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[2013] ZALCPE 18
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Gotshana and Others v MEC Department of Rural Development and Agrarian Reform (Eastern Cape) and Another (P80/13) [2013] ZALCPE 18 (16 July 2013)
REPUBLIC OF SOUTH AFRICA
THE LABOUR COURT OF SOUTH AFRICA, PORT ELIZABETH
JUDGMENT
N
ot reportable
case No: p 80/13
In the matter between:
Malusi Gotshana and Fifty Five Others
Whose names appear on Annexure “A”
...................................................
Applicant
and
MEC Department of Rural Development
and Agrarian Reform ( Eastern Cape)
..........................................
First
Respondent
Department of Rural Development
and Agrarian Reform (Eastern Cape)
......................................
Second
Respondent
Heard
:
29 May 2013
Delivered
:
16
July 2013
Summary: An interdict pending the finalisation of an unfair labour
dispute at the bargaining council should not be granted when the
requirements for an interdict have not been established.
JUDGMENT
LALLIE, J
The applicants filed this urgent application for an order in the
following terms:
‘
Para 2:That a Rule Nisi be issued with the
return date to be determined by the Registrar of the above Honourable
Court when the
respondents shall advance reasons and show cause, if
any why the following order should not be made final.
Paragraph 2.1:Interdicting and restraining the respondents from the
unilaterally demoting the applicants and/or otherwise adversely
affecting their status/rank/level/notch and/or salary grade and/or
remuneration pending the final determination in an appropriate
forum
of an unfair labour practice dispute that has been referred by the
applicants to the General Public Service Sectorial Bargaining
Council, alternatively, pending the implementation of a fair and
proper procedure in which respondents disclose all relevant
information
and documentation to applicants and affected employees
and permit the applicants and affected employees to each be heard and
make
full representations prior to Respondents taking any decision to
demote them retrospective to 2009;
An Order directing the respondents to restore the status quo ante
29
th
November 2012 with respect to applicants’
status/rank/level/notch and/or salary grade and/or remuneration
and/or deductions
pending the final determination in an appropriate
forum of an unfair labour practice dispute that has been referred by
the applicants
to the General Public Service Sectorial Bargaining
Council, alternatively, pending the implementation of a fair and
proper procedure
in which respondents disclose all relevant
information and documentation to applicants and affected employees
and permit the applicants
and affected employees to each be heard and
make full representations prior to respondents taking any decision to
demote them retrospective
to 2009;
That the respondents be ordered to pay the costs of this application.
Further and/or alternatively relief,
The relief set out in paragraph 2.1 and 2.2 above will have immediate
effect pending the return date and/or the final determination
of the
dispute between applicants and respondents
.’
When this matter was argued on 28 February 2013, Counsel for the
respondents, after raising a few issues, sought an opportunity
to
deliver answering papers. The basis for his request was that
although the applicants set the matter down for 28 February 2013
they required the respondents to deliver their notice of opposition
and answering affidavit on or before 8 March 2013. The respondents
were afforded the opportunity they required. The applicants were
similarly granted an opportunity to file replying papers. The
matter
was postponed to 13 March 2013 when it was further postponed for
further affidavits to be filed. It was finally argued
on 29 May
2013.
Background
The applicants are employees of the Department of Rural Development
and Agrarian Reform of the Eastern Cape Province (the Department).
Between 20 December 2012 and 21 January 2013,each applicant received
an envelope containing two notices from the Department.
They were
signed by the Superintendent General on 29 November 2012. The
notices are similar but reference to the first applicant’s
notices will suffice. The notices will be referred to as the first
and second notices. The first notice reads as follows:
Notification of irregular promotion: yourself
As you are aware, during 2009
you were granted a notch promotion to level
N/A
In implanting (1) above, you
were paid an amount of
R
24746.16
as salary
back-pay, and promoted from R
N/A
to
R
N/A
, and from level
N/A
to
level
N/A
retrospectively to
01 May 1994. You were then translated from
N/A
to
N/A
retrospectively to
01 May 1994.
Following a departmental audit
of all rank/leg or notch promotions awarded and implemented during
2009, the Department determined
that your promotion was irregular
and unlawfully in that your file does not evidence that the
substantive and/or procedural requirements
for such promotion to
level
N/A
were
complied with.
The Department, in compliance
with HROPT EXCO Resolution (Annexure A) as communicated by the
Director General on 20 April 2011
is herewith conducting its
preparatory word as per the memorandum dated 12 May 2011 (Annexure
B), circulated to all staff through
the offices of the then Acting
General Manager: Corporate Services.
Very important
:
You are entitled to make
written representation before
2013-01-31
.
This is to be submitted to the office of your relevant Deputy
Director General. Failure to respond by this date will mean that
the
Department’s decision is final and binding
:
The notices are materially different from each other. By way of
example the first applicant’s first notice reflects that
he
received a salary back-pay of R24746.16 while the second provides
that it was R874 735.44. According to the first, the
level and
salary he was promoted from retrospectively to 1 March 1994 is
written N/A. The portion provided for his translation
from and to,
retrospectively to 1 May 1992 is also written N/A. The second states
the level to which he was granted a notch promotion.
It also shows
the level and the salaries from and to which he was promoted. The
annexures referred to in both notices were not
enclosed.
Notwithstanding that the notices informed the applicants that the
demotion and deductions would be from 1 February
2013 the Department
unilaterally implemented the demotion a month earlier, 30 days
before the 31 January 2013, the date by which
they were required to
have made representation.
As the applicants seek interim relief they are required to prove a
prima facie
right, apprehension of irreparable harm, balance
of convenience, no other satisfactory remedy and I also have a
discretion to
exercise in deciding whether the relief should be
granted.
The applicants submitted that they have a clear right. In
determining whether the right exists, it is necessary to trace the
history of this dispute which began in the formation of the province
of the Eastern Cape as it exists today. Shortly before the
1994
democratic elections the independent homelands which were created by
the former South African Government were abolished.
Two of them the
former Transkei, and the former Ciskei were integrated into the
former Cape Province to form the present Province
of the Eastern
Cape. All the civil servant of the integrated area became employees
of the government of the Eastern Cape Province.
Shortly before the integration a lot of irregular promotions were
affected in the public service of the former Transkei and Ciskei.
Consequently, at the time of the integration many civil servants of
the former Transkei and Ciskei had inflated salaries. The
President
of the Republic of South Africa invoked the provisions of section
236 (6) of the interim Constitution and appointed
the
Browdey
Commission to determine the lawfulness of the promotions. After
Browdey’s resignation on 30 November 1995, he was succeeded
by
Judge White on 25 March 1996 and the commission was referred to as
the White Commission. The White Commission declared 16650
promotions
irregular and set them aside, necessitating civil servants who had
been over paid as a result of irregular promotions
to refund the
government. It ceased to operate in November 1998. In a letter dated
18 August 1998 the Department of Public Service
and Administration
informed all Heads of Departments/Provincial Administration Offices
of Provincial Services Commission that
the
Audi alteram parten
rule applied in the application of Section 38 of the Public Service
Act of 1994.
In July 1999, the National Treasury issued a circular stating the
method in which wrongly granted remuneration was to be recovered
from employees. Some employees repaid the remuneration they received
unlawfully. On 4 October 2006, the Executive Council of
the Eastern
Cape Province (the EXCO) took a resolution to write off the balance
of R73 174 000.00 owed by 2558 employees in the
9 Departments
pursuant to the finding of the White Commission. It directed
employees with genuine and justifiable cases of promotion
and pay
progression to submit their claims to their respective heads of
departments for thorough scrutiny where after responses
would be
communicated to such employees in writing within a period of 3
months. It also required heads of departments to inform,
in writing
employees whose claims had been rejected, of the course open to
them.
In 1997, the government of the Eastern Cape Province assembled the
Human Resources Operation Project Team (the HROPT) to put
together
the different pay roll systems. The HROPT also made findings on
promotions. The Department later established the Departmental
Task
Team (the DTT) comprising of representatives of the employer and
trade unions to identify individual cases and assess the
work of the
HROPT. The DTT was disbanded in 2009 and the Department appointed
Grant Thornton, an independent firm of auditors
to audit its
employees’ files. It issued a report, which reflected that
some employees were promoted and granted salary
increases
irregularity while others were granted promotions and salary
increases due to them.
On or about 1 November 2010, the Office of the Premier of the
Eastern Cape issued a document to all Heads of Department in
relation to the implementation of the EXCO resolution regarding the
HROPT audit. The Heads of Department were advised among others
that
in the recovery of the alleged debts from employees they must
“include effective communication with the affected employees
to advise them of the over/under payments that the department
intends to recover such overpayments” and that the employer
is
not entiltled to effect a unilateral process. The document also
makes it clear that if the employees concerned do not consent
to the
deduction the employer should institute legal proceedings.
In the main the applicants seek to assert their right not to be
demoted or have their remuneration or status unilaterally reduced
pending the finalisation of their unfair labour practice dispute,
alternatively pending the respondents affording them the opportunity
to be heard before the respondents take any decision to demote them
retrospectively to 2009. In addition, they seek to have the
status
quo at the 29 November 2012 regarding their remuneration and status
restored pending the finalisation of their unfair
labour practice
dispute, alternatively not to be demoted retrospectively to 2009
before the respondents afford them an opportunity
to be heard.
Prima facie right
The applicants submitted that they have a clear right to have their
unlawful demotions reversed. Their case is that the issue
in this
matter is not whether each applicant was receiving an inflated
salary but whether the respondents are entitled to demote
the
applicants retrospectively to 1999/2000 levels based upon
allegations of false en masse promotions in 2009. They claim that
prima facie,
an employee is entitled to enjoy the status and
rank accorded to him or her over many years by his or her employer.
The entitlement
is a clear right. Part of the clear right is the
right to make representations and be heard before the decision to
demote them
was put into effect. It is clear from the notice of
motion and the manner in which the applicants defined their right
that it
is a combination of a substantive right, which is their
right not to be demoted from the status and levels of remuneration
the
respondents demoted them from and a procedural right to be heard
before the decision to demote them was implemented.
A demotion must be justifiable and on substantive grounds. In this
regard see
Mathese vs Acting Provincial Commissioner,
Correctional Services and others
1
.
It must also be procedurally fair. In this regard see Hock v Mustek
Electronics (Pty) Ltd.
2
In MEC for Education v Gradewell
3
it was held that an interdict should not be granted when the
requirements for an interdict have not been established.
In their attempt to prove their substantive right the applicants
disputed that their promotion was irregular or unlawful. They
also
denied being part of the 2009 masse promotion.
The applicants submitted that they were subjected to the moratorium
declared by the Office of the Premier of the Eastern Cape
(the
Premier) in respect of any appointments, promotions, salary
increases and translation of rank. The escalation of the applicants’
ranks and remuneration took the same pattern as that of the first
applicant. The respondents’ persal records regarding
the first
applicant’s employment with the second respondent from 1 July
1996 to 1 July 2009 reflect that on 1 July 1996,
his rank and salary
was that of an Administration Officer on Level 6, the level upon
which he had entered the Department of Agriculture,
Eastern Cape in
1994 and which he had formely held in the Department of Agriculture,
Ciskei. On 1 July 1999, after the moratorium
imposed by the Premier
in 1994 had been lifted he received a translation in rank which
translated his Ciskei rank, level and
length of service to the
Department of Agriculture Eastern Cape. On 1 May 2000, he was
promoted to level 8 which was the Level
which he continued to occupy
from 1 May 2000 until 1 January 2013 when he was demoted to level 6.
The respondents’ case is that, the DTT went beyond the scope
of the 2006 EXCO resolution and violated the Public Service
Regulations. It recommended that irregular promotions reversed by
the Browde Commission be regularised to allow employees to
progress
through their ranks and recommended rank promotion up to salary
level 8. The DTT recommendations violated the prescripts
applicable
to rank and notch promotions. The Head of Department issued a
statement to all staff members and organised labour
on 20 March 2009
that payments would be effected as from 15 April 2009.
The statement served as a mandate to proceed with the processing of
the
en masse
payments based on the findings of the
Departmental Task Team. In the process the Department was unable to
implement the HROPT
payments as per the finding of Grant Thornton
Auditors. The findings of the DTT were not approved by Head of the
Department.
The respondents submitted that Provincial Government has made a
decision to reverse the grant of unlawful salary increases and
has
appointed independent auditors who have confirmed that the
applicants are in receipt of unlawful salary increase. The decision
has not been set aside. This submission is not supported by the
letters notifying the applicants of the reduction in their
remuneration which reflects the reason as irregular promotion. The
reasons proffered by the respondents for the reversal of the
payments are inconsistent. One reason is reversal or irregular
promotions and other is reversal of over payments.
The respondent’s basis for demoting the applicants was that
they were amongst its employees who were promoted
en masse
in
2009. The respondents allege that they demoted the applicants in the
process of reversing unlawfully granted salary increases.
They
however failed to prove that the applicants received such increases.
Further the notices the applicants received reflect
that they were
irregularly promoted. The respondents cannot claim to have
substantive reason for demanding the applicants when
they could not
identify the reason for the demotion. They even withdrew the other
reason they sought to rely on when it proved
to be false. On their
own vision the respondents did not disclose a substantive reason for
the demotions.
I have considered the respondents’ argument that the
applicants cannot use the procedural defect of the demotion to found
a substantive right. The arguments by the respondents and the
authority they sought to rely on in defence of the their failure
to
follow a fair procedure cannot sanitize the reality that the
Department demoted the applicants without giving them an opportunity
to be heard. The applicants have proved their substantive right by
proving that the respondent had no valid and lawful reason
to demote
them. I therefore conclude that the applicants have proved the
existence of clear substantive right which was violated
by the
respondent.
The respondents submitted that before the demotions were effected
the applicants were given an opportunity to make representation
which opportunity they took up. The weakness of this submission is
that it is common cause that the respondents did not provide
the
applicants with the documents in terms of which they intended
deducting their remuneration. Although the documents are referred
to
in the notices they were not attached. The omission made it
difficult for the applicants to exercise their right to make
presentations. Further, the deductions were made a month before the
date on which the presentation were due. The inescapable conclusion
is that the applicants’ representations were not considered
before the decision to reduce their remuneration was implemented.
The demotions were therefore procedurally unfair.
The applicants seek to protect a substantive right not to be demoted
pending the outcome of their unfair labour practice dispute
and to
have the status quo ante 29 November 2012 restored pending the
finalisation of their unfair labour practice dispute. They
seek to
assert their procedural right to be heard in the alternative.
When the excess is removed, I have employees before me who have been
demoted. The two notices they were given shortly before
their
demotion contain contradictory reasons for their demotion. The
evidence tendered as reasons for their demotions is inconsistent
with the contents of the notices. The documents in terms of which
they were demoted were not attached to the notices contrary
to the
content of the notices. The respondents purported to afford them the
right to be heard before making the final decision
to demote them
but went ahead with the demotions before the presentations were due
and without considering them. The respondents
failed to prove that
the applicants were part of the en
masse
promotion. The
applicants had a substantive right not to be unilaterally demoted
without a valid reason and a procedural right
not to be demoted
before making presentations. The applicants proved that the
respondents demoted them without valid reason and
before granting
them an opportunity to make representations thus providing the
existence of their right.
Irreparable harm
One of the grounds on which the respondents challenged the urgency
of this application is the absence of irreparable harm. The
applicants submitted that the respondents’ conduct has an
extremely detrimental and prejudicial effect on them and their
livelihood as their salaries have been reduced. The first applicant
submitted that he had to remove his child from university,
cancel
funeral and life insurance policies and is unable to provide for his
dependents. The respondents submitted that harm suffered
by the
applicant is not irreparable as if they are successful in proving
their unfair demotion, the GPSSBC will grant an award
for the
compensation they are entitle to. The respondent further submitted
that financial hardship cannot found urgency.
Not every harm entitles an applicant to have his or her application
heard urgently. Irreparable and serious financial loss or
prejudice
arising from the conduct of the respondents does not constitute
irreparable harm which can found urgency. It is trite
that financial
prejudice does not give rise to urgency. In this regard see
Hultzer
v Standard Bank of SA (Pty) Ltd
4
and Caledon Street Restaurant CC and Monica D’ Aviera
a
judgement of the South Eastern Cape Local Division under case number
2656/97.
I have considered the financial position the applicants find
themselves in as a result of the respondents’ conduct. The
only irreparable harm they have advanced is financial prejudice. The
first applicant has even submitted that he could write over
100
pages expressing the irreparable financial hardship and ruin caused
by the demotion. No other form of irreparable harm was
provided by
the applicants. They further furnished no valid reason for this
court to depart from the general rule that financial
prejudice
cannot found urgency. In the circumstances I must find that the harm
suffered by the applicants is not the kind of
irreparable harm that
can found urgency.
No other remedy
The respondents argued that the applicants are not without
alternative effective remedy in that the GPSSBC will issue an award
for the payment of all the money unfairly deducted from them and
compensate them for any procedural unfairness they have suffered
should they prove their case. An award for damages is generally
considered an alternative adequate. Like an award of the bargaining
council while not immediately available it is accepted as adequate.
In this regard see
Calden Street Restaurant CC (supra).
The applicants did not establish the apprehension of irreparable harm
and the absence of effective alternative remedy. As it was
held in
MEC for Education v Gradwell
(supra) an interdict should not
be granted when its requirements have been established. In the
circumstances the application cannot
succeed.
Costs
Amongst the factors I need to consider in deciding whether a costs
order should be granted in terms of section 162 of the LRA
is the
conduct of the parties in proceeding with or defending the matter
before court. The applicants did not act unreasonably
in bringing
this application. A costs order against them will therefore not be
appropriate.
In the circumstances the following order is made:
The application is removed from the roll for lack of urgency.
No order is made as to costs.
_______________________
Lallie, J
Judge of the Labour Court of South Africa
Appearances:
For the Applicant: Adv. Wylde
Instructed by Chris Unwin Attorneys.
For the first Respondents
:
Adv. Pretorius SC and Adv. Mbenenge
SC
Instructed by State Attorney.
1
(2000)
22 ICL 1653 (LC)
2
(2000)
21 ILJ 365 (LC)
3
[2012]
8 BLLR 747
(LAC)
4
(1999)
20 ICL 1806