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[2015] ZALCJHB 406
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Public Servants Association v Department of Home Affairs and Another (J189/2012) [2015] ZALCJHB 406 (12 November 2015)
THE
LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
Not Reportable
Case no: J189/2012
In
the matter between:
PUBLIC SERVANTS
ASSOCIATION
and
DEPARTMENT OF HOME
AFFAIRS
THE DIRECTOR
GENERAL:
DEPARTMENT OF HOME
AFFAIRS
Delivered:
12 November 2015
First Applicant
First Respondent
Second Respondent
JUDGMENT
TLHOTLHALEMAJE,
AJ
Introduction
[1]
The
Applicant approached the Court in terms of section 158 (1) (a) (iii),
(iv) and 158 (1) (h) of the Labour Relations Act
[1]
to seek an order in the following terms;
1.1
That
the decision taken by the Respondents to deduct performance bonus
payments made to its members be declared unlawful and unfair;
1.2
Ordering
the Respondents to pay back to its members, all the performance bonus
amounts it had deducted within 30 days of the court’s
order;
1.3
Reviewing
and setting aside the decision of the Respondents not to pay
performance bonuses to employees who qualified for performance
bonuses and ordering the Respondents to pay all its employees who
qualified for performance bonuses for 2009/2010 within 30 days
of the
order.
[2]
The
Respondents opposed the application and further sought condonation
for the late filing of the answering affidavit. The application
for
condonation was not opposed, and having properly considered it, it is
determined that good cause has been shown, and thus the
late filing
of the answering affidavit is condoned.
Background:
[3]
The
First Respondent had developed and adopted its Integrated Performance
Management and Development Policy for Employees Level
1 to 12 in
November 2008 (‘the Policy’). The purpose of the Policy
is to
inter
alia
,
provide for the establishment of an integrated system for the
management and development of performance, i.e., a system that
enhances the linkage between the employees’ performance and
development with organisational performance in order to achieve
the
Department’s vision, mission and strategic objectives. The
Policy further provided for standards and procedures according
to
which employees should be managed, and provided that all performance
and formal assessment and reviews shall be based on the
respective
employees’ performance agreement and to be conducted on a
quarterly basis.
[4]
The
Policy also provided that all annual performance reports were to be
moderated by the Moderating Committee, with its role being
inter
alia
to monitor the performance assessment process by obtaining an overall
sense of whether or not standards are being applied realistically
and
consistently; to review overall assessment scores across
sections/components/branches in the department; to determine the
performance of the entire component and aligning that with the
summary results based on individual performance, and to recommend
and
reward level and remedial action of performance and non-performance
respectively.
[5]
In
July 2010, performance assessments were conducted on employees and
scores were allocated with regards to performance of each
employee.
The results were submitted to the Moderating Committee which then
recommended reward levels for the employees. On 21
December 2010, the
Second Respondent (Director-General) issued the Human Resources
circular (Number D4 of 2010) addressed to staff,
noting that whilst
the Department was underperforming, a high number of employees had
received above average performance ratings,
and as a result thereof,
it was going to conduct a review and ensure that due diligence was
followed in the assessment for 2009/2010
financial year. Payment of
performance bonuses in 2010 was postponed until the review process
was finalised.
[6]
On
23 March 2011, another circular (B1 of 2011) was issued to staff
members informing them that the performance review process was
concluded, and that performance bonus or incentive for the financial
year 2009/2010 would be allocated. Qualifying staff members
were to
be paid on three different dates on 28 and 31 March 2011, and 4 April
2011. Payments as promised were duly made on those
dates.
[7]
Between
June and July 2011 a number of employees including the Applicant’s
members received letters informing them that as
a result of the
review process, it was established that some of them were erroneously
paid performance bonuses, and that in terms
of section 38 of the
Public Service Act
[2]
(the PSA),
the affected employees that were overpaid would have those amounts
deducted from their monthly salaries over a period
of 12 months.
[8]
The
Applicant’s main contention is that the Respondents’
action and/or decision to deduct the performance bonuses paid
to its
members was unlawful and/or unfair on the following grounds;
a)
The
Respondents failed to observe the
audi
alteram partem
rule before implementing the deductions. In this regard, it was
contended that no consultations were held with the Applicant’s
members prior to the decision being taken by the Reviewing Committee
to overturn the decision of the Moderating Committee.
b)
The
Respondents were obliged to consult with the Applicant’s
members especially having regard to the fact that the process
that
led to the decision to pay them performance bonuses was inclusive and
consultative. In this regard, it was further submitted
that the
Applicant’s members and other employees had agreed with their
immediate superiors on the scores to be allocated,
which were then
submitted to the Moderating Committee, and which had in turn assessed
the scores and recommended rewards payable
to employees.
c)
There
was an obligation to consult with the affected employees prior to
making the deductions as they had to know how the decision
by the
Moderating Committee was erroneous.
d)
The
employees were not aware what the error was regarding the bonus
payments, on which basis the decision of the Moderating Committee
was
erroneous, who had committed the error and whether such error should
have resulted in them forfeiting their bonuses as a whole.
e)
The
decision to deduct the incentive bonus payment was not consistent
with the Respondents’ Policy, was irrational, arbitrary
and
capricious.
[9]
In
opposing the application, the Respondents’ contentions were
that;
a)
The
performance bonus payments were made to the affected employees in
error. The nature of the error was based on the fact that
the
authority to approve the performance assessment reports lies with the
Second Respondent (Director-General). However in this
case, the
recommendations made by the local moderating committees were mistaken
to be authority to process the payments to the
employees. The correct
status of the local moderating committees was to do the moderation
and submit recommendations, and not approvals
to the
Director-General. However in this instance, the recommendations were
submitted to the Deputy Director-General for ‘approval’
and were mistakenly approved.
b)
When
the fifth report was submitted, it was discovered that the
performance assessment reports received had performance ratings
that
were distorted in that the performance ratings were above the normal
distribution curve of 25% and/or that the performance
bonuses
exceeded the 1.5% of the department’s remuneration budget. The
error was further attributed to the fact that the
assessments reports
were approved on a piece-meal basis and not on a cumulative basis.
c)
When
the error was discovered, submissions were then made to the Executive
Management Committee and it was decided that the assessment
process
should be reviewed in order to rectify the process and to ensure
alignment between organisational and individual performance.
A
Departmental Moderating Review Committee (DMRC) was then established
with a mandate to review the performance bonus allocation
process.
After the review process was approved, a circular was then sent to
the employees on 21 December 2010 informing them of
that process;
d)
Local
moderating committees together with relevant supervisors and where
possible, in consultation with the affected employees,
reviewed the
performance ratings to align them with the revised criteria. The
revised ratings from the local Moderating Committees
were then
resubmitted to the DMRC, which had recommended to the Director
General that the moderated performance assessment reports
should be
approved. The Director-General had then approved the revised ratings
as it was aligned to the departmental performance
as well as meeting
the target of 1.5% of the remuneration budget.
e)
The
Director-General met with representatives from the Applicant and
NEHAWU on 1 June 2011 and fully explained the process to them
and
informed them that where there had been bonus overpayments, these
would be recovered. A letter was then sent to employees informing
them of overpayments, and this was followed up with a letter on 15
July 2011 detailing the recoupment process.
f)
The
Director-General as the Accounting Officer had a duty under the
Public Service Act as well as the PFMA to recover monies erroneously
paid so that it is not regarded as wasteful and unauthorised
expenditure. This authority stems from the provisions of section 38
of the Public Service Act read with the Regulations, and also from
section 38 of the PFMA.
g)
The
Department was entitled to scale down the applicable percentages
which meant that the amounts paid to employees could be reduced
if
the department exceeded the 1.5% remuneration budget allocated for
performance bonuses.
h)
Performance
bonuses are not a right to which employees are entitled to and are
allocated to deserving employees at the discretion
of the employer.
Thus the overpayments are amounts to which employees cannot claim
that they have a right to. Thus the employees
do not have a right
ex
contractu
or
ex
lege
to performance bonuses or pay progression, and could not create an
entitlement to benefits through arbitration. There was therefore
no
duty on the employer to consult with them.
i)
The
Applicant had not made out a case on its papers for the relief
sought, and further that the relief sought was inconsistent with
the
admission made that the review process was not challenged.
j)
Since
the review process was not challenged, it was contended that the
process was thus admitted to have been lawful and fair, and
that on
the Applicant’s own version, the review process followed was
correct and in line with the Policy;
The jurisdiction of
the Court:
[10]
In
further opposing the application, the First Respondent raised a
preliminary point pertaining to the jurisdiction of the Court
in the
light of the relief sought and the alleged failure to utilise the
internal and alternative remedies open to the Applicant.
In this
regard, it was submitted that the relief sought by the Applicant
clearly fell within the discretion of the employer and
within the
definition of remuneration, and thus a dispute in that regard should
have been referred to the General Public Service
Sectoral Bargaining
Council (GPSSBC) for conciliation.
[11]
It
was submitted that Applicant had not referred a dispute to the
relevant Bargaining Council in view of the dispute raised; and
that
no certificate of outcome was issued entitling the Applicant to refer
this dispute before the Court. To this end, it was submitted
that the
since Applicant had not complied with the provisions of section 191
of the LRA, the court lacked jurisdiction to determine
the matter in
terms of section 157 (4) of the LRA, and that the mere mention of
section 158 (1) (h) of the LRA did not make the
application a review
application. In the light of these factors, it was contended that the
matter was premature and not ripe for
hearing.
[12]
In
response to the preliminary issues raised, the Applicant in its
supplementary heads of argument submitted that the issue surrounding
the applicability of the provisions of section 191 of the LRA was
raised for the first time in the written heads of argument. It
was
nevertheless submitted that its case was not directed at the review
of the performance ratings, and was not an attack on the
decision to
review the performance ratings, but on the decision to effect
deductions after payments were made in terms of the outcome
of the
review process.
[13]
It
was further submitted that the complaint was especially that the
deductions were made without prior consultations with affected
employees, and that the Director-General lacked authority to make the
decision. In the light of these contentions, it was submitted
that
the fundamental issue in the dispute was primarily about the
substantive validity of the impugned decision, which was sought
to be
reviewed as envisaged in section 158 (1) (h) of the LRA. It was
further submitted that a decision which was unauthorised
and
otherwise inconsistent with the law was invalid and not merely
unfair, and also offended against the constitutional principle
of
legality or the rule of law.
[14]
Reliance
in regard to the above was placed on
Kaylor
v Minister of Public Service & Administration
[3]
,
and
the confirmation of the principles set out therein by Labour Appeal
Court in the same matter
[4]
. In
the light of these authorities, it was submitted that it was
permissible for an aggrieved employee in the public service, whose
rights are affected by an unlawful and invalid decision of an
employer, to approach the Court directly in terms of section 158
(1)
(h) of the LRA. To this end, it was further submitted that that both
the failure to consult and the lack of the Director-General’s
authority to make the impugned decision rendered the decision invalid
and unlawful, and thus liable to be reviewed and set aside.
Evaluation:
[15]
The
Court takes notice of the fact that these preliminary issues were not
raised in the Respondents’ answering affidavit.
Even if this
was the case, the Court still has to satisfy itself that it has the
requisite jurisdiction to determine the issues
before it
[5]
.
Thus the issue to be determined is whether the Court has the
requisite jurisdiction to review the impugned decision under the
provisions of section 158 (1) (h) of the LRA.
[16]
The
jurisdiction of the Labour Court is provided in section 157 of the
LRA
[6]
. Jurisdiction generally
means the power or competence of the Court to hear and determine a
dispute between the parties
[7]
.
In
Ekurhuleni
Metropolitan Municipality v South African Municipality Workers
Union
[8]
the Labour Appeal Court held that;
“
It is trite
that the jurisdiction of the Labour Court (and the CCMA or a council)
to entertain a matter is determined from the pleadings
in the matter.
It is also an established principle that in application proceedings,
the affidavits constitute the pleadings and
the evidence. While the
issues between parties generally emerge from the pleadings, it may
not be readily possible to determine
what the true nature of those
issues are, or what the true nature of the dispute is, because of the
manner in which the pleadings
are drafted. Therefore, the true nature
of the dispute is to be determined from an analysis of the facts and
not from the parties’
characterisation of the dispute.”
[17]
It
follows from the above that the Court has a duty to determine the
true nature of the issue in dispute between the parties, no
matter
how an applicant may choose to label or describe that dispute
[9]
.
Furthermore, it is trite that the Court is not bound by the
description of the dispute as may be articulated by an applicant
[10]
.
[18]
In
MEC
Department of Education Kwazulu-Natal v Khumalo and Another
[11]
,
this Court held that;
“
Section
158(1) (h) is available when no other process is available or special
circumstances exist to review an act of the State
as employer. It is
not a safety net to process disputes in public employment that should
have been channelled through some other
prescribed provision. Nor is
it a licence to bypass the prescribed conciliation, arbitration and
review procedures when an applicant
has missed the time limits”
[19]
The
same approach was essentially followed in
Hendricks
v Overstrand Municipality and Another
[12]
,
where the Labour Appeal Court held that;
“…
.The
Constitution dictates that the common law be developed to confine the
remedy of review in section 158(1)(h) to legitimate challenges
where
there is no other available remedy. If a cause of action meets the
definitional requirements of an unfair labour practice
or an unfair
dismissal, the dictates of constitutional and judicial policy mandate
that the dispute be processed by the system
established by the LRA
for their resolution”
[20]
Flowing
from the decisions in
Chirwa
and
Gcaba
v Minister of Safety and Security and Others
[13]
, it
is generally accepted that the conduct of the state in its capacity
as an employer does not constitute an administrative action.
Thus
employment disputes between the state and its employees should
ordinarily be dealt with in terms of the dispute resolution
mechanisms created by the LRA or other relevant labour related
legislation. There may however be instances where the Court may
depart from the general rule. This would obviously be dependent on
the nature of the decision sought to be impugned, the source
upon
which the decision was taken, and whether the power exercised was in
terms of a contract or a statute
[14]
.
[21]
Applying
the above principles to the facts of this case, the question to be
determined is what is the legal nature of the Applicant’s
challenge to the impugned decisions. It is noted in this case that
the Applicant chose not to frame its dispute as pertaining to
an
unfair labour practice disputes within the meaning contemplated in
section 186 (2) (a) of the LRA
[15]
.
The Applicant further chose not to pursue the claim in terms of
section 34 of the Basic Conditions of Employment Act
[16]
(The BCEA). Its reasoning was that it does not seek to attack the
review of the performance ratings or the decision to review the
performance ratings. The attack is primarily against the
decision
to effect deductions after payments were made in terms of the review
process. Thus the issue for the Applicant was the legality
of the
impugned decision.
[22]
To
the extent that it was contended on behalf of the Respondents that
the nature of the dispute fell squarely within the meaning
of an
unfair labour practice as contemplated in section 186 (2) (a) of the
LRA, the Labour Appeal Court (Per Musi AJA) in
Apollo
Tyres South Africa (Pty) Ltd v Commission for Conciliation Mediation
and Arbitration and Others
[17]
held that;
“
In
IMATU
obo Venter v Umhlathuze Municipality
,
the Labour Court followed the
Protekon
approach. It then concluded that:
‘
The
more plausible interpretation is that the term “benefits”
was intended to refer to advantages conferred on employees
which did
not originate from contractual or statutory entitlements, but which
have been granted at the employer’s discretion
.’
It
seems to me that the court in
IMATU
was concerned that if benefits include a statutory or contractual
right or entitlement, the right to strike may be curtailed. As
pointed out above employees will have an election to strike or go the
arbitration/adjudication route in respect of many rights
disputes. In
my view, the better approach would be to interpret the term benefit
to include a right or entitlement to which the
employee is entitled
(
ex
contractu
or
ex
lege
including rights judicially created) as well as an advantage or
privilege which has been offered or granted to an employee in terms
of a policy or practice subject to the employer’s discretion.
In my judgment “benefit” in section 186 (2)(a)
of the Act
means existing advantages or privileges to which an employee is
entitled as a right or granted in terms of a policy
or practice
subject to the employer’s discretion. In as far as
Hospersa,
GS4 Security
and
Scheepers
postulate a different approach they are, with respect, wrong.”
[18]
[23]
Ordinarily in line with the above
dictum
,
the Applicant’s dispute would fall squarely within the realm of
section 186 (2) (a) of the LRA, as the subject of the dispute
is
payment in respect performance bonuses, which was an issue regulated
and ‘granted’ in terms of the Policy. However,
since on
the Respondent’s version the decision to deduct the payments
made or not to make payments was predicated on the
provisions of
section 38 of the PSA, and since further the impugned decision is not
attacked on the basis of fairness, the legal
basis for challenging
the decision is that whilst the Director General was empowered to
determine the amount of the instalments
payable in respect of the
deductions, the decision to effect those deductions and reverse the
incorrect payments lay with the Minister,
and further that in terms
of the provisions of section 38 of the PSA, all affected persons
should be afforded a fair hearing
before a decision was made.
[24]
It
therefore follows that the legal nature of the Applicant’s
challenge to the impugned decisions is one for judicial review
under
the principle of legality, which the Court has jurisdiction to
determine under the provisions of section 158(1) (h). This
is so in
that it becomes irrelevant whether the decision sought to be impugned
is administrative or not, as the principle of legality
is applicable
to all exercises of public power and not only to “administrative
action” as defined in PAJA. It is thus
required that all
exercises of public power are, at a minimum, lawful and rational
[19]
.
To the extent that the decision sought to be impugned
has
its source in legislation, regulations and the Policy of the
Department, this Court therefore has the
requisite
jurisdiction and powers of review under the provisions of section 158
(1) (h) of the LRA.
[25]
It
is further trite that there are no prescribed time limit for the
launching a review under section 158(1) (h) of the LRA.
Whilst
it is accepted that there is a premium on expeditious resolution of
disputes, despite time frames not being specified under
these
provisions, at the most, it is expected of such reviews to be
launched within a reasonable period of time
[20]
.
As to what constitutes ‘reasonable period’, the
Constitutional Court in
Khumalo
[21]
stated
in regards to the facts of that case that;
“
Nevertheless,
it is a long-standing rule that a legality review must be initiated
without undue delay and that courts have the power
(as part of their
inherent jurisdiction to regulate their own proceedings) to refuse a
review application in the face of an undue
delay in initiating
proceedings or to overlook the delay. This discretion is not
open-ended and must be informed by the values
of the Constitution.
However, because there are no express, legislated time periods in
which the MEC was required to bring
her application, there is no
requirement that a formal application for condonation needs to have
been brought”. (Authorities
omitted)
[26]
In
this case, the letters from the Director-General informing the
employees of the intention to effect deductions of the payments
erroneously made were issued at varying dates between March 2011 to
June 2011. The application before the Court was launched on
27
January 2012. In my view, the delay can hardly be described as being
inordinate. Accordingly, considerations of the interests
of justice
dictate that that the delay be overlooked.
Grounds
of review:
(i)
Obligation
to consult?
[27]
The
power of the Department to deduct monies from state employees or
civil servants to reverse situations of wrongly paid remuneration,
is
specifically governed by legislation in the form of section 38 of the
Public Service Act which provides that:
‘
38
Wrongly
granted remuneration
(1)
(a)
If an incorrect salary, salary level, salary scale or reward
is awarded to an employee, the relevant executive authority
shall
correct it with effect from the date on which it commenced.
(b) Paragraph (a) shall apply
notwithstanding the fact that the employee concerned was unaware that
an error had been made
in the case where the correction amounts to a
reduction of his or her salary
(2)
If an employee contemplated in subsection (1) has in respect of his
or her salary, including
any portion of any allowance or other
remuneration or any other benefit calculated on his or her basic
salary or salary scale or
awarded to him or her by reason of his or
her basic salary-
(a) been underpaid, an amount
equal to the amount of the underpayment shall be paid to him or her,
and that other benefit
which he or she did not receive, shall be
awarded to him or her as from a current date; or
(b) been overpaid or received
any such other benefit not due to him or her-
(i) an amount equal to the amount of
the overpayment shall be recovered from him or her by way of the
deduction from his or her
salary of such instalments as the relevant
accounting officer may determine if he or she is in the service of
the State, or, if
he or she is not so in service, by way of deduction
from any moneys owing to him or her by the State, or by way of legal
proceedings,
or partly in the former manner and partly in the latter
manner;
(ii) that other benefit shall be
discontinued or withdrawn as from a current date, but the employee
concerned shall have the right
to be compensated by the State for any
patrimonial loss which he or she has suffered or will suffer as a
result of that discontinuation
or withdrawal.
(3)
The accounting officer of the relevant department may remit the
amount of an overpayment
to be recovered in terms of subsection (2)
(b) in whole or in part’
[28]
The
above provisions received attention in
Western
Cape Education Department v General Public Service Sectoral
Bargaining Council and Others
[22]
,
where Molemela JA stated that;
“
While
section 38 of the Public Service Act, 1994, permits the recovery of
any overpayment made to an employee and permits the accounting
officer of the relevant government department to determine the
instalments in terms of which the overpayment can be liquidated,
the
exercise of such a power must be effected reasonably. The need for
the accounting officer to act reasonably is implicit in
the purpose
of the section read as a whole. Section 38(1) provides for the
recovery of an overpayment of remuneration which, being
money which
has been improperly paid from public funds, must be recovered.
However, section 38(2) (b) which empowers the accounting
officer to
recover the monies, expressly provides that he or she make a decision
as to the quantum of the instalments to be paid
by the employee to
discharge the debt so owing. That power clearly envisages that the
amounts to be deducted from the employee’s
salary should take
account of the need to repay and the ability of the employee to
discharge the debt as expeditiously as possible…”
[29]
From
the construction of section 38 of the PSA, and as can further be
gleaned from the above
dictum
,
it should be accepted that it is the obligation of the relevant
‘executive authority’ to correct any incorrect and/or
erroneous salary or reward awarded to an employee, and to do so
reasonably. Any amount recoverable resulting from an overpayment
shall be made by way of instalments as determined by the ‘relevant
accounting officer’. Furthermore, the amounts to
be deducted
should take account of the need to repay and the employee’s
ability to discharge the debt. In effecting the decision
to recover
incorrect amounts paid, it is expected of the accounting officer to
act reasonably.
[30]
Whether
there was an obligation on the Respondents to consult with the
Applicant prior to the deductions being effected has to be
determined
within the context of the provisions of section 38 of the PSA and the
Policy itself. In this case, it can be accepted
that bonuses
are given annually to employees at the discretion of the employer. At
most, this can be gleaned from Clause 1.4.2
of the Performance
Management and Development policy Implementation Guidelines
[23]
.
Secondly, the Department may not exceed 1.5% of its remuneration
budget for bonuses, and should the amount prove to be insufficient
to
award the maximum percentage cash bonus, the Moderating Committee may
scale down the applicable percentage by allocating a lower
percentage
in the range to qualifying employees to ensure that the Department
stays within the 1.5% limit
[24]
.
Furthermore, it was of importance that the performance ratings should
not be distorted, and be within the normal distribution
curve of 25%.
[31]
Unlike
in instances where a claim is brought under section 34 of the BCEA,
where an amount erroneously paid is recouped in terms
of the
provisions of section 38 of the PSA, and where such amounts do not
not constitute remuneration, an employer is not in my
view obliged to
get the consent of an employee before effecting the deductions. Even
more significant, to the extent that the amounts
erroneously paid to
employees are not what they are ordinarily entitled to
ex
lege
or
ex
contractu
,
no such obligation arises, and all that is required is of the
accounting officer to exercise his or her discretion in effecting
those deductions, and to act reasonably within the meaning of section
38 (2) (b) of the PSA. Thus intrinsic in those provisions
is a
discretion enjoyed by the accounting officer to determine what
instalments should be made based on what employees can afford
to
repay, and such a discretion should be exercised reasonably.
[32]
It therefore follows that the proposition by the Applicant that there
was such a duty to consult, and in reliance
Conjwa
& others v Post Master-General, Transkei & another
[25]
is misplaced, as the facts in that case pertained to a reduction in
salary, which was an existing right. The performance bonuses
in this
case did not give rise to such rights and there could therefore be no
obligation on the Director-General to consult prior
to effecting
those deductions. The fact that the process that led to the decision
to pay performance bonuses was inclusive and
consultative does not
give rise to concomitant obligation to consult when reductions were
to be effected.
[33]
The
fact that no such duty to consult existed does not imply that the
Director-General was at liberty to act in any manner that
he or she
deemed fit when deciding to effect the deductions. What the above
conclusions therefore imply is that it was up to the
Applicant to
indicate in what material respects the decision to make the
deductions as taken by the Director-General was unreasonable,
irrational or arbitrary. Thus the Applicant further needed to show in
what material respects the accounting officer had in exercising
his
or her discretion, done so capriciously. From the pleadings, no such
case has been made by the Applicant other than to contend
that its
members (who remain unidentified) were never informed of the basis of
the alleged error in the payment of the performance
bonus. This
however is belied by the first Circular issued on 21 December 2010 in
which the basis of the review process was explained,
followed by
actual letters to affected employees in which the basis of seeking to
effect reductions was explained.
[34]
There
are also fundamental difficulties with the Applicant’s case to
the extent that it had submitted that the employer, other
than
failing to establish whether overpayments were made, failed to take
into account ‘certain facts and information’,
and also
failed to do so when determining the amount of instalments, or when
arriving at the decision as to whether or not to remit
an
overpayment. The difficulties herein lie in the fact that the
Applicant does not dispute that the performance bonuses had to
fall
within the 1.5% of the remuneration budget, The Department could not
exceed 1.5% of its remuneration budget for bonuses, and
should the
amount prove to be insufficient to award the maximum percentage cash
bonus, the Moderating Committee could scale down
the applicable
percentage by allocating a lower percentage in the range to
qualifying employees to ensure that the Department stays
within the
1.5% limit
[26]
. The Applicant
however did not dispute the lawfulness or fairness of the review
process, which process was intended to ensure that
these performances
bonuses were allocated within the confines of the allotted budget.
[35]
Furthermore,
I did not understand it to be in dispute that it was of importance
that the performance ratings should not be distorted,
and be within
the normal distribution curve of 25%. To the extent that the decision
to effect the deductions were based on these
considerations, there is
no room for any argument to be made that the decision was irrational,
unreasonable or had flouted the
principles of legality.
[36]
Aligned
to a further jurisdictional point raised by the Respondents was the
issue surrounding the identity of the affected employees.
The
Applicant submitted that ‘certain facts and information’
was not taken into account when effecting the deductions
or when
determining the instalments payable. These submissions were
nevertheless made in a vacuum as in the founding and replying
affidavits, there was neither a list of individual applicants nor any
form of identification or description of even who the individuals
affected by the decision were. It therefore defies logic to make
reference to a failure to take into account certain facts and
circumstances pertaining to individuals when taking a decision to
effect the deduction, when it is not known to whom those particular
facts and circumstances applied to, or when it is not known in what
respect the decision was unreasonable or capricious in respect
of
those unidentified affected employees.
[37]
It is accepted that in terms of the provisions of section 200 of the
LRA, the Applicant (PSA) is entitled to bring this application
in its
own interests or on behalf of any of its members or in the interests
of any of its members. The submissions made on behalf
of the
Applicant to the effect that the Union acted only on behalf of those
of its members whose individual letters are attached
to the founding
affidavit as annexures however does assist its case. This is so in
that the relief sought pertains to unknown individuals,
and also
involves unknown amounts either due to them or which should not have
been deducted. Thus the failure to not only identify
them in the
notice of motion or by way of a scheduled list, and also to not
indicate the particulars of their claim makes this
defect fatal to
their application. Effectively, the unknown affected employees are
not properly parties to these proceedings. There
was at the very
least, an obligation on the Applicant to properly list the affected
individual employees for the purposes of their
individual claims.
(ii)
The decision as effected by the Director-General.
[38]
'Accounting
officer' as defined in the PSA means an accounting officer as defined
in section 36 of the Public Finance Management
Act
[27]
.
Section 36 of the PFMA (which falls under Chapter 5 (Departments and
Constitutional Institutions. Part 1. Appointment of Accounting
Officers)) provides that;
“
36.
Accounting officers-
(1) Every department and every
constitutional institution must have an accounting officer.
(2) Subject to subsection 3
(a)
the
head of a department must be the accounting officer for the
department; and
(b)
the
chief executive officer of a constitutional institution must be the
accounting officer for that institution.
(3) The relevant treasury may,
in exceptional circumstances, approve or instruct in writing that a
person other than the person
mentioned in subsection 2 be the
accounting officer for—
(a)
a
department or a constitutional institution; or
(b)
a
trading entity within a department.
(4)
The
relevant treasury may at any time withdraw in writing an approval or
instruction in terms of subsection 3.
(5)
The
employment contract of an accounting officer for a department,
trading entity or constitutional institution must be in writing
and,
where possible, include performance standards. The provisions of
sections 38 to 42 as may be appropriate, are regarded as
forming part
of each such contract.”
[39]
It
was the Respondents’ contention that the decision to award
performance bonuses does not lie with the employee and the
supervisor/manager or the moderating committees, and that it was the
Minister or her delegate that approved the performance assessments
and the payments. The Applicant’s contention on the other hand
was that the Director –General was only empowered to
determine
the amount of the instalments that should be deducted, and that the
decision to effect the deduction and reverse the
incorrect payment
lay with the Minister.
[40]
Section
38 of the PSA provides that the relevant executive authority shall
correct any incorrect salary or reward. I did not understand
from
these provisions that the executive authority being the Minister of
the Department, shall be expected to specifically attend
to each
individual case and make these corrections. It is not the duty of the
Minister of a Department to attend to such mundane
matters. There was
nothing placed before the Court to gainsay the Respondents’
contention that the Director-General had the
necessary delegated
authority to effect the deductions. Even if there might be some merit
in the Applicant’s contentions,
by virtue of the provisions of
section 38 (2) of the PSA, and as further confirmed in
Western
Cape Education Department v General Public Service Sectoral
Bargaining Council and Others
[28]
,
the
Director-General as the accounting officer is obliged to effect those
overpayments.
[41]
Furthermore,
by virtue of the provisions of sections 38 to 40 of the PFMA (Which
provisions outline, the general responsibilities
of accounting
officers; their responsibilities relating to budgetary control and
reporting responsibilities) the accounting officer
has a duty to
recover monies paid erroneously so that it cannot be regarded as
fruitless, unauthorised and wasteful expenditure.
In the light of
these obligations and wide discretion enjoyed by the
Director-General, it cannot be said that the decision to effect
the
deductions was unlawful purely on the basis that it was not taken by
the Minister.
[42]
The
provisions of section 38 of the PSA cannot be read or interpreted in
isolation from those of the PFMA in regards to the responsibilities
of the Director-General. Thus where as in this case the department in
allocating performance bonuses was restricted within the
1.5% of its
remuneration budget, and had exceeded that budget, the
Director-General as the accounting officer was within his legal
obligations to act appropriately. There is therefore no basis
to conclude that the decision to effect the deductions in instances
where the performance bonuses were erroneously paid, should be set
aside on the basis of legality. In effecting these deductions,
the
Director-General not only had the necessary delegated authority to do
so, but also acted legally within the confines of section
38 of the
PSA and as further obliged within the prescripts of the PFMA.
[43]
In
conclusion, I have had regard to the submissions made on behalf of
the Respondents in regards to the issue of costs. However,
having
further taken into account considerations of law and fairness, I am
of the view that a cost order in this case is not warranted.
Order:
a)
The
Respondents’ late filing of the answering affidavit is
condoned.
b)
The
Applicant’s application is dismissed.
c)
There
is no order as to costs.
__________________
Tlhotlhalemaje, AJ
Acting
Judge of the Labour Court of South Africa
APPEARANCES:
For
the Applicant:
Adv. PG Seleka
Instructed
by:
Thabang Ntshebe Attorneys
For
the Respondents:
Adv. WR Mokhari SC (Heads of argument having been drawn by IAM
Semenya SC and AL Platt)
Instructed
by:
The State Attorney
[1]
Act No 66 of 1995 as amended
[2]
Act 103 of 1994
[3]
(2013) 34 ILJ 639
(LC) at para 33 where the Labour Court held that;
“
The
applicant bases her grounds of review on the doctrine of legality.
This court recently confirmed in
POPCRU
v Minister of Correctional Services
that it has review jurisdiction in terms of s 158(1)(h) of the LRA
on the basis of the doctrine of legality. That doctrine implies
that
public officials may only exercise such powers and perform such
functions as are permissible and conferred upon them by
law. In
addition, not only must the exercise of such power be lawful, but it
must also not be arbitrary, unreasonable or irrational;
and it must
be procedurally fair.” (Citations omitted)
[4]
The
Minister
for Public Service & Administration & another v Kaylor
(2013) 34 ILJ 3111 (LAC)
[5]
See
CUSA
v Tao Ying Metal Industries and Others
at para 68 where it was held that;
‘
Where
a point of law is apparent on the papers, but the common approach of
the parties proceeds on a wrong perception of what
the law is, a
court is not only entitled, but is in fact also obliged
mero
motu
,
to raise the point of law and require the parties to deal therewith.
Otherwise, the result would be a decision premised on an
incorrect
application of the law. That would infringe the principle of
legality.’
[6]
“
157
Jurisdiction of Labour Court
(1)
Subject to the Constitution and section 173, and except where this
Act provides
otherwise, the Labour Court has exclusive jurisdiction
in respect of all matters that elsewhere in terms of this Act or in
terms
of any other law are to be determined by the Labour Court.
(2)
The Labour Court has concurrent jurisdiction with the High Court in
respect of any
alleged or threatened violation of any fundamental
right entrenched in Chapter 2 of the Constitution of the Republic of
South
Africa, 1996, and arising from-
(a)
employment and from labour relations;
(b) any dispute over the
constitutionality of any executive or administrative act or conduct,
or any threatened executive or administrative
act or conduct, by the
State in its capacity as an employer; and
(c)
the application of any law for the administration of which the
Minister is responsible.
(3)
Any reference to the court in the Arbitration Act, 1965 (Act 42 of
1965), must be
interpreted as referring to the Labour Court when an
arbitration is conducted under that Act in respect of any dispute
that may
be referred to arbitration in terms of this Act.
(4) (a)
The Labour Court may refuse to determine any dispute, other than an
appeal or
review before the Court, if the Court is not satisfied
that an attempt has been made to resolve the dispute through
conciliation.
(b) A certificate issued by a
commissioner or a council stating that a dispute remains unresolved
is sufficient proof that an
attempt has been made to resolve that
dispute through conciliation.
(5)
Except as provided in section 158 (2), the Labour Court does not
have jurisdiction to
adjudicate an unresolved dispute if this Act
requires the dispute to be resolved through arbitration.
[7]
See
Gcaba
v Minister of Safety and Security & Others
(2010) 31 ILJ 296 (CC) at para [74];
Graaff-Reinet
Municipality v Van Ryneveld’s Pass Irrigation Board
1950 (2) SA 420
(A) and
Mgijima
v Eastern Cape Appropriate Technology Unit & another
(2000) 21 ILJ 291 (Tk) at 296E–H where it was held that;
‘
Jurisdiction
means 'the power or competence of a Court to hear and determine an
issue between parties, and limitations may be
put upon such power in
relation to territory, subject matter, amount in dispute, parties
etc'
[8]
[2015] 1 BLLR 34
(LAC) at para [21]
[9]
See
MEC
of the Western Cape Provincial Government Health Department v
Coetzee and Others
(CA3/2011)
[2015] ZALAC 35
(24 August 2015) at para [89], where the
Labour Appeal Court held that
“
It
is now trite that the jurisdiction of the Labour Court to resolve a
dispute is determined from the pleadings. But the pleadings
cannot
be taken at face value. They need to be properly construed to
ascertain what the legal basis of the applicant’s
claim is….”
[10]
See
National
Union of Metalworkers of SA and Others v Bader Bop (Pty) Ltd and
Another
(2003) 24 ILJ 305 (CC) at para [52] and
CUSA
v Tao Ying Metal Industries and Others
[2008] ZACC 15
;
2009 (1) BCLR 1
(CC) at para
[66]
[11]
[2010] 11 BLLR
1174
(LC) at para [26]
[12]
[2014] 12 BLLR
1170 (LAC)
[13]
(2010) 31 ILJ 296
(CC) where it was held at para [64] that;
“
Generally,
employment and labour relationship issues do not amount to
administrative action within the meaning of PAJA. This is
recognised
by the Constitution. Section 23 regulates the employment
relationship between employer and employee and guarantees
the right
to fair labour practices. The ordinary thrust of section 33 is to
deal with the relationship between the State as bureaucracy
and
citizens and guarantees the right to lawful, reasonable and
procedurally fair administrative action. Section 33 does not
regulate the relationship between the State as employer and its
workers. When a grievance is raised by an employee relating to
the
conduct of the State as employer and it has few or no direct
implications or consequences for other citizens, it does not
constitute administrative action.” (Footnotes omitted)
[14]
See
De
Villiers v Head of Department: Education, Western Cape Province
(2010)
31 ILJ 1377 (LC) at para [19] where Van Niekerk J held that;
“
In
summary: as a general rule, conduct by the state in its capacity as
an employer will generally have no implications or consequences
for
other citizens, and it will therefore not constitute administrative
action. Employment-related grievances by state employees
must be
dealt with in terms of the legislation that gives effect to the
right to fair labour practices, or any applicable collective
agreements concluded in terms of that legislation. Departures from
the general rule are justified in appropriate cases. An assessment
must be conducted on a case-by-case basis to determine whether such
a departure is warranted. The relevant factors in this determination
(following SARFU) are the source and nature of the power being
exercised (this would ordinarily require a consideration of whether
the conduct was rooted in contract or statute (see Cape Metropolitan
Council v Metro Inspection Services cc
2001 (3) SA 1013
(SCA)),
whether it involves the exercise of a public duty, how closely the
power is related to the implementation of legislation
(as opposed to
a policy matter) and the subject matter of the power. I venture to
suggest that the existence of any alternative
remedies may also be a
relevant consideration - this was a matter that clearly weighed with
the Court in both Chirwa and Gcaba,
who it will be recalled, were
found to have had remedies available to them under the applicable
labour legislation”.
[15]
‘
(2)
Unfair labour practice means any unfair act or omission that arises
between an employer and an employee
involving-
Unfair
conduct by the employer relating to the promotion, demotion,
probation (excluding disputes about dismissals for a reason
relating
to probation) or training of an employee or relating to the
provision of benefits to an employee;
[16]
Act 75 of 1997,
which provides that;
“
(1)
An employer may not make any deductions from an employee’s
remuneration unless –
a) subject to sub-section (2), the
employee in writing agrees to the deduction in respect of a debt
specified in the agreement;
or
b) the deduction is required or
permitted in terms of a law, collective agreement, court order or
arbitration award.
…
(5) An employer may not require or
permit and employee to –
(a) repay any remuneration except for
overpayments previously made by an employer resulting from an error
in calculating the employee’s
remuneration; or
(b)
acknowledge receipt of an amount greater than the remuneration
actually received.”
[17]
(2013) 34 ILJ 1120
(LAC)
[18]
At para [50]
[19]
See
Nkosinathi
Lawrence Khumalo and another v MEC For Education, Kwa-Zulu Natal
2014 (3) BCLR 333
(CC) at para [28]
[20]
See
Gqwetha
v Transkei Development Corporation Ltd and Others
2006 (2) SA 603
(SCA) at 612 E-F para [22]where it was held that;
“
It
is important for the efficient functioning of public bodies ... that
a challenge to the validity of their decisions by proceedings
for
judicial review should be initiated without undue delay. The
rationale for that longstanding rule ... is twofold: First,
the
failure to bring a review within a reasonable time may cause
prejudice to the respondent. Secondly, and in my view more
importantly, there is a public interest element in the finality of
administrative decisions and the exercise of administrative
functions.”
[21]
At para [46]
[22]
[2014] 10 BLLR 987
(LAC) at para [29]
[23]
Which provides
that ‘Employees are not entitled to rewards. Rewards shall
only be given for significant outstanding and
consistent performance
that advances the Departmental goal, and should be tied to specific
accomplishment(s)
[24]
Clause 12 of the
Policy
[25]
[1998] 8 BLLR 718
(TK)
[26]
Clause 12 of the
Policy
[27]
Act 1 of 1999
[28]
At para [29]