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[2015] ZALCD 59
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University of KwaZulu-Natal Staff Union obo Members v University of KwaZulu-Natal (D266/2014) [2015] ZALCD 59 (30 September 2015)
IN THE
LABOUR COURT OF SOUTH AFRICA
HELD AT
DURBAN
CASE NO:
D266/2014
DATE: 30
SEPTEMBER 2015
Not
Reportable
In the matter between:
THE
UNIVERSITY OF KWAZULU-NATAL STAFF
UNION on
behalf of its
members
............................................................................................
Applicant
And
THE
UNIVERSITY OF
KWAZULU-NATAL
....................................................................
Respondent
Heard:
18 March 2015
Delivered:
30 September 2015
Summary:
a declaratory and interdictory relief is sought – application
proceedings - Court has power to grant a declaratory
order as
envisaged by section 158 (1) (a) (iv) of the Act
in
respect of matters that fall under its jurisdiction
-
Court will decline to
entertain a dispute as a Court of first instance if the dispute must
first be referred to conciliation
and
arbitration – application dismissed.
JUDGMENT
CELE J
Introduction
[1] In
terms of section 158 (1) (a) of the Labour Relations Act
[1]
the Applicant seeks declaratory and interdictory relief in the
following terms:
1. It is
declared that:
1.1
The Respondent is bound to hour the existing terms and conditions of
its employees conditions
of service, including the provisions of all
policies and practices applicable to them;
1.2
the Respondent is bound to hour the provisions of its Performance
Management Policy, in
particular (and without derogating from the
generality of the foregoing);
1.2.1
Clause 3.15 thereof to the effect that measures to recognise and
reward good performance amongst the Respondent’s
employees must
be applied in a fair and equitable way;
1.2.2
Clause 6 thereof which provides that the policy applies to all
permanent and long fixed term employees of the
Respondent; and
1.3
the Respondent is further bound to follow the provisions of clauses
5.1.1 and 5.6.2 of
its amended Remuneration Policy, 2011 to
2014;
2. the
Respondent is interdicted and restrained from employing any means to
compel and/or induce its employees who are not currently
on the
Respondent’s 2012 conditions of service to migrate to those
conditions other than via a process of collective bargaining
at the
Joint Bargaining Forum or by way of a lawful lock-out in terms of
chapter 4 of the LRA; and
3. the
Respondent is ordered to pay the costs of this application.
[2] The
Respondent opposed this application on the basis,
inter
alia,
that this
Court does not have jurisdiction to grant the relief sought for what
is in effect an unfair labour practice dispute within
the meaning of
section 186 (2) of the LRA, in the alternative, that it should
decline to exercise such jurisdiction, and that no
case has been made
out for the relief sought. The answering and the replying affidavits
were filed late. Condonation was sought
for such lateness. A case has
been made for same. It is granted.
Factual
Background
[3] The
Applicant, the University of Kwazulu-Natal Staff Union (UKSU), is a
trade union duly incorporated in accordance with the
provisions of
the LRA. and which carries on business as such at UKZN, Durban. The
Respondent, the University of Kwazulu-Natal,
(UKZN), is an
incorporated statutory entity created by the Statute of the
University of Kwazulu-Natal and it operates from various
campuses in
Durban and one in Pietermaritzburg. The Respondent employs
approximately 3 213 employees divided into around 1 349
academic
staff and 1 864 administrative or support staff. The Applicant
has approximately 970 members who are made up predominantly
from the
ranks of the support staff but include various academic staff as
well.
[4] The current dispute has its
genesis in attempts by the Respondent to “persuade”
employees to change from their existing
conditions of service to new
conditions of service introduced by the Respondent. The action of the
Respondent in doing so is justified
by UKZN in that it is in
financial difficulty that it operates under, particularly the
non-payment of university fees but also
because it wishes to
modernise and update its remuneration practices. UKZN contended that
according to an un-audited consolidated
income statement for the
respondent for the period ended 31 December 2013, it suffered a
deficit of R412, 048,000.00 at the end
of that year.
[5] It said that the nett deficit was
calculated before taking into consideration student bad debt
write-offs for 2013 which were
estimated between 10% to 13% of R869
million which translated to a figure of between R89 million and R115
million. This was
expected to result in the projected deficit
increasing to more than R502 million, which was over and above about
R100 million that
had to be written off in the past, the bulk of
which was prescribed. The deficit was said to have resulted in an
estimated backlog
of maintenance of university buildings of
approximately R1 billion. In addition thereto, it has impacted
severely on student housing.
The respondent currently has
approximately 11500 beds but it needs a further 6000 beds of which it
is only able to provide 800
beds. The 800 beds will cost
approximately R150 million.
[6]
Further concern of the Applicant is that the Respondent intends
retrenching staff, support staff in particular and that employees’
current conditions of service entail considerable benefits, including
generous retrenchment provisions which are not included in
the new
conditions which the Respondent favours. Examples of benefits which
do not exist under the new conditions of service and
are therefore
lost to employees should they change, are:
·
Generous
retrenchment benefits which include an entire years pay as a
“severance gratuity”, plus an additional 2% of
the
employees maximum salary per completed year of service. Additional
benefits for staff over the age of 46, up to an additional
full
year’s salary, are also applied. Under the new conditions of
service only the statutory minimum of one week’s
pay for every
completed year of service applies.
·
The annual leave
gratuity payable on termination is also reduced from a maximum of 120
days to only 60 days.
·
The sick leave
provisions were reduced and special leave was reduced from 22 days to
15 days. Annual leave was similarly reduced.
All employees employed
prior to 2 July 2004, which is a significant percentage, were said by
the Applicant to enjoy substantial
post -retirement medical aid
benefits which were not continued on the new conditions.
[7] The
Applicant contended that the generous retrenchment provisions, in
particular, are a compelling reason why the Respondent
wishes
employees to accept changed conditions of service. Conversely, and as
retrenchments are contemplated, they present a powerful
inducement to
employees not to change conditions. The Applicant further said that
the unlawful methods the Respondent has utilised
to persuade
employees to change to the proposed conditions of service include:
1.
effectively
discontinuing the “auto-notch” system of granting
employees incremental increases based on their years of
service in an
attempt to detract from the desirability of the old conditions;
2.
paying performance
bonuses only to staff on the new conditions without any legal,
logical or equitable basis for doing so;
3.
refusing to honour
existing conditions of service and unilaterally implementing aspects
of the new conditions of service; and
4.
refusing to promote
deserving staff, or move staff internally, unless they migrate to the
new conditions.
[8] The Respondent disputed the
assertions of the Applicant on retrenchments by saying that the
question of the retrenchment benefits
has never been a factor
primarily because the respondent had not performed any
retrenchments. It was averred that this was
an issue that had
never been raised by the applicant in any of its meetings with the
Respondent. The Respondent denied having utilised
any unlawful
methods as alleged in that:
(a)
The Respondent had not
discontinued the “
auto-notch”
system of incremental increases and it continued to apply to 239
staff members. Although the Respondent had since 2009
negotiated
salary increases on a Total Remuneration Package (“TRP”)
basis the question of the auto-notch system had never been
presented
as a real issue in dispute between unions and the Respondent. A
communique dated 12 July 2012, to employees explaining
what the
benefits of the TRP approach to remuneration are, also explains the
significance of migration to the new conditions of
service was
referred to.
[9] The
issue of paying performance bonuses was said to be at the core of the
dispute between the Applicant and the Respondent.
It was disputed
that the Respondent acted illegally, illogically or inequitably.
In this regard paragraphs 5.2.1 and 5.2.5
of a remuneration committee
(“REMCO”) meeting held on 19 October 2010 were referred
to as showing that in order to
finance the payment of performance
management bonuses it was necessary for employees on the old
conditions of service to relinquish
some of the generous benefits.The
employees were said to have resisted doing so and the Respondent said
that it was accordingly
not in a position to pay such bonuses until
agreement could be reached on that issue. Employees who were on the
new conditions
of service were said to be already receiving such
bonuses where they were due. The respondent said that it wished to
move from
a service based increase in salary, that is, automatic
increases for years of service, to a performance-based system of
reward
where employees who were assessed to be deserving of rewards
were paid such bonuses.
[10] The
contention of the applicant that the respondent was paying
performance bonuses only to staff on the new conditions without
any
legal, logical or equitable basis for doing so was denied by the
respondent. The respondent was said to be refusing to honour
existing
conditions of service and that it was unilaterally implementing
aspects of the new conditions of service. It
disputed
these allegations by pointing out that what was said was so vague as
to make it impossible to meaningfully deal with the
allegations
contained therein.
[11] The
applicant said that the respondent was refusing to promote deserving
staff, or to move staff internally, unless they migrate
to the new
conditions. In response the respondent said that the position was
that academic staff were in what was referred to as
“
broad
banded”
positions where they were promoted without vacancies having to be
advertised. They were all employed on the new conditions
of
service. Support staff vacancies were, however, not broad banded and
were vacancy driven and advertised on the budgets available.
For that
reason the respondent offered promotions to such employees on the new
conditions of service. The respondent’s budget,
which has
already been stated to be severely compromised, was said not to allow
the respondent to link promotions to the old conditions
of service.
It was said to be simply unaffordable and to be realistic the
respondent said that it encouraged its staff members
to migrate to
the new conditions of service. The linking of promotions to the
new conditions of service was described as
a legitimate tool by means
of which such migration was encouraged.
[12] The
actions of the Respondent were described to be a contravention of the
employee’s contracts of service; contrary to
the Respondent’s
own policies; unlawful; and unfair with the consequence of causing
extreme agitation and unhappiness amongst
the employees and,
ultimately, detracting from the ability of the Respondent
institution, as a whole, to deliver academic services
as it was
required to do. The response to these submissions was that these were
a gross overstatement in that there had certainly
been no protests or
even meetings concerning this issue and all staff members were
perfectly aware of the pros and cons of either
remaining on the old
conditions of service or migrating to the new conditions of service.
They were perfectly free to choose what
they wish to do. Naturally,
said the submission, the Respondent encourages its employees to
migrate to the new conditions of service.
[13] In
around 2004 the Respondent was formed by the former University of
Natal (Durban and Pietermaritzburg), the University of
Durban-Westville and Edgewood Teachers’ Training College.
General negotiated conditions of service were implemented for all
permanent staff employed. During 2004 a second set of conditions of
service was introduced for staff employed from 2 July 2004
onwards
and in 2006 a third set of conditions arose for staff employed from
18 February 2006 onwards. The latter two sets of conditions
of
service were not established by collective agreement but were later
ratified and amended by a collective agreement in 2007.
All three are
termed the “old conditions of service”.
[14]
Staff appointed in 2006 received an appointment letter stating that
the Respondent was “developing a Performance Management
System
(PMS) which would be applicable to them if approved by Council”.
Thereafter, all appointment letters were specifically
made subject to
the PMS. On 28 November 2008 the Respondent’s Council approved
the Respondent’s Performance Management
Policy. Significant
aspects of the policy are that it was aimed at recognising and
rewarding good performance in a fair and equitable
way. It would
apply to all permanent and long fixed term employees of the
University. The policy was linked to rewards which could
take the
form of promotion (for academic staff) and the payment of performance
related incentives. The performance management policy
was to be read
in conjunction with the UKZN Remuneration Policy.
[15]
On 1 January 2009 the Remuneration Policy for 2009 to 2011 which was
approved on the same date as the Performance Management
Policy, 28
November 2008 was implemented. Paragraph 5 of the Remuneration
Policy referred to two approaches to remuneration
being the “basic
salary plus add on” and the Total Remuneration Package (TRP)
approaches. Prior to that time only the
University Executive, Deans
and Deputy Deans were on the TRP package. According to the applicant
the three existing sets of conditions
of service previously referred
to were based on the basic salary plus add on benefits approach. The
Respondent said it was based
on an annual cost to the employer basis.
[16]
Further significantly, paragraph 5.6.2 refers to a “performance
incentive award scheme” in terms of which
an
incentive scheme was to be implemented that would be linked directly
to the University performance management system and would
be paid
annually on the results of the performance review. It further
stipulated that:
1)
the performance
incentive award scheme would be implemented during 2010 and would
“replace all existing merit awards, performance
notches and
merit notches”;
2)
the calculation of the
incentive would be based on University performance as well as other
targets as determined by the Respondent’s
Council;
3)
once a value had been
calculated it would be applied to individual performance through
progress in achieving the individual performance
targets as set out
in the performance management system; and
4)
annual assessments of
performance would be based on the result of the proceeding calendar
year ending 31 December each year.
[17] It
was highly significant to the Applicant that the new performance
incentive award scheme replaced existing performance benefits
and the
Applicant contended that it demonstrated that the incentive award
scheme was clearly intended to operate across the entire
spectrum of
the Respondent’s employees. The Applicant said that there was,
in any event, no other basis on which the policy
could be
interpreted. According to the Applicant the three performance
benefits had been part of the Respondent’s policy
and practice
for many years and were applied to all staff on the old conditions of
service. The Respondent’s version amounted
to it disputing:
·
the significance
which the applicant sought to attach to the performance incentive
award scheme as envisaged in the policy;
·
that the three
performance benefits mentioned in clause 5.6.2 formed part of the old
conditions of service and
·
that an employee
could apply for a further salary increase as alleged by the
applicant.
[18]
Merit awards were once-off payments made to individual staff members
for outstanding performance as motivated for by their
manager. Merit
notches entailed a salary elevation to a higher level based on
overall performance. Performance notches applied
when an employee had
reached the highest applicable level in their salary grade and thus
the “auto-notch” ceased to
operate. According to the
Applicant, in such circumstances an employee could apply for a
further salary increase in any particular
year which would be
considered based on that employee’s performance.
[19] The
workings of the auto-notch system could best be explained by
reference to the grade 12 salary range. Various sub-levels
or
“notches” are contained within the applicable salary
range. On a yearly basis, employees would automatically be
elevated
to a higher notch and thus receive a further salary increase in
addition to the negotiated across the board yearly increase.
The gap
between the different notches was uniform The gap between the
notches, was increased on a yearly basis by the same percentage
as
the yearly salary increase, with the result that the upper level of
that particular salary grade would increase as the gaps
between the
notches increased. This “auto-notch” entitled staff
members to an increase equivalent to the incremental
value as
provided for the applicable salary range as approved by council from
time to time. Such increases were effective from
the first day of
January of every year, provided staff members had not reached the top
of the applicable salary range.
[20]
There
are a number of other factual considerations in respect of which the
parties are in dispute. Essentially, they all revolve
around the
migration of Applicant’s members to the new conditions of
service, the performance management policy, the remuneration
policy,
the Respondent’s financial situation and the question of the
Applicant’s willingness to bargain on conditions
of service.
For purposes of this application it is not necessary to have to
outline each such factual dispute, save to say that
each has been
considered. The history of this matter reveals that in the middle of
2003
the Applicant
referred an unfair labour practice dispute to the CCMA against the
Respondent. Those proceedings are still pending
and have not
been disposed of or withdrawn. The present proceedings call for a
determination of the same issues although the relief
is framed
differently. The parties agreed to keep those proceedings in abeyance
pending the outcome of this matter. There is thus
pending and
suspended litigation between the same parties based on the same cause
of action and essentially in respect of the same
subject-matter.
[21]
The
Applicant’s primary complaint is that the Respondent is using
unfair and unlawful means to compel employees of the Respondent
to
convert to new conditions of service. It contended that not only did
some of the methods used constitute unilateral changes
to the
employee’s conditions of service but they were contrary to the
Respondent’s own policies approved by its Council.
In respect
of the new conditions of service and the payment of a performance
bonus the Applicant submitted that there was no link
at all between
the two. It said that the performance based pay system was
specifically stated to replace benefits previously enjoyed
by those
on the old conditions of service. In support of its case the
Applicant made specific submissions on Respondent’s
Performance
Management Policy 2008 to 2011; the Remuneration Policy for 2009 2011
and the Performance Management Manual.
[22] The
Respondent raised a number of issues in its closing submissions to
oppose this matter. Essentially, they are the following:
(a)
Whether the matter is
lis pendens
;
(b)
Whether the Court has
jurisdiction to grant the relief sought;
(c)
If so, whether the
Court should intervene and grant any relief in circumstances where:
(i)
the dispute relates to
an issue which should properly be resolved through the collective
bargaining process, alternatively the dispute
resolution processes as
set out in the Act;
(ii)
there are material
disputes of fact which cannot be resolved on the papers.
(d)
Whether the Applicant
has made out a case for interdictory relief in circumstances where it
has an alternative remedy and there
can be no suggestion of
irreparable harm.
(e)
Whether the Applicant
is entitled to urgent relief.
Evaluation
[23]
This Court has power to grant a declaratory order as envisaged by
section 158 (1) (a) (iv) of the Act. In
Mantzaris
v University of Durban Westville,
[2]
it was held that the power to make declaratory orders was similar to
the power conferred on the High Court to make such orders
in terms of
section 19 (1) (a) (iii) of the Supreme Court Act.
[3]
The approach adopted by the High Court ought therefore to be followed
as a guide. This Court may however do so only in respect
of matters
that fall under its jurisdiction.
[4]
For instance, this Court will decline to entertain a dispute as a
Court of first instance if the dispute must first be referred
to
conciliation by an appropriate statutory body such as the Commission
for Conciliation, Mediation and Arbitration, the CCMA.
[24]
Further, and as a general policy, this Court might decline to grant
declaratory orders when a party approaches the court to
obtain a
declaration of rights merely because those rights have been disputed.
In the
Louw
-case
supra the Court held that:
“
The
court is not here to advise on the merit of differing contentions in
these circumstances, however important these may be to
the parties,
or however convenient it may be to them that the court makes an order
upholding one of the positions contended for
”
.
[25] The
Labour Appeal Court, (the LAC) has already sounded caution against
premature referrals of disputes to this Court when such
disputes are
about or concern allegations of unfair labour practices which, in the
ordinary course, must first be referred to conciliation
and
arbitration, in accordance with the mandatory provisions of section
191 of the Act, either by the CCMA or a bargaining council.
Where a litigant sought a declaratory order from this Court in terms
of s158 (1) (a) (iv) of the Act, to the effect that the suspension
was unfair, unlawful and unconstitutional the LAC had the following
to say:
“
A
declaratory order will normally be regarded as inappropriate where
the applicant has access to alternative remedies, such as those
available under the unfair labour practice jurisdiction. A final
declaration of unlawfulness on the grounds of unfairness will
rarely
be easy or prudent in motion proceedings.”
[5]
[26] In
labour disputes therefore, a declaratory order will normally be
regarded as inappropriate where the Applicant has access
to
alternative remedies. The High Court approach,
[6]
that the availability of another
remedy does not render the grant of a declaratory order incompetent,
will have to be departed from,
in the light of the Gradwell-decision.
The facts of this matter, some of which were briefly outlined above,
indicate without doubt
that a final declaration of unlawfulness on
the grounds of unfairness will rarely be easy or prudent in motion
proceedings.
[27]
That the Respondent seeks to persuade its employees to change from
their existing conditions of service to new conditions of
service the
Respondent has introduced is common cause. To the extent that the
migration might be justified by the financial difficulties
which the
Respondent is operating under, any allegation that such a change is
unfair or for that matter unlawful could properly
be attested to in a
viva voce
hearing with the advantage of cross examination. The position of the
Respondent is not as simple as that of the Applicant. Apart
from the
interchange that the Respondent has with its employees in respect of
the terms and conditions of service, it still has
to look after the
affairs of its students. The balancing process it has to keep between
the two groups it interacts with might
often be a daunting task.
[28]
The
Applicant seeks relief by way of application in circumstances where
the application has its genesis in a longstanding dispute
between the
parties. On the Applicant’s own version, the dispute
regarding conditions of service started in 2008 and
the issue
relating to the payment of performance bonuses arose, at the latest,
in 2013. The parties have consistently adopted opposing
positions on
the issues and it is accordingly unsurprising that the papers are
replete with material disputes of fact which, as
correctly contended
by the Respondent, cannot be resolved on the papers. In the light of
the history of the matter, the Applicant
must at the time of
initiating these proceedings, have reasonably foreseen that material
and numerous disputes of fact would arise
between it and the
Respondent which would be incapable of resolution on the papers. In
those circumstances, the initiation of motion
proceedings was
improper and inappropriate.
[29] Two examples of such difficulty show that
the application proceedings were not suited for this matter. Firstly,
it remained
common cause that the new conditions of service
contained, at the least, slightly reduced benefits relating,
inter
alia,
to leave days. The
Respondent said that it envisaged that any savings obtained through
the reduction in such benefits would
potentially fund the performance
incentive award scheme. In this application the Applicant has not
demonstrated the apparent unfairness
or unlawfulness of this
approach. The allegation has been made by the Respondent that a
s
at the end of 2011, the Applicant refused to engage the Respondent on
the possibility of its members transferring to the new conditions
of
service and, according to the Respondent, the performance incentive
award scheme remained unfunded, which could explain the
concern
raised by the Applicant.
[30] Secondly,
in
2012, the Respondent introduced the new conditions of service as an
alternative to the existing conditions of service. A number
of the
Applicant’s members, amongst other employees, elected to
convert to the new conditions of service. Some of these employees
might very well be senior lecturers of the Respondent. The Respondent
then said that during 2013 and as a direct result of such
employees
enjoying slightly reduced benefits, the Respondent was able to afford
to implement a performance based remuneration policy
for the payment
of performance bonuses to those persons on the new conditions of
service who achieved the prescribed standard of
performance. In terms
of the principle in the
Plascorn
Events
Paints
v Van Riebeck Paints
[7]
the Court had to accept this
statement of facts. Again, there is no demonstration by the Applicant
why this approach should be found
to be unfair and unlawful without
further scrutiny afforded by cross examination.
[31] I
am accordingly, not satisfied that the declaratory order sought by
the Applicant is
inappropriate
where the Applicant has access to alternative remedies.
Further, the application proceedings
adopted by the Applicant were not shown to be a proper procedure to
resolve the dispute between
the parties. As a passing remark though,
the change of the retrenchment provisions as terms and conditions of
employment leave
much to be desired when the Respondent avers that it
does not foresee retrenching its staff. There cannot be any financial
benefits
generated from the retrenchment provisions which it can use
to fund any of its future programs.
[32] The
following order shall issue, bearing in mind that there is a
continuous relationship between the parties which must be
kept
harmonious:
1.
The application is
dismissed.
2.
No costs order is
issued.
Cele J.
Judge of
the Labour Court of South Africa.
APPEARANCES:
For
the applicant: Mr P Schumann
Instructed
by Brett Purdon Attorneys.
For the
respondent: Mr G O van Niekerk
Instructed
by Jayshree Moodley and Associates.
[1]
Act Number 66 of 1995 hereafter referred to as the LRA
[2]
[2000] 10 BLLR 1203
(LC) at 1212.
[3]
Act Number 59 of 1959.
[4]
See
Louw v Eden District Municipality
(2011) 32 ILJ 1118 (LC)
at para [5].
[5]
See
Member of the
Executive Council for Education, North West Provincial Government v
Gradwell
(2012) 33 ILJ 2033 (LAC), the
Gradwell-decision.
[6]
Munn Publishing Pvt Limited vs Zimbabwe
Broadcasting Corporation
1995(4) SA
675 ZSC at 680C.
[7]
Plascorn Events Paints v Van Riebeck Paints
[1984] ZASCA 51
;
1984 (3) SA 623