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[2010] ZALCJHB 55
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South African Revenue Services v Commission for Conciliation Mediation And Arbitration and Others (JR514/08) [2010] ZALCJHB 55 (14 April 2010)
IN
THE LABOUR COURT OF SOUTH AFRICA
(HELD
IN BRAAMFONTEIN)
CASE
NUMBER: JR514-08
IN
THE MATTER BETWEEN:
SOUTH
AFRICAN REVENUE SERVICES
APPLICANT
v
COMMISSION
FOR CONCILIATION, MEDIATION,
AND
ARBITRATION 1
ST
RESPONDENT
PIETER
VENTER
NO 2
ND
RESPONDENT
COBUS
PRETORIUS 3
RD
RESPONDENT
RONELL
FOURIE 4
TH
RESPONDENT
JUDGMENT
AC
BASSON, J
[1]
This is a review of an arbitration award in terms of which the
withdrawal of the 3
rd
and 4
th
respondents’
travel allowance was held to be an unfair labour practice. The
applicant (the South African Revenue Services)
was ordered to
implement the travel allowance in respect of the 3
rd
and
4
th
respondents (hereinafter referred to as “the
respondents”). The two respondents (Mr. Cobus Pretorius and Ms.
Ronell
Fourie) in this matter received a travel allowance for a
period of some 10 months before the decision to withdraw the
allowance
was taken. In brief it was the 2
nd
respondent’s
(hereinafter referred to as “the commissioner”)
conclusion that the applicant is estopped from relying
on the fact
that the General Manager did not (in fact) approve the applications
for a travel allowance. (I will return to
the facts in more
detail hereinbelow.)
Application
for condonation for the late filing of the review application
[2]
The applicant filed an application for condonation for the failure to
launch the review application within the prescribed time
limits. The
condonation application is not opposed. It appears from the founding
affidavit that the review application is 6 days
out of time. I have
considered the length of the delay and the explanation therefore. The
explanation tendered is reasonable. I
have also considered the
prospects of success and possible prejudice to the respondents. I am
satisfied that a case has been made
out for condonation. In the event
condonation is granted.
Jurisdiction
[3]
During argument before this court the applicant raised a
jurisdictional point in terms of which it was argued that the CCMA
did not have the necessary jurisdiction to hear the unfair labour
practice dispute. The point was raised that the travel allowance
received by the respondents was not a “
benefit
” as
contemplated by the unfair labour practice definition and
consequently the CCMA did not have the necessary jurisdiction
to hear
the dispute.
[4]
It is unfortunate that this issue was not properly raised on the
papers, nor was the issue fully canvassed in argument before
this
court. The record of the proceedings before the CCMA is also not
helpful. What is, however, clear from the opening statement
before
the CCMA is the fact that the jurisdiction of the CCMA was not
challenged. The commissioner also does not deal with the
issue of
jurisdiction in his award. In fact, he accepted, without discussion,
that a travel allowance is regarded as a “benefit”
with
reference to
Schoeman & Another v Samsung Electronics (Pty)
Ltd
(1997) 18
ILJ
1098 (LC).
[5]
Because the issue of whether or not a travel allowance is a “
benefit
”
was not properly canvassed, this court is not in a position to decide
the jurisdictional issue on the papers as they stand
before this
court. I have, however, decided to review and set aside the award for
other reasons and I have decided to refer the
matter back to the CCMA
for a
de novo
hearing. This does not mean that the
jurisdictional point may not be raised at the commencement of the
rehearing. Should the parties
be of the view that this is an issue
that needs to be raised, they should do so when the matter is
re-enrolled at the CCMA.
Record
of the proceedings
[6]
Before I turn to an exposition of the facts, brief reference must be
made to the fact that the respondents have raised the point
that the
record is incomplete. The record reflects the opening statement and
the full evidence of both witnesses. What is not contained
in the
record is the closing arguments of the parties. I must point out that
the respondents are not particularly helpful in pointing
out to the
Court
what
is not contained in the record. As already pointed
out, the evidence of both the witnesses who testified before the
commissioner
and to which reference is made in the award is contained
in the record. Insofar as the award does not refer to any other
evidence
not included in the record, I can find no reason to conclude
that the record (except for the absence of the closing arguments)
that the record is incomplete. I have thus proceeded on the basis
that the record is sufficiently complete for this court to consider
the review.
Brief
outline of the relevant facts
[7]
The two respondents are employed as auditors on salary level 4B by
the applicant at its Welkom offices.
[8]
On or about mid June 2006 the respondents applied for a travel
allowance in terms of the Agreement on Travel Allowance for Field
Workers (concluded between the South African Revenue services (SARS)
and the Public Service Association (PSA) and National Education,
Health and Allied Workers Union (NEHAWU)). (I will refer to this
agreement simply as “the agreement”.)
[9]
This agreement provides in clause [2] that –
“
the
organization [SARS] will always make available pool cars for
business-related travel. Alternatively employees can elect to use
their private cars in the execution of field work/audits. Where
employees elect to use their own vehicles for this purpose, they
will
be reimbursed by means of a travel allowance.”
[10]
The relevant clause in the agreement relied upon in respect of the
procedure to claim a travel allowance is clause 5.5 : It
provides as
follows:
“
All employees
in grades 1 to 4B will use the available pool cars for all field
work. However, should employees in the aforementioned
grades who met
the requirements of spending 50% + 1% of their working time doing
field audits/work elect to utilize their private
motor vehicles to
conduct field work/audits, they can voluntarily apply for the payment
of the travel allowance and it will become
payable once applications
have been approved by the
General manger or his/her
designate
.”
Clause
5.6 further provides that:
“
All voluntarily
applications for payment of the travel allowance will be
subject
to the approval of the appropriate General Manager or his/ her
designate
.
Considerations for approval/no-approval of applications will be
effected within 30 working days after applications have been received
by General Managers or his/her designate. Such approval shall not be
unreasonably withheld.”
[1]
[11]
The respondents’ applications for the travel allowance were
signed by their acting team leader (Gideon van der Westhuizen
(“Van
der Westhuizen”) and sent to Jean van Staden (“Van
Staden”) who is the Human Resources Consultant
to the Free
State and Western Cape Enforcement. On 23 June 2006 Van Staden sent
the application forms to Fanie Groenewald (“Groenewald”)
who is the Regional Human Resources Manager Enforcement for the Free
State and Western Cape for consideration. On 24 June 2006
Van Staden
sent an e-mail to Van der Westhuizen in terms of which Van der
Westhuizen was advised that the applications must be
approved by both
the Enforcement Centre Manager and the Human Resources Manager and
then ultimately by the General Manager and
that same cannot be signed
off at team leader level. The 3
rd
and 4
th
respondents then completed another set of applications and sent them
together for approval by the relevant managers.
[12]
According to the applicant, the respondents’ applications were
subsequently processed on the applicant’s head office
computer
programme in terms of a so-called “
people soft
”
computer programme used to capture employee’s personal
information
without
the approval of the General Manager and/or
his/her designate. As a result, according to the applicant, the
respondents
erroneously
received monthly payments of travel
allowances in the sum of R 3000.00 (which were included in their
total remuneration packages)
with effect from
July 2006
until
31 March 2007
due to the fact that their applications were
never received and approved by the General Manager and/or his or her
designate in
terms of the aforementioned agreement.
[13]
On
28 August 2006
the applicant issued an internal communiqué
to all employees on the “
Revised Policy on Travel Allowance
for Field Workers
” in line with the collective agreement
signed on
30 June 2006
. In terms of the revised policy
employees in grades 1 to 4B doing field work
must
use the
applicant’s pool vehicles. Where such employees meet all the
qualifying criteria the General Manager may for specific
business
reasons consider such employee for the travel allowance but this will
be done strictly at the sole discretion of the General
Manager
concerned. The relevant section of the revised policy reads as
follows:
“
All employees
in grades 5 and 6 who are engaged in field work and who meet all the
qualifying criteria and who voluntarily elect
to use their own
vehicles to conduct SARS business will be eligible to receive a
travel allowance of R 3000 per month before tax.
The allowance is to
be regarded as a tool of trade as it is intended to enhance the work
performance of individuals who qualify
and elect to use their private
vehicles for business purposes.”
[14]
According to the applicant, it became aware of the erroneous payment
of the travel allowance during February 2007. Following
this
discovery, the applicant dispatched a letter to the respondents in
terms of which they were informed that the applications
for field
work allowance were processed on “people soft” without
the approval of the General Manager. They were informed
that the
payments will be stopped with effect from 1 April 2007 until such a
time their applications for payment has been considered
by the
General Manager: Enforcement and Risk and possibly approved. The two
respondents were advised to use the pool cars for all
field work as
amplified and required by the “
Revised Policy
”.
The respondents were thus given a month’s notice of termination
of the allowance.
[15]
The 3
rd
Respondent (Pretorius) could not deny that his
application was not approved by the General Manager. He could also
not say who signed
the application. He was, however, of the view that
that he was entitled to the allowance:
“
According to me
once again I will not agree to that because I feel we were entitled
to the application. The point is we have never
seen or anything, we
do not have an idea who signed it. The only time we saw it was when
we sent it through to Bloemfontein
.” Pretorius was then
asked in cross-examination: “
Mr PRETORIUS will you further
agree with me that if the employer pays money to any employee
erroneously it is fair for that employer
to stop that payment
?”
Pretorius
did not, however, dispute the right of the employer to stop payment.
He answered as follows:
“
It – I
mean every case is different. I mean you cannot generalize according
– I thing you cannot generalize so you must
go and have a look
at any – every specific situation and in this situation I do
not agree with it
.”
Pretorius
also confirmed in his evidence that they only applied once for the
car allowance and that they never re-applied. The 4
th
respondent did not testify but it was confirmed that her evidence
would have been exactly the same as that of Pretorius.
[16]
The travel allowances were subsequently reconsidered and on 2 March
2007 the applicant addressed a letter to the respondents
in terms of
which they were advised that the travel allowances were disapproved
by the office of the General Manager due to financial
reasons. In the
same letter the respondents were advised to utilize the pool cars for
all field work. In March 2007 the respondents
lodged a formal
grievance with the applicant against the withdrawal of the travel
allowance.
[17]
Ms. Linder (hereinafter referred to as “Linder”, the
Human Resources Consultant in the Free State) testified that
an
applicant’s application had to be accompanied by a driver’s
license and that there had to be proof of a car that
is insured and
that the car is either in the name of the applicant or the spouse’s
name. In cross-examination Linder also
confirmed that ownership of a
car was one of the pre-requisites for applying for a car allowance:
“
As I said
earlier they had to submit a copy of their driver’s license and
motor vehicle ownership and a copy of the ID and
applications,
physical applications.”
It
was not disputed that an applicant had to own his own vehicle when
applying for the travel allowance. This is clear from the
question
posed to Linder in cross-examination:
“
Let me ease
this question for you and I will try and assist you. I understand
that at the end of the day it must be approved but
that is not part
of the criteria to qualify. In terms of the qualifying criteria, the
50% plus 1% and the making use of your own
vehicles, did the
applicant comply with these criteria?”
Linder
responded in the affirmative
.
[18]
Linder also testified that the (travel allowance) application had to
go through a lengthy process starting with the Business
Area Manager
for recommendation, then to the regional HR manager for
recommendation and then to the Enforcement Centre Manager
and
ultimately to the General Manager. She testified as follows:
“
Okay, it is
quite a long process. The applicant will apply, the application needs
to consist out of an application form and there
needs to be proof of
a car that is insured and the car is on either the person’s
name or spouse’s name or anything
to that effect. From there it
will go to the business area manager for recommendation.”
She
also testified that it took a long time before the Applicant actually
realized that they had made a mistake. She confirmed that
the general
manager did not approve the application.
Referral
of unfair labour practice dispute to the CCMA
[19]
On 23 March 2007 the respondents lodged a formal grievance against
the anticipated withdrawal of the travel allowance. The
dispute was
eventually referred to the CCMA. The dispute was not resolved and the
respondents subsequently referred an alleged
unfair practice dispute
to the CCMA for conciliation and arbitration.
[20]
The commissioner was required to determine whether the withdrawal of
the travel allowance and the subsequent failure by the
applicant to
continue to pay the allowance constituted an unfair labour practice
in terms of the Labour Relations Act, 66 of 1995
(hereinafter
referred to as “the LRA”).
[21]
The evidence of the respondents (both employed as auditors on the
salary level 4B) was that they both qualified for the allowance
as
they performed more than 50% of their duties in the field.
[22]
Although the allowances were stopped the respondents were not
instructed to pay back any amount because it was acknowledged
that
they had used their own private vehicles during the relevant period.
The
review
[23]
The commissioner concluded, without discussing what the requirements
of the doctrine of estoppel are, that the applicant is
estopped from
relying on the fact that the General Manager did not approve the
application:
“
5.6.5 I am
therefore satisfied that the doctrine of estoppel may firstly apply
in the labour context and that it is relevant and
applicable in this
matter. The Respondent made representations that the allowance was
approved and they continued to pay the allowance
for a period of 9
months. The Applicants acted on this and purchased vehicles. They are
clearly prejudiced and should not be blamed
for the oversight.
5.6.6 I am
therefore of the opinion that the Respondent should be estopped from
relying on this fact that the appropriate
GM did not approve the two
applications. I also wish to emphasize that this matter is unique and
should not be interpreted as a
general approval of allowances.”
[24]
The applicant’s primary ground for review is centered on
whether the invocation of the doctrine of estoppel in the present
matter was reasonable having regard to all the evidence and material
that were placed before the CCMA.
The
principle of estoppel
[25]
The principle of estoppel has been held to be applicable in the legal
field of labour relations. The Appellate Division (as
it then was)
confirmed in
Chamber of Mines of SA v NUM
1987 (1) SA 668
(A)
that there was no reason for concluding that the principle of
estoppel by election or waiver based as it is on considerations
of
elementary fairness, should be regarded as a trespasser in the legal
field of labour relations. The essence of this doctrine
is that if a
person has an election, the person is allowed a reasonable time
within which to make that election and must make an
election. The
person may change his or her mind about the election but not if an
injustice is done to another.
[26]
In
Maluti Transport Corporation Ltd v MRTAWU & Others
(1999) 9 BLLR 887
(LAC) the Labour Appeal Court referred with
approval to the decision in the Chamber of Mines case and confirmed
that the principle
of estoppel is based on elementary principles of
fairness. The court also confirmed that it did not agree with the
submission that
once an election has been made it cannot be undone.
Where fairness dictates it and it causes no injustice to the other
party, a
party can change its mind. It further held that there are
two requirements for a fair renunciation or retraction of an earlier
decision: (1) Where good reason exists for the change; and (2) the
other party is given timeous notice of the change so as to prevent
that party from being prejudiced thereby.
See also SA Broadcasting
Corp v Coop & Others
(2006) 27 ILJ 502 (SCA) where the court
said the following about this doctrine:
“
[63]
The plaintiffs in a replication relied on estoppel, otherwise
described as ostensible authority. A person
who has not authorized
another to conclude a juristic act on his or her behalf may in
appropriate circumstances be estopped from
denying that he or she had
authorized the other so to act. The effect of a successful reliance
on estoppel is that the person who
has been estopped is liable as
though he or she had authorized the other to act.
[64]
The essentials of estoppel can briefly be stated as follows: The
person relying on estoppel will
have to show that he or she was
misled by the person whom it is sought to hold liable as principal to
believe that the person
who acted on the latter's behalf had
authority to conclude the act, that the belief was reasonable and
that the representee acted
on that belief to his or her prejudice.”
Application
to the present facts
[27]
Although I accept that the doctrine of estoppel is relevant and
applicable in the labour law field, I am of the view that,
in this
particular matter, the application of the doctrine was misplaced and
in fact not applicable for the following reasons:
(i)
Firstly, no mention whatsoever was made in the opening statement
by
Mr. Van Aswegen, the legal representative on behalf of the
respondents to the effect that the respondents (the two applicants
before the CCMA) intended relying on the doctrine of estoppel.
In his evidence Pretorius also made no mention of the fact
that he
bought the car because he was
mislead
into thinking that he
will be able to pay the installments on his car. Pretorius merely
stated in his evidence that he bought a
car as a result of the travel
allowance to use for business purposes. It was also never put to the
applicant’s witness that
the respondents were
mislead
by
the applicant and that it was this representation that led them to
believe that they would then be able to purchase cars with
the travel
allowance. In fact, as I will indicate hereinbelow, the respondent
suffered no prejudice as a result of the withdrawal
of the travel
allowance and any prejudice that may have resulted from the
withdrawal of the travel allowance was entirely of their
own doing.
The respondents are still able to do their field work without having
to find themselves out of pocket. Instead of using
their own cars,
they must now use the pools cars.
(ii)
Secondly, the travel allowance is intended to assist employees who
use their own
private cars when doing field work on behalf of their
employer. It is clearly the intention of the travel allowance policy
to ensure
that employees who elect to use their own cars and not the
pool cars (when they do field work) do not find themselves out of
pocket
in respect of travel expenses. The revised policy on travel
allowance for field workers is clear in respect of the purpose of the
travel allowance. “
The allowance is to be regarded as a tool
of trade as it is intended to enhance the work performance of
individuals who qualify
and elect to use their private vehicles for
business purposes”.
It is clearly not the intention of the
policy to pay the employees a travel allowance so that they can use
the money to purchase
cars. Put differently, the travel allowance was
not intended as a subsidy for the installments on the car of an
employee who decides
to use his or her own car and not the pool car.
If an employee decides to use the travel allowance for other
purposes, for example,
to subsidize the installments on their cars,
they can therefore hardly claim that they are “
prejudice
”
if the travel allowance is withdrawn and then rely on estoppel to
reinstate the travel allowance. Clause 2 of the agreement
also
specifically refers to the fact that the travel allowance is intended
to assist employees who use “
their private cars
”
for field work (see paragraph [9]
supra.
) Clause 5.5 of the
same agreement also refers to employees who “
elect to
utilize their private motor vehicles to conduct field work/audits
”.
These
clauses clearly presuppose that an employee already has a private
motor vehicle when applying for the travel allowance. This
was also
the uncontested evidence of Linder.
[28]
The commissioner therefore clearly misconceived the evidence placed
before him in deciding (seemingly
mero motu
) that the doctrine
of estoppel was relevant and applicable in this particular matter.
Clearly the respondents did not suffer any
“
prejudice”
(as contemplated by the doctrine of estoppel) as a result of the
withdrawal of the travel allowance. As already pointed out, the
respondents are still able to do their field work without having to
find themselves out of pocket for any expenses incurred as
a result
of having to travel as they are entitled to use pool cars. The
“
prejudice
” therefore suffered as a result of the
withdrawal of the travel allowance is entirely of their own doing and
not as a result
of any misleading conduct on the part of the
applicant.
[29]
The commissioner also arrived at two conflicting conclusions: On the
one hand the commissioner was of the view that the principle
of
estoppel was applicable and consequently reinstated the travel
allowance. On the other hand, however, the commissioner was also
of
the view that the reasons advanced by the applicant for refusing to
reinstate the travel allowance were reasonable because the
applicant
had provided a reasonable explanation - namely financial
considerations - for the refusal to reinstate the allowance.
The
commissioner was also of the view that financial constraints would be
a factor to consider in deciding whether or not to reinstate
the
allowance. However, despite the finding that the applicant had
provided a reasonable explanation for refusing to reinstate
the
allowance and despite the fact that the commissioner was of the view
that it would
not
be unreasonable to turn down any application
due to financial reasons, he nevertheless proceeded to order that the
travel allowance
be reinstated.
[30]
I am
therefore of the view that the award must be reviewed and set aside.
The award of the commissioner is simply not reasonable.
[2]
A reading of the award and an objective assessment of the
circumstances clearly indicates that the commissioner failed to apply
his mind to the totality of the evidence that was placed before him
and that he misconceived the applicability of the doctrine
of
estoppel. I am further of the view that the matter must be referred
back to the CCMA for a hearing
de
novo
before a different commissioner. I have decided not to make an order
as to costs.
[31]
In the event the following order is made:
1. The
Application for condonation for the late filing of the review
application is granted.
2. The
arbitration award under case number FS2007-07 is reviewed and set
aside.
3. The
matter is referred back to the CCMA for a hearing
de novo
before a different commissioner.
4.
There is no order as to costs.
………………………………
..
AC
BASSON, J
14
April 2010
For
the applicant:
Adv
M Ramotlou: Instructed by Maserumule Inc
.
For
the respondent:
Adv
S Grobler: Instructed by Peyper Attorneys Inc.
[1]
My emphasis.
[2]
See
in this regard
Sidumo
v Rustenburg Platinum Mines and Others
(2007) 28
ILJ
2405 (CC).