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[2007] ZALAC 22
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Potterill and Others v Minister of Safety and Security and Another (JA 47/2003) [2007] ZALAC 22 (29 June 2007)
IN THE LABOUR APPEAL COURT OF SOUTH AFRICA HELD AT
BRAAMFONTEIN JOHANNESBURG
CASE NO: JA 47/2003
IN THE MATTER BETWEEN
C F POTTERILL AND FIFTEEN OTHERS APPELLANTS
AND
THE MINISTER OF SAFETY AND SECURITYFIRST RESPONDENT
THE NATIONAL COMMISSIONER: SOUTH SECOND RESPONDENT
AFRICAN POLICE SERVICE
JUDGMENT
JAPPIE AJA
[1] This is an appeal against a judgment of Pauw AJ,
sitting in the Labour Court, in which judgment he reviewed and set
aside an
arbitration award made in favour of the appellants by an
arbitrator, one Mr J.J Malan. Pauw AJ made two further orders,
namely,
an order condoning the late filing of the application to
review the arbitrator’s award and an order dismissing an
application
by the appellants to have the arbitrator’s award
made an order of court. It is unnecessary to consider these two
further
orders as they are not relevant for the determination of the
issue raised in the appeal. The arbitration was a private
arbitration.
[2] The appellants are all chaplains employed in the
South African Police Service. The first respondent is the Minister of
Safety
and Security. The second respondent is the National
Commissioner for the South African Police Service.
[3] The appellants had been in the service of the South
African Police Service for some time when a dispute arose as to
whether
or not they were entitled, as part of their conditions of
service, to apply for, or, to participate in, a subsidised motor
vehicle
scheme to which members of the Police Service above a certain
rank were entitled. The event which gave rise to the dispute occurred
in 1999 when the National Commissioner of the South African Police
Service withdrew an authorization for the implementation of
a
subsidised motor vehicle scheme which had been given previously.
[4] It is common cause that each of the appellants took
up his employment with the South African Police Service pursuant to a
letter
of appointment. Each letter of appointment referred to the
supply of a state motor vehicle to each of the appellants. The
reference
to the motor vehicle as it appears in the letter of
appointment of the first appellant reads as follows-:
“
U
word voorsien van ‘n staatsvoortuig in die vorm van ‘n
sedan motor vir
amptelike gebruik
.”
The letters of appointment of the other appellants, in
reference to the use of a motor vehicle, contain a statement similar
to the
one as that set out in the letter of appointment of the first
appellant.
[5] Each letter of appointment expressly stated that the
service conditions of each of the appellants were to be regulated by
the
provisions of the South African Police Act, Act 7 of 1958 (“the
Police Act”) and the regulations promulgated under that
Act. In
the letter of appointment of the first appellant the position is
stated as follows-:
“
U
diensvoorwaardes word beheer deur die bepalings van die Polisie Wet,
Wet 7 van 1958 en die regulasies ingevolge die Wet uitgevaardig
.”
[6] After appointment the appellants participated in the
motor vehicle scheme and continued to do so up until 1999. On the
12
th
April 1999
the National Commissioner of Police introduced a new subsidised motor
vehicle scheme for all ranks from superintendent
and higher. However,
on the 12
th
November 1999, the then National Commissioner had a change of mind
and withdrew his authorisation scheme. The communication of
the
withdrawal of the authorisation of the subsidised motor vehicle
scheme read as follows-:
“
2. Die
versakaafing van ‘n gesubisidieerde voertuig aan ‘n
werknemer is ‘n werksfasiliteit wat sodanige werknemer
in staat
stel om noodsaaklile en goedgekeurde reise in daardie gevalle te
onderneem waar die gebruik van ander beskikbare vervoer
nie practise
of ekonomiese is nie.
Deelname aan die
gesubisideerde motovervoerskema is nie ‘n diensvoorwaarde nie,
maar ‘n werkfasiliteit wat nie as ‘n
reg vertolk kan word
nie.
3. As gevolg
van die beperkte aantal voertuie wat verkry kon word deur deelname
aan die skema sal dit nie in belang of tot voordeel
van die diens
wees, inaggenome die finansiele implikasies, om voertuie ingevolge
die skema toe te ken nie. Daar is besluit dat
die begrootte fondse
vir die genoemdeskema beter aangewend kan word om ander hulp- bronne
en werksfasiliteite vir die diens as
‘n geheel te voorsien.
Gevolglik is besluit dat geen
gesubsidieerde voertuie gedurende die huidige finansiel jaar toegeken
sal word nie. Verdere deelname
aan die skema sal jaarliks oorweeg
word.”
[7] After the withdrawal of the authorisation the South
African Police Service refused to entertain any application for a
subsidised
motor vehicle. All the appellants wanted to continue
participating in the subsidised motor vehicle scheme on the same
terms that
existed prior to November 1999. The appellants now claim
that they are all entitled to continue to participate in the
subsidised
motor vehicle scheme and that their entitlement to do so
stems from the fact that each of their letters of appointment
expressly
stated that they would be provided with a state motor
vehicle in the form of a sedan motor vehicle for official use. They
contend
that this was a term of their employment contract.
[8] The position of the South African Police Service is
that the letters of appointment did not make transport for official
use
a service benefit, but that the South African Police Service
would provide transport in the form of a sedan motor vehicle as a
work facility. The South African Police Service maintained that it
retained the discretion to vary or suspend this facility in
appropriate circumstances.
[9] The parties agreed to refer the dispute to private
arbitration. Mr J.J Malan, a senior law lecturer, was appointed as
arbitrator.
In terms of the agreement referring the matter to
arbitration, the arbitrator was required to rule on the following-;
“
(a) whether the employer (South African Police
Service) was obliged to allow the appellants, being employees of the
South African
Police Service, to participate in a subsidised motor
vehicle scheme, as revised from time to time, because participation
in the
scheme was a term of the appellants’ employment with the
South African Police Service; and
(b) to decide in each individual case, if participation
in the motor vehicle scheme was a term of the appellants’
employment
contract, the employer’s refusal to permit each
appellant to participate in a motor vehicle scheme whether this
constituted
an unfair labour practice and if so, to make a suitable
award.”
[10] At a meeting convened between the parties prior to
the arbitration proceedings it was agreed,
inter alia,
that
the evidence that would be presented would consist not only of the
oral evidence given but would also include such facts as
set out in
the affidavits of various deponents whom the parties deem relevant.
The status and the contents of certain documents,
compiled into
bundles, were agreed upon and such documents were received as
evidence which would form part of the record.
[11] The arbitration proceedings took place over
several days and culminated in the arbitrator delivering a written
award. The
arbitrator found in favour of the appellants and he issued
the following award-:
“1.Skadevergoeding
aan elke van die 16 appliakante vir die gelede skade soos ooreengekom
tussen die partye…
Skadevergoeding word
belastingvry toegestaan…..
1.3 Rente a tempore morae teen
15.5% ingevolge die Wet op die Voorgeskrewe Rentekoers, 55 van 1975,
soos gewysig…..
2. Spesifieke nakoming van
alkeen van die dienskontrakte van die sestien gegriefde werknemers en
in die vervoerbeding, naamlik dat
die werkgewer gelas word om die
applikante toe to laat om, indien hulle, hul vorderingreg tot ‘n
keuse ten gunste van gesubsidieerde
vervoer sou wou uitoefen, aansoek
te doen om gesubsidieerde voertuie en dat die werkgewer hierdi
aansoeke ooreenkomstig die geldene
vereistes sal oorweeg. Asook
spesifieke nakoming van die dienskontrak in die sin dat sou ‘n
applicant sy/haar vorderingsreg
tot ‘n keuse uitoefen ten
gunste van ‘n staatsvoertuig, in plaas van gesubsidieerde
vervoer, die werkgewer bevel word
on sodanig voertuig vir
alleengebruik vir ampltelike werk aan hom of haar toe te ken.
The total sum that the South African Police Service was
ordered to pay to the appellants in terms of paragraph 1 of the
award was
R960 277.
[12] The appellants applied to the Labour Court in
terms of
section 158(1)(c)
of the
Labour Relations Act 66 of 1995
to
have the arbitration award made an order of court. The respondents
opposed the application and simultaneously applied for the
review and
the setting aside of the arbitration award. As the two applications
were interlinked they were heard simultaneously
by Pauw AJ.
[13] The basis of the respondents’ opposition to
having the arbitration award made an order of court was that the
award was
fatally defective. The alleged defects of the award were
set out in the review application.
[14] Although the parties had agreed that the
arbitrator’s award would be final and binding, the respondents
contended that
they were nevertheless entitled in terms of
section
33(1)(b)
of the
Arbitration Act No 42 of 1965
to have the award
reviewed and set aside. The gravamen of the respondents’
contention for having the award reviewed and set
aside was that the
arbitrator had committed gross irregularities in the conduct to the
arbitration proceecding and that he had
exceeded his powers.
[15] With regard to the first ground of complaint the
respondents contended that the arbitrator committed gross
irregularities by-:
allowing into evidence inadmissible evidence and
material and considering the same in making his award;
by negating the current law with regard to the
standardised contents of the appellants’ service contracts;
by not applying his mind to the matter before him, and
by making an arbitration award which, in view of the
reasons advanced for it, was unreasonable and unjustifiable.
Of course the ground of review mentioned in 4 above does
not apply as it is not contained in
section 33
of the
Arbitration
Act.
[16
] With regard to the second ground of review, namely
that the arbitrator exceeded his powers, it was contended,-
1. that the arbitrator had disregarded the current law
with regard to the interpretation and contents of the appellants’
service
contracts and service provisions;
2. that the arbitrator did not apply his mind to the
matter before him as he was legally obliged to do.
3. that the award was unreasonable and\ or not
justifiable in terms of the reasons supplied therefore; and
4. that the arbitrator went further than the dispute
referred to him and with which he was seized.
[17] The
Court a quo
approached the matter on the footing that the claim of the appellants
could only stem from the terms of their employment contract
and the
interpretation to be given to the relevant regulations which govern
the provision of transportation for the individual
appellants. The
arbitrator had concluded that the appellants had a contractual right
to a subsidised motor vehicle as a service
benefit. The
Court
a quo
was critical of this conclusion and
found that the arbitrator had committed several gross irregularities.
In particular, the
Court a quo
held
that the
arbitrator had allowed into evidence inadmissible material and had
relied on the same to justify his award. It held that
he had failed
to apply his mind to the relevant facts and the prevailing current
law and regulations. In addition, it was of the
view that the
arbitrator had exceeded his powers. The
Court
a quo
came to the conclusion that the
arbitration award was to be reviewed and to be set aside. It,
accordingly, set it aside.
[18] The appellants applied for and were granted leave
to appeal. Before this Court the appellants have argued that the
Court a quo
erred in setting aside the arbitrators award. It
was argued that the
Court a quo
had erred in the following respects-:
1. in finding that the policy of the South African
Police Service as set out in the relevant circulars was equivalent to
legislation
and regulations. Therefore, the change in policy (on the
12
th
November 1999) constituted a supervening
impossibility of performance on the part of the South African Police
Service.
2. in finding that the arbitrator’s interpretation
of the stipulation as it appears in the various letters of
appointment
in regard to the provision of subsidised transport for
official use was in conflict with the provision of
regulation 23(5)
promulgated in terms of the Police Act;
3. in holding that the appellants had not suffered any
“damage”;
4. in holding that the probabilities were abundantly
against the existence of consensus pertaining to the participation of
the appellants
in a subsidised transport scheme as contended for by
the appellants; and
5. in finding that the arbitrator’s award for
specific performance was untenable.
[19] The appellants have presented detailed and full
argument on each of the grounds enumerated above. In my view it is
only necessary
to consider the issue raised in respect of 2 above as
a finding against the appellants on this issue would be decisive of
the appeal.
[20] It is clear that nowhere in the award does the
arbitrator make reference to regulation 23(5) promulgated in terms of
the Police
Act. This regulation is headed “
Subsidised and
Government- owned Motor Transport”.
It reads as follows-:
“
if the Commissioner is
satisfied that the interest of the State will be best served thereby,
he may, notwithstanding any provisions
to the contrary in this
regulation, require a member whose duties necessitate frequent or
regular travelling on official duty
–
to utilize such Government-
owned motor transport as may be deemed necessary for the efficient
performance of his duties; or
to maintain subsidised motor
transport for official purposes if the use of government- owned
motor transport is impractical or
inadvisable.”
The letters of appointment of appellants expressly state
that each appellant’s employment was subject to the provisions
of
the South African Police Act and any amendment thereto and to the
regulations that were promulgated in terms of that Act. It,
therefore, follows that the provisions of subsidised transport to
each of the appellants in terms of their letters of appointment
was
subject to regulations 23(5).
[21] In my view, the plain meaning of the words in the
regulation is that the Commissioner has a discretion to be exercised
in
the best interest of the State, either to require a member of the
police service to utilise a government-owned motor vehicle or
to
maintain a subsidised motor vehicle for official purposes if use of
government owned motor vehicle is found to be impracticable
and
inadvisable.
[22] The National Commissioner was, therefore, entitled
to withdraw the subsidised motor vehicle scheme on the 12
th
November 1999 provided that he was satisfied that the interest of
the state would best be served by the withdrawal of the scheme.
It
has not been shown that it could never have been in the interest of
the state for the National Commissioner to withdraw the
scheme. With
the withdrawal of the scheme any claim by the appellants to
participate therein fell away.
[23] In this regard the appellants have argued that
neither the Police Act nor the regulation promulgated in terms of
thereof prohibited
the Commissioner from concluding individual
contracts of employment with each of the appellants and for the
Commissioner to have
specifically made reference to regulation 23(5)
as a term of their contracts of employment. As each individual
appellant contracted
separately with the South African Police Service
and no mention is made of regulation 23(5) the withdrawal of the
transport subsidy
and/or transport scheme as it pertained to each
individual appellant, be it due to the redistribution of funds or the
failure to
budget therefor, constitutes a breach of their contracts
of employment. This argument ignores the express provision in the
letters
of appointment which state that the conditions of service of
each individual appellant were subject to the Police Act and the
regulations
promulgated thereunder.
[24]
Section 33(1)(b)
of the
Arbitration Act 42 of 1965
provides that a Court may set aside an award where “
an
arbitration tribunal committed any gross irregularity in the conduct
of the proceedings or has exceeded its powers
;”. In coming
to his conclusion that the appellants had a right, stemming from
their contracts of employment, to participate
in a subsidised motor
vehicle scheme the arbitrator no doubt relied on the contents of the
letters of appointment. It is apparent
that the arbitrator
disregarded that part of the letter which expressly stated that the
service conditions were subject to the
Police Act and the regulations
promulgated there under. He made no reference to this and appears to
have completely disregarded
it in making his award. This aspect of
the award is referred to in paragraph 52 of the judgment of the
Court
a quo
in my view the reasoning of the
Court a quo
on this
point is correct and is decisive for the outcome of the appeal.
[25] The provisions of the Police Act and the
regulations promulgated there under are fundamental to an
understanding and determination
of the appellants’ conditions
of service.
[26] In my view for the arbitrator to have ignored the
provisions of regulation 23(5) when considering this matter
constituted
a gross irregularity. It prevented a fair determination
of the issues and the
Court a quo
correctly concluded that the
arbitration award fell to be reviewed and to be set aside. Having
come to this conclusion, it is unnecessary
to determine the other
remaining grounds of appeal raised and argued by the appellants.
In the result I make the following order-:
The appeal is dismissed
The appellants are ordered to pay the respondents costs
of appeal jointly and severally, the one paying the others to be
absolved.
_______________
Jappie AJA
I agree
_________________
Zondo JP
I agree
_________________
Musi AJA
On behalf of the appellants: Adv IC Prinsloo
Instructed by
Geldenhuys Attorneys
Centurion
On behalf of the respondent: Adv MM Osthuizen
Instructed by
State Attorney
Pretoria
Judgment handed down on the 29
th
June 2007
14