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[2015] ZALCCT 31
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Western Cape Gambling & Racing Board v Commission for Conciliation, Mediation And Arbitration and Others (C973/2013) [2015] ZALCCT 31; [2015] 9 BLLR 966 (LC); (2015) 36 ILJ 2166 (LC) (20 February 2015)
REPUBLIC
OF SOUTH AFRICA
IN
THE LABOUR COURT OF SOUTH AFRICA, CAPE TOWN
JUDGMENT
Reportable
C973/2013
DATE:
20 FEBRUARY 2015
In
the matter between:
WESTERN CAPE
GAMBLING & RACING
BOARD
........................................................
Applicant
And
COMIMISSION
FOR CONCILIATION, MEDIATION
AND
ARBITRATION
..................................................................................................
First
Respondent
BELLA GOLDMAN
N.O
.........................................................................................
Second
Respondent
WILLIAM
ATTWOOD DANIEL
BOWERS
...........................................................
Third
Respondent
YVONNE
SKEPU
.....................................................................................................
Fourth
Respondent
Date
heard: 5 August 2014
Delivered:
20 February 2015
Summary:
Application to review an arbitration award on the basis that award
would force a public entity to act ultra vires the PFMA;
a public
entity
qua
employer is bound to meet its obligations under the
LRA.
JUDGMENT
RABKIN-NAICKER
J
[1] This is an
opposed review application in terms of section 145 of the LRA. The
applicant seeks to review and set aside an arbitration
award dated 14
November 2013, under case number WECT11468-13.
[2] The
background facts material to the review application are not in
dispute. The third and fourth respondent, both senior employees,
referred an unfair labour practice dispute to the first respondent,
the CCMA. They alleged that the applicant committed an unfair
labour
practice by excluding them from the application of its Pay
Progression Policy (the Policy).
[3] The applicant
is a statutory body responsible for regulating gambling activities in
the Western Cape Province. It is an independent
public entity, and
must comply with the provisions of the Public Finance Management Act
1 of 1999 (the PFMA). In terms of the applicant’s
enabling
legislation, the MEC for Finance, Economic Development and Tourism of
the Provincial Government of the Western Cape has
oversight over its
functions.
[4] During August
2002, the applicant’s board considered implementing the Policy.
Its intended purpose was to achieve parity
within the organization,
in relation to the remuneration packages paid to employees. On or
about 27 September 2002, the applicant
adopted a resolution which
approved the implementation of the Policy.
[5] A Practice
Note issued by the Board to explain the Policy to its employees
defined the procedure and criteria to be made to
adjust the
remuneration packages of its employees appointed on entry-level
remuneration packages to equal those of other employees
appointed on
higher salary levels.
[6] In order to
qualify for the benefit, employees had to be employed by the
applicant for a minimum continuous period of
two years and be
appointed at a salary level lower than the salary level of an
employee appraised at the average level.
[7] In terms of
the policy, a qualifying employee’s remuneration would be
adjusted on the following basis: the employee would
receive a 50%
adjustment of the difference between the employee’s current
remuneration and that of an average employee’s
remuneration if:
(i)
The employee had an average performance appraisal rating, after three
year’s employment
;
or
(ii)
The employee had an above average performance appraisal rating, after
two year’s employment.
[8] The Policy
was not applied to the third and fourth respondents and they did not
receive any benefit. During September 2012,
the third and fourth
respondents raised concerns regarding the fact that they had been
excluded from its application. According
to the founding affidavit,
the applicant’s CEO investigated why they had been
excluded from the application of
the policy and following these
investigations on 30 April 2013, he avers that a resolution was
adopted in terms of which the policy
would be applied to the third
and fourth respondent as of 1 May 2013.
[9] In a
subsequent meeting of the board, serious concerns were raised
regarding the legality of the application of the policy to
the third
and fourth respondents. The board resolved that it would seek to
obtain clarity from the MEC regarding the legality of
its earlier
decision. It also resolved that it would suspend the application of
the policy and reduce the third and fourth respondent
salaries to
what they were prior to applying the policy. On or about the 7 June
2013, the CEO informed the third and fourth respondent
in writing of
the decision taken by the Board.
[10] On 1
October 2013, the MEC advised the applicant that the resolutions it
adopted at its April 2013 meeting had required his
prior approval and
that the payment of the adjustments was considered to be unauthorized
and irregular. He further instructed the
board to recoup the monies
paid to the third and fourth respondent in terms of the resolution
adopted in April 2013. As a result,
the third and fourth respondent
did not receive the increase, as detailed in the April 2013
resolution.
[11] The dispute
was referred to the CCMA as an alleged unfair labour practice and the
second respondent, (the Commissioner) made
an award as follows:
“
74.
I find that the respondents Policy known as
Practice Notice 2/2003
Adjustment of Salaries of Employees Appointed on Entry Level
Remuneration Packages
when applied to its employees is a benefit
in terms of the Labour Relations Act 1995 (LRA).
75.
I also find that the applicants, Yvonne Skepu and William Attwood
Bowers were beneficiaries in terms of that Policy.
76.
Further I find that by not benefiting in terms of the Policy in the
case of 1st applicant, Yvonne Skepu, on her 2nd and 4th
anniversary
of employment, and in the case of second applicant, William Attwood
Daniel Bowers on the 2nd anniversary of employment;
they were
subjected to unfair labour practices relating to benefits in terms of
section 186 (2) of the LRA by the fact that the
Policy was not
applied to them.
77.
In terms of relief I order that the respondent Western Cape Gambling
and Racing Board pay the first and second applicants the
full amounts
that would have been paid to them had the policy been applied to them
which in the case of the first applicant is
R175, 983.13 and in the
case of the second applicant is R112, 072.23 up to the 30 November
2013.
78.
The respondent, the Western Cape Gambling and Racing Board is ordered
to pay the first applicant, Yvonne Skepu the sum of R175,983.13
(one
hundred and seventy-five thousand nine hundred and eighty three rand
and thirteen cents) and the second applicant, William
Attwood Daniel
Bowers the sum of R112, 072.23 (one hundred and twelve thousand and
seventy two rand and twenty three cents). These
amounts are to be
paid by the Western Cape Gambling and Racing Board to Yvonne Skepu
and William Attwood Daniel Bowers by no later
than 6 December 2013,
after which interest will run at the prescribed rate.
79.
The respondent, the Western Cape Gambling and Racing Board is ordered
to remunerate the first applicant, Yvonne Skepu at the
annual rate of
R759, 913. 15 per annum as from 1 December 2013. The respondent, the
Western Cape Gambling Board is also ordered
to remunerate second
applicant William Attwood Bowers at the annual rate of R624,136.05
per annum as from 1 December 2013.
80.
I also order that the respondent Western Cape Gambling and Racing
Board, upon the 2
nd
applicant, William Bowers fourth
anniversary it apply the Pay Progression policy known as the Practice
Notice 2/2003 Adjustment
of Salaries of Employees Appointed on Entry
Level Remuneration Packages to William Attwood Bowers subject to him
receiving an above
average performance rating, or on his fifth
anniversary, if if he receives an average performance rating, and his
salary then be
increased to the top end of the salary of a Head of
Department. ”
[12] The
applicant submits that the award of the Commissioner is reviewable in
that she committed a gross irregularity by failing
to apply her mind
to the evidence before her and/or ignoring relevant evidence. It is
further submitted that her conclusion was
one that a reasonable
Commissioner could not have reached. The essence of the applicant’s
case is that the Commissioner did
not take into account the
relationship between it and the Provincial Department of Economic
Development and Tourism and further
failed to consider that the
applicant is one of 14 public entities within the Western Cape
Province and that the
Public Finance Management Act (the
PFMA)
applies to all of these entities.
[13] In terms of
section 53
of the PFMA, the applicant is required to annually submit
a budget of estimated revenue and expenditure for that financial
year,
for approval by the executive authority i.e. the MEC. Once the
budget is approved it must comply with the terms of the approval.
In
other words, it is submitted that it is not open to a public entity
to spend funds as it sees fit. All expenditure must comply
with the
prescripts of the budget, as approved. Expenditure not authorized by,
or contrary to the purpose of and/or conditions
attached to the
budget, may constitute unauthorized or irregular expenditure.
[14] In its
supplementary affidavit, applicant’s CEO of the Board refers to
the record of the arbitration proceedings and
avers that: “based
solely on my oral testimony before the Commissioner, it was made
clear to her that both I in my capacity
as CEO of the Applicant as
well as the Board of the Applicant, considered the exclusion of the
Third and Fourth Respondents from
the Pay Progression Policy as
unfair”. He lists all the efforts he made to convince the MEC
that he should condone and ratify
the decisions taken by the board.
It is his submission that there was a clear and unequivocal attempt
by the applicant to remedy
the situation in respect of the third and
fourth respondents.
[15] It was
argued on behalf of applicant that in circumstances where the
uncontroverted evidence before the Commissioner was that
it is
subject to the authority of the MEC and that the MEC had directed it
not to proceed to implement policy in relation to the
third and
fourth respondents, the finding that it had committed an unfair
labour practice nevertheless, is a conclusion that a
reasonable
decision-maker could not make.
[16] Mr Leslie on
behalf of the applicant argued that the Commissioner’s finding
that the third and fourth respondents were
entitled, as of right, to
the benefits under the policy was unreasonable. Even if the third and
fourth respondents prima facie
qualified under the policy, their
entitlement to the salary increase depended on the prior approval of
the increase by the MEC.
Since no such approval had been obtained ,he
submitted, they had no “right” to the increase within the
meaning of
Protekon
(Pty) Ltd v Commission for Conciliation, Mediation & Arbitration
& others
[1]
[17] The court in
Protekon
held that:
“
[34]
The establishment of the CCMA's unfair labour practice jurisdiction
specifically in relation to benefits is, it seems to me,
a
legislative response to the complexity of the reciprocal employer and
employee rights and obligations that exist in many employee
benefit
schemes. In typical employee benefit schemes (such as pension funds
and medical aid schemes) the employer's obligations
frequently extend
beyond the simple payment of money to the employee or a third party
in return for services rendered by the employee.
Employer obligations
are typically regulated by separate policies or rules. In many
instances the employer enjoys a range of discretionary
powers in
terms of those policies or rules. The legislature has clearly
considered it necessary to regulate employer conduct in
those
circumstances by superimposing a duty of fairness irrespective
whether that duty exists expressly or impliedly in the contractual
provisions that establish the benefit.”
[18] In
Apollo
Tyres SA (Pty) Ltd v Commission for Conciliation, Mediation &
Arbitration & others
[2]
the Labour Appeal Court endorsed the approach taken in
Protekon
finding
that an employee has an ex lege right created by
s 186(2)(a)
not to
be treated unfairly in relation to promotion, demotion, training and
the provision of benefits
[3]
.
The court held that the interpretation of the term 'benefit'
includes:
“
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 s 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.”
[4]
[19] It is the
applicant’s contention that it is the MEC who has the
discretion to grant the benefit
in casu
and that the effect of
the award is to compel it to do something that is unlawful and which
it is not empowered to do. Compliance
with the award, therefore,
would amount to a breach of the PFMA and the conditions on which the
applicant’s budget was approved.
By ordering the Board to do
something that is unlawful it submits, the Commissioner exceeded her
powers and the award falls to
be reviewed and set aside on this
ground alone.
[20] This matter
therefore raises important questions: can public entity employees’
ex lege
right to fair labour practices be limited by their
employer’s obligations in terms of the PFMA? Can a public
entity
qua
employer offer a defence to prima facie unfair
conduct in respect of provision of benefits by reliance on the
prescripts of the
PFMA?
[21] In my
judgment, the answer to the above questions must be in the negative.
Such an approach would violate constitutionally
entrenched rights of
employees of these entities. It would create a scenario in which
employees of public bodies would be precluded
from the protection of
ex
lege
rights applicable to private sector employees, offending against
their fundamental right to equality and fair labour practices
amongst
others. As the Constitutional Court has held, one of the manifest
objects of the LRA is to subject all employees, whether
in the public
sector or in the private sector, to its provisions, except those who
are specifically excluded from its operation
[5]
.
[22] Mr Conradie
for the third and fourth respondents argued that the applicant’s
stood to be judged on the basis of its
employer status. I would
agree. Even if it was the subjective view of certain of the
applicants board members that it was not fair
to deprive the third
and fourth respondents from the benefit of the Policy the objective
conduct of the employer in not doing so,
amounted to an unfair labour
practice.
[23] I therefore
find that the approach taken by the Commissioner and the outcome of
the award is unassailable. The applicant
qua
employer is bound
to meet its employment law obligations in terms of the LRA. It needs
to do so while at the same time complying
with the obligations that
it has by virtue of its public funding. The PFMA was not intended to
be used as a shield behind which
public sector employers can hide
from employment law obligations.
[20] In all these
circumstances, and taking into account the basis on which this review
was brought, I make the following order:
Order:
1.
The application is dismissed.
2.
The Applicant is to pay the costs.
H.
Rabkin-Naicker
Judge
of the Labour Court
Appearances
Applicant:
Mr. G Leslie instructed by Bowman Gifillan Inc
Third
respondent: Mr. B Conradie of Bradley Conradie Attorneys
[1]
(2005) 26 ILJ 1105 (LC)
[2]
(2013) 34 ILJ 1120 (LAC)
[3]
At
para 41
[4]
At paragraph 50
[5]
Chirwa v Transnet Ltd
[2007] ZACC 23
;
2008 (4) SA 367
(CC) at paragraph 101