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[2019] ZAGPPHC 199
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Public Servants Association of South Africa and Others v Government Employers Pension Fund and Others (57703/16) [2019] ZAGPPHC 199 (25 May 2019)
IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION, PRETORIA
CASE NO.: 57703/16
22/5/2019
In
the matter between:
PUBLIC
SERVANTS ASSOCIATION OF SOUTH AFRICA
First Applicant
JAMES
KILGOUR VANWYK
Second Applicant
BENSON
BOY ISHMAEL OLIFANT
Third Applicant
and
GOVERNMENT
EMPLOYEES PENSION FUND
First Respondent
MINISTER
OF FINANCE
Second Respondent
MINISTER
OF PUBLIC SERVICE AND
Third Respondent
ADMINISTRATION
AND
19 Others
Fourth to Nineteenth
Respondent
JUDGMENT
VAN
DER WESTHUIZEN, J
[1]
The
relief sought in this application concerns the review and setting
aside a decision
[1]
of the Board of Trustees of the Government Employees Pension Fund
(GEPF) made in respect of the calculation of the actuarial interest
of members whose membership terminated after 1 April 2015 and
ancillary relief thereto. An order condoning the late institution
of
the review is also sought.
[2]
The
first applicant is an association of public service employees. The
fourth to nineteenth respondents are similar associations,
or
organisations, or trade unions, to which public employees could
belong.
[3]
The
GEPF is the pension fund that caters to the employees in the public
service. Employees in the public service could respectively
be
members of any one of the first applicant, or of the fourth to
nineteenth respondents. The GEPF is governed by the Government
Employees Pension Law, 1996, (GEP) and the Rules promulgated
thereunder. The GEPF does not fall under the
Pension Funds Act, 24 of
1956
. The GEP Law and its rules bind the Government, its members and
pensioners, and their beneficiaries or other persons who claim
against the GEPF.
[2]
[4]
In
terms of
Section 6(3)
of the GEP Law, members and pensioners have
direct representation on the Board of Trustees of the GEPF. The Board
of Trustees comprises
16 members of which half are employer
appointees and the other half are appointees by the members. The
member appointees include
one representing pensioners, one
representing the armed forces and the other six are nominated by and
represent representative
trade unions at the Public Service
Coordinating Bargaining Council (PSCBC).
[5]
In
addition, the GEP Law provides for negotiations, agreement and
consultations in various different contexts, directly between
the
GEPF and the employee organisations,
[3]
i.e. the first applicant and the fourth to nineteenth respondents.
[6]
This
application is premised upon the allegation that the GEPF had taken a
decision on 3 December 2014, and with reference to a
valuation report
received from its actuary, to amend the actuarial factors with effect
from 1 April 2016 without prior consultation
with neither the
Minister nor the employee organisations. The submission is that in
terms of the provisions of
Rule 14.4.2
, the GEPF is obliged to first
consult with the employee organisations and the Minister before
taking the decision to amend the
factors relevant for the calculation
of actuarial interest.
[7]
The
stance of the GEPF is that it did consult with the relevant parties
in that regard, albeit after the fact. In the consultations,
the
Minister and the employee organisations allegedly endorsed the
decision taken to amend the factors.
[8]
The
nub of the dispute entails an interpretation of the provisions of
Rule 14.4.2
in its particular context.
[9]
Rule
14.4.2
provides as follows:
"14.4.2
The actuarial interest of a member who has-
(a)
not attained the age of 55 years,
shall be calculated in accordance with the following formula:
Provided that the actuarial interest
shall not be Jess than the
amount of the benefit described in
rule 14.4.1
(a):
N(adj) x FS x F(Z) x [1
+
(0.04 x (60 -Z))]
Where-
N(adj) is the member's period of pensionable
service, taking into account all adjustments thereto in terms of the
rules, as at the
date of termination of service;
FS is the member's final salary;
F(Z) is a factor determined by the Board
acting on the advice of the actuary, and after consultation with the
Minister and the employee
organisations;
Z
is the age of at which the member attains
his or her pension-retirement date;
(b)
attained the age of 55 years,
shall be calculated in accordance with the following formula:
Provided that the actuarial interest
shall not be Jess than the
amount of the benefit described in
rule 14.4.1
(a):
G
+[A x A(X)]
Where-
G
is the amount of the gratuity the member
would have received in terms of the rules had he retired on that
date. For this purpose,
a
member with less than 10 years
pensionable service, will be deemed to qualify for the same benefit
as
a
member with 10 years or more service;
A is the amount of the annuity the member
would have received in terms of the rules. For this purpose,
a
member with less than 10 years
pensionable service, will be deemed to qualify for the same benefit
as
a
member
with 10 years or more service;
A(X)
is
a
factor
determined by the Board acting on the advice of the actuary, and
after consultation with the Minister and the employee organisations."
[10] On a purposive
reading of the afore quoted passage, there appears to be two
requirements that are to
be considered when determining the
respective factors, F(Z) and
A(X).
Those requirements are: advice from
the actuary and consultations with the Minister and employee
organisations.
[11]
The first requirement is that of the
advice of the actuary. The informed advice of the actuary is
paramount in determining the respective
factors. That advice is
provided on the strength of
inter
alia
important fiscal and other
financial considerations that impact upon the determination of the
respective factors, to which the Board
of GEPF do not have access to,
or has the required expertise to consider, analyse or make informed
decisions thereon. The actuary
referred to is that of the Board of
the GEPF.
[4]
[12]
The
second requirement is that of consultation. The Board is obliged to
consult with the Minister and the relevant employee organisations.
This requirement appears from the language used in
Rule 14
, the
syntax thereof and the grammatical rules to be applied. The
requirement follows on the use of a specific punctuation tool,
i.e. a
comma, which is immediately followed by the word "and". The
so called Oxford comma. The purpose of the Oxford
comma is to
introduce a second category, in the present instance that of
consultation.
[13] In the context of
the GEP Law, the Board of the GEPF has fiduciary duties in respect of
its members
as well as towards the
fiscus.
The one is not more
important than the other. Both are of equal importance. A balance is
to be struck.
[14] It is submitted on
behalf of the applicants that the requirement of consultation is to
be complied
with prior to a determination of the relevant factors. It
is further submitted on their behalf, that the purpose of the prior
consultation
is to permit the consultees to obtain their own actuary
to advise on what the appropriate factors should be. That submission
would
entail that the Minister would likewise be entitled to appoint
his or her own actuary to advise on the appropriate factor.
[15] In my view, the
context of the GEP Law and the Rules promulgated thereunder, do not
lean to such interpretation.
As recorded above, there is only one
actuary involved, that of the GEPF.
[16] The purpose of the
consultation required in the context of
Rule 14.4
is to inform the
Minister and the employee organisations of the advice of the actuary
and of the effect of the proposed factors
and to discuss those
issues, as those have financial implications not only for the
employees, but also for the
fiscus.
[17] It is of
fundamental importance to note that the rule only requires
consultation, and not the reaching
of an agreement. The phrase used
is
"after consultation".
That phrase has been considered by
the courts on numerous occasions.
[5]
It means nothing more than discussion and not to arrive at an
agreement. The importance of this difference is manifest.
[6]
[18]
In my view, it does not matter whether
the consultation took place prior to or after the taking of the
decision. The requirement
only requires consultation and in terms of
the dictum in
Premier, Western Cape v
President of the Republic of South Africa, supra,
the
Board of GEPF is not obliged to accept any input from the employee
organisations.
[19]
Compliance
with the first requirement is common cause. The dispute is in respect
of the second requirement. In this regard, there
is ample proof that
the Minister was consulted on the issue as required. The Minister in
fact acquiesced in that regard in the
form of a letter dated 28
January 2015.
[20]
In respect of whether there was
consultation at all with the employee organisations, the parties are
at odds. It is submitted on
behalf of the GEPF that the rule does not
require consultation with members, but with representative trade
unions, i.e. employee
organisations. The latter is defined in the
Rules as comprising those unions that are recognised by an employer
for collective
bargaining. The definition
[7]
reads as follows:
"'
employee
organisation',
1.10.1
an admitted employee organisation
referred to in section 1 of the Public Service Labour Relations Act,
1994 ;
1.10.2
an admitted employee organisation
referred to in section 1 of the Education Labour Relations Act, 1993;
1.10.3
an admitted employee organisation
or other employee structure formed by personnel appointed in terms of
the Intelligence Services
Act, 1994 (Act 38 of 1994), the Defence
Act, 1957 (Act 44 of 1957) and the South African Police Service Act,
1995 (Act 68 of 1995)
and which has for negotiation purposes been
accepted by the employer;"
[20]
It
is common cause that the members have direct representation on the
Board of GEPF. That much is clear from the composition of
the Board
of GEPF as recorded above. It is also common cause that the first
applicant is represented on the Board of GEPF.
[21]
It
is further apparent from the answering affidavit of the GEPF, that a
letter was addressed to the PSCBC during June 2015 from
which it is
clear that the GEPF was alive to the consultation process and that
the issue of the relevant factors advised on by
the actuary would be
discussed at the next PSCBC meeting. That meeting was held on 11
December 2015.
[22]
The
GEPF submitted that at the meeting of 11 December 2015, the PSCBC
agreed to the implementation of the relevant factors provided
by the
actuary.
[23]
It
is further submitted by the GEPF that the first applicant had a
representative on the PSCBC and, according to the attendance
register, was present at the meeting. The minutes of that meeting
does not reflect that the first applicant's representative was
late.
Further in that regard, no proof was provided by the first, who bears
the onus in that respect, of any late coming on the
part of that
representative. It follows that the first applicant was in fact
"
consulted"
on the issue of the
relevant factors to be used, both as a member of the Board of GEPF,
as well as part of the PSCBC. At neither
time was any objection
raised.
[24]
In
my view, determining the relevant factor primarily depends upon the
actuary's advice. That much flows from the dicta in
Premier,
Western Cape v President of the Republic of South Africa, supra.
[8]
The GEPF is not obliged to accept
the input of the employee organisations. Furthermore, in the present
instance, both parties acquiesced
in the determination of the
relevant factors.
[25]
There
are two other issues in dispute between the parties. The one relates
to the whether a review lies in respect the Board of
GEPF's decision
to implement the actuary's advice on the relevant factors, and if so
in terms of which principle, that provided
in PAJA or on the issue of
legality. The second relates to whether the relevant time constraints
have been met.
[26]
In
view of the interpretation found to be applied to Rule 14.4.2, as set
out above, neither requires any further consideration.
[27]
It follows that the application cannot
succeed.
I
grant the following order:
(a)
The application is dismissed with costs,
such costs to include the costs consequent upon the employ of two
counsel.
CJ
VAN DER WESTHUIZEN
JUDGE
OF HIGH COURT
On
behalf of Applicant:
CE Watt-Pringle SC
M SIBANDA
Instructed
by:
FASKEN MARTINEAU
On
behalf of Respondent: V NGALWANA
SC
S KHUMALO
F
KARACHI
Instructed
by:
MOHULATSI ATTORNEYS
[1]
Rule 14.4.2 of the GEPF Rules
[2]
Section 29(5) of the GEPF Law
[3]
Section 31 of the GEPF Law
[4]
Rule 4.8 read with the definition of actuary in Rule 1.3
[5]
McDonald et al v Minister of Minerals and Energy et al
2007(5)
SA 642 (C) at [17]-[18];
President of the Republic of
SA
et
al v Reinecke
2014(3) SA 205 (SCA) at [9];
Tloumama et al v
Speaker of The National Assembly et al
2016(1) SA 534 (WCC) at
569-570
[6]
Premier, Western Cape v President of the Republic of South Africa
et al
1999(3) SA 657 CC) at [85]
[7]
Rule 1.10
[8]
At [85]