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[2016] ZAKZPHC 100
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Edumbe Municipality v Makhoba and Others (1940/16P) [2016] ZAKZPHC 100 (27 October 2016)
IN
THE HIGH COURT OF SOUTH AFRICA
KWAZULU-NATAL DIVISION, PIETERMARITZBURG
REPORTABLE
CASE
NO: 1940/16P
In the matter between:
EDUMBE
MUNICIPALITY
APPLICANT
And
NKOSINATHI SAHLUKO
MAKHOBA FIRST
RESPONDENT
THE PENSION FUNDS ADJUDICATOR
SECOND
RESPONDENT
NATAL JOINT MUNICIPAL PENSION
FUND THIRD
RESPONDENT
THE KWAZULU-NATAL JOINT MUNICIPAL
PROVIDENT
FUND FOURTH
RESPONDENT
ORDER
1. The determination and ruling given by the second
respondent (the Pension Funds Adjudicator) on 17 November 2015 in
respect of
the complaint by the first respondent against the
applicant and the third respondent is set aside and replaced with the
following
ruling:
“
The complaint is dismissed.”
2. The first respondent is directed to pay the costs of
the application.
JUDGMENT
SEEGOBIN J:
Introduction
[1]
This is an application by the Edumbe Municipality (‘the
municipality’) brought in terms of
section 30P
of the
Pension
Funds Act 24 of 1956
, as amended (‘the Act’) in which it
seeks an order setting aside the determination of the second
respondent, the Pension
Funds Adjudicator (‘the adjudicator’)
and replacing it with an order dismissing the complaint of the
complainant,
Mr Makhoba. Mr Makhoba is cited in these
proceedings as the first respondent.
[2] The third and fourth respondents are the Natal Joint
Municipal Pensions Fund and the KwaZulu-Natal Joint Municipal
Provident
Fund respectively. Neither of these parties have
opposed the application and abide the decision of the court. Mr
Makhoba,
on the other hand, has filed an answering affidavit in
opposition to the application. At the opposed hearing on 14
September
2016, the municipality was represented by Ms Mazibuko and
Mr Makhoba represented himself. He will hereafter simply be
referred
to as the respondent.
High
Court’s Jurisdiction
[3] The jurisdiction of the High Court to entertain an
appeal against a determination by the adjudicator is governed by the
provisions
of
section 30P
of the Act which provides as follows:
‘
30P Access to court
(1) Any party who feels aggrieved by a determination of the
Adjudicator may, within six weeks after the date of the
determination,
apply to the division of the High Court which has
jurisdiction, for relief, and shall at the same time give written
notice of his
or her intention so to apply to the other parties to
the complaint.
(2) The division of the High Court contemplated in subsection (1) may
consider the merits of the complaint made to the Adjudicator
under
section 30A
(3) and on which the Adjudicator's determination was
based, and may make any order it deems fit.
(3) Subsection (2) shall not affect the court's
power to decide that sufficient evidence has been adduced on which a
decision can
be arrived at, and to order that no further evidence
shall be adduced.
’
[4]
The consideration and adjudication of complaints is dealt with in
Chapter VA which was inserted in the Act by
section 3
of the
Pension’s Fund Act 22 of 1996. The office of the
adjudicator is set up in terms of section 30B of the Act and
the
functions thereof are to be performed by the adjudicator. The
main function of the adjudicator is to dispose of complaints
[1]
lodged in terms of section 30A(3) of the Act. Section 30D of
the Act further requires that the adjudicator dispose of such
complaints in a procedurally fair, economical and expeditious
manner. In order for the adjudicator to achieve that aim,
he/she has the power in terms of section 30E(1)(a) to ‘investigate
any complaint and make the order which any court of law
may make’.
In terms of s30J the adjudicator is permitted to follow any procedure
which he/she considers appropriate
in conducting an investigation,
including inquisitorial procedures. Any determination of the
adjudicator is in terms of s30O deemed
to be a civil judgment of any
court of law had the matter been heard by such court.
[2]
[5]
In
Iscor Pension
Fund v Murphy NO and Another,
[3]
van der Merwe J pointed out that the proper approach to be adopted by
the court in considering an application in terms of section
30P of
the Act was that dealt with by Nugent J (as he then was) in the
unreported decision of the High Court (WLD) in the matter
of the
South African Eagle
Pension Fund v Murphy NO,
dated 11 February 2000 under case number 99/30587, in which he said
the following:
‘
Although the approach
which this Court ought to take when considering a determination made
by the adjudicator is not expressly dealt
with in the Act, it seems
to me to follow from the nature of the adjudicator's duties that this
Court is called upon to correct
his determination if it is not in
accordance with law. In other words, this Court does not merely
exercise powers of review over
the performance by the adjudicator of
his functions, but is required itself to assess the merits of the
complaint, and decide whether
the adjudicator's determination was
correct in law. If not, this Court will substitute its own decision.
’
[6]
In the same matter, van der Merwe J also refers to the unreported
judgment of Wise AJ in the matter of
Southern
Staff Pension Fund v Murphy NO and Another
,
[4]
where the following was stated concerning section 30P of the Act:
‘
Subsection
(2) enacts that the Court ''shall have the power to consider the
merits of the complaint in question, to take evidence
and to make any
order it deems fit''. I do not understand this to exclude or limit
this Court's inherent review jurisdiction. In
my view, it is the
intention of this section to give the Court powers in addition to its
inherent powers of review
.’
[7] From what has been stated
above, it is apparent that the High Court has wide powers not only to
assess the merits of the complaint
but also to decide whether the
adjudicator’s determination was correct in law.
Brief
Common Cause Facts
[8]
The following facts are common cause and provide a brief insight into
what motivated the respondent to lodge a complaint with
the
adjudicator:
[8.1] The
respondent was employed by the municipality from the 1 September 2008
until 30 April 2014. He was a registered
member of the
KwaZulu-Natal Joint Municipal Provident Fund (the Provident Fund).
[8.2] He
was absent from work from September 2011 to September 2012.
[8.3] In
February 2012 the respondent was advised that his leave had been
exhausted and that he would not be paid a salary
until such time as
he resumed his duties.
[8.4] The
respondent returned to work on 3 September 2012. However,
between the period February 2012 to 3 September
2012 the municipality
did not pay his pension fund contributions to the Provident Fund nor
did it pay his salary.
[8.5] The
respondent ceased being an employee of the municipality in April 2014
following upon the outcome of a disciplinary
inquiry which
effectively resulted in his dismissal.
[8.6] The
respondent thereafter submitted a complaint of unfair dismissal to
the South African Local Government Bargaining
Council (the Bargaining
Council). This dispute was resolved on 22 July 2014 on the
basis that he was to be regarded as having
resigned.
[8.7] He
thereafter lodged a complaint with the Provident Fund.
Receiving no joy from the Provident Fund he thereafter
lodged a
complaint with the adjudicator.
[8.8] The
essence of his complaint to the adjudicator amounted to the
following:
[8.8.1] He
alleged that he had received a letter from his employer, being the
municipality herein, advising him that it had made
a retrospective
salary adjustment for him in November 2010. The salary
adjustment came as a result of a rectification of
14 months of his
service as a housing officer whilst he was being paid as a clerk.
According to the respondent the payment
of the adjusted salary was
supposed to have commenced in December 2010. He averred that he
was supposed to be paid the 14
months shortfall in terms of the
adjusted salary in December 2010, however he was never paid the
adjusted salary until he fell
sick.
[8.8.2] The respondent further
alleged that he was dismissed by the municipality for complaining
about the non-payment of the adjusted
salary and that he was forced
to withdraw from his fund. He further complained that the
municipality was in arrears with
its payments to the fund for the
period February 2012 to April 2014 contrary to section 13(7) of the
Act. He also complained
that the municipality failed to pay the
arrear contributions in terms of the adjusted salary despite the fact
this adjustment applied
with retrospective effect from December 2011.
Adjudicator’s
Determination
[9]
After calling for and receiving submissions on behalf of the two
respondents, viz the Natal Joint Municipal Pension Fund and
the
Edumbe Municipality who were cited in the complaint, the adjudicator
considered that it was not necessary to hold a hearing.
She
then proceeded to make her determination, a copy of which appears as
annexure TM13 to the founding affidavit. While the
determination is dated 17 November 2015, it was filed with the
registrar of this court on 24 February 2016 in terms of s30M read
with s30O of the Act.
[10] The full extent of the order
made by the adjudicator is in the following terms as set out in
annexure TM1:
‘
ORDER
6.1
In the result, the order of this Tribunal is as follows:
6.1.1 The first respondent is
ordered to pay the complainant the withdrawal benefit it is currently
holding for
him for the period September 2008 until January 2012
together with interest calculated at the rate of 9%
per annum
from 31 May 2014 to date of payment, less any deductions permitted in
terms of the Act, within three weeks from the date of this
determination;
6.1.2 The second respondent
is ordered to submit all outstanding contribution schedules from
February 2012 to
April 2014 and also the shortfall contribution
schedules from October 2009 to January 2012 to the first respondent
in respect of
the complainant in order to facilitate the computation
of the complainant’s arrear contributions, within three weeks
from
the date of this determination;
6.1.3 Should the second
respondent fail to comply with paragraph 6.1.2, the first respondent
is ordered to reconstruct
the complainant’s contribution
schedules based on the information already in its possession, within
two weeks of the second
respondent’s failure to submit the
schedules;
6.1.4 The first respondent is
ordered to calculate the arrear contributions due by the second
respondent together
with late payment interest calculated in
accordance with section 13A(7) of the Act, within one week of receipt
of the schedules
referred to in paragraph 6.1.2 or 6.1.3 (whichever
is applicable);
6.1.5 The first respondent is
ordered to transmit to the second respondent its computations in
paragraph 6.1.4
above within three days of completing them;
6.1.6 The second respondent
is ordered to pay arrear contributions together with late payment
interest as computed
in accordance with paragraph 6.1.4 above, to the
first respondent, within one week of receiving the computations from
the first
respondent; and
6.1.7 The first respondent is
ordered to pay the balance of the complainant’s withdrawal
benefit, within
two weeks of receipt of arrear contributions from the
second respondent in terms of paragraph 6.1.6 above; and
6.1.8 The
first respondent is ordered to provide the complainant with a
complete breakdown of his withdrawal benefit,
within one week of
effecting payment in terms of paragraph 6.1.7 above.
’
[11] As I pointed out above the fund cited by the
respondent in his complaint to the adjudicator is the Natal Joint
Municipal Pension
Fund. This is the fund which is referred to
by the adjudicator in her determination and to which the
adjudicator’s
order applies. According to the applicant,
however, the respondent was never a member of this fund – in
actual fact
he was a member of the KwaZulu-Natal Joint Municipal
Provident Fund. This is one of the aspects that go to the heart
of the
applicant’s objections to the manner in which the
adjudicator has dealt with the complaint before her. I will
revert
to this aspect later in this judgment.
Condonation
[12]
A preliminary issue which requires determination is whether the
applicant’s failure to institute these proceedings within
the
time-frames prescribed in s30(P)(1) should be condoned. Section
30(P(1),
supra
, stipulates that any party aggrieved by the
determination of the adjudicator may apply to the division of the
High Court
within six weeks
after the date of the
determination for relief. [My emphasis]
[13]
In
Samancor Group
Pension Fund v Samancor Chrome and Others,
[5]
the SCA held
in paragraph 20 that the high court, because of its inherent
jurisdiction, has the powers to govern its own procedures.
This
jurisdiction pertains not only to non-compliance with the rules of
court but also to statutory time limits.
[6]
This position was re-affirmed by the SCA in
Investec
Employee Benefits Ltd v Marais and Others
.
[7]
In
Samancor supra
,
it was further pointed out that when the high court dealt with the
application for condonation in that matter it did not consider
any
possible prejudice to the Pension Fund against whom it ultimately
granted an order.
[14]
As I mentioned, the adjudicator’s determination is dated 17
November 2015. According to Mr Themba Vuzumuzi Mkhize,
who is
the municipal manager of the municipality and the deponent to its
founding affidavit, the adjudicator’s determination
was only
received by the municipality on 4 January 2016 as evidenced by the
date stamp which appears on the first page of ‘TM1’.
Mr Mkhize explains that the determination was brought to his
attention immediately after his return from vacation on 20 January
2016.
A consultation was thereafter held with the
applicant’s attorneys on 10 February 2016. Since the
matter had an extensive
labour relations background, further
information concerning the respondent’s employment history was
called for and furnished
to the attorneys. The attorneys also
directed certain of their own enquiries to the adjudicator and in
response thereto they
received the further information on 16 February
2016. The application papers were then prepared and issued on
25 February
2016. In light of these facts, the applicant
contended that if the date of 4 January 2016 is to be considered,
then the six
week period referred to in s30P(1) would have expired on
14 February 2016, thus the delay in bringing the application was only
11 ordinary days.
[15]
The respondent, on the other hand, avers that the adjudicator’s
determination was transmitted to all the parties, including
the
municipality, on the 17 November 2015 by email. However, no
proof of this has been put up. He further states that
on 4
December 2015 he personally hand-delivered a copy of the
determination to the registry office of the municipality. Proof
of this is to be found on a date stamp of the municipality which
appears on the first page of the determination put up at page
164 of
the papers.
[16]
These allegations are countered by Mr Mkhize in reply. He
contends that the respondent is unable to say to whom the document
was delivered, if indeed it was so delivered. As such Mr Mkhize
is unable to check the veracity of the respondent’s
claims.
The municipality contends that in any event, it made no sense for the
document to be stamped and receipted twice
in different formats.
It points out that in view of the fact that the applicant is a small
municipality there would have
been no real difficulty on the part of
the respondent to identify the official who received the document.
The respondent
has simply failed to do so and it is highly
questionable how the municipality’s date stamp came to be
inserted on the document
without any other confirmation by the
municipality’s registry clerk that the document was in fact
received.
[17]
It is trite that a court dealing with an application for condonation
should, in the exercise of its judicial discretion have
regard,
inter
alia
, to the degree
of lateness, the explanation therefore, the prospects of success and
the importance of the matter to the parties.
Additionally, a
court should inquire into the issue of prejudice and what impact the
order may have on the party against whom it
is ultimately
granted.
[8]
[18]
In the present matter, I consider that the delay on the part of the
municipality can by no stretch of the imagination be considered
to be
excessive. Mr Mkhize has provided a reasonable explanation for
the delay which I accept. This is an important
matter not only
for the municipality but also for the respondent. It is in the
interests of all parties that the dispute
be finalized as
expeditiously as possible. In my view the municipality stands
to be severely prejudiced by the order of the
adjudicator.
[19] The very fact that the Natal Joint Municipal
Pension Fund was cited and referred to by the adjudicator in her
determination
raises serious issues as to whether the adjudicator had
applied her mind properly to all the facts before her. This
aspect
is relevant to the municipality’s prospects of success
which even at a
prima facie
level appears to be reasonable in
the circumstances. In my view, the explanation for the slight
delay in bringing the present
application is sufficiently cogent to
warrant a consideration by this court of the municipality’s
overall prospects of success
and the order that should follow.
Municipality’s
Case
[20]
The municipality’s case is that the determination made by the
adjudicator is fatally flawed both on the facts and on
the law and
falls to be set aside. In substantiation hereof the
municipality relies on the following facts and circumstances:
[20.1] As a start it contends that the adjudicator was
under the mistaken belief that the respondent was a member of the
Natal Joint
Municipal Pension Fund whereas in truth and in fact he
was a member of the KwaZulu-Natal Joint Municipal Provident Fund.
The adjudicator was made fully aware of this position in a letter
dated 2 June 2015 written to her by the applicant’s attorneys.
As earlier pointed out this letter appears as annexure ‘TM13’
to the papers.
[20.2] The result of this mistake is that the
adjudicator has relied on the wrong set of regulations in considering
the respondent’s
complaint. While she relied on
regulations 15, 18 and 19 as set out on pages 6 and 10 of her
determination, the applicable
provisions are in fact regulations 12,
14, 17 and 18 of the Regulations Governing the KwaZulu-Natal Joint
Municipal Provident Fund
(annexure ‘TM2’). In
essence these regulations provide that a municipal employee may elect
to become a member
of the Fund (regulation 12); that a member shall
contribute a percentage of his salary to the fund as from the date of
becoming
a member (regulation 14); that a municipality must pay the
member’s contribution and an amount equal to a specified
percentage
of the member’s contribution to the fund within
seven days of the end of the month (regulation 17) and that a member
who
is on leave without pay is only permitted to contribute to the
fund if he has been granted to do so, after so applying to the
Committee
(regulation 18(2)). These have been fully traversed
by the municipality not only in annexure ‘TM13’ but also
in its founding papers. What follows is a summary of the
background facts and circumstances of the two periods in respect
of
which the respondent claimed that pension contributions were to be
paid to the fund for his benefit.
The
First Period
[21]
The first period ran from October 2009 to December 2010 and the
second period ran from February 2012 to April 2014. As
far as
the first period is concerned, the respondent was employed as a
cashier with effect from
1 September 2008. He became a
member of the Provident Fund with effect from 1 September 2008 and as
such he was subject to
the Regulations Governing the KwaZulu-Natal
Joint Municipal Provident Fund as I previously pointed out. He
was thereafter
appointed as a housing clerk but his letter of
appointment erroneously referred to him as a ‘housing
officer’.
In March 2009 the respondent’s job title
changed to that of ‘housing clerk’. He was
specifically informed
of this by the applicant in a letter dated 18
March 2009 (‘TM3’) and was also advised that ‘the
changes in your
job title will not affect your salary”.
[22]
In October 2009 the respondent was transferred internally to another
department within the municipality and his position remained
the
same. Once again, by letter dated 8 October 2009 (‘TM4’),
the municipality informed him that ‘the transfer
is not going
to affect your salary, meaning that your salary will remain the
same’.
[23]
According to the municipality the respondent’s salary was paid
at the correct rate and the municipality complied with
all its
obligations in terms of the regulations referred to above. The
salary slip for the month of November 2010 (‘TM5’)
shows
the amount that was contributed by the respondent and the amount
contributed by the municipality.
[24]
By the end of the first period, with effect from 1 December 2010, the
respondent’s salary was increased. The municipality
duly
paid the respondent’s salary at the new rate and additionally
it complied with the regulations by paying the new contributions
over
to the Provident Fund. Once again the salary slip (‘TM6’)
for the month of December 2010 reflects this position.
[25]
Annexure ‘TM7’ to the founding affidavit is a schedule
prepared by the provident fund setting out the following
contributions that were made by the municipality to the fund:
[25.1] for the month of November 2010
the municipality paid an amount of R1654,15 to the fund;
[25.2] for the month of December
2010, it paid an amount of R3240,66 to the fund.
[26]
The applicant contends that while the respondent complained that he
was entitled to a higher salary for the first period, he
did nothing
about this for over four years. It was only on 11 December 2014
that he decided to lodge a complaint of an unfair
labour practice to
the South African Local Government Bargaining Council in terms of the
Labour Relations Act 66 of 1995 (the LRA).
The complaint to the
adjudicator was only lodged on 4 May 2015.
[27] The municipality further contends that the
complaint of the unfair labour practice made to the South African
Local Government
Bargaining Council was substantially out of time and
accordingly dismissed. Similarly the complaint emanating from
the first
period, which arose more than three years before the date
when the complaint was received, ought not to have been investigated
by the adjudicator as it had prescribed in terms of section 30I of
the Act.
The
Second Period
[28]
As far as the second period is concerned, the following background
applied but which, according to the municipality, was not
taken into
account when the determination was made:
[28.1] The respondent had been off
work almost continuously from September 2011, on sick leave.
The effect of this was that
by February 2012 he had exhausted all his
sick leave and vacation leave.
[28.2] On 14 February 2012 the
municipality wrote to the respondent informing him that he had
exhausted all his sick leave as well
as vacation leave and that he
would no longer receive his salary until he resumed his duties
(‘TM9’).
[28.3] Since the respondent was not
being paid, no contributions were due to the Fund in terms of
regulations 14 and 17. The
municipality contended that if the
respondent wished to continue contributing to the fund, he ought to
have applied to the committee
for permission to do so as contemplated
by regulation 18(2). The respondent simply failed to apply for
such permission.
[28.4] The respondent ultimately
returned to work only on 3 September 2012. By then he had been
off work for an entire year.
The effect of this was that
contributions to the Fund on his behalf had ceased in terms of the
regulations due to the break in
his service.
[28.5] Within the structures of the
municipality itself, he had similarly been taken off the payroll
system as it was not clear
after February 2012 as to whether he was
going to return to work especially since he failed to advise the
applicant as to what
had transpired after his medical consultation in
November 2011.
[28.6] On the respondent’s
return to work in September 2012 he was nevertheless re-instated.
However, in order to have
his membership of the Fund re-instated he
was required to sign certain relevant forms confirming his membership
of the Fund.
Despite repeated requests for him to do so he
simply refused to complete and sign the necessary documentation.
[28.7] Additionally, on his return he
exhibited irrational and unreasonable behavior by refusing to take up
his appointed office
and to clock in when he arrived at work. He
also absented himself without leave or permission and generally
behaved in a
rude, abusive and aggressive manner.
[28.8] The respondent was thereafter suspended and
subjected to disciplinary proceedings which culminated in his
dismissal.
He lodged a complaint of unfair dismissal with the
South African Local Government Bargaining Council. This dispute
was resolved
on 22 July 2014 on the basis that he was regarded as
having resigned. The respondent complained to the Fund about
the non-payment
of his contributions. He thereafter referred
the complaint to the adjudicator which resulted in her determination
dated 17
November 2015.
Respondent’s
Case In This Court
[29] In answer to the present application by the
municipality, the respondent delivered an answering affidavit in
essay form.
He has not dealt pertinently with the allegations
raised by the applicant in its founding affidavit. I do not
consider it
necessary to deal in detail with this answering affidavit
except to set out the main grounds why he contends that the
application
should be dismissed. The first relates to his
incapacity to work due to ill-health as covered in the applicant’s
chronic
illness policy. The complaint is that the municipality
made its decisions without taking up the matter of his medical
boarding
with its council and as such he was victimized. The
second is that the municipality had miscalculated his available leave
when his salary was cancelled leading to unfair losses to the
provident fund contributions. The third relates to the unpaid
salaries of his back-pay which exhausted his leave. Lastly
,
he contends that the adjudicator was correct in her determination and
that the present application falls to be dismissed.
Material
Flaws in Adjudicator’s Findings
[30] From what follows hereunder I consider that the
adjudicator has committed certain material irregularities in the
manner in
which she dealt with the complaint before her thus
resulting in an adverse order being made against the municipality.
For
convenience I list these irregularities under the following
headings:
Wrong
Fund and Wrong Regulations
[31]
As I pointed out on several occasions already, the adjudicator
incorrectly believed that the respondent was a member of the
Natal
Joint Municipal Pension Fund when in fact he was a member of the
KwaZulu-Natal Joint Municipality
Provident
Fund. [My
emphasis] This is not only apparent from the relevant pay slips
(annexures ‘TM5’ and ‘TM6’)
issued by the
municipality but it is also evident from the second paragraph of the
letter of 2 June 2015 (‘TM13’) which
was written by the
Provident Fund’s attorneys in response to a request by the
adjudicator for submissions.
[32]
It seems to me that this mistake on the part of the adjudicator flows
from the fact that in her determination she incorrectly
cited the
Natal Joint Municipal Pension Fund as the ‘first respondent’
and the Edumbe Municipality as the ‘second
respondent’.
No other parties were either referred to or cited by her.
[33] What is perhaps more confusing is the fact that in
sub-para 2.1 of her determination the adjudicator herself confirms
that
the respondent herein ‘was a member of the first
respondent, a
registered provident fund
in terms of the Act,
by virtue of his employment with the second respondent’. [My
emphasis] Despite this the adjudicator
goes on to apply the
rules and regulations of the Natal Joint Municipal Pension Fund and
not those of the Provident Fund.
In my view, the inescapable
conclusion is that the adjudicator simply failed to apply her mind
properly to precisely which fund
the respondent was a member and
precisely which rules and regulations were applicable in the
circumstances.
The
First Period
[34]
The respondent’s case before the adjudicator was that he became
entitled to an adjusted salary in December 2010.
He averred
that he only became aware of the non-payment of the shortfall of
contributions ‘in August 2014 upon being so advised
by [the
fund] that [the municipality] had not paid the shortfall of
contributions in terms of the adjusted salary for the period
December
2010 to April 2014’. The adjudicator’s findings
regarding this aspect of the complaint are dealt with
in sub-para 5.9
of her determination. The adjudicator noted that the respondent
became entitled to an adjusted salary in
October 2009 and not in
December 2010 as he contended.
[35] In making a finding in favour of the respondent
regarding his salary adjustment and his alleged entitlement to a
higher salary,
the adjudicator failed to have regard to the fact that
the first period ran from October 2009 to December 2010 during which
all
the necessary contributions due to the respondent were paid by
the municipality. Furthermore, the municipality had complied
fully with its obligations in terms of the applicable rules and
regulations of the Provident Fund. More specifically, she
either failed to have regard to the salary slips for the months of
November 2010 (‘TM5’) and December 2010 (‘TM6’)
which show what contributions were being made by the municipality at
the time on behalf of the respondent, alternatively, the respondent
failed to make a full and honest disclosure to the adjudicator when
the complaint was lodged. It also seems that the adjudicator’s
attention was not drawn pertinently to the fact that although the
respondent’s job title changed in March 2009 and that he
was
transferred internally in October 2009, his salary remained the
same. The respondent’s salary only increased with
effect
from
1 December 2010 as explained in para 19
supra.
First
Complaint Time-barred
[36] The adjudicator failed to consider that the
respondent’s complaint regarding his salary adjustment and his
claim for
a higher salary was in fact time-barred in terms of
section
30I
of the
Pension Funds Act read
with section 12(3) of the
Prescription Act, 68 of 1969 (the
Prescription Act). Section
30I deals with the time limits for lodging of complaints and reads as
follows:
‘
Time limit for lodging of complaints
(1) The Adjudicator shall not investigate a complaint if the act or
omission to which it relates occurred more than three years
before
the date on which the complaint is received by him or her in writing.
(2) The provisions of the Prescription Act, 1969
(Act 68 of 1969), relating to a debt apply in respect of the
calculation of the
three year period referred to in subsection (1).
’
[37]
Section 30H of the Act deals with matters pertaining to jurisdiction
and prescription, sub-section(3) of which provides that
the ‘receipt
of a complaint by the Adjudicator shall interrupt any running of
prescription in terms of the Prescription Act,
1969 (Act No.68 of
1969), or the rules of the fund in question.’ In
Investec
Employee Benefits Ltd v Marais
[9]
it was held that the section makes it clear that the
Prescription Act
applied
to claims such as those involved in that case. The
‘claims’ in that case related to an intention on the part
of the first respondent to withdraw the total value from a provident
fund and a pension fund in which he had invested. The
court
(per Farlam JA) held that the receipt of a complaint by the third
respondent (the adjudicator) would interrupt prescription
in terms of
the
Prescription Act. It
was further held that although there
is similarity between
section 12(3)
of the
Prescription Act and
section 30I of the Act, the sections must not be conflated as both
Acts serve different and discrete functions.
[38]
As in the
Investec
matter,
supra
, I similarly find that
the nature of the claims by the respondent in this matter which
formed the subject matter of his complaint
before the adjudicator had
to be lodged in the period prescribed in section 30I of the Act.
In the present matter a period
of four years had lapsed before the
respondent even considered lodging a complaint with the Bargaining
Council on 11 December 2014
in terms of the LRA. The
Bargaining Council had to decide whether it should grant the
respondent condonation for the
late lodging of the dispute. The
explanation advanced by the respondent before the Bargaining Council
for the lateness was
that although he had previously referred the
dispute to the Department of Labour in 2011, he fell ill again and
was unsuccessful
before that department. The Bargaining Council
accordingly found that the dispute between the respondent and his
employer
arose and was unresolved since 2011. It accordingly
found that the delay (of more than three years) was unacceptable in
the
circumstances. The ruling of the Bargaining Council which
appears at pages 111 and 112 of the indexed papers was delivered
on
30 January 2015. As previously mentioned, the respondent’s
complaint to the adjudicator was lodged on 4 May 2015.
[39]
Against these facts which have not been disputed by the respondent in
these proceedings, I find his assertion before the adjudicator
that
he only became aware in August 2014 of his claims relating to the
salary adjustments and his entitlement to a higher salary,
to be
disingenuous in the extreme. In my view, the prescription
period would have commenced to run only when the respondent
became
aware or ought reasonably to have become aware of the act or omission
which gave rise to his complaint
[10]
which on the established facts would have been around January 2011.
In the circumstances I consider that the respondent’s
claims
arising from the first period had prescribed and should not to have
been adjudicated upon by the adjudicator.
[11]
[40] Reverting to the ruling by the Bargaining Council,
I find it strange that the respondent did not consider it necessary
to have
that ruling set aside but chose instead to bring the same
issue for determination in a different forum.
[41] For the reasons set out above, I conclude that the
adjudicator erred in not considering the decision of the Bargaining
Council
and further erred in investigating an issue which on the face
of it had arisen more than three years before the complaint was
lodged
with her. No condonation application served before the
adjudicator and as such her decision to entertain the complaint
amounted
to a serious misdirection on her part.
The
Second Period
[42]
As previously pointed out, this period ran from February 2012 to
April 2014 when no contributions were paid on the respondent’s
behalf primarily for two reasons, viz:
42.1 Firstly, he was informed that
his leave days had been exhausted and that he would have to resume
his duties if he expected
to be remunerated. As it turned out,
the respondent did not return to work and this resulted in a break in
his service from
February 2012 to August 2012.
[12]
42.2 Secondly
,
from September 2012 to date of his dismissal the respondent refused
to comply with the necessary administrative requirements which
would
have resulted in his re-instatement as a member of the Provident
Fund. This would have allowed the municipality to
make pension
contributions on his behalf.
[13]
[43] At no stage did the respondent apply to the
Provident Fund’s Committee in terms of Regulation 18(2) for
permission to
continue making contributions during this period when
he was on leave without any pay. All in all, it seems that the
respondent
became the author of his own misfortune when he flatly
refused to comply with the relevant administrative requirements of
the municipality
and the Provident Fund.
Conclusion
[44] Having examined the adjudicator’s
determination carefully, I find it inconceivable that she could have
made the order
which she did. It seems to me that she adopted a
rather sympathetic attitude towards the respondent. She failed
to
have regard to the submissions advanced on behalf of the Provident
Fund as set out in annexure ‘TM13’, she failed to
have
regard to the true factual position which existed at the time and she
failed to have regard to the relevant provisions of
the
Pension Funds
Act and
the
Prescription Act. In
my opinion the adjudicator
herein, like any other official exercising a public power, is
required to do so in a manner which is
lawful, reasonable and
procedurally fair. Regrettably, the adjudicator in the present
instance did not do so. The result
is that her determination
and ruling cannot stand and fall to be set aside.
Costs
[45] The municipality has been substantially successful
in this application and there is no reason why it should not be
entitled
to its costs. While the other respondents elected to
abide the decision of the court, the first respondent,
Mr
Makhoba, has vigorously and relentlessly pursued his opposition
thereto in circumstances where it was quite clear that no effect
whatsoever could be given to the order made by the adjudicator.
In my view, the costs of this application must be borne by
him.
Order
[46]
In the result, I make the following order:
1. The determination and ruling given by the second
respondent (the Pension Funds Adjudicator) on 17 November 2015 in
respect of
the complaint by the first respondent against the
applicant and the third respondent is set aside and replaced with the
following
ruling:
‘
The complaint is dismissed.’
2. The first respondent is directed to pay the costs of
the application.
_______________
Date of Hearing
:
14
September 2016
Date of Judgment :
27 October 2016
Counsel for Appellant :
Ms M Mazibuko
Instructed by
:
PKX
Attorneys
First Respondent
:
In
Person
MATERIAL
FLAWS IN ADJUDICATOR’S FINDINGS
“
45.
The Adjudicator believed that the matter concerned the Third
Respondent when the Fourth Respondent was the applicable party.
I can directly confirm that the First Respondent was a member of the
Fourth Respondent. This is clear from his payslips (annexures
“TM5” and “TM6”). The letter from the
Fund (“TM13”) clarifies that Provident Fund is
in fact
the applicable fund.
46. The Adjudicator herself confirms that the First Respondent was a
member “
of the first respondent, a registered
provident
fund”
, as appears from
paragraph 2.1
of her
determination (“TM1”). Despite this Adjudicator
considered the Third Respondent’s Rules and failed
to apply the
applicable Regulations. I submit that the Adjudicator was
mistaken in law and fact, and failed to apply her
mind to the
applicable regulations.
The
Adjudicator’s findings in respect of the First Period:
47. The Adjudicator refers to the contributions due for the First
Respondent for the First Period in
paragraph 5.9
of her
determination. The Adjudicator made two findings with regard to
the First Period.
48.
She states that the First Respondent “
was advised by [the
Fund] in August 2014 that [the Municipality] had not paid the
shortfall of contributions in terms of the adjusted
salary for the
period December 2010 to April 2014”.
49.
As a matter of fact the proper deductions were made with effect
December 2010 as appears from annexure “TM6”.
As
stated above this situation persisted until February 2012 as set out
in my letter to the First Respondent dated 14 February
2012 (“TM9”).
50.
It is disingenuous for the First Respondent to claim that he first
became aware of the alleged failure to make payment of contributions
for the First Period in August 2014 (as stated in paragraph 5.9 of
the determination). This information is clearly set out
in his
pay advice slips provided to him each month. (I refer to
annexures “TM5” and “TM6” in this
regard.)
I also refer to the Condonation ruling issued by the Bargaining
Council (annexure “TM8”), where the
arbitrator states (at
page 3) that the First Respondent had referred a dispute to the
Department of Labour in 2011. In the
premises, his claim for
relief with regard to the extra pay and benefit were dismissed by the
Bargaining Council, and were time-barred,
and should not have been
entertained by the Adjudicator.
51.
The Adjudicator herself should be well aware that the information
concerning the pay and the pension contributions are expressly
set
out in the First Respondent’s payslip as this is a statutory
requirement under
section 33(1)
of the
Basic Conditions of Employment
Act 75 of 1997
, and is provided to the Fund in terms of
Regulation
17.
The Adjudicator failed to apply her mind to these
provisions.
52.
The Adjudicator goes further, and states “
However, this
Tribunal notes that the [First Respondent] became entitled to an
adjusted salary in October 2009 in terms of the aforementioned
letter
of 10 November 2010 and not in December 2010 as he contended”.
(I presumed that the Adjudicator is referring to the letter attached
hereto marked “TM14”.)
53.
It is clear that the Adjudicator has jumped to a conclusion and has
gone beyond the First Respondent’s own evidence.
54.
Furthermore it is not correct that the First Respondent was to have
been paid for the period prior to the adjustment of his
salary in
December 2010. This letter does not change the explicit
statement by my predecessor in annexures “TM3”
and “TM4”
which state that his salary will not change. This remained the
position until it was increased with
effect from December 2010.
55.
The complaint with regard to the First Period was time barred and
should not have been entertained. As stated above, the
First
Respondent did not challenge the s
tatus quo
for over 4 years.
The effect of this is that he has foregone his right to challenge the
amount due to him. The Adjudicator
cannot take it upon herself
to act in terms of powers granted specifically to a bargaining
council or Labour Court, and make a
determination about what salary
he was due.
56. For this reason the Adjudicator should have declined to
investigate the complaint in terms of
section 301
of the
Pension
Funds Act.
The
Adjudicator’s findings in respect of the Second Period:
57. The Adjudicator relied on the Settlement Agreement (“TM12”)
for confirmation that the First Respondent was employed
until 30
April 2014.
(I
refer to paragraph 5.8 of her determination).
58.
The issue is however not the period of the First Respondent’s
employment, but whether any contributions were due to be
paid for him
for that entire period.
”
[1]
In section 1 of the Act the word ‘complaint’ is defined
as follows:
‘ “
complaint”
means a
complaint of a complainant relating to the administration of a fund,
the investment of its funds or the interpretation
and application of
its rules, and alleging-
(a)
that
a decision of the fund or any person purportedly taken in terms of
the rules was in excess of the powers of that fund or
person, or an
improper exercise of its powers;
(b)
that
the complainant has sustained or may sustain prejudice in
consequence of the maladministration of the fund by the fund or
any
person, whether by act or omission;
(c)
that
a dispute of fact or law has arisen in relation to a fund between
the fund or any person and the complainant; or
(d)
that
an employer who participates in a fund has not fulfilled its duties
in terms of the rules of the fund;
but shall not include a complaint which does not relate
to a specific complainant.’
[2]
Iscor Pension Fund v Murphy NO and another
2002 (2) SA 742
(T) at 748E-G.
[3]
Ibid. See also
Shell and BP South Africa Petroleum Refineries
(Pty) Ltd v Murphy NO and Others
(2000) 9 BPLR 953(D) at 958 I
and 958 E-F.
[4]
Case No. 14179/99 (WLD) page 6.
[5]
Samancor Group Pension Fund v Samancor Chrome
and Others
[2010] 4 All SA 297
(SCA).
[6]
Toyota South Africa Motors (Pty) Ltd v Commissioner, SARS
2002(4)
SA 281 (SCA).
[7]
Investec Employee Benefits Ltd v Marais and
Others
[2012] 3 All SA 622
(SCA).
[8]
See the
Samancor
decision,
supra
, para [20].
[9]
Investec
Employee Benefits Ltd v Marais
[2012] 3 All SA 622 (SCA).
[10]
Roestorf and Another v Johannesburg Municipal Pension Fund and
Others
[2012] 3 All SA 68
(SCA) para [23].
[11]
See
Investec Employee Benefits Ltd v Marais, supra
,
para [31].
[12]
Annexure TM9 at page 113 and paragraphs 31-36 of the founding
affidavit.
[13]
Para 36 of founding affidavit and paras 12 and 14 of replying
affidavit.