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[2020] ZALAC 13
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Gerhard Potgieter Maintenance Services (Witbank) (Pty) Limited t/a Mr Clean v Contract Cleaning National Provident Fund and Others (JA98/2018) [2020] ZALAC 13; [2020] 9 BLLR 889 (LAC); (2020) 41 ILJ 2430 (LAC) (22 May 2020)
IN
THE LABOUR APPEAL COURT OF SOUTH AFRICA JOHANNESBURG
Reportable
Case no: JA98/2018
In the matter between:
GERHARD POTGIETER
MAINTENANCE SERVICES
(WITBANK) (PTY)
LIMITED t/a MR CLEAN Appellant
and
THE CONTRACT CLEANING
NATIONAL
PROVIDENT
FUND First
Respondent
TREVOR ACKERMAN N.O.
AND
OTHERS
Second
to Eighteenth
Respondents
THE MINISTER OF
LABOUR
Nineteenth
Respondent
Heard:
19 November 2019
Delivered:
22 May 2020
Coram: Tlaletsi,
Sutherland JJA and Murphy AJA
JUDGMENT
SUTHERLAND JA
Introduction
[1]
The sole issue on appeal is whether a decision of the Minister of
Labour (the Minister),
is to be set aside because it is unlawful. The
grounds of unlawfulness alleged are that the decision exhibits
arbitrariness and,
as such, is irrational in relation to the purpose
for which the power to make the class of decision was conferred on
the Minister.
[2]
The Basic Conditions of Employment Act 75 of 1997 (BECA) confers on
the Minister the
power to make Determinations for the various sectors
of the economy. Section 55 lists these powers.
[1]
The decision in question was made pursuant to section 55(4)(m) in
respect of regulating a provident Fund, namely the first respondent.
[3]
The Minister, in the Determination for the Contract Cleaning Sector,
provided for
the creation of a provident fund in respect of which
membership was to be compulsory. Having done so, the Minister
thereupon provided
for an exemption option. The relevant text reads
thus:
‘
31.3.1
Employer Participation
(a)
…
(b)
An employer who, in respect of all his/her
employees
as at the date of the
publication of this amendment already
participates
in a retirement fund that: -
(i)
Complies with the requirements of the Act;
(ii)
Has been approved by the Commissioner for
the South African Revenue Service; and
(iii)
Provides benefits equal to or better in all
respect to those provided by the Fund; may, with the agreement of a
majority of his/her
employees, apply in writing to the Board for
exemption from contributing to the Fund in accordance with the Rules,
provided that
…”
(Underlining supplied)
[4]
Therefore, as part of the provision for the newly created Fund, in
recognition of
the fact that some employers and their employees were
already members of other funds, provision was made that they could
opt out
of the new fund, subject to various conditions. Importantly,
the class of employers who were eligible had to have been in
established
funds
before a specified date
which served as a
cut-off. The controversy, in this case, is centred on the underlined
text determining that cut-off date.
[5]
The appellant initially sought to establish that, on the facts, it
was an eligible
employer who was participating in another fund prior
to the critical date. That case was dismissed. That finding is not
the subject
of the appeal.
[6]
Trapped by the strait jacket of this clause, the alternative argument
proffered by
the appellant is that the very fact of a cut-off date is
unlawful. The foundation of the edifice of the appellant’s case
depends on whether the decision to determine a cut-off is arbitrary.
If it cannot be found that the decision was arbitrary then
the
appellant’s case fails.
The case advanced for
arbitrariness
[7]
The proposition advanced by the appellant, in essence, is as follows:
7.1
The
Constitution protects freedom of association and fair labour
rights.
[2]
7.2
The BCEA is enacted to give flesh to those
values.
7.3
The Minister is, in terms of the BCEA,
vested with powers which must be used to achieve the objects of the
BCEA.
7.4
Among the objectives of the BCEA is to
create a floor of minimum conditions of employment;
7.5
The decision to create a provident fund for
the Contract Cleaning Sector in respect of which membership was
compulsory was an appropriate
decision by the Minister.
7.6
As a fact, and accepted by all as such, at
the time of the creation of the Contract Cleaning Provident Fund,
some employers and
their employees were already members of other
established funds.
7.7
The Minister, properly, decided that these
employers could apply for exemption if they in general, offered a
superior set of benefits.
7.8
However, the right to apply for an
exemption was tied to whether or not any given employer was “already”
a member of
another fund as at the critical date. This decision had
deleterious consequences for employers in the position of the
appellant.
If an employer offered its employees a superior set of
benefits under another fund after that cut-off date, it would not be
entitled
to rely thereon to apply for an exemption; the employer
would be compelled, with its employees, to contribute towards the
Contract
Cleaning National Fund.
7.9
This consequence is intolerable because the
result is:
7.9.1
to violate the employer’s and its
employees’ rights of free association.
7.9.2
to create a maximum set of benefits not a
minimum, which is inconsistent with the objectives of the BCEA;
7.10
Accordingly, the decision is arbitrary and
unlawful.
The Judgment
a quo
[8]
Prinsloo J dealt with this thesis and dismissed it. The judgment
addressed the maximum
benefits idea and reasoned that there was no
bar to the employer and its employees belonging to another fund in
addition to the
respondent.
[3]
Of the violation of freedom of association argument, the judgment
considered the compulsory nature of the membership of the first
respondent and adjudged it to be a limitation that was justifiable in
terms of section 36 of the Constitution. On the determination
of the
date
per
se
,
it was held that the review grounds did not raise it and it was
therefore not an issue before the court.
Evaluation
[9]
There are several discrete ancillary issues raised on the papers but
because of the
view we have taken on the central issue, it is
unnecessary to address them, save one. That issue is the absence of
an answering
affidavit by the Minister. The contention is that the
cut-off date decision is therefore unexplained by the decision-maker
and
therefore, if the argument of the appellant is correctly
understood, there is no rebuttal on the facts of the critique of the
decision.
In our view, this is not the correct approach. An
administrative decision must be respected, and validity is presumed
until that
presumption is disturbed. Before the Minister can be
embarrassed by not answering a claim of unlawful conduct, the
aggrieved accuser
must establish at least a
prima facie
case
that demands a rebuttal. In our view, the appellant has not done so
and the absence of an affidavit is inconsequential. As
is
demonstrated by the analysis that follows, the text of the
Determination speaks for itself and the inherent structure of the
scheme of the fund and the intrinsic policy choices made are
self-evident. Accordingly, the circumstances, in this case, are
unlike
those illustrated in
Minister of Justice v Saripa
2018
(5) SA 349
(CC) in which case the minister had not offered a rebuttal
to a
prima facie
case of blatant discrimination and a finding
was made of arbitrariness against the minister.
[10]
As to the notion of a violation of the right to freedom of
association; it is correct, as held
a quo
, that an employer
and its employees may be members of other provident funds. The
compulsion to be a member of this fund does not
ban anyone from
joining others. The freedom of association problem does not exist.
The fact that multiple memberships may give
rise to some degree of
inconvenience or be commercially bothersome does not establish the
cogency of the critique.
[11]
The compulsory nature of membership of the fund, which is itself not
challenged, serves a rational
purpose, ie to secure a critical mass
of contributors in one pool. Indeed, the pooling of risk is the
fundamental element of any
provident fund, a commonplace example of
collective sharing of risk. If a member could join and leave at will
for better schemes
the risk that the residue would be diminished to a
point where the scheme would be unviable is plain. Imposing a
compulsion to
belong serves to eliminate that risk. It serves the
interests of the most vulnerable employees.
[12]
The exemption option recognised vested interests by those employers
who had voluntarily provided
for their employees in a scheme, which
qualitatively assessed, could afford a better set of benefits. The
opportunity to obtain
an exemption was limited to this class of
employer who had vested interests prior to the creation of the fund.
[13]
The selection of a date was a mechanical exercise. Once it is
accepted that a compulsory scheme
with a limited right of exemption
on the grounds of prior commitments is the model chosen, the
selection of a cut-off date is inevitable.
One date as is good as
another, the exact argument advanced by the first respondent. There
is no argument about lack of notice
or inadequate notice or the like.
The selection of the date is not, therefore, subject to criticism.
[14]
The notion that the existence of a cut-off date causes a result that
employees have to endure
a “maximum” set of benefits
which outcome would be inimical to the purpose of the BCEA, which is
to craft a set of
minimum conditions, is misplaced. What the
regulation achieves is that it is a minimum condition of employment
that an
employee belongs to a fund
, if not the first
respondent fund, then another offering benefits no less generous. The
minimum floor is indeed created. The policy
trade-off between
trapping employers in a scheme that offered minimum benefits and
allowing a free for all and risk compromising
the viability of the
fund is plain. The Minister’s choice was rational.
Conclusions
[15]
There is no merit in the appeal.
[16]
As to costs, the effect of the review and the appeal has been to
burden the first respondent
with expenses that could have been spent
on benefits for members. It would be unfair to allow that burden to
fall on the first
respondent, and in effect, on the employees and
employers who contribute.
[4]
The
review court saw fit to make no costs order. That discretion will be
respected. In respect of the appeal, the appellant shall
bear the
costs, including the costs of two counsel, in the light of the
importance of the matter to the future administration of
the fund.
The Order
The
appeal is dismissed with costs, to include the costs of two counsel.
_________________
Sutherland
JA
__________________
Tlaletsi
JA
___________________
Murphy
AJA
APPEARANCES:
FOR THE APPELLANT: Adv
P Buirski
Instructed by Fairbridges
Wertheim Becker Inc
FOR THE RESPONDENTS:
Adv C Watt-Pringle SC, with him, Adv K Premhid,
Instructed
by Tabacks Attorneys
[1]
55
Making of sectoral determination:
(1) After considering
the report and recommendations of the Commission contemplated in
section 54 (4), the Minister may make a
sectoral determination for
one or more sector and area or as contemplated by subsection (8).
[Sub-s.
(1) substituted by s. 8
(a)
of
Act
20 of 2013
(wef
1 September 2014).]
(2) If the Minister does
not accept a recommendation of the Commission made in terms of
section 54 (4), the Minister must refer
the matter to the Commission
for its reconsideration indicating the matters on which the Minister
disagrees with the Commission.
(3) After considering
the further report and recommendations of the Commission, the
Minister may make a sectoral determination.
(4) A sectoral
determination may in respect to the sector and area concerned-
(a)
set
minimum terms and conditions of employment, including minimum rates
of remuneration;
(b)
provide
for the adjustment of remuneration by way of-
(i) minimum
rates; or
(ii) minimum
increases;
[Para.
(b)
substituted
by s. 8
(b)
of
Act
20 of 2013
(wef
1 September 2014).]
(c)
regulate
the manner, timing and other conditions of payment of remuneration;
(d)
prohibit
or regulate payment of remuneration in kind;
(e)
require
employers to keep employment records;
(f)
require
employers to provide records to their employees;
(g)
prohibit
or regulate task-based work, piecework, home work, sub-contracting
and contract work;
[Para.
(g)
substituted
by s. 8
(c)
of
Act
20 of 2013
(wef
1 September 2014).]
(h)
set
minimum standards for housing and sanitation for employees who
reside on their employers' premises;
(i)
regulate
payment of travelling and other work-related allowances;
(j)
specify
minimum conditions of employment for trainees;
(k)
specify
minimum conditions of employment for persons other than employees;
(l)
regulate
training and education schemes;
(m)
regulate
pension, provident, medical aid, sick pay, holiday and unemployment
schemes or funds;
(n)
regulate
any other matter concerning remuneration or other terms or
conditions of employment;
(o)
taking
into account the provisions of
section 21
(8) of the
Labour
Relations Act, 1995
, set a threshold of representativeness at which
a trade union will automatically have the organisational rights
contemplated
in
sections 12
and
13
of the
Labour Relations Act,
1995
, in respect of all workplaces covered by the sectoral
determination; and
[Para.
(o)
added
by
s. 8
(d)
of
Act
20 of 2013
(wef
1 September 2014).]
(p)
establish
one or more methods for determining the conditions of service for
labour tenants who has [sic] a right
to occupy and to use a part of
a farm as contemplated in
section
3
of
the Land Reform (Labour Tenants) Act, 1996 (
Act
3 of 1996
),
for the purpose of section 4 (3).
[Para.
(p)
added
by s. 8
(d)
of
Act
20 of 2013
(wef
1 September 2014).]
(5) Any provisions of a
sectoral determination may apply to all or some of the employers and
employees in the sector and area
concerned.
(6) A sectoral
determination in terms of subsection (1):
(a)
May
not be made in respect of section 7, 43 (2), 44 or 48;
(b)
may
only be made in respect of section 43 (1) to allow the employment of
children in the performance of advertising,
sports, artistic or
cultural activities;
(c)
may
not reduce the protection afforded to employees by sections 17 (3)
and (4) and 25 or a regulation made in
terms of section 13; and
(d)
may
vary the basic conditions of employment in section 9 in the
circumstances contemplated by section 50 (2A).
[Sub-s.
(6) substituted by
s.
11
of
Act
11 of 2002
(wef
1 August 2002).]
(7) The Minister may not
publish a sectoral determination-
(a)
covering
employees and employers who are bound by a collective agreement
concluded at a bargaining council;
(b)
covering
employees covered by a collective agreement concluded in a statutory
council regulating any matter
in respect of which that statutory
council has concluded a collective agreement;
[Para.
(b)
substituted
by s. 8
(e)
of
Act
20 of 2013
(wef
1 September 2014).]
(c)
regulating
any matter regulated by a sectoral determination for a sector and
area which has been in effect for
less than 12 months.
(8) Subject to the
provisions of subsection (7), the Minister may publish a sectoral
determination that applies to employers and
employees who are not
covered by any other sectoral determination.
[Sub-s.
(8) added by s. 8
(f)
of
Act
20 of 2013
(wef
1 September 2014).]
[Date of commencement of
s. 55: 21 March 1998.]
(underlining
to S55(4)(m) supplied.)
[2]
Sections
18 and 23 of the Constitution of the Republic of South Africa,1996
(Constitution).
[3]
There
is no bar in law to multiple memberships.
[4]
See
Zungu
v Premier, Kwazulu-Natal
(2019)
39 ILJ 523 (CC) at [23] – [26] where the approach to costs is
addressed.