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[2011] ZALCJHB 172
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POPCRU obo Mahlangu v Premier, Gauteng and Another (JR 510/10) [2011] ZALCJHB 172; (2012) 33 ILJ 1247 (LC) (2 December 2011)
Reportable
REPUBLIC OF SOUTH AFRICA
THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
JUDGMENT
case
no: JR 510/10
In the matter between:
POPCRU
OBO N J MAHLANGU & OTHERS
..........................................................
Applicant
and
THE PREMIER, GAUTENG
..........................................................................
First
Respondent
MEC FOR INFRASTRUCTURE
DEVELOPMENT, GAUTENG
.................................................................
Second
Respondent
Heard
:
27 October 2011
Delivered: 2 December 2011
Summary: Review in terms of section 158 (1) (h) – decision
of State to charge market related rental not made in capacity as
employer – dismissed with costs
JUDGMENT
BHOOLA J
Introduction
[1] This is an application in terms of section 158(1)(h) of the
Labour Relations Act- (“the LRA”),
1
in which the applicant seeks an order reviewing and setting aside a
decision taken by the second respondent to charge market related
rental for state housing occupied by officials of the Gauteng
Provincial Government, and which is provincial property (“the
Decision”).
[2] The Decision was communicated by the Department of Infrastructure
Development (“the Department”) of the Gauteng
Provincial
Government in its letter of 24 February 2009 in the following terms:
‘
To all
GPG Officials Accommodated in State Residences:
NOTICE OF INTENTION TO CHARGE
MARKET RELATED RENTALS – NEW LEASE AGREEMENT
Please be informed that:
1) The PFMA (Public Finance
Management Act 1 of 1999) and in particular Treasury Regulation
16A7.4 (as published in Government Gazette
27388 dated 15 March 2005)
requires this Department to charge market related rentals in respect
of provincial property.
2) On the 3rd February 2009, the
Executive Management Team (EMT) took a decision that all tenants who
are occupying Gauteng Provincially
owned properties must pay Market
Related Rentals (MRR).
3) In a task team meeting on 15
May 2009, attended by Organised Labour at the office of the Premier,
it was deliberated and agreed
that the MRR implementation process
should commence and that the implementation date should be 1
st
August 2009.
4) You are hereby given three
(3) months’ notice of termination of your current tenancy with
effect from 1 March 2010 until
31 May 2010.
5) Should you be interested in
entering into a new lease with the Department, which is to be
effective 1 June 2010, you should kindly
note that the new lease
agreement will reflect a Market Related rental derived from the
current Market Value of the property and
you are free to come view
the Valuation report.
6) Should you decline the offer,
you will unfortunately have to vacate on or before 31 May 2010. …
7)…..
8) Should you wish to enter into
a new lease agreement but are of the opinion that you are by way of
your conditions of service
entitled to state housing, you are advised
to provide a letter signed by your Director, stating that you qualify
for state housing
as provided for in your Departmental Criteria on
State Housing.’
[3] The applicant, POPCRU, seeks relief on behalf of its members who
lease state and other housing owned by the provincial government
in
the Gauteng Province through the second respondent. None of these
members are identified in the pleadings, nor are the terms
of their
lease agreements disclosed. However, the applicant has put up a lease
concluded between NJ Mahlangu and the respondents
as an example of
the kind of lease agreements that exist between the respondents and
POPCRU members occupying state housing. In
terms of this agreement
Mahlangu leases as ‘state housing a residence/flat…for
the purpose of housing, upon the terms
and conditions stated in the
lease agreement’. The agreement stipulates that an amount of
R200.00 per month is payable as
rent, which equal 4% of Mahlangu’s
salary and is to be deducted from his monthly salary. A salary advice
was also put up
in respect of Mahlangu and reflects that he receives
a housing allowance of R500.00 per month and that rent of R500.00 per
month
is deducted from his salary. The lease agreement also contains
a clause to the effect that ‘
the lessee understands and
accepts that he/she is not entitled to State Housing as contemplated
in Public Service Staff Code Chapter
DVII
2
,
and furthermore that the residence he/she is occupying is coupled
without any recourse to the Gauteng Provincial Government’.
Grounds of review
[4] The applicants submit that they are entitled to review the
decision on the grounds of legality in terms of section 158(1)(h)
of
the LRA. They expressly disavow reliance on the administrative law
grounds of review. They submit that the Decision is contrary
to
treasury regulations, collective agreements concluded in the Public
Service Co-ordinating Bargaining Council (“the PSCBC”),
and individual lease agreements concluded with employees, rendering
it
ultra vires
and irrational.
[5] Mr Basson advanced the following submissions in support of the
review:
(a) The Decision is contrary to regulation 16 A 7.4 of the treasury
regulations, which was issued in terms of the Public Finance
Management Act, 1 of 1999 (“the PFMA”), which provides as
follows :
‘
The letting of immovable state property
(
excluding state housing for officials
3
and political office bearers) must be at market-related tariffs,
unless the relevant treasury approves otherwise. No state property
may be let free of charge without the prior approval of the relevant
treasury’.
(b) The decision is contrary to collective agreements regulating the
provisions of state housing for public officials. These include
PSCBC
Resolution 3 of 1999, PSCBC Resolution 2 of 2004, and PSCBC
Resolution 1 of 2007. Part XVI of Resolution 3 of 1999 provides
that
it is applicable where the employer deems it necessary for an
employee to occupy state housing. It further provides for the
parties
to agree on a more detailed policy provided it is negotiated and does
not violate existing provisions. It requires the
executing authority
to enter into a lease agreement with the employee and states that the
rent payable by officials who occupy
state housing is 4% of their
salary up to a maximum of R200.00 in respect of married quarters and
1% of salary in respect of single
quarters. Resolution 2 of 2004
provides for a housing allowance (previously paid only to officials
who owned houses), to be phased
in to apply to officials who own or
rent accommodation over a period from 2005 to 2009. It requires the
rent to be equal to the
housing allowance and states that rent
payable by employees occupying housing
other than state housing
4
as provided for in Resolution 3, shall be determined in terms of a
department policy, provided it is not less than the maximum
rent
payable for state housing. Resolution 3 of 1999 provides for the
phasing in of the housing allowance until full implementation
by 2007
and an increase to R500.00 per month with effect from 1 July 2007.
(c) The Decision is contrary to the lease agreement between Mahlangu
and the second respondent.
Analysis
[6] The respondents raise a number of points
in limine
in
opposing the application, including that POPCRU does not act on
behalf of any employee of the respondents and therefore lacks
locus
standi
. However, in essence they contend that this Court has no
jurisdiction on the grounds
inter alia
that the review was not
brought in terms of any specific provision of the LRA; the dispute
relates to a contractual matter between
the respondents and lessees;
and that the issue of rent payable for provincial property is a
matter of mutual interest.
[7] The example of the lease agreement makes it clear that Mahlangu
(and consequently the other unidentified members on behalf
of whom
the claim is brought), has no right to occupy state housing. It is
common cause that in respect of state housing employees
can be
charged rental; such rental is fixed by collective agreements and
cannot be unilaterally changed. It would be appropriate
to dismiss
the review simply on this ground alone. However I consider it
appropriate to deal with some of the other points raised
in limine
by Mr Semenya and in the heads of argument prepared by Mr Maenetje
and do so below.
No provision in the LRA for a legality review of this nature
[8] Mr Basson submitted that the applicants were entitled to rely on
section 158(1)(h) of the LRA which gives this Court the power
to
review ‘any decision taken or any act performed by the State in
its capacity as employer, on such grounds as are permissible
in law’.
Legality, he submitted, is a permissible ground and has been
recognised as such in two Labour Court decisions :
De Villiers v
Head of Department: Education, Western Cape Province
5
and
POPCRU v Minister of Correctional Services and Another.
6
In
De Villiers
Van Niekerk J held, after a succinct discussion
of the administrative law review grounds post-
Chirwa
, that the
employer’s conduct in refusing to reinstate the employee in
terms of section 14(2) of the Employment of Educators
Act constituted
administrative action and that the Labour Court was entitled to
review the decision on this ground. Furthermore,
in the
POPCRU
case,
Steenkamp J confirmed that an act of the state in its
capacity as employer is reviewable on the basis of the principle of
legality
even if the act does not constitute administrative action.
Mr Semenya argued that
Correctional Services
(which is on
appeal) was distinguishable in that it addressed itself to whether
the Minister acted
intra
or
ultra vires
in issuing
regulations. In the present matter, the reliance on legality as a
ground of review is misplaced in that the applicants
admit that the
Treasury regulations enjoin government to charge market related
rental in respect of state property. Lack of authority
is thus not in
issue and the decision cannot therefore be said to be
ultra vires
or irrational
.
However even if the applicants contend, as
I understood Mr Basson to do in argument, that the applicants stance
is that the decision
is
ultra vires
the treasury regulations,
the application would still be misconceived. It is clear from the
facts that Mahlangu is not entitled
to occupy state housing nor has
such an entitlement been shown among other members. In any event, if
they do then all they are
required to do is to submit the information
required. It is clear that on the face of it, the Decision does not
purport to apply
MRR to state housing occupied by officials as part
of their conditions of service.
[9] The applicant invoked section 158(1)(h) for the first time in
reply in response to the respondents’ allegation in their
answering affidavit that they did not purport to being their case in
terms of any specific provision of the LRA. However, even
if one
disregards the fact that this amounts to seeking to make out a case
in reply which would warrant dismissal of the application
solely on
this ground, the applicant must still fail for the reason that
section 158(1)(h) is not applicable to the facts. In this
regard, the
respondents make the point in their heads of arguments that the
Decision does not qualify for review in terms of section
158(1)(h)
for three reasons :
(a) It does not constitute a decision taken or an act performed by
the State in its capacity as an employer but in its capacity
as a
lessor;
(b) It is not reviewable on any grounds permissible in law; and
(c) Even if it were in principle reviewable, no case has been made
out for review.
[10] The issue therefore is not whether legality is a permissible
ground of review, but whether the decision is one that has been
taken
by the State as employer. I am in agreement with the submissions of
Mr Semenya that the matter concerns a decision of the
State
qua
lessor in this instance and that the review is on this basis
misconceived.
The Decision relates to a contractual matter
[11] The respondents submit that the Decision relates to a
contractual matter between the Department and affected members of
POPCRU.
The applicants submit that this loses sight of the fact that
the decision is based, in the first instance, on the purported
authority
derived from the relevant provision of the treasury
regulations (which have been incorrectly interpreted by the
Department), and
secondly on an alleged agreement concluded with
labour (which has not been proven to exist). The Decision has not
been taken in
the context of, or with consideration given to,
existing lease agreements. Furthermore, insofar as the rights and
obligations of
parties are determined by the lease agreements they
are also determined by the collective agreements concluded in respect
of state
housing in terms of which the individual lease agreements
are then concluded. Mr Basson submitted that the Decision was taken
contrary
to collective agreements concluded between the parties and
arises from the employment relationship between the parties. It is
therefore
not a dispute about the interpretation of a lease in terms
of ordinary contract law but in terms of the applicable conditions of
service.
[12] Mr Basson conceded however that the term “state housing”
can apply only when employees are required by their employers
to
occupy specific state owned accommodation for operational reasons.
Mr Basson submitted that it follows from the distinction between
state and other housing referred to in clauses 7.1.8 and 7.1.9
of
PSCBC Resolution 2 of 2004 that different considerations apply to the
determination of rental as follows :
‘
7.1.8
The rental payable by employees
occupying
state housing, as required by the employer,
shall,
with effect from 1 January 2005, be equal to the greater of either
the housing allowance, as part of the phasing-in period
referred to
in clause 7.1.5 of the applicable amount payable in terms of Part XVI
of Annexure B to PSCBC Resolution 3 of 1999,
i.e. the rental amount
will be equal to the housing allowance.
7.1.9 The rental payable by
employees occupying
housing
other than state housing
as
provided for in Part XVI of Annexure B to PSCBC Resolution 3 of 1999,
shall be in terms of a departmental policy, provided that
it is not
less
than the maximum rental payable for state housing’.
(Counsels’ emphasis).
[13] For this reason, Mr Basson submitted that where an employer
requires an employee to occupy state housing, for operational
reasons
or otherwise, and the employer charges the employee rent for that
housing, the determination of that rental is subject
to collective
agreements, the purpose of which is to neutralise any detrimental
financial impact of the requirement to pay rent
on the employee by
introducing two mechanisms. The collective agreements achieve this by
limiting the amount of rent the employer
may charge in respect of the
housing and secondly by granting the employee an equivalent housing
allowance. In respect of state
housing then, the rent would be as
prescribed by collective agreements and any revision of that rental
would have to be subject
to collective bargaining. The issue in
dispute therefore does not relate to an ordinary contractual issue
but to an issue that
is regulated by collective bargaining.
[14] However, it is self-evident that the Decision excludes state
housing and requires officials in such housing to provide proof
to
that effect. Insofar as Mahlangu (and, it must be inferred) other
individual applicants therefore occupy “other housing”,
the rental applicable to them can be determined by departmental
policy and would accordingly be excluded from the ambit of the
collective bargaining. It is self explanatory that in light of the
applicable Resolutions, it would be left to be regulated by
the
parties themselves outside the employment context.
Rent is a matter of mutual interest
[15] The applicants in essence are challenging the Department’s
decision which they contend is based on its interpretation
of the
treasury regulations. This, they submit, does not relate to a matter
of mutual interest. In this regard, they rely on the
following
passage from Rycroft & Jordaan: A Guide to SA Labour Law (Juta,
1992) at 169:
‘
Broadly
speaking, disputes of right concern the infringement, application or
interpretation of existing rights embodied in a contract
of
employment, collective agreement or statute, while disputes of
interest (or “economic disputes”) concern the creation
of
fresh rights, such as higher wages, modification of existing
collective agreements, etc. Collective bargaining, mediation and,
as
a last resort, peaceful industrial action, are generally regarded as
the most appropriate avenues for the settlement of conflicts
of
interests, while adjudication is normally regarded as an appropriate
method of resolving disputes of right.’
[16] Accordingly, Mr Basson submitted that the decision taken by the
respondents to charge market related rent is clearly not something
that was proposed by the employer to the employees in the context of
negotiations to create fresh rights, or with the purpose of
amending
the existing collective or individual lease agreements. This means
that an unlawful and final decision has been taken
outside the scope
and application of the existing agreements, which decision infringes
on the existing rights of employees embodied
in collective agreements
and lease agreements subsequently entered into.
[17] Even if the Department is correct in its understanding that it
is required by the treasury regulations to charge market related
rent
for
all
provincial property occupied, it clearly attempts to
distinguish “state housing” from the ambit of the
regulations by
way of the proviso at the end of the letter conveying
the Decision. Even on the limited basis contended for in reply by Mr
Basson
the relief sought would then be entirely academic and the
application would still be misconceived in that all POPCRU members
would
need to show that they are in state housing in order to be
excluded from the ambit of the Decision.
[18] The applicants sought to argue that the Decision, insofar as it
applies to state and other housing i.e. to
all occupants of state
housing
irrespective of whether they occupy the housing at the
employer’s behest as a term and condition of their employment
or whether
it is by their choice, is
prima facie
in conflict
with the treasury regulations as well as the collective agreements
and individual lease agreements. The applicants
have not shown that
any of its members are occupying state housing by virtue of their
contracts of service. Nor are they employed
by the respondents.
Accordingly, they seek relief as lessees and cannot do so in this
Court for the reasons set out above.
Order
[19] In the circumstances therefore, the points
in limine
are
upheld and the application dismissed with costs.
_______________________
Bhoola J
Judge of the Labour Court
APPEARANCES
APPLICANT: Advocate J L Basson
Instructed by Grosskopf Attorneys, Pretoria .
RESPONDENTS: Advocate I Semenya SC (heads of arguments prepared by
Advocate H Maenetje)
Instructed by the Office of the State Attorney, Johannesburg
1
66
of 1995.
2
The
Public Service Staff Code was withdrawn with effect from 1 July 1999
as per GN 847 published in Government Gazette No. 20271.
3
Counsel’s
emphasis.
4
Counsel’s
emphasis.
5
(2010)
31 ILJ 1377.
6
[2011]
10 BLLR 996
(LC).