Brief Summary

Labour Law — Unfair Labour Practice — Grading and placement of employees during restructuring — The National Union of Mineworkers appealed against a Labour Court order that set aside a commissioner’s award finding Eskom guilty of unfair labour practices regarding the grading of employees post-restructuring. The employees, previously designated in lower grades, contested their placement following Eskom's transition from the Patterson to the TASK grading system. The appeal raised the issue of whether Eskom's failure to upgrade the employees constituted an unfair labour practice. The Labour Appeal Court held that the commissioner’s award was valid, confirming that Eskom had indeed committed an unfair labour practice by not appropriately grading and placing the employees according to the migration policy.

Comprehensive Summary

Summary of Judgment

1. Introduction

The proceedings were an appeal to the Labour Appeal Court against a judgment of the Labour Court which had set aside a CCMA arbitration award. The underlying dispute concerned an alleged unfair labour practice arising from Eskom’s handling of the grading and placement of employees during a restructuring and transformation process.

The appellant was the National Union of Mineworkers (NUM) acting on behalf of five employees (Messrs Zatu, Coetzee, Lambert, Smit and Wolstenholme). The first respondent was Eskom Holdings SOC Ltd, the second respondent was the commissioner who issued the arbitration award, and the third respondent was the Commission for Conciliation, Mediation and Arbitration (CCMA).

Procedurally, the employees referred disputes to the CCMA in October 2015, conciliation failed, and the matter proceeded to arbitration during 2016. The commissioner found that Eskom had committed an unfair labour practice and ordered upgrades and back pay. Eskom successfully reviewed that award in the Labour Court, which set it aside and declared that no unfair labour practice had been committed. NUM then appealed to the Labour Appeal Court. Eskom filed a cross-appeal concerning the categorisation of the dispute (promotion versus benefits), which was pursued only faintly.

The general subject matter of the dispute was the grading and recognition of the work actually performed by the employees in the context of Eskom’s restructuring, including whether Eskom acted unfairly by failing to implement an internal appeal outcome and by treating the employees differently from other similarly situated employees who were upgraded.

2. Material Facts

Eskom undertook a restructuring and transformation exercise beginning in 2011, following an earlier shift (2007–2008) from the Patterson grading system to the TASK grading system. The evidence accepted by the court indicated that anomalies arose in the transition between systems, particularly concerning titles, grading, and how incumbents were captured in organisational documentation.

In March 2014 Eskom adopted a written policy titled “Principles for Employee Migration during Transformation” (the migration policy). The migration policy applied to bargaining unit employees and contemplated consultation, job profiling, job evaluation through a job evaluation committee (JEC), and placement of employees into posts in a new organisational structure. It also created an appeal structure via Employee Care Groups (ECGs) tasked, among other functions, with dealing with and finalising employee appeals about placement decisions.

The five employees worked at Eskom’s Koeberg nuclear power station in the Materials Management Department. It was common cause that four of the employees (Coetzee, Lambert, Smit and Wolstenholme) reported to Zatu. However, documentation (including a 2010 organogram) reflected anomalies: Zatu’s purported earlier position (a T10 supervisory designation) did not appear to exist on the relevant organogram, and the organogram reflected only one Senior Storeman: Issuing position, despite four employees later being treated as occupying that designation. The court accepted that these anomalies were not adequately explained, but were likely related to the earlier grading transition.

In August 2012 Smit and Wolstenholme filed a grievance about their T06 grade not reflecting supervisory responsibilities. The grievance outcome in February 2013 recorded that the anomaly stemmed from the earlier Patterson-to-TASK change, could not be altered retrospectively, and recommended waiting for the restructuring process intended to standardise job profiles and correct anomalies.

During the restructuring, job profiles were approved and graded. On 30 July 2014 job profiles for new positions were approved by line management, and on 6 August 2014 the JEC chair confirmed the TASK grades for those new positions. Organograms for 2015 and 2016 reflected (in relevant respects) a materials management structure including a Senior Warehouse Supervisor (T12) and Warehouse Supervisors (T10), alongside other posts.

A critical factual feature accepted on appeal was that the employees’ evidence about their actual work outputs was not meaningfully challenged. Zatu testified (and Eskom did not dispute in substance) that he performed the functions reflected in the Senior Warehouse Supervisor T12 job profile. Although it was suggested to him in cross-examination that he was acting, he stated he continued performing those functions even after Eskom stopped paying an acting allowance and that he had been asked to do so because the migration process would correct his profile and grading.

Coetzee testified that, although placed and paid as a Senior Storeperson T06, he performed the duties described in the Warehouse Supervisor T10 job profile, including supervising staff and having employees of various grades reporting to him. The minutes of the ECG meeting later recorded that management confirmed that the employees were operating at the relevant higher level.

On 11 December 2014 a letter signed by Mr Culligan (senior manager) was addressed to Zatu notifying him of appointment into the Senior Warehouse Supervisor T12 position, recording that the job profile had changed by more than 30%, that the JEC had confirmed a T12 grading, and that although he did not meet minimum requirements he had the necessary skills, knowledge and experience and would be appointed. Zatu signed acceptance the same day. Eskom’s evidence was that such letters were not “officially issued” and were not actioned because Eskom head office was uncomfortable with upgrades; the letter was said to have been issued prematurely.

Subsequently, on 21 May 2015 the employees received letters stating their positions were not affected by transformation and that job contents, designation and grading remained unchanged. Those letters placed Zatu at Warehouse Supervisor T10 and the others at Senior Storeperson T06. The court noted that, even on Eskom’s version, the letters were not entirely accurate because designations had changed, and the absence of old job profiles made definitive job-content comparison difficult. The court treated as important that the employees’ evidence that their duties aligned with the higher job profiles remained uncontroverted.

The employees appealed internally to an ECG on 8 June 2015. The ECG considered the appeals on 14 July 2015. The minutes recorded that the appellants were “T06 operating at T10 level,” that management confirmed employees were operating at T10 level, and that management supported upgrading as fair. The ECG recommended rectifying designations on SAP such that the correct grades would follow. Mr Culligan implemented this by completing internal forms, but Ms Sishuba (Remuneration and Benefits manager) was unwilling to approve the changes, and HR communicated that the grade changes “cannot happen” due to her lack of comfort signing off.

A comparator group of employees at Koeberg (Van Wyk, Scullard and Louw) pursued appeals that were recorded in similarly worded ECG minutes. Their appeals resulted in a decision agreeing to an upgrade to T10, and that decision was implemented: they were promoted to T10 Assistant Quality Officers. The employees relied on this differential implementation to allege inconsistent and unfair treatment.

The employees referred unfair labour practice disputes to the CCMA on 19 October 2015, describing Eskom’s refusal to upgrade them “as per the migration principles” despite their performing work at a higher grade. Conciliation failed and the matter proceeded to arbitration. The commissioner characterised the dispute as one concerning upgrading of posts, treated it as falling under section 186(2)(a) as unfair conduct relating to benefits, and found unfairness largely in Eskom’s failure to treat the employees consistently with the Van Wyk group and in failing to implement the ECG outcome. The commissioner ordered upgrades with effect from 1 September 2014 and back pay.

On review, the Labour Court set aside the award, holding (among other things) that there was no evidence supporting that the employees performed duties in the higher job descriptions, that ECG lacked final authority, and that recruitment and selection (rather than migration) was required for higher placement. The Labour Appeal Court was required to assess whether those findings were sustainable on the record and whether the commissioner’s award was reviewable.

3. Legal Issues

The central legal questions were whether the commissioner’s finding of an unfair labour practice was one that could reasonably be reached on the evidence, and whether the Labour Court erred in setting aside the award on review. This required determining whether Eskom’s conduct—particularly its failure to align grading with actual work performed and its non-implementation of the ECG outcome—was unfair in the sense contemplated by section 186(2)(a) of the Labour Relations Act 66 of 1995.

A further issue concerned the correct categorisation of the dispute: whether it was an unfair labour practice relating to promotion or relating to benefits. Although the Labour Court treated this as largely immaterial to jurisdiction (given that section 186(2)(a) encompasses both), Eskom’s cross-appeal challenged the characterisation, and the Labour Appeal Court addressed it.

The dispute therefore involved a mixed inquiry. It required findings about fact (what work the employees performed; what decisions were taken in the restructuring and appeal processes; what was implemented for comparators), the application of legal standards to those facts (unfair labour practice; the notion of “benefits” and whether incorrect grading is cognisable), and an evaluative judgment about fairness in the specific circumstances, including the significance of inconsistent treatment and the employer’s reliance on internal authority constraints.

4. Court’s Reasoning

The Labour Appeal Court scrutinised the record and the migration policy and found that several factual premises relied upon by the Labour Court were incorrect on the evidence accepted at arbitration. It rejected the Labour Court’s conclusion that there was no evidence that the employees performed the work described in the Senior Warehouse Supervisor T12 and Warehouse Supervisor T10 job profiles. The employees had given direct evidence that those profiles described their duties both before and after restructuring, and Eskom did not meaningfully contest the substance of that evidence. In Zatu’s case, cross-examination did not dispute that he performed T12 functions, focusing instead on whether this was “acting” and on the cessation of acting allowances.

The court regarded the ECG minutes of 14 July 2015 as corroborative documentary material, recording that management confirmed the relevant employees were operating at T10 level. It also treated the 2015 organogram, signed off by senior management and HR at Koeberg and reflecting the employees in the higher-level posts, as supporting an inference that local management accepted that the employees’ actual work corresponded to the higher-graded job profiles. The court was careful to state that the organogram may not have created rights or legitimate expectations, but it was relevant to understanding management’s acceptance of job content alignment.

The court further held that the Labour Court erred in finding there was no evidence of job evaluation resulting in upgrading. The record indicated that job profiles for Senior Warehouse Supervisor and Warehouse Supervisor were evaluated and graded by the JEC in August 2014. The court also emphasised testimony from Eskom’s remuneration and benefits manager, Ms Sishuba, confirming that all jobs went through evaluation and grading, and that employees might perceive otherwise if a job did not change grade.

On the migration policy’s application, the Labour Appeal Court disagreed with the Labour Court’s approach that the policy was inapplicable because the employees’ jobs were unchanged. It reasoned that, on the evidence, the policy applied to bargaining unit employees and jobs were evaluated, and the dispute centred on whether the employees’ positions could correctly be treated as “unaffected.” The court placed weight on the fact that the old-designation positions (as reflected in the record) no longer existed after restructuring, which undermined the proposition that the employees simply remained in the same posts unaffected by transformation. While the court noted uncertainty due to the absence of old job profiles, it treated it as at least clear that designations changed and that the employees continued performing functions reflected in newly profiled and graded higher positions.

Importantly, the court stated that it was not necessary to decide the appeal by definitively determining which specific migration-policy provisions applied or whether each procedural prescription of the policy had been followed. It observed, however, that the policy appeared prima facie not to have been followed properly and that this itself pointed towards unfairness. The court’s focus remained on the statutory question posed at arbitration: whether Eskom’s conduct was unfair.

The court held that Eskom’s reliance on internal organisational authority constraints (such as Sishuba’s ultimate approval role, national-level discomfort, or requirements that changes be finalised only upon certain authorised letters) did not adequately answer the fairness complaint on the facts. The employees did not base their case on contractual entitlement or legitimate expectation flowing from representations; rather, they asserted unfairness in being denied grading commensurate with work performed and in the employer’s failure to implement corrective outcomes achieved through the internal appeal structure.

The Labour Appeal Court found Eskom’s reasons for reversing or failing to implement the initial corrective outcomes to be insubstantial, particularly when contrasted with the implementation of the ECG decision in the Van Wyk group. It accepted as significant that the higher-level positions were profiled and graded in mid-2014 and that those profiles reflected the work the employees in this matter continued to perform. The court was informed from the bar that the T12 and T10 posts remained vacant, reinforcing the conclusion that the employees were continuing to perform higher-graded work without corresponding grading and benefits.

On that basis, the court concluded that the commissioner’s finding of unfair labour practice was rationally based on the evidence and that the commissioner’s remedial order upgrading the employees was a reasonable determination of the dispute. It therefore held that the Labour Court erred in setting aside the arbitration award.

Regarding Eskom’s cross-appeal about categorisation, the court accepted that the unfair conduct related to the provision of benefits. It reasoned that grading is closely connected to benefits such as status, remuneration and eligibility for advancement, and that a complaint about incorrect grading does not necessarily entail a claim to promotion into a different job. The court distinguished re-grading (recognising the correct value of what an employee is already doing) from promotion (which involves appointment into a different or revised task set). It held that an unfair incorrect grading dispute thus falls within unfair labour practice disputes concerning benefits and that the cross-appeal lacked merit.

5. Outcome and Relief

The Labour Appeal Court upheld NUM’s appeal and set aside the Labour Court’s order. The Labour Court’s order was substituted with an order dismissing Eskom’s review application, with the result that the CCMA arbitration award (ordering upgrades and back pay) remained operative.

The cross-appeal by Eskom was dismissed. Eskom was ordered to pay the costs of the appeal and the cross-appeal.

Cases Cited

Thiso v Moodley NO [2015] 5 BLLR 543 (LC).

Apollo Tyres South Africa (Pty) Ltd v CCMA [2013] 5 BLLR (LAC) at para 50.

Legislation Cited

Labour Relations Act 66 of 1995 (specifically section 186(2)(a)).

Rules of Court Cited

No rules of court were expressly cited in the judgment text provided.

Held

The Labour Appeal Court held that the commissioner’s finding that Eskom committed an unfair labour practice was supported by uncontroverted evidence that the employees performed duties aligned to higher-graded job profiles and by documentary material showing that the relevant job profiles were evaluated and graded. The Labour Court was found to have erred in concluding otherwise and in setting aside the award.

It further held that the dispute properly concerned unfair conduct relating to benefits under section 186(2)(a), because the complaint was about incorrect grading (and its consequences for remuneration and related advantages) rather than a claim for promotion into a different job. The commissioner’s remedial order upgrading the employees and awarding back pay was found to be a reasonable outcome on the record.

LEGAL PRINCIPLES

An unfair labour practice dispute under section 186(2)(a) of the Labour Relations Act 66 of 1995 may encompass unfair conduct relating to benefits, and the concept of benefits may include the consequences flowing from correct or incorrect grading where grade determines remuneration, status, and related advantages.

A dispute about incorrect grading may be distinguished from a dispute about promotion. On the court’s reasoning, re-grading that aligns an employee’s grade to the work actually performed does not necessarily constitute promotion into a new or different position; rather, it recognises the value of the existing work performed.

In review and appeal assessment of arbitration outcomes, the court emphasised that where an employee’s evidence about actual duties is uncontroverted, and where documentary material supports that those duties align with evaluated and graded job profiles, an arbitral conclusion that the employer acted unfairly in failing to align grading and benefits to that reality may be sustained as a reasonable determination of the dispute on the evidence.

National Union of Mineworkers obo Coetzee and Others v Eskom Holdings SOC Ltc and Others (CA4/2018) [2019] ZALAC 62; [2020] 2 BLLR 125 (LAC); (2020) 41 ILJ 391 (LAC) (4 October 2019)