the Republic as a member state of the International Labour
Organisation; and to provide for matters connected therewith.”
[31]
Section
34 promotes fair labour practices by regulating deductions from an
employee’s remuneration which he/she would ordinarily
be
entitled to be paid together with other benefits whilst in service
and when his/her earnings and benefits are due.
(In this instance the leave monies claimed by the applicant fell to
be paid within seven days of the applicant’s resignation
from
the Municipality.)
[23]
[32]
The
section underpins the employee’s entitlement to receive his
full remuneration for which he has worked. It achieves the
objective
of fairness by setting forth protection and by rendering illegal any
deductions against his earnings and benefits unless
he has agreed to
it in respect of a specified debt, or unless deductions are required
or permitted in terms of a law, collective
agreement, court order or
arbitration award.
[24]
(An example of a permissible deduction given in Workplace Law by John
Grogan would be one for the payment of an employee’s
unions
dues in terms of
section 13
of the
Labour Relations Act.)
[25
]
[33] It can
fairly be stated that the applicant did not agree to any deductions
in casu
. The questions remains then whether the provisions of
subsection (1) (b) carry the day. Certainly there was no court order
in place
that sanctioned the deduction at the time it was made.
[34]
Deductions may be effected to reimburse an employee for loss or
damage caused by the employee in the course of
their employment, but
only, apparently, with the employee’s consent and under the
strict conditions outlined in subsection
2 (b)– (d), evidently
to ensure fairness.
[26]
That
situation is certainly not applicable here either.
[35]
Section 34
(5) (a) does not on its own permit a unilateral deduction
unless in the two instances made provision for in subsection (1),
even
if brought within the exception contemplated in subsection (5)
(a). In my view it merely establishes the premise that an employee
cannot expect the same protection against deductions where he has
been overpaid due to an error in calculating his remuneration.
It
follows logically that if there has been no error in calculating
remuneration due to him, he cannot be required or permitted
to repay
any amounts paid to him as remuneration as that would violate the
protection afforded to him by the section. He is entitled
to his
unadulterated remuneration. A different situation pertains though if
the exception referred to in subsection (5) (a) is
established on the
factual premise. A historical mistake in calculating his
remuneration, which I believe may notionally arise
even where he was
thought to have been on a higher level and paid in excess of what the
actual position warrants, may ground a
fair request to repay the
alleged overpayment previously made to him.
[36]
But the section does not, as Mr. Malunga suggests, provide a causa in
itself or a remedy to recover the alleged
overpayment. If the
employee does not agree as is provided for in subsection (1) (a) to
repay the amount paid to him in error,
then the next step is for the
employer to recover the alleged overpayment in legal proceedings as
is provided for in subsection
(1) (b). For the moment leaving aside
what I find in respect of the counterapplication, there would have
been no legal justification
for the second respondent to have
retained the leave benefits due to the applicant when they fell due
to him, or to have applied
set off. It was simply put ultra vires the
protection afforded to the applicant by the section. The reason why
that is, is because
the deduction was arbitrarily made. It was,
firstly, not sanctioned by the applicant’s consent, which
consent appears to
be prospectively required before such a deduction
can be made. The applicant had made it abundantly plain that he was
not prepared
to agree that any mistake had been made at all.
Secondly, there was no other law, collective agreement, arbitration
award or court
order in place at the time that permitted the
deduction. To the contrary there remains a dispute between the
parties concerning
whether there was any overpayment at all. It is
that dispute that he was entitled to the benefit of a hearing in
respect of (with
a judicial pronouncement or award arising therefrom
in the second respondent’s favour) before the respondents could
claim
to have been acting within the prescripts of
section 34
(1) by
holding over, withholding, or applying set off.
”
(Emphasis added for
present purposes.)
[35]
In
Public Servants
Association
of South Africa obo Ubogu v Head of the Department of Health, Gauteng
and Others
[27]
the
Constitutional Court confirmed,
that
the provisions of subsections (1) and (5) of
section 34
of the BCEA
do not authorize arbitrary deductions in any manner.
[36]
The Court had reason in confirmation
proceedings before it to refer to the provisions of
section 34
of the
BCEA as providing a more constitutionally justifiable alternative to
the provisions of section 38 (2)(b)(i) of the Public
Service Act, No.
103 of 1994 (“PSA”) which (before the court’s
confirmation of the Labour Court’s order
declaring the section
unconstitutional) allowed the State to recover monies wrongly paid to
an employee out of state coffers without
recourse to a court of law.
[37]
In holding up the provisions of section 34
(1) of the BCEA in comparison to section 38 (2)(b)(i) of the PSA, the
court observed
in this respect that:
“
There
can be no doubt that the recovery of monies overpaid by the state
engages multi-faceted interests. Section 34(1) of the BCEA
may be a
point of reference when the defect in the impugned legislation is
remedied.
This
section prohibits an employer from making deductions from an
employee’s remuneration unless by agreement or unless the
deduction is required or permitted in terms of a law or collective
agreement or court order or arbitration award. It bears mentioning
that section 34(5) read with section 34(1) of the BCEA does not
authorise arbitrary deductions.
”
[28]
(Emphasis added)
[38]
Counsel
in Vumazonke had sought to persuade me that the municipality’s
obligations as responsible stewards of public funds
to recover any
ostensible overpayments would constitute “the law” that
gave them the necessary authority to recover
the alleged
overpayments, but I was not convinced that this proposition was a
sound one.
[29]
[39]
Ironically, I referred to my interim order
issued in the present matter as establishing the requirement that
“the law”
contemplated by section 34 (1) (b) of the BCEA,
had to be specific in this respect:
“
In reasons
furnished recently in T A Gqithekhaya & Others v Amathole
District Municipality (EL Case No. 601/2021) I issued an
interim
order prohibiting arbitrary deductions summarily effected or about to
be effected against the applicants’ salaries
all of whom were
engaged in unlawful industrial action. I observed that the authority
in section 34 (1)(b) of the BCEA by one of
the four instruments
indicated in the sub-section had to be specific in relation to their
authorisation for the relevant deductions
to be made rather than
being of general effect. In that scenario there had been a general
order simply declaring the strike in
which the applicants were
involved as an unprotected one.”
[30]
[40]
In PSA obo Ubogu the Constitutional Court
reiterated that a court is required to respect an employee’s
fair trial rights referred
to in section 34 of the Constitution which
guarantees everyone the right to “have any dispute that can be
resolved by the
application of law decided in a fair public hearing
before a court”.
[41]
The
mischief in Vumazonke which I found had to be guarded against, where
the employee had disputed liability for the claimed deduction
in the
first place, is that his/her entitlement to judicial redress to
determine that dispute cannot be compromised by a perceived
mechanism
for recovery, even one that undergirds a municipality’s general
obligation to look after public funds.
[31]
[42]
The significance of the fair trial right,
at the heart of the court’s reasoning in PSA obo Ubogu for
confirming the declaration
of the invalidity of section 38 (2) (b)
(i) of the PSA, was eloquently articulated as follows:
“
[61]
The foundational values of the Constitution include the supremacy of
the Constitution and the rule of law. This supremacy
connotes that
“law or conduct inconsistent with [the Constitution] is
invalid, and the obligations imposed by it must be
fulfilled.”
[62]
In any event, to the extent that it is necessary to deal with the
limitation of the right to have judicial redress
as self-help
denotes, section 34 of the Constitution guarantees everyone the right
“to have any dispute that can be resolved
by the application of
law decided in a fair public hearing before a court”. This
section not only guarantees everyone the
right to have access to
courts but also “constitutes public policy” and thus
“represents those [legal convictions
and] values that are held
most dear by the society.” As this Court has repeatedly said
before, the right to a fair public
hearing requires “procedures
. . . which, in any particular situation or set of circumstances, are
right and just and fair”.
Notably, none of the respondents has
suggested that the limitation of the right to have judicial redress
is reasonable and justifiable
in an open and democratic society based
on human dignity, equality and freedom.
[63]
Regarding the principle of fair procedure, this Court remarked in De
Lange:
“
[a]t
heart, fair procedure is designed to prevent arbitrariness in the
outcome of the decision. The time-honoured principles that
no-one
shall be the judge in his or her own matter - and that the other side
should be heard [
audi alteram partem
]
- aim toward eliminating the proscribed arbitrariness in a way that
gives content to the rule of law. They reach deep down into
the
adjudicating process, attempting to remove bias and ignorance from
it. . . .
Everyone has the right to
state his or her own case
, not because
his or her version is right, and must be accepted, but because, in
evaluating the cogency of any argument, the arbiter,
still a fallible
human being, must be informed about the points of view of both
parties in order to stand any real chance of coming
up with an
objectively justifiable conclusion that is anything more than chance.
Absent these central and core notions, any procedure
that touches in
an enduring and far-reaching manner on a vital human interest . . .
points in the direction of a violation”.
[64]
Although section 38(2)(b)(i) is a statutory mechanism to ensure
recovery of monies wrongly paid to an employee
out of the state
coffers, the provision gives the state free rein to deduct whatever
amounts of money allegedly wrongly paid to
an employee without
recourse to a court of law. The alleged indebtedness here is R675
092,56. The state determined, arbitrarily,
the amount of the monthly
instalments so as to avoid what it believed was the necessity for
Treasury approval of an instalment
plan over 12 months. Given that
the alleged indebtedness was R675 092,56, the monthly deduction was
in the sum of about R56 257,72
from Ms Ubogu’s gross salary of
R62 581,42. It meant that, even at the rate of her downgraded gross
salary of R40 584,85,
Ms Ubogu could not afford to pay the alleged
debt.
[65]
The effect of the provision is to impose strict liability on an
employee. The deductions may be made without the
employee concerned
making representations about her liability and even her ability to
pay the instalments. The impugned provision
also impermissibly allows
an accounting officer unrestrained power to determine, unilaterally,
the instalments without an agreement
with an employee in terms of
which the overpayment may be liquidated.
[66]
Section 38(2)(b)(i) undermines a deeper principle underlying our
democratic order. The deductions in terms of that
provision
constitute an unfettered self-help − the taking of the law by
the state into its own hands and enabling it to become
the judge in
its own cause, in violation of section 1(c) of the Constitution.
Self-help, as this Court held in
Chief
Lesapo
,
[32]
“is inimical to a society in which the rule of law prevails, as
envisaged in section 1(c) of our Constitution.” Although
there
may be circumstances when good reasons exist − justifying
self-help − this is however not a case of that kind.
[67]
By aiding self-help, the impugned provision allows the state to
undermine judicial process − which requires
disputes be
resolved by law as envisaged in section 34 of the Constitution. This
provision does not only guarantee access to courts
but also
safeguards the right to have a dispute resolved by the application of
law in a fair hearing before an independent and
impartial tribunal or
forum. It is not insignificant that section 31 of the Act envisages
recovery of money, in the case of unauthorised
remuneration, “by
way of legal proceedings”. The Minister of Public Service
argues that Ms Ubogu’s section 34
right was not violated
because that protection applies only to disputes that are capable of
resolution by application of law. This
contention is flawed. The
Minister does not explain why the existing dispute was not capable of
resolution by the application of
law in a fair public hearing before
a court. The mechanism through section 38(2)(b)(i), as currently
formulated, is clearly unfair.
It promotes self-help and imposes
strict liability on an employee in respect of overpayment
irrespective of whether the employee
can afford the arbitrarily
determined instalments and was afforded an opportunity for legal
redress.
[68]
On those bases, section 38(2)(b)(i) does not pass constitutional
muster.”
[43]
The Constitutional Court went further and
denounced as flawed the contention that a deduction under section 38
(2)(b)(i) of the
PSA regulated the common law right of set-off:
“
[69]
(I)t is necessary to address the question whether the section
38(2)(b)(i) deductions regulate set-off. The appellants
submit that
section 38(2)(b)(i) regulates the right of set-off, which is not
self-help, arbitrary or unfair. The underlying premise
to the
argument that common law set-off does not amount to a form of
self-help, is not correct.
[70]
The doctrine of set-off is recognised under the common law. The
Appellate Division, as the Supreme Court of Appeal
was then known,
pointed out in
Schierhout
that:
“
When
two parties are mutually indebted to each other, both debts being
liquidated and fully due, then the doctrine of compensation
comes
into operation. The one debt extinguishes the other
pro
tanto
[only to the extent of the debt]
as effectually as if payment had been made”.
[71]
In
Harris
, Rosenow J remarked that the “origin of
the principle appears rather to have been a common-sense method of
self-help”.
In my view, the mechanisms in the impugned
provision are not comparable to set-off under the common law. The
doctrine of set-off
does not operate
ex lege
(as a matter of
law). Besides, there are no mutual debts. Here, the deductions in
terms of section 38(2)(b)(i) are made from an
employee’s
salary. The dispute regarding whether the translation of her position
as Clinical Manager: Medical affected her
starting package on the new
position remains unresolved. Therefore, the parties cannot be said to
be mutually indebted to each
other. It is arguable that the alleged
debt can, in the circumstance, be said to be fully due.
[72]
The doctrine cannot be invoked to defeat the employee’s claim
in relation to her salary. Particularly, where a dispute
surrounding
the translation of her position that, allegedly, did not affect her
starting package, had not been resolved by the
application of law in
a fair hearing before a court. At the risk of repetition, the
mechanism in the impugned provision constitutes
self-help. As the
Labour Appeal Court correctly observed in
Western Cape Education
Department
, the state has an obligation to exercise its power
under section 38(2)(b)(i) reasonably and with regard to procedural
fairness.
Indeed, the notions of fairness and justice inform public
policy − which takes into account the necessity to do simple
justice
between individuals. The contention that a deduction under
section 38(2)(b)(i) regulates the right of set-off is, in the
circumstance,
flawed. However, this should not be understood to
suggest that there can never be instances in which the doctrine of
set-off, especially
where there are mutual debts in existence, may be
invoked.”
[44]
Having
intimated to counsel in the present application what my
prima
facie
views were based on Vumazonke, Mr. Schultz on behalf of the
respondent put forward several submissions why I should not apply it
in
casu
,
the first being that the facts of the two matters are obviously
distinguishable from each other and that in his opinion the
respondent
in the present scenario had had every right to invoke the
doctrine of set-off. His second point was that section 34 of the BCEA
in the present factual scenario provides a constitutionally endorsed
instrument through which the respondent was and is entitled,
employer
qua
employee,
to recover the payments that were purportedly paid to the applicants
in error. Thirdly he submitted that the respondent
was entitled to
invoke the provisions of section 34 (5)(a) of the BCEA specifically
(in the peculiar fact set) based on the respondent’s
claimed
“error.” Fourthly, he contended that its machinery as a
tool for recovery of salary overpayments or errors
in calculation is
distinct and disjunctive from subsections (1) and (2) and not
subordinate thereto, this based on a finding of
a full court of this
division in Mnquma Local Municipality v Mgongwana
[33]
which, so he pointed out to me, is binding on this court. His fifth
submission is that the comments made by the Constitutional
Court in
PSA obo Ubogu relative to the practical effect of section 34 of the
BCEA were made
obiter
.
[45]
Let me begin with what the full court held
in Mnquma Local Municipality. That matter went about the
municipality’s withholding
of a car allowance it had previously
paid to the respondent (employee) without her written consent or a
court order entitling it
to do so. It appeared that the respondent
had in motion court proceedings sought an order reviewing and setting
aside the municipality’s
decision to discontinue the payment of
the allowance to her which she alleged had been paid to her since
2014. Bizarrely the respondent
contended in the court below that the
provisions of section 34 (1) of the BCEA were applicable to her
circumstances. The “central
issue” in the appeal was
stated by the full court to be “whether the court
a
quo
was correct in its conclusion that
the cessation by the appellant of its payment of a monthly sum of R5
000.00 to the respondent
without her consent amounted to a deduction
of (her) remuneration in violation of the provisions of section 34 of
the (BCEA)”.
[46]
I can understand the full court’s
concern that the whole premise of the judgment appealed against was
wrong and that it had
been a fundamental error of law (leaving aside
the court
a quo’s
further
mistake in concluding, as a fact, that the car allowance formed part
of her remuneration) for the court below to have found
that the
provisions of this section were applicable to her circumstances at
all.
[47]
But given the arguments before the full
court as to the applicability of section 34 of the BCEA, it happened
to traverse the various
cases dealing with its provisions and
concluded that the application of section 34 (5) of the BCEA was
“different”
from subsection (1) “because it
concerns repayments” and supposedly set apart in the sense that
subsection (5) does
not require the prior consent of an employee for
its invocation and application.
[48]
It is useful to set out the summary of the
cases mentioned by the full court:
“
[14]
The application of section 34 (5) is different, not only because it
has no bearing on deductions but because it concerns
repayments. This
subsection has been considered in a number of cases:
[14.1]
In
Jonker
v Wireless Payment Systems CC
[34]
Molahlehi J held as follows:
“
In
support of her case that her right had been interfered with the
applicant relied on the provisions of
s 34(1)
of the
Basic Conditions
of Employment Act. That
section prohibits an employer from making any
deductions from an employee's remuneration unless the employee agrees
in writing.
It is indeed correct that as a general rule the Basic
Conditions Employment Act prohibits deductions from employees'
salaries without
their prior consent. However, deductions without
consent are permitted where they are permitted by the law, a
collective bargaining
agreement and a court order or arbitration
award. In these instances all that the employer needs to do is to
advise the employee
of the error in payment and the deduction made or
to be made. See
Papier & others v
Minister of Safety & Security & others
(2004)
25
ILJ
2229 (LC).”
[14.2]
In
Sibeko
v CCMA
[35]
Revelas J, dealing with the issue of deductions, stated:
“
It
is indeed so that in terms of the
Basic Conditions of Employment Act,
an
employer may not deduct amounts from the salary or remuneration of
an employee without the employee's consent. Where an employee
was
however overpaid in error, the employer is entitled to adjust the
income so as to reflect what was agreed upon between the
parties in
the contract of employment, without the employee's consent.”
[14.3]
In
Padayachee
v Interpak Books (Pty) Ltd
[36]
Whitcher AJ (as she then was) observed:
“
[27]
It is noteworthy that the drafters of
s 34
chose to identify and deal
separately with a number of different types of deductions. This must
mean that the purpose of the provision
is to regulate these
deductions.
[28] It thus follows that
any enquiry into
s 34
should commence by identifying the nature and
purpose of the deduction in dispute and then ascertain whether the
section requires
employers to regulate such deductions in a
particular manner.”
[14.4]
Ngcukaitobi, AJ in
SA
Medical Association on behalf of Boffard v Charlotte Maxeke
Johannesburg Academic Hospital & Others
[37]
also appeared to accept, albeit perhaps
obiter
,
that the repayment of overpayments made in error could warrant
deductions without the requirements of
section 34
(1) (a) being met.
In particular, commenting on
Jonker
and
other decisions, he stated as follows:
“
[39]
It is apparent from these decisions that the view taken by the Labour
Court is that an overpayment as a result of an administrative
error
does not constitute remuneration as defined in terms of the BCEA.
Since it is outside the parameters of the BCEA, an employer
is not
required to obtain the consent of an employee before effecting the
deductions as required by
s 34(1)
of the BCEA.”
[49]
The full court in Mnquma Local Municipality
made no particular finding in my view that binds this court or states
unequivocally
that the requirements stated by
section 34
(1) (a) of
the BCEA
do not have to be met
before repayments envisaged under sub-section (5) can be recovered in
the peculiar circumstances of the present matter. Indeed,
the facts
in each scenario simply cannot be equated. Neither was a purported
precedent created by the full court in Mnquma Local
Municipality
which can be held up as clear authority for the proposition contended
for by the respondent that the applicants’
consent to implement
the proposed deductions did not first have to be obtained.
[50]
As
for the several cases documented by the full court on the subject of
the practical application of the provisions of
section 34
(5) of the
BCEA, their impact seems to have been neutralized by the observations
made by the Constitutional Court in PSA obo Ubogu,
even if made
obiter
.
Indeed, it would be counterintuitive to promote arbitrary deductions
where the Constitutional court has held up the provisions
of
section
34
of the BCEA as a mechanism that does not permit arbitrary
deductions but instead requires that due respect be given to an
employee’s
constitutional rights to fair labour practices, of
access to court, and the right not to be arbitrarily deprived of
their property.
[38]
[51]
In Vumazonke I held that the municipality’s
perception of an error in payment could notionally have been brought
within the
ambit of an overpayment of salary as is contended for in
section 34
(5) of the BCEA, but to what purpose? The same situation
applies here in the sense that the sum equivalent to the portion of
the
applicant’s salary the municipality was entitled to
withhold in lieu of the period when they failed to render services,
probably
represents an objective overpayment.
[52]
But even so, how does the fact that the
applicants were paid in error (classification wise) assist an
employer in the position of
the respondent when it wants to recover
the overpayment five months after the fact against present
remuneration owing to the employee.
Perhaps only by giving an
employer the licence to require that the overpayment, adjudged an
“error” in its view in
terms of subsection (5), be
recovered by way of deductions against the employee’s future
remuneration with his or her consent
in terms of subsection (1). If
the employee disagrees that there was an error within the
contemplation of
section 34
(5) of the BCEA he or she would be able
to say no, I do not believe that there has been an overpayment or
error in calculation
and to declare a dispute, I would venture to
suggest at the risk to the employee of being held liable for the
unnecessary costs
of any dispute resolution where the refusal to
agree in writing to the deduction(s) or its proposed terms, is
unreasonable.
[53]
In this instance the respondent by its own
admission made a conscious election to pay the applicants
notwithstanding their participation
in the strike initially giving
the impression that it was not invoking the no-work no-pay rule. Then
after an enquiry it determined
that it had made a mistake, not an
error in calculating the employees’ remuneration on the basis
envisaged in subsection
(5), but by not having included them in the
category of employees against whom they intended to implement the
no-work no-pay rule.
This set of circumstances does not suggest an
error within the contemplation of
section 34
(5) of the BCEA, but
even so it does not matter because unilateral deductions are not
countenanced in subsection (1). The applicants
appear to have raised
other disputes that in any event are required to be resolved.
[54]
The provisions of subsection (5) do not in
itself grant the employer a remedy or right to apply set off (even in
a scenario where
there has been an error in calculating the
employees’ remuneration). The section merely in my view
confirms the category
of deductions that an employee cannot be
expected to challenge on the basis that she/she had no entitlement to
in the first place
due to it constituting an obvious overpayment or
arithmetic miscalculation.
[55]
Mr. Schultz submitted that my
interpretation of
section 34
(5) of the BCEA in Vumazonke in effect
renders its utility or the subsection itself obsolete or nugatory. He
maintained that the
intention behind its inclusion is to not busy the
court with arithmetical calculations and the like and that this is
why the provision
is there without legal imprimatur or judicial
oversight.
[56]
However I cannot agree that it provides a
machinery for recovery against the remuneration of an employee (the
payment of which is
sacrosanct and protected under the mantle of
section 34
of the BCEA) except on the basis of one of the four
criteria made provision for in subsection (1) being satisfied.
[57]
I have also said above that notwithstanding
the universal no-work no-pay principle its invocation does not
elevate it to one that
is “permitted in terms of a law”
as is envisaged by
section 34
(1)(b). The respondent should have gone
further in the interdict proceedings and have asked for leave to
deduct remuneration it
was entitled to withhold on the basis of the
established principle in the event of the court finding in its favour
that the strike
was unlawful.
[58]
The
penultimate question concerns the permissibility of the extent of the
deductions representing more than 25% of the applicants’
gross
remuneration. In this respect the provisions of
section 34
(2) of the
BCEA appear to be self-contained and pertain to the unique scenario
where loss or damage is sought to be recovered from
an employee that
occurred in the course of employment and was due to his/her
fault.
[39]
The enquiry
envisaged by subsection (2)(b) calls for a fair procedure.
[40]
[59]
Despite the respondent’s argument
that the recovery of the mistaken payment to the applicants in four
instalments is an “indulgence”,
a “fair procedure”
is implicit in the provisions of
section 34
(1) of the BCEA as well.
The employee may, for example, agree to the extent of his/her
liability but not to the terms of the repayment
which an employer
wishes to implement. The employee in that instance will not in
writing agree to the deduction, but take his/her
recourse to the
court or labour forum to determine what is fair in all the
circumstances.
[60]
In
PSA obo Ubogu the Constitutional Court was alive to the fact that an
employer unilaterally imposing its terms on an employee
concerning a
repayment might be unfair and wreak havoc. In the case of Ms. Ubogu
it expressed the reservation that the proposed
monthly deduction in
relation to her gross salary was palpably unaffordable. The
preferable outcome it seems is to obtain the employee’s
agreement not only to make the deductions, but also in respect of the
terms under which the overpayment may be liquidated.
[41]
[61]
In this respect the ceiling envisaged in
section 34
(2)(d) of the BCEA might be a guide as to what amount
would be fair to deduct in relation to an employee’s gross
monthly
remuneration, but in my view would depend on the relevant
circumstances.
[62]
The
final question is whether the common law doctrine of set-off finds
application here. I would suggest that it can, but only in
circumstances where the employee has admitted the debt and payment
terms, or if a judgment debt already exists, as provided for
in
subsection (1) because only then can it be said that the applicants
and the respondent are mutually indebted to each other.
[42]
One ought to be mindful of the Constitutional Court’s
observation that the doctrine cannot be invoked to defeat an
employee’s
claim to his or her salary.
[63]
In the result I am inclined to find that
the applicants are entitled to “final relief”, but
limited to the single prayer
below.
[64]
This
entails substantial success in my view for the applicants and that
costs should follow that result. The scale however requires
some
elaboration. It is so as Mr. Metu indicated that it was not until the
last moment that Mr. Schultz who appeared on behalf
of the respondent
conceded that my previous interim order was dispositive of the two
technical objections raised. Mr. Schultz however
submitted that it
had appeared necessary for the respondent to persist with its
objection to the jurisdictional challenge because
the same challenge
had been successful in a related matter running concurrently with the
present matter where the issues are identical
but involve a different
category of employees.
[43]
[65]
I take the respondent’s further point
that the respondents could not have conceded the relief sought under
Part B as crafted
in the notice of motion even at the doors of the
court hence my tailoring of the relief I am prepared to grant
specific to the
unique facts of the matter rather than as a
generalized declarator. It is not by any stretch of the imagination
unlawful for the
employer to have implemented a no-work no-pay stance
after the fact, albeit the manner in which they went about their
recovery
in my judgment fell foul of the provisions of
section 34
(1)
of the BCEA. Neither can it be said to have been incompetent for the
respondent to have declared belatedly that the applicants
had to pay
back the money.
[66]
There is the further misfortune that the
applicants themselves have not stepped forward to try and resolve the
issue of the repayments,
whereas they concede that they were involved
in an unlawful strike and that this will ineluctably lead to their
having to reimburse
the respondent. Why they have made no tender to
date is quite alarming, bearing in mind that the costs of the further
litigation
they are driving the respondent to may prove to be
prohibitive.
[67]
Mr. Schultz added that until the Vumazonke
judgment had come across his desk he was inclined to follow the
authority in Mnquma Local
Municipality. This position adopted by the
respondent was therefore according to him not spurious, frivolous or
reckless. Whilst
I do not agree that Mnquma Local Municipality has
the persuasive force he professes it to have, I accept that the line
of cases
cited in the judgment involve an interpretation of
section
34
(5) as providing a self-standing recovery mechanism apart from the
provisions of
section 34
(1) of the BCEA.
[68]
He submitted further that his client, who
is a custodian and functionary in the public space, has a duty to try
and recover public
funds where they could and should. I accept in
this respect that the respondent has acted within its constitutional
mandate to
recover the public funds due to it and should not be
mulcted in costs on a punitive scale for doing so.
[69]
Regarding
the reserved costs of the last failed joinder application, these are
in reality not between the applicants and the respondent.
It appears
that they should rather according to the usual success rule be borne
by SAMWU. The present parties accept that they
will have to take
appropriate steps to recover these from the union, after giving them
notice in this respect.
[44]
[70]
I issue the following order:
1.
It is declared that the deductions effected
against the applicants’ salaries on 25 May 2022 (already
reimbursed to them) were
not permissible or at the time properly
effected in accordance with the provisions of
section 34
(1) of the
BCEA and amounted, in those circumstances, to self-help.
2.
The respondent is directed to pay the costs
of the application under Part B on the party and party scale.
B HARTLE
JUDGE OF THE HIGH
COURT
DATE OF HEARING:
21 April 2022
DATE OF JUDGMENT:
5 August 2022*
*Judgment delivered
electronically on this date by email to the parties.
APPEARANCES
:
For the applicants:
Mr. B Metu instructed by Sotenjwa Attorneys of East London (ref.
NS/30/ADM)
For the respondent:
Mr. N C G Schultz instructed by Lionel Trichardt & Associates of
East London (ref. Mr. Trichardt)
[1]
On
10 November 2020 the respondent obtained a rule
nisi
in the Labour Court, returnable on 10 December 2020, interdicting
the striking workers from participating in an unlawful strike,
but
this did not deter them. The order was made final on an extended
return date despite opposition to the application by SAMWU.
[2]
In the media statement the respondent announced that it would
implement the no-work no-pay principle “as prescribed by
section 67
(3) of the
Labour Relations Act&rdquo
;.
[3]
They
complained that the then anticipated deductions amounted to more
than 25% of their take home pay, leaving them with a paltry
balance
which would have rendered them unable to meet their monthly
financial commitments.
[4]
The applicants submitted that the respondent ought to have
approached the Labour Court (which in any event has exclusive
jurisdiction
to deal with the issue of just and equitable
compensation for any loss or damage attributable to the strike) for
“an appropriate
order” to give effect to the no-work
no-pay principle.
[5]
It
was common cause that the anticipated deductions were to be made on
the same day the interim application was argued before
me,
ostensibly in accordance with the respondent’s programmed
salary run already in place.
[6]
By this I meant that the challenge was not in respect of their
entitlement to be paid for the period that they did not work.
Their
concern was that they had not consented to any deductions against
their present-day remuneration.
[7]
Here I am referring to their ordinary remuneration which according
to the respondent is paid to municipal staff monthly in arrears.
[8]
I
considered it arguable that there was a mutual indebtedness to speak
of at the time.
[9]
These would be their ordinary salaries to which they are
contractually entitled, against which the respondent was purporting
to justify the set-off.
[10]
See
section 157 (2) of the Labour Relations Act, No. 66 of 1995 (“LRA””)
which confers concurrent jurisdiction
on the Labour Court with the
High Court in respect of any alleged or threatened violation of any
fundamental right arising from
inter
alia
employment and labour relations.
[11]
In this respect the respondent had suggested that SAMWU,
representing the interests of the employees affected by the strike,
ought to have been joined. The applicants averred that they were
however not satisfied with the assistance rendered by the union
and
elected to appoint their own attorneys.
[12]
The
court held in South African Informal Traders Forum and Others v City
of Johannesburg and Others
2014 (4) SA 271
(CC) at para [31] that
the ability of people to earn money and support themselves and their
families is an important component
of the right to human dignity.
Without it they faced “humiliation and degradation”
meaning that it is a vital interest
worthy of seeking to protect on
an urgent basis. See also Mpumulanga Economic Growth Agency v
Mthembu Qinisi Christocentric ZALCJHB
2015/352 at paras [17] - [19].
[13]
Evidently the offence registered by the applicants is that the
respondent purported to rely on the provisions of section 67 (3)
of
the LRA for its authority to make deductions against their salaries.
They were not in my view questioning the respondent’s
entitlement, in principle, to invoke the universal no-work no-pay
rule.
[14]
This
was probably because the relief claimed under Part A had been
construed in a rule
nisi
format. The order which I issued was however crafted differently,
although more or less of the same effect. The “declarator”
sought by the applicants in paragraphs 6 to 9 is confusing, but once
that relief is qualified by the introductory premise that
it is
subject to what was granted under Part A, and otherwise read in its
factual context, the confusion is resolved. Prayer
3 under Part A
required a rule
nisi
calling upon the respondent to show cause on the return date “why
a final order should not be granted”.
[15]
The
respondent asserted that the counterapplication would and should
have removed any concern and/or complaint seated in the accusation
about self-help, a concession in itself that recognises in my view
that the manner in which they had purported to implement their
recovery strategy, without any adjudication or prior process, was
perhaps found wanting. It is a pity that they did not press
ahead
with their intended counterapplication as this would have put this
matter to its final rest.
[16]
The parties were
ad
idem
that these provisions were not of application to the relevant
factual matrix here. It is however worth mentioning what the Act
provides concerning the employer’s obligation to remunerate an
employee for services not rendered during a
protected
strike in order to appreciate that the converse applies in a
scenario where the strike is unlawful. It follows logically that
in
the case of an unprotected strike, the employee should not expect to
be remunerated for any hiatus in his/her services rendered
as a
result of his/her unlawful participation in a strike. This in any
event accords with the universally accepted no work no
pay principle
in the context of labour relations.
[17]
Exclusive
jurisdiction is also conferred on the Labour Court in sub-section
(1) (b) to order the payment “of just and equitable
compensation for any loss attributable to the strike or lock-out, or
conduct …” having regard to certain factors
which are
not relevant for present purposes. It is clear however that we are
not presently concerned with such a loss attributable
to the strike
within the contemplation of that provision.
[18]
COVID protocols no doubt made it difficult to appreciate whether one
was staying home to give effect to the state of emergency
objectives
or in support of a strike.
[19]
It is arguable that the act of contemporaneously withholding might
be different from the act of making a deduction against an
employee’s salary in respect of which there are obvious legal
constraints.
[20]
Plascon-Evans Paints (TVL) Ltd v Van Riebeeck Paints (Pty) Ltd
[1984] ZASCA 51
;
[1984] 2 All SA 366
(A).
[21]
The applicants made no attempt to negate the respondent’s
version in their replying affidavits.
[22]
(595/2019
[2021] ZAECELLC 24 (15 December 2021).
[23]
Section
32 (3)(b) of the BCEA.
[24]
See section 34 (1) (a) and (b) of the BCEA.
[25]
8
th
Edition, at pages
68
- 69.
[26]
Workplace
Law,
Supra
at page 69.
[27]
2018
(2) BCLR 184 (CC).
[28]
Supra
,
at par [78]. For present purposes the effect of this principle is
that even assuming an overpayment (thus a factual premise
for the
practical invocation of subsection (5) by a request to the
applicants to repay the amounts that should have been docked)
the
employee must still agree to the deduction if a court or labour
forum has not authorised it. The Labour Court went no further
than
pronouncing that the strike was un unprotected one. There is further
no general collective agreement in place between the
parties that
outlines the steps to be taken to recover salaries paid to staff to
which they are or were not entitled as a result
of their
participation in an unlawful strike.
[29]
This was the driving force behind the respondent’s perceived
obligation in this instance as well, namely, to recover the
monies
owing to them by the employees by applying set-off against their
remuneration on the indisputable basis that the law does
not
countenance any entitlement to be paid a salary where services are
withheld.
[30]
See footnote 15 in the Vumazonke judgment.
[31]
Self-evidently the municipality’s public duty
in
casu
to recover the monies that it should not have paid to the applicants
intersects with the applicants’ rights to fair labour
practices and to have their (notional) disputes resolved by the
application of law decided in a fair public hearing.
[32]
Chief Lusapo v Northwest Agricultural Bank 2000 (1) SA 409 (CC).
[33]
(CA86/2019) [2020] ZAECMHC 16 (19 May 2020).
[34]
(J1137/09)
[2009] ZALC 150
; (2010) 31 ILJ 381 (LC) (23 June 2009) para [21].
[35]
(2001)
JOL 8001 (LC).
[36]
(D234/12)
[2014] ZALCD 4; (2014) 35 ILJ 1991 (LC) (3 March 2014).
[37]
(J2469/13)
[2014] ZALCJHB 78; (2014) 35 ILJ 1998 (LC) (20 March 2014).
[38]
Ironically the provision struck down permitted the state, as an
employer, to recover monies wrongly paid to its employees directly
from their salaries and wages in the absence of any due process or
agreement between the parties. This is exactly what the respondent
purported to do here, albeit under the mantle of section 34 of the
BCEA, which the Constitutional Court held does not permit
arbitrary
deductions.
[39]
Grogan opines that punitive fines for negligence or other misconduct
are thus precluded.
[40]
Grogan suggests that the same established principles that apply to
hearings would be applicable in respect of the “fair
procedure” indicated.
[41]
Supra
at paras 64 – 67.
[42]
PSA obo Ubogu
supra
at 70 - 72.
[43]
Case
No. EL 626/2021 refers. I was informed from the bar that there is an
application for leave to appeal in that matter
[44]
The
answer probably lies in the provisions of Uniform Rule 41 (1)(c)
appropriately adapted by the court to meet the unique circumstances.
See
Republikeinse Publikasies (Edms) Bpk v Afrikaanse Pers Publikasies
(Edms) Bpk
1972 (1) SA 773
A at 783 - 6.