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[2020] ZALAC 54
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Public Servants Association and Others v Minister of Public Service and Others (J500/2020) [2020] ZALAC 54; [2021] 3 BLLR 255 (LAC) ; (2021) 42 ILJ 796 (LAC) (15 December 2020)
IN
THE LABOUR APPEAL COURT OF SOUTH AFRICA, JOHANNESBURG
Reportable
LAC
Case No: JS00/2020
In
the matter between:
PUBLIC
SERVANTS ASSOCIATION
First Applicant
NATIONAL
PROFESSIONAL TEACHERS
ORGANISATION
OF SOUTH AFRICA
Second
Applicant
HEALTH
AND OTHER SERVICES PERSONNEL
TRADE
UNION OF SOUTH AFRICA
Third
Applicant
SOUTH
AFRICAN TEACHERS UNION
Fourth Applicant
NATIONAL
TEACHERS UNION
Fifth
Applicant
and
MINISTER
OF PUBLIC SERVICE
AND
ADMINISTRATION
First Respondent
MINISTER
OF BASIC EDUCATION
Second Respondent
MINISTER
OF JUSTICE AND
CORRECTIONAL
SERVICES
Third Respondent
MINISTER
OF POLICE
Fourth
Respondent
NATIONAL
DIRECTOR PROSECUTIONS
OF
PUBLIC
Fifth
Respondent
MINISTER
OF FINANCE
Sixth
Respondent
DEPARTMENT
OF UBLIC SERVICE
AND
ADMINISTRATION
Seventh Respondent
PUBLIC
SERVICE CO-ORDINATING
BARGAINING
COUNCIL
Eight Respondent
DEMOCRATIC
NURSING ASSOCIATION
OF
SOUTH AFRICA
Ninth Respondent
NATIONAL
EDUCATION HEALTH AND
ALLIED
WORKERS UNION
Tenth Respondent
POLICE
AND PRISONS CIVIL RIGHTS UNION
Eleventh Respondent
NATIONAL
UNION OF PUBLIC SERVICE
AND
ALLIED WORKERS UNION
Twelfth
Respondent
SOUTH
AFRICAN POLICING UNION
Thirteenth Respondent
SOUTH
AFRICAN DEMOCRATIC
TEACHERS
UNION
Fourteenth Respondent
Heard:
09 December 2020
Delivered:
15 December 2020
Coram:
Phatshoane ADJP, Davis JA and Coppin JA
JUDGMENT
THE
COURT
Introduction
[1]
In his seminal contribution to the understanding of the scope of
adjudication, Professor Lon Fuller
[1]
,
in describing disputes which cannot be resolved adequately by
adjudication, introduced the concept of polycentricity. Fuller
defined polycentric problems as 'situations of interacting points of
inference' which, when applied to adjudication 'involved many
affected parties and a somewhat fluid state of affairs.'
[2]
In short, Fuller emphasised that where a multitude of parties is
affected by a decision, this may result in complex repercussions
as a
result of interventions which cannot be adequately predicted by the
adjudicator. The criticism of this theory
[3]
notwithstanding, the problem of a polycentric decision looms large in
the context of the present dispute.
[2]
In essence, the dispute concerns a collective agreement
entered
into between the Government through the offices of the
first respondent and the admitted union members to the Public Service
Coordinated
Bargaining Council ('PSCBC') which was concluded in
2018. The agreement was entitled 'Resolution 1: Agreement on the
Salary Adjustments
and Improvements on Conditions of Service in the
Public Service for the Period 2018/2019; 2019/2020 and 2020/2021
('the collective
agreement').
[3]
The agreement concerned adjustments to
the salary structure of public service employees for the three
financial years referred to
above. The collective agreement was
implemented for both the 2018/2019 and the 2019/2020 financial years.
The present dispute concerns
the enforceability of part of the
collective agreement that provides for salary increases for these
employees for the financial
year 2020/2021.
[4]
This Court is now faced with an
application in which the applicants seek the enforcement of a clause
in the collective agreement
which the first and seventh
respondents contend would cost the fiscus in the amount of R 37.8
billion. The sixth respondent,
which opposes the enforcement of the
clause in its entirety, has launched a counter-application seeking
declaratory relief that
the relevant clause is unlawful, invalid and
unenforceable.
[5]
At the hearing, this court
treated the application and the counter-application
as inextricably linked so
that a finding of invalidity and
unenforceability of the collective agreement, insofar as it is
relevant to the present dispute,
would be determinative thereof. For
the sake of clarity, I shall refer to the ninth to fourteenth
respondents who oppose the counter-application
as the
respondent unions.
The
factual matrix
[6]
Wage negotiations between the Government
as the employer and the trade union parties which were represented at
the PSCBC commenced
in November 2017. After lengthy
negotiations, Resolution 1, which constituted the collective
agreement, was concluded in May and
June 2018. The parties who signed
it were the Government as employer and the ninth, tenth,
eleventh, fourteenth respondents
together with the second applicant.
According to an affidavit deposed to by Mr Mchunu, on behalf of the
first respondent, the signatory
unions, whilst not the only ones in
the PSCBC constituted the majority for the purposes of clause 17.9 of
the PSCBC's constitution.
The resolution was thus signed by the
Government through the first respondent and the unions which
represented the majority of
the union votes at the PSCBC. The
resolution thus became binding on all parties at the PSCBC.
[7]
Clause 3 of Resolution 1 provided for
the necessary salary adjustments. Clauses 3.1 and 3.2 provided for
salary adjustments in the
2018/2019 and 2019/2020 years. As
indicated, these clauses were implemented. Clause 3.3, which is the
relevant one for the purposes
of the present dispute, provides for
salary adjustments for employees in the public service in the
2020/2021 year in the
following terms:
'3.3
The salary adjustment for the period 1 April 2020 to 31 March 2021,
effective from 1 April 2020, for employees on salary levels
1-12 will
be as follows;
3.3.1
Level 1 to 7
Projected CPI+ 1.0%
3.3.2
Level 8 to 10
Projected CPI + 0.5% and
3.3.3
Level 11 to 12:
Projected CPI'
[8]
Clause 3.4 of the collective agreement
then provides that:
'3.4
The projected CPI for the 2019/2020 and the 2020/2021 FY will
be as
determined by the National Treasury for these respective periods.'
[9]
Between 25 February and 25 March 2020,
the Government sought the agreement of the union parties to revise
clause 3.3 on the basis
that its costs were unaffordable. The union
parties refused to revise the agreement and insisted on its
implementation. It is common
that clause 3.3 was not implemented on 1
April 2020.
[10]
Aggrieved by the Government's attempt to
alter, if not repudiate, the collective agreement, the ninth,
eleventh and fourteenth respondents,
inter alia, referred the
dispute to the PSCBC on 2 April 2020. The dispute was conciliated on
20 May 2020 but proved to be unsuccessful
and thus the dispute
remained unresolved when the relevant unions requested arbitration
which was opposed by the Government
parties. The dispute about
whether the matter should be resolved by arbitration was superseded
by events, in
that, on 8 June 2020, the present application was
launched seeking an order to compel the first, sixth and
seventh respondents
to comply with its obligations in terms of
clause 3.3 of the collective agreement. The arbitration was postponed
until this
application was finalised. At the same time, the
counter-application was launched by the sixth respondent seeking
declaratory relief
concerning the legality of the collective
agreement and its enforcement.
[11]
When the dispute came before this Court,
sitting as a court of first instance, a range of legal issues was
raised by the various
parties. Suffice to say that the key question
for determination of both the application and the counter
application was whether
Clause 3.3 is invalid in that the collective
agreement, in the view of the sixth respondent, was concluded in
contravention of
Regulations 78 and 79 of the Public Service
Regulations which were promulgated under the Public Service Act 1994.
It is to that
question to which we must now turn in order to resolve
the present dispute.
The
applicable regulations
[12]
Regulation 78 mandates collective
bargaining and empowers the Executive to engage in negotiations and
subsequently to conclude a
collective agreement. To the extent that
it is relevant, the regulation reads thus:
(1)
Collective bargaining shall be regulated
by the Labour Relations Act.
(2)
An executive authority
may
enter into a collective agreement on a matter of mutual interest
only
if
that authority
(a)
is responsible for managing collective
bargaining on behalf of the State as employer in that forum;
(b)
has authority to deal with the matter
concerned; and
(c)
meets the fiscal requirements
contained in regulation 79.
(3)
In the Public Service Co-ordinating
Bargaining Council, which deals only with matters transverse to the
public service, the Minister
is responsible for negotiations on
behalf of the State as employer. (emphasis added)
[13]
Regulation 79 headed "Matters with
Fiscal Implications, provides inter alia" as follows:
'An
executive authority shall enter into a collective agreement in the
appropriate bargaining council on any matter that has financial
implications
only if
(a)
he or she has a realistic calculation of
the costs involved in both the current and the subsequent fiscal
year;
(b)
the agreement does not conflict with the
Treasury Regulations; and
(c)
he
or she can cover the costs
(i)
from his or her departmental budget;
(ii)
on the basis of a written commitment
from the Treasury to provide additional funds; or
(iii)
from the budgets of other departments or
agencies with their written agreement and Treasury approval.'
(emphasis added)
[14]
When the two regulations are read
together, it is clear that they impose a requirement for the
conclusion of a collective agreement
by the State to this extent: the
cost of the collective agreement must be covered from the budget of
the relevant department of
State or on the basis of a written
commitment from the Treasury to provide additional funds or,
alternatively, from
the budget of other departments or
agencies with their written consent together with approval from
National Treasury.
[15]
From the papers, it appears that the
cost of the collective agreement could not be covered
solely from the budget of
the seventh respondent. No written
commitment was provided by National Treasury to provide additional
funding and, further, no
written agreement by any other department or
agency and National Treasury's approval has been procured to fund the
deficit from
other budgets. The applicants' and the respondent unions
contended that National Treasury and the Minister of Finance were
bound
by the approval by Cabinet of a draft agreement which had been
entered into on 26 January 2018.
[16]
Counsel for the applicants as well as
counsel for the ninth, eleventh and fourteenth respondents, together
with counsel for the
tenth respondent, all contended that the seventh
respondent had been authorised to act on behalf of the
Government at the
PSCBC. The offer had been made by the Government
and had been approved by the Cabinet. Further, the seventh respondent
had then
made the offer to the relevant unions in the PSCBC
which had been accepted. It was this outcome which represented
the
collective agreement.
[17]
Applicants contend that, in terms of s
91 of the Constitution of the Republic of South Africa, 1996, once
Cabinet approves the offer
to be made to the unions, that
is the January 2018 offer, all Ministers of State were bound by it,
including the first
and sixth respondent. In particular, the
presentation to the Committee of Ministers ('COM') set out the full
range of public service
negotiations for the relevant period of
2018/2019 to 2020/2021. Applicants' counsel submitted that from this
document it was clear
that the first and seventh respondents intended
to implement other measures in order to obtain the additional funding
necessary
to meet the costs of the collective agreement,
including Clause 3.3. In that presentation, it was stated that the
additional
expenditure per year would be as follows:
2018/2019
-
R6.2 billion
2019/2020
-
R10.7 billion
2020/2021
R13.2
billion
[18]
This represented a total outlay over the
period of R 30.2 billion. These figures were part of the presentation
made to the COM.
COM approved the draft agreement and hence the final
collective agreement. The sixth respondent, was both a member of the
Cabinet
and of COM and therefore the collective agreement fell within
the ambit of s 91 of the Constitution.
[19]
In support of this conclusion, the
respondent unions contended that, as the sixth
respondent was the political
head of National Treasury, and had been
part of Cabinet and thus had participated in the relevant Cabinet
decision, there had been
Treasury approval for the proposal which, in
turn, gainsaid the reliance of the sixth respondent on Regulation 79.
The applicants,
together with the respondent unions, therefore,
submitted that it could be inferred that the Cabinet had considered
ways
in which it would raise funds to meet the shortfall of R 30.2
billion, being the additional funding required in the
event that the collective agreement was implemented. In their view,
this was the only reasonable inference to draw
from the
facts because this Court could not assume that the Executive arm of
Government had chosen deliberately
to use its
powers in breach of the rule of law by concluding an agreement in
flagrant violation of Regulations 78 and 79. Hence
it followed that
the only reasonable inference which this Court could draw from
the evidence presented was that Cabinet
considered and then
complied with Regulation 79, when it made its decision to present the
offer of January 2018 to the applicants
and respondent unions, and
hence agreed to enter into the collective agreement on that basis.
[20]
In answer to this argument, counsel for
the sixth respondent referred extensively to a letter written by the
then Minister of Finance,
Mr Malusi Gigaba, to the then Minister for
Public Service Administration, Ms AF Muthambi, on 14 February
2018 which contains
the following of relevance to the present
dispute:
'The
National Treasury has carefully examined the request against funds
available within the fiscal framework. However, no additional
funding
can be made available to fund the wage negotiations outcome which
exceeds the provided funding envelope over the 2018 MTEF.
The
compensation budgets of departments remain hard ceilings.
In
order to maintain government's compensation ceiling, and provide
a credible alternative approach to· the negotiations,
the
National Treasury proposes:
•
Voluntary
early retirement and exit of 19, 000 public servants,
in order to free up R12 billion in additional
resources. These funds
can be used to fund above - CPI costs-of-living adjustments and
other proposals set out below.
•
Cost-of-living
adjustment not exceeding the following effective rates for each
financial year per salary range:
Levels
2018/19
2019/20
2020/21
Salary
levels 1-7
CPI+
0.15%
CPI+
0.25%
CPI+
0.50%
Salary
levels 8-10
CPI
+0.00%
CPI+
0.20%
CPI+
0.30%
Salary
levels 11-12
CPI+
0.00%
CPI+
0.00%
CPI+
0.20%
•
Equalisation
of pay progression at 1.5 per cent across the public service starting
in 2019/20; and
•
Extension
of housing allowance to spouses who are public servants in 2020/21.
Other
measures must also be considered:
•
The
State spends RB billion per year on overtime, spent largely in the
health sector. Possible savings may be found in this area,
particularly as it relates to commuted overtime doctors.
•
The
State spends R 2 billion per year on performance bonuses. If
performance bonuses are curtailed, the State could save over R
1
billion per year. This amounts to spending only 0.2 per cent of the
wage bill on performance bonuses. The policy allows for spending
of
up to 1.5 per cent of the wage bill on performance bonuses.
Consideration should be given to reducing this threshold to 0.75
per
cent of the wage bill.
•
It
is also crucial that teachers be required to submit performance
evaluations in line with the policy and practice for the rest
of the
public service.
I
kindly advise that DPSA consider the measures described above as part
of the employer offer to labour parties at the PSCBC. In
effect, the
DPSA needs to urgently put in place a programme that will facilitate
voluntary exits to remain within the current compensation
ceilings.
In
light of the serious fiscal constraints that the country faces,
acceptance of this proposal may require level of political
intervention.
I strongly advise that we urgently meet the principals
of labour parties, preferably before the resumption of negotiations.
To
this end, we may also have to consider requesting postponement of
the sitting of the PSCBC scheduled for Friday 16 February 2018
to
allow for this engagement.'
[21]
Counsel for both the sixth and first and seventh respondent submitted
that it was clear
from this letter that the conditions imposed
by National Treasury through the Minister of Finance had not been
met. It followed
therefore that there had been no written commitment
of any kind given by National Treasury to provide additional funding.
In their
view, it was also clear that there had been no
written agreement which could be shown to have been concluded by any
other department or agency to supply the necessary shortfall nor any
Treasury approval to fund the deficit from any other budget.
Evaluation
[22]
Mr Mogajane, the Director General of
National Treasury, in his affidavit, drew the
Courts'
attention to the clear qualifications by Treasury as set out in the
Minister of Finance's letter of 14 February 2018. All
that Mr
Galorale, representing the ninth, eleventh and fourteenth respondents
stated in answer was 'if the collective agreement
was indeed
unlawful, invalid and unenforceable the government would not
have complied with Clauses 3.1 and 3.2 and would
have sought an order
declaring the collective agreement to say unlawful and invalid. Such
an order is not sought in the notice
of counter application.'
[23]
The contents of the letter of 14 February 2018 evinces the absence of
any commitment by National
Treasury of the kind required
expressly by Regulation 79. The sixth respondent's case is
buttressed by the lack of
evidence of any written agreement by any
other Department of State. This is not denied by applicants or the
respondent union in
their affidavits.
[24]
It is arguably, for this reason, that
counsel for the ninth, eleventh and
fourteenth respondents astutely concentrated much of his argument on
two fundamental issues. Firstly, he submitted that as the
collective
agreement, including Clause 3.3, was concluded in June 2018, the
challenge to the validity of the collective agreement
had been
brought more than two years later, in July 2020, approximately 24
months after the collective agreement was concluded
and the rights
therein had already vested.
[25]
Counsel contended further, on the basis
of the decision by the Constitutional Court in
Member
of the Executive Council for Health Eastern Cape and another v
Kirland Investments (Pty) Ltd tla Eye and Lazer Institute
2014
(5) BCLR 547
(CC) that, even where a decision could be found to be
invalid, a Government department should generally not be exempted
from
the forms and processes of review. Further,
the Court held that the reviewing court had a
discretion
as to what relief should be granted pursuant to a
successful review application in such a case. We turn to deal with
these two
fundamental questions.
Delay
[26]
It was submitted by the respondent
unions that a delay of 24 months was clearly unreasonable. Even in a
collateral challenge, on
the assumption that the counter-application
represented a collateral challenge (which was not conceded by counsel
for the respondent
unions), Government is required to explain any
delay in challenging the impugned action proactively. See
Merafong
City Local Municipality v AngloGold Ashanti Limited
2017
(2) BCLR 182
(CC). In counsel's view, an argument that an application
for the review of the clause, prior to 1 April 2020, would have been
premature
was both hollow and untenable response. It was contended
that Regulations 78 and 79 were relevant at the time of the
conclusion
of the collective agreement and not thereafter. Therefore,
the sixth respondent's delay in challenging the legality
of the collective agreement was clearly unreasonable. See
A/tech
Radio Holdings (Pty) Ltd and others v City of Tshwane Metropolitan
Municipalities
[2020] ZASCA 122.
[27]
If, by contrast, the sixth respondent's argument on the
merits of the validity of
the collective agreement is correct, namely
that Cabinet had no power to grant the approvals required
by Regulation
79 and that the necessary requirements set out in
Regulations 79 had not been met, then the principle of
legality
must dictate that the agreement was invalid. It is a
fundamental principle in terms of the common law, that an actor must
be
legally empowered to perform any act in question and
that public power may only be exercised by the lawfully constituted
authority. The act must be performed in accordance with the
substantive and procedural requisites prescribed by the empowering
provision. See C Hoexter
Administrative Law in South Africa
(2nd
ed) Juta (2012) at 255 ff.
[28]
It
was argued both by counsel for the first and seventh respondents and
counsel for the sixth respondent that, in the first two
years of the
collective agreement, it was possible to meet the demands imposed
upon them by the agreement. However, in the view
of the sixth
respondent's counsel, this did not detract from the
argument that the collective agreement was invalidly
concluded and
was thus an illegal agreement. The fact that the implementation
of Clause 3.3 would impose an additional burden
of R 37.2 billion,
undoubtedly prompted the sixth respondent to raise the issue of
invalidity and legal unenforceability.
[4]
[29]
The question of delay was carefully
considered by the Constitutional Court in
Khumalo
and another v MEG for Education, KwaZulu Natal
(2014)
(5) SA 579
(Khumalo)
at
para 44:
'It
is a long-standing rule that a legality review must be initiated
without undue delay and that courts have the power (as part
of the
inherent jurisdiction to regulate their proceedings) to refuse a
review application in the face of an undue delay in initiating
proceedings or to overlook the delay. This discretion is not
open-ended and must be informed by the values of the Constitution.
However, because there are no express, legislated time periods in
which the MEC was required to bring her application, there is
no
requirement that a formal application for condonation needs to have
been brought.'
[30]
The Court in
Khumalo,
supra
went on to say that, given the
importance of the rule of law as a founding value; 'a court would be
slow to allow procedural obstacles
to prevent it from looking into a
challenge to the lawfulness of an exercise of public power'. (para
45) The Court emphasised that
delay undermines the ability of a court
to evaluate fully an allegation of illegality, although that is
clearly inapplicable in
this case. While there is
prejudice to the applicants and union respondents, there is
also massive prejudice
to the public interest at large, given that an
additional R37.2 will have to be found to finance the costs of
increases pursuant
to Clause 3.3 of the collective agreement. This
imposes a significant burden on the fiscus.
[31]
In summary, the prejudice caused by
refusing to adjudicate upon the legality of clause 3.3 in
circumstances where so large
a sum of money is required from
the public purse and where it is common cause that the State finances
are in an even more
parlous state than they were before the advent of
Covid 19, all dictate that the discretion of this Court should be
exercised in
favour of examining whether there is a legal
justification for the payment of so large a sum of public monies to a
relatively small
cohort of the South African population.
[32]
The only argument against the submission
of the sixth respondent that Treasury provided no written agreement
to make good the shortfall
from the budget of the first respondent to
fund Clause 3.3, pursuant to the requirements of
Regulation 79, was that
the COM and later the Cabinet appeared to
have agreed to enter into the collective agreement. That,
however, does not represent
compliance with the express wording of
Regulation 79, read together with s 216 (2) of the Constitution which
provides that 'the
National Treasury must enforce compliance with the
measures established in terms of sub section (1) and may stop
the transfer
of funds to an organ of State if that organ of
State commits a serious or persistent material breach of the
measures prescribed'.
[33]
National Treasury is given a particular
status under the Constitution. The constitutional provision set out
in s 216 of the Constitution
ensures that National Treasury is one of
the guardrails to ensure that the appropriate standard of
constitutional governance is
adhered to by the Executive. The
inclusion of the role of National Treasury in Regulation
79 fits together with
the purpose of s 216 of the Constitution.
Absent compliance with Regulation 79, it matters not whether Cabinet
might have approved
the agreement, in that, whatever the
Minister of Finance may or may not have said in Cabinet cannot be
read to equate
to compliance with s 216 of the Constitution read
together with Regulation 79. The argument that the collective
agreement breached
the applicable regulations, namely Regulation 78
and 79, must thus be upheld. This leads to the second issue raised by
counsel
for the respondent unions, namely consideration
of the consequences of a decision to declare Clause 3.3 of the
collective agreement to be invalid.
The
consequences of invalidity
[34]
On the assumption that clause 3.3 was
declared to be invalid, counsel for the applicants referred to the
decision in
State Information
Technology Agency
SOC
Ltd
v Gijima Holdings (Pty) Ltd
2018 (2)
SA 23
(CC) in support of an argument that, notwithstanding a
declaration of invalidity of clause 3.3, the Government should not
benefit
from such a finding.
[35]
In
Gijima
v State Information Technology Agency (SITA),
Gijima
and SITA had concluded an agreement in terms of which the former was
required to provide IT services to the South African
Police Service
on behalf of SITA. The agreement was concluded in
2006 and extended several times. On 25 January
2012, SITA terminated
the agreement with effect from 31 January 2012. A settlement
agreement was entered into between the parties
subsequent to an
urgent application which Gijima instituted against SITA. SITA
assured Gijima that it had the authority to
enter into this
settlement agreement in which Gijima was appointed as a service
provider for the KwaZulu Natal Health Department
and for the
Department of Defence. This agreement was extended on numerous
occasions until 30 May 2013 when SITA informed Gijima
that it did not
intend to further renew this agreement.
[36]
A payment dispute then arose. SITA
resisted Gijima's claim on the basis that the agreement as well as
the three extended addenda
that followed it were invalid as there was
non-compliance with the provisions of s 217 of the Constitution when
the parties concluded
the agreement.
[37]
Both
the High Court and the Supreme Court of Appeal held that the review
which SITA had launched against the validity of the agreement
had
been brought way out of the 180 day period stipulated in s 7 of
Promotion of Administrative Justice Act 30 of 2000
.
[5]
The Constitutional Court found that there was no basis for the
exercise of a discretion to overlook the inordinate delay in the
application brought by SITA and held at para 49 that:
'From
this, we see that no discretion can be exercised in the air. If we
are to exercise a discretion to overlook the inordinate
delay in
this matter, there must be a basis for us to do so. That basis
may be gleaned from facts
placed before us by the
parties or objectively available factors. We see no possible basis
for the exercise of the discretion here.'
[38]
The Court found that SITA had acted
contrary to the 'dictates of the Constitution'. Having so concluded,
the Court then referred
to s 172 (1)
(a)
of the Constitution which enjoins a
court to declare invalid any law or conduct that it finds to be
inconsistent with the
Constitution.
[39]
In the view of the Court, the award fell
to be declared to be invalid. However, in terms of s 172 (1)
(b)
of
the Constitution, a Court deciding a constitutional matter has a wide
remedial power. The question, therefore, was what relief
should be
granted in circumstances where the agreement had been
held to be invalid. It was to this aspect of
the judgment that
counsel for the applicants referred this Court in support of the
submission that the Government
could not benefit
from its breach of the provisions of Regulation 79.
[40]
The court in
Gijima
held:
'It
seems to us that justice and equity dictate that, despite the
invalidity of the award of the DoD agreement SITA must not benefit
from having given Gijima false assurances and from its own undue
delay in instituting proceedings. Gijima may well have performed
in
terms of the contract while Sita sat idly by and only raised the
question of the invalidity of contract when Gijima instituted
arbitration proceedings. In the circumstances, a just and equitable
remedy is that the award of the contract and the subsequent
decisions
to extend it to be declared invalid with the rider that the
declaration of invalidity must not have the effect to divest
in
Gijima of rights to which- but for the declaration of invalidity- it
might have been entitled.' (at para 54)
[41]
Counsel for the applicants therefore
submitted that in similar fashion, the first, sixth and seventh
respondents should not be permitted
to benefit from a declaration of
invalidity in circumstances where two-thirds of the collective
agreement had been implemented
already and where fiscal pressure now
impelled these respondents to seek refuge in the invalidity of the
entire agreement.
[42]
In similar fashion, counsel for the
union respondents submitted that an appropriate just and equitable
remedy would be that the
Government should meet its obligations in a
'phased in' manner. In his view, this relief would be appropriate and
just and equitable
in that the employees' constitutional right
to bargain would be vindicated, the relevant employees were not aware
that
there was any non-compliance with the relevant
legislation and Regulations 78 and 79 at the time of the
conclusion
of the collective agreement and they had fashioned their
lives on the basis that the collective agreement was valid and
enforceable.
[43]
The present dispute is significantly
different from that which confronted the Constitutional Court in
Gijima, supra.
In
that case, the concern related to one contract entered into between
Gijima and SITA. It was understandable in the circumstances
that the
Court found it just and equitable, under the circumstances of an
inordinate delay to justify an order which would not
penalise the
innocent party, being Gijima.
[44]
In the present case, the
dispute is far more complex; hence the problem of
the polycentric dispute
which is set out in the introduction to this
judgment. The submission on behalf of certain of the respondent
unions is illuminating
in that it reflects that certain of these
parties have understood the parlous financial position in which the
fiscus finds itself
and thus the country in the wake of the Covid 19
pandemic. They were prepared to accept a staggered approach to the
compliance
with clause 3.3.
[45]
An exercise of a discretion depends on
the particular case. Under the present financial circumstances, it
does not appear to be
just and equitable to order government to
expend significant and scarce financial resources on employees
whose jobs are already
secured and salaries have been paid in
full, particularly in circumstances where the imperative exists for
the recovery of
the economy to the benefit of millions of vulnerable
people. For example, the provision of social grants to fellow
South
Africans living on the margin could well be imperilled by
such a decision, as might the need to pay for significant and
critical
additional medical costs caused by the pandemic.
[46]
In the exercise of a discretion of the
kind set out in
Gijima, supra,
considerations of the effect on the
public purpose in general and the impact on millions of
South Africans who barely
survive on a day to day basis and need all
the help the State may be able to provide are paramount
considerations. As Mr Mojanane
stated in his affidavit, Government
has very limited capacity to borrow additional funds and the national
interest burden is now
a critical expenditure item in the National
Budget. In our view, the normative vision of the Constitution which
aims that everyone
living in the country should live a dignified life
and hence those most in peril should be assisted first dictates the
outcome
of the discretion in this context.
[47]
To return to the submission about a
compromise remedy, there were no details provided by any of the
union respondents as to
how their proposed staggered approach could
be structured. Resolution 1 of 2018 only operates for a three-year
cycle which ends
on 31 March 2021. There was also
evidence of new negotiations for the new cycle already being
underway.
[48]
That further negotiations
may well take place with regard to a settlement of
the salary cycle ending
on 31 March 2021, is, of course, an issue
beyond the competence of the court. That is for the parties to
negotiate. We have already
found that a decision to find that it is
just and equitable that the government pay the entire sum which flows
from Clause 3.3
for the period ending 6n 31 March 2021 cannot in and
of itself be regarded as a just and equitable
remedy within
the economic and social context within which this
dispute is located. Absent some clear guidance as to how a compromise
remedy
could be crafted, the Court would be left on its own to
exercise such a discretion in circumstances in which clear
polycentric
consequences stand to be considered. There was simply no
evidence nor guidance provided to the Court. In these
circumstances,
it would be inappropriate for the Court to attempt
such a difficult fiscal balancing measure. And it is not the role
of a
court to so do.
Conclusion
[49]
The Court is faced with an application and a counter-application. The
application brought
by the first and seventh respondents was to the
effect that this Court declare the enforcement of Clause 3.3 of
Resolution
1 of 2018 to be in contravention of ss 213 and
215 of the Constitution read together with Regulation 78 and 79 of
the Public
Service Regulations 2016. There were, in addition, in the
notice of the counter-application a series of alternative
declarations
which were sought. The sixth respondent lodged a
conditional counter-application contemporaneously with the filing of
his
answering affidavit on 17 July 2020 in which the
application was opposed.
[50]
The counter-applications are, as
indicated earlier, inextricably linked to the application. Once it is
found that clause 3.3 of
Resolution 1 of 2018 infringed the mandatory
legal requirements governing the conclusion of the collective
agreement by Government,
it follows that there is no need to deal
with the application. It stands to be dismissed, in that there
is no
valid agreement upon which to base applicants'
claim. Given the nature of this dispute and the legal questions
raised, it would
be inappropriate to make an order as to costs.
Order
[51]
The
following orders are made.
1.
It is declared that the enforcement of
clause 3.3 of Resolution 1 of 2018 (the Resolution) is unlawful for
contravention of ss 213
and 215 of the Constitution of the Republic
of South Africa, 1996 and Regulations 78 and 79 of the Public Service
Regulations,
2016.
2.
The application is dismissed.
THE
COURT
Phatshoane
ADJP, Davis JA and Coppin JA
APPEARANCES:
For
the applicants
C Orr SC and GK Phajane
Instructed
by Bowman Gilfillam Inc
For
the first and seventh respondents T.J
Bruinders SC, Adv J Thobel-Mkhulisi,Adv E Richards
Instructed
by The State Attorney
For
the sixth respondent J.J Gauntlett SC and QC, F. B
Pelser
Instructed
by the State Attorneys
For
the nineth, eleventh and fourteenth respondents N.H Maenetja SC
and Adv M.Y Salukazama
Instructed
by Cheadle Thompson and Haysom
For
the tenth respondent W.R Mokhare SC and Adv E
Masombuka
Instructed
by Mdhluli Pearce and Mdzikwa Inc
For
the twelfth respondent Adv B Mkhize
Instructed
by NUPSAW
[1]
LR Fuller 'The Forms and Limits of Adjudication' (1978) 92 Harvard
Law Review 353.
[2]
Fuller at 395-397
[3]
See for example J W F Allison ' Fuller's Analysis of Polycentric
Disputes and Limits of Adjudication' 1994 (53) Cambridge Law
Journal
367.
[4]
There was some dispute about this figure but no evidence was put up
by the applicants or the union respondents to contest the
averment
of the Government respondents that the cost of the increase as
contained in Clause 3.3 of the collective agreement was
at present
figures in the amount of R 37. 2 billion
[5]
The question of whether the Court was dealing with administrative
action and hence the applicability of PAJA was not debated
in that
it was clearly common cause that the question of delay was relevant
to these proceedings.