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[2019] ZALAC 48
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MEC for the Department of Health, Western Cape v Coetzee and Others (CA5/2018) [2019] ZALAC 48 (3 May 2019)
IN
THE LABOUR APPEAL COURT OF SOUTH AFRICA, CAPE TOWN
Case
no: CA5/2018
In
the matter between:
THE
MEC FOR THE DEPARTMENT OF HEALTH,
WESTERN
CAPE
Appellant
and
PROFESSOR
A R COETZEE & 49 OTHERS
First
to Fiftieth Respondents
UNIVERSITY
OF CAPE TOWN
Fifty
First Respondent
UNIVERSITY
OF STELLENBOSCH
Fifty
Second Respondent
NATIONAL
MINISTER OF HEALTH
Fifty
Third Respondent
NATIONAL
MINISTER OF THE DEPARTMENT OF
PUBLIC
SERVICE AND ADMINISTRATION Fifty
Fourth Respondent
COMMISSION
FOR CONCILIATION, MEDIATION
AND
ARBITRATION
Fifty
Fifth Respondent
D I
K WILSON N.O.
Fifty
Sixth Respondent
Heard:
07 March 2019
Delivered:
03 May 2019
Summary:
Interpretation of collective agreement – Western Cape
Provincial government entering into an agreement with UCT and
Stellenbosch University in terms of which university staff rendered
clinical services at state hospitals - a
collective
agreement providing for the payment of a scarce skills allowance to
health professionals was concluded in accordance
with the
constitution of the
bargaining council - the respondents
employees claim the scarce skills allowance which they allege is
owing to them in terms of
a collective agreement - the appellant
contends that the employees fall outside the registered scope of the
bargaining council,
are not public service employees and are
consequently not entitled to the benefits of the collective
agreement.
Held
that these special contractual provisions leave no doubt that the
principal and chief specialist positions are posts “which
have
been created for the normal and regular requirements” of the
relevant hospital departments and as such are part of the
fixed
establishment as defined in section 1 of the PSA. They are central to
the functioning of a teaching hospital and confer clinical
responsibilities on the incumbents. The employees accordingly “hold
posts on the fixed establishment” and are part
of the public
service. They are thus employees of both the university and the
public service falling within the registered scope
of the bargaining
council by virtue of their holding those posts with the result that
the collective agreement applies to them
in terms of clause 2 and
they are entitled to the allowance payable under clause 3. Labour
Court’s judgment upheld –
Appeal dismissed with costs.
Coram:
Coppin JA, Murphy and Savage AJJA
JUDGMENT
MURPHY
AJA
[1]
The appellant appeals against the decision of the Labour Court
(Moshoana AJ) dismissing
its application to review and set aside an
award handed down by the fifty sixth respondent (“the
commissioner”). The
first to fiftieth respondents (“the
respondents”)
[1]
claim a
scarce skills allowance which they allege is owing to them in terms
of a collective agreement concluded in the Public Health
and Welfare
Sectoral Bargaining Council, (“the bargaining council”),
in 2004.
[2]
The appellant
contends that the respondents fall outside the registered scope of
the bargaining council, and are for that reason
not entitled to the
benefits of the collective agreement.
The
collective agreement
[2]
The collective agreement dealing exclusively with a scarce skills
allowance (“the
allowance”) was concluded in accordance
with the constitution of the bargaining council on 28 January
2004.
[3]
The bargaining council
is a sectoral bargaining council established under the auspices of
the Public Service Co-ordinating Bargaining
Council (“the
PSCBC”) in terms of section 37 of the Labour Relations Act
[4]
(‘the LRA”). The collective agreement was signed by the
Minister of Health on behalf of the state as employer and by
three
trade unions (DENOSA, NEHAWU and PSA) on behalf of their members.
[3]
The respondents were not members of the signatory trade unions but
members of the
South African Medical Association (“SAMA”).
However, in terms of an agreement between DENOSA and SAMA, the two
unions
arranged to act together and have been admitted jointly as a
single party to the bargaining council. Clause 9 read with clause 7.3
of the constitution of the bargaining council permits two unions to
be admitted as a single party to the bargaining council provided
their aggregate membership meets the designated threshold of
membership. Through this unusual mechanism in the constitution of
the
bargaining council, the respondents are members of a registered trade
union that is party to the collective agreement concluded
in the
bargaining council, despite the fact that SAMA was not a signatory to
the collective agreement.
[5]
[4]
The heading of the collective agreement reads:
‘
AGREEMENT:
INSTITUTION OF A NON-PENSIONABLE SCARCE SKILLS ALLOWANCE: DESIGNATED
HEALTH PROFESSIONALS WORKING IN PUBLIC HEALTH SECTOR
HOSPITALS/INSTITUTIONS AS MANAGED BY THE HEALTH EMPLOYER.’
[5]
Clause 1 of the collective agreement specifies the five objectives of
the agreement.
These were: i) to attract and retain health
professionals with scarce skills on a full time basis to the public
health sector as
managed by the health employer; ii) to institute a
non-pensionable scarce skills allowance for designated health
professional categories
working in clinical service delivery
(including those in the management of the function of their
specialities) of public health
sector hospitals/institutions and are
not part of the senior management service; iii) to identify the
initial occupational groups
as the first recipients of the scarce
skills allowance; iv) to determine the percentage of the allowance
and the method of payment;
and v) to agree that the scarce skills
allowance be a fixed percentage linked to the annual salary notch.
[6]
Clause 2 of the collective agreement defines its scope. It applies to
“the employer
and employees…in the Public Health Sector
as managed by the Health Employer, but excluding those health
professionals in
other sectors and…(who) fall within the
registered scope of the PH&WSBC”. Clause 3 of the
collective agreement
provides that the allowance shall be payable to
the occupational groups that are designated as “Scarce Skills”.
Clause
3(b) of the collective agreement includes a table of the three
“designated categories” of registered health
professionals
entitled to the allowance. The category relevant to
this appeal includes: i) medical and dental specialists; ii)
dentists; iii)
medical doctors; iv) pharmacists; and v)
pharmacologists.
[7]
The allowance payable in respect of the relevant designated category
was in the amount
of 15% of the annual salary notch payable to
personnel (designated employees appointed on a full time basis) in
the occupational
group. The allowance was backdated to 1 July 2003
(the implementation date) and remained in force until 30 June 2009
when it was
replaced by a new remuneration model (the
occupation-specific dispensation – “OSD”) which the
respondents are
paid as part of their remuneration.
[8]
The issue in this appeal is whether the respondents were entitled to
be paid the allowance
for the period of its duration.
The
teaching hospital agreements
[9]
The respondents are or were medical doctors employed as principal or
chief specialists
at teaching hospitals in the Western Cape,
particularly Groote Schuur Hospital and Tygerberg Hospital. The
respondents currently
hold (or, in the case of those respondents who
have retired, previously held) posts as professors in the faculties
of medicine
at
either
the University of Stellenbosch (“Stellenbosch”) or the
University of Cape Town (“UCT”).
[10]
The employment arrangement of the respondents is governed in part by
a peculiar set of agreements,
entered into about 50 years ago, which
regulate the relationship between the state and the universities with
regard to teaching
hospitals.
[11]
Groote Schuur Hospital and Tygerberg Hospital
[6]
are used by the medical faculties of, respectively, UCT and
Stellenbosch as teaching hospitals for the training of students at
their faculties of medicine. Students studying medicine participate
in the treatment of patients at the teaching hospitals and
accompany
the professors and lecturers on patient ward rounds and other medical
interventions, enabling them to acquire practical
medical knowledge.
[12]
In 1967, an agreement (“the UCT agreement”) was concluded
between UCT and the erstwhile
Provincial Administration of the Cape
of Good Hope (“the Province”). A few years later, a
similar agreement was concluded
between Stellenbosch and the Province
(“the Stellenbosch agreement”). There are no material
distinctions between the
terms of the Stellenbosch and UCT agreements
(“the teaching hospital agreements”).
[13]
Groote Schuur and Tygerberg Hospitals are situated on state land. The
teaching hospital agreements
provide for the universities to
contribute to the capital costs of erecting and maintaining the
lecture rooms, libraries, students’
common areas, hostels and
other buildings reserved for purposes of the university, on such
state land. The universities are also
responsible for the cost of
maintaining these buildings and the cost of equipment and consumables
required for research purposes.
The Province, in turn, is responsible
for the capital and maintenance costs of hospital wards, operating
theatres, treatment facilities
and other amenities used in the
treatment of the patients.
[14]
Clause 6 of the UCT agreement provides for the constitution of “joint
staff”. It
reads:
‘
Salaried
medical and other professional staff (referred to as Joint Staff)
shall be employed to serve jointly the University and
the Provincial
Administration. Having regard, however, to the responsibilities of
the University in regard to medical teaching
and training and to the
Administration in regard to the provision of hospital services, the
University through its professors and
lecturers in charge shall have
control over the academic duties of the joint staff and the
Provincial Administration through the
Director and the Medical
Superintendent of a teaching hospital over their non-academic
duties.’
[7]
[15]
Clause 2 of the UCT agreement defines the term “joint staff”
to mean the medical
and other professional staff jointly responsible
to the university and the Province, in terms of the agreement. Clause
8 defines
the duties of the joint staff under the agreement. Joint
staff shall: i) with the assistance of medical interns employed by
the
Province, provide and administer services in all branches of
medicine to patients at the teaching hospitals; ii) provide all
formal
and clinical teaching in all branches of medicine to students
of the university; iii) provide pathological and other specialised
services for the teaching of students at the university; iv)
undertake such research in the practice of medicine as can be
combined
with other services; v) serve in a consultative capacity,
whenever required, to the university in respect of matters relating
to
the medical school of the university and to the Administration in
respect of any matters relating to the provincial hospitals; and
vi)
perform such other duties as may be agreed upon between the
university and the Province from time to time. All members of the
joint staff therefore render services both to the university and to
the Province.
[16]
Clause 9(a)(i) of the UCT agreement provides that, unless otherwise
agreed to by the university
and the Province, the persons on the
joint staff who hold the post of Dean, Deputy Dean or Professor in
the faculty of medicine
are appointed under conditions of service of
the university. The other members of the joint staff are employed
under conditions
of service of the Province. The joint staff thus
consists of those persons appointed by the university on its terms
and conditions
(“university employees”) and those
appointed by the Province exclusively on its terms and conditions
(“provincial
employees”).
[17]
Clause 10 of the UCT agreement provides that “the authority
under whose conditions of service
a member of joint staff is
appointed shall be responsible for the payment of his salary.”
Clauses 31 and 32 stipulate that the
authority on whose conditions of service a particular joint staff
member will be appointed
has the responsibility to advertise, recruit
and interview for the post although the appointment still requires
the approval of
the other authority. Thus if someone is appointed by
the university, that appointment must be approved also by the
Province, and
vice versa. Clause 32(c) of the UCT agreement provides
that in respect of an appointment of a person under university
conditions
of service, no appointment may be made if the Province
does not agree. In which event, the post remains vacant and has to be
re-advertised.
[18]
Clause 60 of the UCT agreement provides that the retirement age of
the UCT employees is determined
by the conditions of service of UCT,
and the retirement age of the provincial employees by the Province’s
terms and conditions,
although the services of any member may be
extended by agreement between the university and the Province. Clause
55 states that
members of the joint staff are subject to the
disciplinary code of the authority under whose conditions of service
they were appointed.
Clause 56 stipulates that members of the joint
staff are responsible to the medical superintendent and the Province
for “performance
of duties relating to the administration and
clinical work of the teaching hospitals” and are responsible to
the professors
and lecturers in charge at the faculty of medicine and
the Senate of the university “for duties relating to the
methods and
direction of teaching of students”.
[8]
[19]
The Province makes certain contributions towards the salary costs of
university appointed employees
serving on the joint staff, and the
university contributes to the salary costs of provincially appointed
joint staff.
[9]
[20]
Each of the respondents concluded a contract of employment with the
university employing them,
which contracts expressly incorporate the
provisions of the UCT agreement or Stellenbosch agreement (as
applicable)
.
The university employees are remunerated by the university; do not
have PERSAL numbers;
[10]
and
are members of the Associated Institutions Pension Fund and not the
Government Employees’ Pension Fund (“the GEPF”)
to
which the provincial employees belong. The disciplinary code and
retirement age of the university are applicable to them.
[21]
It is accordingly not disputed that the respondents were appointed by
the universities.
However,
clause 3 of the UCT agreement makes it clear that while the
respondents are responsible to the Senate of the university
for the
execution of their university duties, they are accountable to the
Province for the execution of their clinical duties and
provincial
administrative duties, including, for instance, managing a
departmental budget.
[22]
The individual respondents who testified both stated that when they
applied for their posts,
the vacancy announcement specifically stated
that they would be subject to joint appointment as a professor and as
a chief specialist.
The interview panel consisted of both university
and government representatives.
The
history of the litigation between the parties
[23]
The MEC for the Department of Health, the Western Cape Provincial
Government, maintains that
the respondents are not entitled to be
paid the allowance because it is payable only to public service
employees. It contends that
since the registered scope of the
bargaining council is “the public service” a collective
agreement concluded in the
bargaining council cannot be applicable to
persons, like the respondents, who are not in the public service and
thus not within
its registered scope.
[11]
The stance of the appellant has led to litigation which has endured
for almost 13 years.
[24]
In response to the appellant’s failure to pay the allowance,
the first respondent and other
professors at Stellenbosch referred a
dispute to the bargaining council, which dismissed the referral on
the grounds that the bargaining
council did not have jurisdiction to
conciliate the dispute, because the claimants were employed by the
university and not by the
Department of Health. However, instead of
reviewing the decision, the respondents instituted a claim for
payment of the allowance
in the Labour Court. The appellant defended
the claim and,
inter alia
,
raised a plea of prescription. Cheadle AJ, purportedly acting as an
arbitrator in terms of section 157 of the LRA, determined
that the
respondents were entitled to the allowance. Subsequently,
Rabkin-Naicker J held that the claim had not prescribed.
[25]
The appellant appealed to this Court which upheld the appeal on the
basis that the Labour Court
had no jurisdiction in the matter. The
respondents
had
instituted a new claim in the Labour Court requesting the court to
sit as an arbitrator in terms of section 158(2)(b) of the
LRA when
they should have persisted with the initial referral to the
bargaining council and a review of the jurisdictional finding.
The
Act does not allow such conduct. Section 158(2)(b) permits the Labour
Court to act as an arbitrator only when after the referral
to the
Labour Court it becomes apparent that the dispute ought to have been
referred to arbitration. That was not the case here.
The respondents
abandoned the referral to the bargaining
council. This Court refrained from expressing any view as to whether
the collective agreement
applied to the respondents, pointing out
that this was an issue to be decided by the forum which had the
requisite jurisdiction.
[26]
The respondents thereafter brought a successful review application in
terms of section 158(1)(g)
of the LRA, which resulted in
Rabkin-Naicker J setting aside the initial ruling of the bargaining
council and the remittal of the
matter to the bargaining council to
be determined by arbitration.
[27]
In its earlier judgment, this Court opined that the dispute between
the parties was one concerning
the interpretation and application of
a collective agreement. Rabkin-Naicker J, however, held that the
dispute was in essence a
demarcation dispute. Accordingly, in late
2016, the respondents referred two disputes (an interpretation and
application dispute
in terms of section 24 of the LRA, as well as a
demarcation dispute in terms of section 62 of the LRA) to the
Commission for Conciliation,
Mediation and Arbitration (“the
CCMA”).
[28]
Section 24 of the LRA provides for disputes about the interpretation
and application of a collective
agreement to be resolved in
accordance with a dispute procedure stipulated in the collective
agreement; alternatively, where there
is no stipulated procedure, as
in this case, by referral to the CCMA. Section 62 of the LRA permits
employers and employees to
apply to the CCMA for a determination
inter alia
as to whether any provision in a collective
agreement is or was binding on any employee, employer, class of
employees or class of
employers.
[29]
In paragraph 7 of the demarcation dispute referral, the respondents
sought a demarcation that
they fell under the bargaining council “for
purposes of the collective agreement” and that they were
entitled to the
allowance.
[30]
The disputes were consolidated by agreement between the parties and
referred to arbitration in
the CCMA. No evidence was led at the
hearing but, by agreement, a number of documents, including the
transcript of the evidence
led before Cheadle AJ in the Labour Court,
were placed before the commissioner.
[31]
The commissioner handed down his award on 29 March 2017. He found
that the respondents were entitled
to payment of the allowance in
terms of the collective agreement. He ordered the appellant to pay
specified capital amounts together
with interest.
[12]
[32]
The essential reasoning of the commissioner in regard to the
demarcation issue was as follows:
‘
On
the basis of these definitions it appears to me that the Applicants
are in fact part of the public service. It was common cause
that they
are employed in provincial hospitals, and at least part of their
duties (the clinical duties at least) are performed
for and on behalf
of the Department of Health. They occupy posts which are firmly
established and have been for many years; but
even if these posts are
regarded as additional to the establishment, they are covered by part
(b) of section 8(1) of the PSA. Their
titles of Chief Specialist and
Principal Specialist are ones which apply equally to the Provincial
appointees. Even if they are
regarded as part-time employees of the
Province, they are covered by section 8(2) of the PSA…….I
do not regard it
as significant that the Applicants are employed on
the conditions of service of the Universities while the Provincial
Appointees
are employed on the conditions of service of the Province.
This is merely a convenient practical arrangement to deal with the
complexities
posed by a joint staffing venture. What is more
significant, to my mind, is that the Respondent has a right to veto
an appointment
by a university, and exercises control over the
non-teaching aspects of the Applicants’ work. This clearly
indicates to me
that the role of the employer was intended to be one
that was shared virtually on an equal basis between the employers,
regardless
of who exercised disciplinary control, handled the
mechanics of payment and paid the PAYE to the Revenue Service. ‘
[33]
He held that the respondents “form part of the public service
and therefore fall within
the scope of the PSCBC” as they were
persons holding posts on the “fixed establishment”
[13]
and hence within the registered scope of
the
bargaining council.
[34]
The commissioner then turned to the interpretation and application of
the collective agreement
and held that it applied to the respondents
as they fell within designated health professional categories working
in clinical service
delivery as identified in the collective
agreement and were working in public health sector hospitals as
managed by the health
employer. He felt fortified in his conclusion
by the fact that on 11 February 2004 (two weeks after the signing of
the agreement),
the Acting Director-General of the department in a
letter
[14]
stated that
professors who were principal and chief specialists were included.
There is also evidence that such employees in other
provinces were
paid the allowance.
[35]
In dismissing the appellant’s application for review, the
Labour Court held that the respondents
were employed by the Province
and that the hospitals where they worked were in the public sector.
It failed to deal clearly with
the question of whether the
respondents were public servants falling within the scope of the
bargaining council
and the collective agreement.
However,
it
held
that even if the commissioner committed an error that the respondents
were public servants, the error was immaterial because
mere errors of
law are not enough to vitiate an award.
The
Labour Court also took the view that a demarcation award is an award
sui
generis
and thus subject to a lower standard of scrutiny on review.
The
appellant’s submissions in this appeal
[36]
As stated, the appellant maintains that the respondents fall outside
the registered scope of
the bargaining council because they are not
public servants, and are accordingly not entitled to the benefits of
a collective agreement
concluded in that bargaining council which
explicitly restricted its application to employees in the public
health sector falling
within the registered scope of the bargaining
council.
[15]
While the
teaching hospital agreements create a joint venture between the
universities and the Province, under which members of
the joint staff
render services both to the Province and to the universities, the
appellant views the respondents exclusively as
university employees,
unlike the other members of the joint staff who are provincial
employees in the public service. The bargaining
council, being a
public service bargaining council, cannot conclude collective
agreements which are applicable to persons not in
the public service.
[37]
The appellant refers to various provisions of the Public Service
Act
[16]
(“the PSA”)
in support of its assertion that the respondents are not public
servants. Most significant, in its view,
the appointment of persons
to posts in the public service is made by the relevant executing
authority being, in respect of a provincial
department, the MEC of
the Executive Council responsible for such department.
[17]
The regulations made under the PSA stipulate procedures by which
persons are appointed to posts in the public service. A failure
to
follow these procedures renders any purported appointment
invalid.
[18]
Contracts of
employment in the public service must be in writing, and must be
concluded with the executive authority responsible
for appointing the
public servant in question.
[19]
[38]
Moreover, the remuneration of public service employees is paid by the
state as employer and public
servants are registered on PERSAL, the
state’s payroll system. Public service employees have the
choice of belonging to the
Government Employees’ Medical Scheme
(“GEMS”), and cannot be compelled to belong to some other
medical scheme.
Disciplinary action against an employee appointed to
the public service takes place in the manner set out in sections 21
to 24
of the PSA. The retirement of public service employees is
governed by section 16 of the PSA and such employees are members of
the
GEPF.
[39]
The appellant submits that since none of these provisions apply to
the respondents, they are
not in the public service but are only
professors in the medical faculties of Stellenbosch and UCT. The
appointments of the respondents
were not affected by the department’s
executive authority, and the PSA procedures were not followed in
relation to their
appointment or the creation of their posts. Nor
were they employed under contracts of employment concluded under the
PSA. The respondents
are remunerated by the universities, do not have
PERSAL numbers and do not belong to the GEPF.
[40]
Although the respondents perform certain duties in public hospitals
by reason of the university
agreements, the appellant argues that the
special contractual arrangement does not override the provisions of
the PSA, and does
not mean that they are in the public service. The
respondents are appointed on university terms and conditions. Only
the employer
(the appellant) and the provincial employees at the
teaching hospitals are bound by the public service terms and
conditions; and
thus the variation effected by the collective
agreement introducing the allowance applies only to the provincial
employees in the
public service.
[20]
[41]
The appellant contests in particular the finding of the commissioner
that
the
r
espondents occupy posts which “are
firmly established and have been for many years” and th
at
these posts fall within the category of post contemplated in s
ection
8(
1
)
of the PSA
.
According to the appellant, only the p
rovi
ncial
employees serving on the joint s
taff at
the teachi
ng hospitals hold posts on
“the f
ixed
e
stablishment”
- defined in section 1 of the PSA to mean posts created for the
normal and regular requirements of a department.
[42]
The appellant also takes issue with t
he
finding by the commissioner that the appointment of the respondents
on the conditions of service of the universities was “merely
a
convenient practical arrangement to deal with the complexities posed
by a joint staffing arrangement.” The finding, it
argues, is
both wrong and unreasonable in that it ignores the contractual
relationship between the parties (in particular clause
9 of the UCT
agreement), effectively creates a new employment contract and
fundamentally
amends the teaching hospital agreements resulting in the respondents
no longer being employed exclusively on university
terms and
conditions.
[21]
[43]
The effect of the award, it was argued, is that the professors at the
teaching hospitals will
form part of the public service. This will
mean that an entire new dispensation is required to replace the
university terms and
conditions, which have hitherto governed their
employment, with those applicable to public servants. Practical steps
will then
have to be taken to: i) create posts on the “fixed
establishment” for these professors; ii) have them become
members
of the GEPF; and iii) subject them to all of the provisions
of the PSA and all other protocols which govern various aspects of
the employment of public servants in the Province.
[44]
For those reasons, the appellant submitted that the commissioner
committed a material error of
law in finding that the respondents are
entitled to the benefits flowing from the collective agreement and
that such material error
of law
per se
renders the award
reviewable or alternatively the award is one which no reasonable
commissioner would make, and should be set aside
on that ground.
The
respondents’ submissions in this appeal
[45]
The respondents argue that they are entitled to the allowance because
they all hold the posts
of principal and chief specialists at the
relevant public hospitals. They, therefore, fall within the express
scope of the collective
agreement as they are “designated
health professionals working in public sector hospitals”. They
submit that the wording
of the collective agreement is clear and
unambiguously indicates that the allowance is to be paid by the
provincial departments
of health to all principal and chief
specialists without exception.
[46]
The respondents aver furthermore that the allowance was specifically
negotiated for persons in
their position and the collective agreement
binds the state in relation to them by virtue of the fact that their
union was party
to it. The collective agreement was negotiated by
DENOSA and SAMA acting jointly for and on behalf of the respondents.
The collective
agreement had in mind the respondents and their
similarly situated colleagues in the other provinces who all received
the allowance
in accordance with the circular of the national Acting
Director-General of the Department of Health, dated 11 February 2004,
distributed
to all heads of provincial departments of health,
instructing payment to be made to principal and chief specialists.
[47]
It was not disputed in the pre-trial minute that the respondents were
appointed to various principal
and chief specialist positions through
a joint process conducted by the university and the Province. The
question of their positions
as principal and chief specialists on the
fixed establishment was not placed in issue in the pleadings before
Cheadle AJ. This
is confirmed in paragraph 48 of the judgment of
Cheadle AJ where he said:
‘
It
is uncontested that the Applicants occupy posts on the joint staffing
establishment of the hospitals. Professors Coetzee and
James for
example are classified as Chief Specialists, a post in the Public
Service Staffing System, and as such the head of their
respective
departments with responsibility for managing and supervising staff,
both provincially and university appointed in their
department. The
fact that they also occupy the post of Professor on the University
establishment does not alter the fact that they
occupy a post on the
establishment of the hospitals and therefore the Province.’
[48]
The respondents also referred to Annexure SOC 13 as proof of the
designation of the respondents
as specialists on the fixed
establishment. This document initially did not form part of the
appeal record because the issue as
to whether they occupied posts on
the fixed establishment was not disputed.
[49]
The respondents complain that had the issue been placed in dispute on
the pleadings further evidence
would have been adduced in respect of
it and that it is now unfair of the appellant to ambush them on
appeal. Evidence was led
before Cheadle AJ only on the pleaded issues
and the parties agreed that the record before the Labour Court would
be placed before
the CCMA for its determination of the issues on that
basis. Hence, the related and consequent issue of the respondents
falling
outside the registered scope of the bargaining council was
never adequately pleaded. For reasons that will become evident later,
it is not necessary to canvass this contention in any detail.
[50]
The respondents, in any event, submit that they hold posts on the
fixed establishment or have
been appointed permanently additional to
the fixed establishment and thus in terms of section 8 of the PSA
form part of the public
service.
Evaluation
[51]
Section 213 of the LRA defines a collective agreement to mean a
written agreement concerning
terms and conditions of employment or
any other matter of mutual interest concluded by one or more
registered trade unions, on
the one hand, and (as far as it is
relevant) one or more employers on the other hand.
[52]
There is no dispute that the agreement granting the scarce skills
allowance to the occupational
groups designated in clause 3 of it is
a collective agreement as defined in section 213 of the LRA. The
written agreement concerned
remuneration and was concluded between
the state as employer and three registered trade unions acting on
behalf of their members.
[53]
Section 31 of the LRA deals with the binding nature of a collective
agreement concluded in a
bargaining council. The relevant part of it
reads:
‘
Subject
to the provisions of section 32 and the constitution of the
bargaining council,
[22]
a
collective agreement concluded in a bargaining council binds –
(a)
the parties to the bargaining council who are also parties to the
collective agreement;
(b)
each party to the collective agreement and the members of every other
party to the collective agreement in so far as the provisions
thereof
apply to the relationship between such a party and the members of
such other party…’
[54]
The collective agreement granting the scarce skills allowance binds
the state and the trade union
parties to the collective agreement,
which in this case include DENOSA and SAMA acting jointly in terms of
the provisions of the
constitution of the bargaining council.
[23]
Section 31(b) of the LRA operates to bind the state to fulfil its
obligations under the collective agreement to “the members
of
every other party to the collective agreement in so far as the
provisions thereof apply to the relationship between such party
(the
state) and the members (the respondents) of such other party (the
unions).”
[55]
A collective agreement only assumes a binding quality in terms of
section 31(b) of the LRA “in
so far as the provisions thereof
apply to the relationship” between the state, as a party to the
collective agreement, and
the respondents, as members of their trade
union. The question then is whether the provisions of the collective
agreement granting
the scarce skills allowance apply to the
relationship between the appellant and the respondents.
[56]
The title of the agreement defines its purpose as the “institution
of a non-pensionable
scarce skills allowance” for “designated
health professionals working
in
public health sector
hospitals”. Moreover, clause 1.2 of the collective agreement
specifies as one of its objectives the
aim “to institute a
non-pensionable scarce skills allowance for designated health
professional categories working in clinical
service delivery of
public health sector hospitals…” There is no denying
that Groote Schuur and Tygerberg hospitals
(where the respondents
work) are public sector hospitals. Likewise, clause 3 of the
collective agreement identifies “medical
specialists” as
being part of the occupational group designated to be paid the
allowance. All the respondents are medical
specialists working in
clinical service delivery.
[57]
Clause 2 of the collective agreement which deals with its scope is
the critical provision. It
provides that the collective agreement
applies to the employer (the state) and employees in the public
health sector as managed
by the health employer, who fall within the
registered scope of the bargaining council.
[58]
Notably, clause 2 of the collective agreement does not apply the
collective agreement to “the
employer and
its
employees”. It applies it rather to the “employer and
employees”. The general appellation “employees”
signals an intention not to require (for the purpose of the
agreement’s application) an exclusive employment relationship
between the health employer (the state) and the employees (the
designated health professionals). It was perhaps sufficient for
the
purposes of this particular collective agreement that the respondents
were “employees”
in
the public health sector
as
managed by the health employer
. Thus, both clause 2 and the
heading of the collective agreement do not posit the state as only
the employer of the employees (the
designated health professionals)
but rather as the manager of the public health sector. This choice of
wording intimates an intention
to cover all designated health
professionals (including employees of the university) working
in
public sector hospitals
as managed by the health employer
.
[59]
The peculiar language hence supports the proposition of the
respondents that the scope of the
collective agreement was designed
and formulated to take account of the unique employment relationships
established by the teaching
hospital agreements. However, there is no
need to make a decisive finding in that regard. The respondents are
in any event “employees”
as defined in section 213 of the
LRA which is delineated more widely than the ordinary contractual
conception of an employee to
include any person “who works for
another person or the State and who receives or is entitled to
receive any remuneration”
and “any other person who in
any manner assists in carrying on or the conducting the business of
the employer”. The
definition does not require there to be a
mutual exchange (
quid
pro quo
)
in that it does not stipulate that the employer must pay the
remuneration. It is thus possible to be an employee as defined if
the
employee works for one person and is paid by another. By the same
token, the broad compass of the definition of “employee”
to include persons assisting in the carrying on of an employer’s
business also indicates that there is no requirement that
the
employer pay such person in order for the latter to be an employee.
In the premises, the respondents fall within the definition
of
“employee” in section 213 of the LRA and thus are
employees as contemplated in clause 2 of the collective
agreement.
[24]
[60]
The remaining question is whether the respondents are employees who
fall within the registered
scope of the bargaining council. As
discussed, clause 2.2 of the collective agreement explicitly limits
the application of the
collective agreement to employees who fall
within the registered scope of the bargaining council. Moreover, in
terms of section
28 of the LRA, the powers and functions of a
bargaining council may be exercised or performed only in relation to
its registered
scope. The introductory part of section 28 makes it
clear that the powers and functions of a bargaining council
(including the
power to conclude and enforce collective
agreements
[25]
) may be
exercised or performed only “in relation to its registered
scope.” A bargaining council may not exercise powers
or perform
functions in respect of persons and matters outside its registered
scope.
[61]
The constitution of the bargaining council defines its registered
scope as meaning “the
state as employer and its employees who
fall within the registered scope of the PSCBC”. Section 37 of
the LRA stipulates
that the PSCBC and the public service sectoral
bargaining councils exercise their duties and functions only in
respect of the public
service. Section 35 states that the bargaining
councils in question are established for “the public service as
a whole”
and “any sector within the public service”.
The registered scope of the PSCBC is defined by its constitution as
the
public service in respect of
inter
alia
terms and conditions of service
that apply to two or more sectors and matters assigned to the state
as employer in respect of the
public service. The registered scope of
the bargaining council is thus undeniably the public service, and its
collective agreements
are not applicable to persons who are not in
the public service.
[62]
The term “public service” is defined in section 213 of
the LRA to mean the national
departments, provincial administrations,
provincial departments and government components contemplated in
section 7(2) of the PSA
which provides that “for the purpose of
the administration of the public service there shall be national
departments and
provincial administrations mentioned in the first
column of schedule 1, provincial departments mentioned in the first
column of
schedule 2 and the organisational components mentioned in
the first column of schedule 3”. UCT and Stellenbosch are not
listed
in any of these schedules.
[26]
The universities are thus not part of the public service.
[63]
This brings us to the decisive question of whether the respondents
(being employees as broadly
defined in the LRA) form part of the
public service as members of the joint staff. Section 8(1) of the PSA
defines the composition
of the public service to include various
persons. The relevant provision is section 8(1)(c) of the PSA which
includes in the public
service persons who “hold posts on the
fixed establishment” other than posts referred to in section
8(1)(a) of the
PSA;
[27]
and
persons “employed temporarily or under a special contract in a
department…additional to the fixed establishment”.
[28]
The fixed establishment is defined in section 1 of the PSA as meaning
“the posts which have been created for the normal and
regular
requirements of a department.”
[64]
As discussed, it was not disputed that the respondents held posts on
the fixed establishment
in the proceedings before Cheadle AJ.
However, in its founding affidavit in the application for review of
the commissioner’s
decision, the appellant averred that the
respondents do not hold posts on the fixed establishment. It
maintained that the creation
of posts on the fixed establishment can
only occur if various established procedures, as laid down in
Regulation F (Part III) of
the Regulations are followed. Regulation F
provides that before creating a post for any newly defined job, or
filling a vacancy,
an executive authority shall confirm that the post
is required to meet the department’s objectives, where
necessary evaluate
the job and ensure that sufficient budgeted funds
are available. This, the appellant says, was not done and thus each
of respondents
holds a post only on the university structures.
[65]
The respondents correctly contest this interpretation. Regulation F
was enacted in 2001, long
after the conclusion of the teaching
hospital agreements. It also is not directly concerned with the
composition of the fixed establishment,
but rather the functional and
budgetary requirements for the creation of new posts and the filling
of vacancies. Non-compliance
with it will not have the effect of
removing an existing post from the fixed establishment.
[66]
The respondents, besides being professors, are all principal and
chief specialists in various
fields of medicine rendering clinical
services for the Province at public hospitals for the benefit of the
public. The positions
“principal and chief specialists”
by virtue of their nomenclature alone are not typical university
positions; they
are part of the normal and regular requirements of a
hospital and its departments. The filling of the posts is subject to
confirmation
by the Province and the management of the clinical work
of those holding the posts is controlled by the Province. One of the
aims
of the teaching hospital agreements is to bring the professors
into the public service in appropriate posts to give them authority
to provide clinical services to the public and to subject them to
direct governmental control and accountability in relation to
the
provision of those services. If such were not posts on the fixed
establishment of the public hospitals, then one must ask why
the
system of joint appointment was established by the teaching hospital
agreements in the first place.
[67]
Clause 6 of the UCT agreement clearly envisages that posts held by
the joint staff are part of
the fixed establishment. It provides that
the joint staff “shall be employed to serve jointly the
University and the Provincial
Administration”. Additionally,
the principal and chief specialists are directly responsible to the
Medical Superintendent,
a public servant employed by the Province,
for the performance of their clinical and administrative duties at
the hospitals. Clause
56 of the UCT agreement provides that the joint
staff “shall be directly responsible to the medical
superintendent”
and through him to the Administration for the
performance of duties relating to the administration and clinical
work of the teaching
hospitals.”
[68]
These special contractual provisions leave no doubt that the
principal and chief specialist positions
are posts “which have
been created for the normal and regular requirements” of the
relevant hospital departments and
as such are part of the fixed
establishment as defined in section 1 of the PSA. They are central to
the functioning of a teaching
hospital and confer clinical
responsibilities on the incumbents. The respondents accordingly “hold
posts on the fixed establishment”
and are part of the public
service. They are thus employees of both the university and the
public service
[29]
falling
within the registered scope of the bargaining council by virtue of
their holding those posts with the result that the collective
agreement applies to them in terms of clause 2 and they are entitled
to the allowance payable under clause 3.
[69]
It does not follow from this finding, as the appellant believes, that
the respondents will be
required to become contractual employees of
the appellant in all the respects identified. The terms and
conditions of public service
employment apply to employees appointed
to the public service in terms of section 9 of the PSA. However,
section 12A of the PSA
permits the executing authority (the
appellant) to appoint one or more persons, “on grounds of
policy considerations”,
under a special contract to perform
tasks as may be appropriate in respect of the exercise or performance
of its powers and duties.
[30]
Such a
sui
generis
arrangement can be (and presumably has been) comprehensively and
adequately catered for in the manner provided for in the teaching
hospital agreements.
[70]
In any event, the resolution of the issue before us is limited to a
finding that a collective
agreement granting a specific allowance is
binding on the appellant in relation to the respondents by virtue of
their membership
of a trade union party to the bargaining council
which was party to the collective agreement. The appellant is obliged
by section
31(b) of the LRA, as a party to a collective agreement, to
extend to the respondents the fruits of a particular collective
bargaining
exercise. Strictly speaking, no obligation or other legal
requirement arises from the collective agreement compelling the
appellant
to reconstitute, substitute or vary the contractual
employment relationship between the respondents and the
universities.
[31]
The
stand-alone allowance is due to the respondents in terms of a
statutory obligation arising under the system of collective
bargaining established by the LRA. The respondents’ entitlement
derives from section 31(b) of the LRA and not from their employment
with the university. Although, the modalities for the fulfilment of
the obligation are not described in the collective agreement,
it was
nonetheless practically possible to give effect to the obligation in
the manner the agreement was executed for the benefit
of similarly
situated medical professors in the other provinces. In this regard,
it is worth repeating that the allowance was paid
to every medical
specialist employed in public health sector hospitals throughout the
Republic with the exception of the respondents
and their colleagues
at the teaching hospitals in the Western Cape.
[71]
In the premises, the commissioner made no material error of law and
did not render an unreasonable
award. His determinations that the
respondents were employed or engaged in the public service and were
entitled to the allowance
in terms of the collective agreement were
both correct and reasonable. Although aspects of its reasoning may be
open to debate,
the Labour Court equally did not err in dismissing
the application for review.
[72]
The appeal is dismissed with costs, such costs to include the costs
of employing two counsel.
___________________
JR
Murphy
Acting
Judge of Appeal
I
agree
__________________
P
Coppin
Judge
of Appeal
I
agree
_________________
K
Savage
Acting
Judge of Appeal
APPEARANCES:
FOR
THE APPELLANT: Adv
A Oosthuizen SC and Adv B Joseph
Instructed
by The state attorney
FOR
THE RESPONDENTS: Adv
R Steltzner SC
Instructed
by: MacRobert Inc
[1]
The other respondents have played no active role in the litigation
and thus can be taken to abide by the decision of the court.
[2]
The Public Health and Welfare Sectoral Bargaining Council has been
renamed the Public Health and Social Development Sectoral
Bargaining
Council.
[3]
Collective Agreement No.1 of 2004.
[4]
Act 66 of 1995.
[5]
The then acting General Secretary of the bargaining council, Mr.
Tekokoze Dlomo, during his testimony in the Labour Court proceedings
before Cheadle AJ (discussed below) explained that an agreement had
been concluded between DENOSA and SAMA referred to as the
“working
together agreement”. That agreement does not form part of the
appeal record. However, it is clear that the
object of the agreement
was for the two unions to act together for the purposes of
collective bargaining and admission to the
bargaining council as a
single party as contemplated in the provisions of the bargaining
council constitution. Mr. Dlomo confirmed
that the unions had put
their membership together to meet the threshold for admission and
voting at the bargaining council. Professor
Denise White, the
vice-chairperson of SAMA between 2003 and 2008, corroborated Mr.
Dlomo’s testimony and confirmed the
existence of the
arrangement in terms of the bargaining council’s constitution.
[6]
Other hospitals have been used for teaching over the years. They
include: Red Cross Children’s Hospital; Somerset Hospital;
the
Mowbray Maternity Hospital etc. For convenience we limit reference
to the teaching hospitals to Groote Schuur and Tygerberg
with which
the respondents are associated and where most of the training of
medical students takes place.
[7]
The Stellenbosch agreement contains a similar provision
[8]
The Stellenbosch agreement contains terms identical to those in the
UCT agreement regulating the position of Stellenbosch employees
and
provincial employees serving on the joint staff at Tygerberg
Hospital.
[9]
Clauses 69 and 70 of the UCT agreement.
[10]
PERSAL is the payroll system utilised by the state to pay salaries
to public servants.
[11]
As stated earlier, clause 2 of the collective agreement expressly
indicates that the collective agreement applies only to employees
in
the Public Health sector who fall within the registered scope of the
bargaining council.
[12]
Subsequent to the initial award, the commissioner issued a variation
award in relation to the capital amounts and a determination
regarding the interest payable. The quantum of the claims is not in
dispute before us.
[13]
Section 8(1) of the PSA defines the public service to consist of
persons holding posts on the fixed establishment. The provision
is
discussed below.
[14]
Annexure SOC5.
[15]
Clause 2 of the collective agreement.
[16]
Act 103 0f 1994
[17]
Section 9(1) read of the PSA.
[18]
Khanyile
v Minister of Education & Culture, KZN and Another
(2004) 4 All SA 442
(N) at 446 – 449; and
University
of the Western Cape and Others v MEC for Health & Social
Services and Others
(1998) 19 ILJ 1083 (C) at 1096A – D.
[19]
Public Service Regulations, B.1.(g) of Part VII, GNR 1 of 5 January
2001 (Government Gazette No 21951).
[20]
See generally section 23(3) of the LRA which provides that where
applicable a collective agreement varies any contract of employment.
[21]
As required in terms of clauses 9 and 10 of the UCT agreement.
[22]
Section 32 of the LRA provides for the extension of collective
agreements concluded in bargaining councils to non-parties by
the
Minister of Labour, which did not happen in this case.
[23]
The binding nature of a collective agreement concluded in a
bargaining council (consistent with the policy of industrial
self-regulation)
is subject to the provisions of the constitution of
the bargaining council. The constitution enjoys precedence over the
statutory
provisions.
[24]
Cheadle AJ pursued this line of reasoning in reaching his conclusion
that the collective agreement applied to the respondents.
[25]
Section 28(1)(a) of the LRA
[26]
The definition lists certain exclusions, which are not relevant for
present purposes.
[27]
Section 8(1)(c)(i) of the PSA. The posts in section 8(1)(a) of the
PSA are specific posts, for example, in the South African
Police
Services.
[28]
Section 8(1)(c)(ii) of the PSA.
[29]
Section 1 of the PSA defines an “employee” to mean a
person contemplated in section 8(1)(c) of the PSA.
[30]
Section 8(1)(c)(ii) contemplates persons employed under special
contracts in posts additional to the fixed establishment as forming
part of the public service.
[31]
Section 31 of the LRA which deals specifically with bargaining
council collective agreements does not include a provision similar
to section 23(3) of the LRA. Section 23 of the LRA governs the legal
effect of collective agreements concluded outside of bargaining
councils. Section 23(3) provides that where applicable a collective
agreement varies a contract of employment. It is debatable
whether
this general provision is applicable to collective agreements
concluded in bargaining councils. The effect of a bargaining
council
collective agreement on the individual employment contracts of
members of trade union parties to a collective agreement
conceivably
may be a matter determined exclusively by the terms of the
collective agreement and the constitution of the bargaining
council.