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[2017] ZALCJHB 427
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Maboza v Matjhabeng Local Municipality and Another (J1034/16) [2017] ZALCJHB 427 (23 November 2017)
Of
interest to other judges
THE
LABOUR COURT OF SOUTH AFRICA,
HELD
AT JOHANNESBURG
C
ase No: J 1034/16
In
the matter between:
MABOZA
HILDA MOROESI
Applicant
and
MATJHABENG
LOCAL MUNICIPALITY
First Respondent
M LEPHEANA (MUNICIPAL
MANAGER)
Second Respondent
Heard
:
25 October 2017
Delivered
:
23 November 2017
Summary:
(unlawful deductions – issue estoppel in respect of due wage –
deductions in breach of s 34(1)
of BCEA – absence of
counterclaim in the alternative)
JUDGMENT
LAGRANGE
J
Background
[1]
The applicant in this case is claiming reimbursement of salary
deductions purportedly made to recover salary overpayments, which
she
claims were unlawful. The deductions were made between 1 May 2014 and
November 2016. Both parties have applied for condonation
for the late
filing of an answering affidavit in the main application and an
answering affidavit in respect of the respondents’
condonation
application. I am satisfied that no material prejudice has been
suffered by the parties in respect of those late affidavits
and that
the explanations for the delays are not unreasonable. In relation to
the fact that at the pre-enrolment hearing the applicant’s
attorney,
Mr Schöltz
, did not advise the court of the
current attorneys of record and gave the court the impression that
since the previous attorneys
of record had withdrawn, no new
attorneys had been appointed even though his firm had corresponded
with the respondent’s
current attorneys, it also ill-behoves
the applicant to complain of the delay in filing the condonation
application and answering
affidavit. As a matter of
professional ethics, I leave that to the respondent to take up with
the Law Society. Consequently,
I am inclined to grant both
condonation applications.
[2]
The municipality had implemented the deductions because it maintained
that the applicant had irregularly been appointed as an
electrician
on post level 8 when she should have been employed on past level 9.
It was common cause that electrician posts at the
municipality at the
time of her appointment were post-level 9 posts. The applicant
claimed that she had negotiated a salary at
a higher post level with
the former municipal manager after she had told him that she could
not leave her existing job for the
salary offered at post level 9.
The applicant claimed that the letter of the municipal manager dated
9 April 2014 which notified
her of the municipality’s intention
to rectify her appointment amounted to an unfair labour practice.
[3]
Her unfair labour practice claim was referred to arbitration and the
arbitrator concluded that she failed to establish the existence
of
the unfair labour practice. Having failed to obtain redress through
the unfair labour practice mechanism, the applicant launched
this
application.
[4]
In the course of arriving at this final conclusion, the arbitrator
made the following subsidiary findings:
4.1 She
had applied for the post which was advertised at post level 9 and her
appointment at that
level was approved.
4.2
There was no advertisement for a post at level 8 and she had failed
to provide proof that former
municipal manager had agreed that she
could be appointed at that level.
4.3 The
letter purportedly appointing her to level 8 was a matter of dispute
and in any event was
irregularly issued.
4.4 The
letter did not demote her but was “rectifying the irregularity”
In
essence, the arbitrator found that the applicant’s appointment
at level 8 was invalid and the municipality was entitled
to assert
the true position, namely that she was appointed in a level 9 post.
As such there was no demotion which could lay the
basis of an unfair
labour practice.
[5]
The respondent raised three essential defences to the claim, namely
that the contract was rectified by the letter of 9 April
which
corrected the erroneous designation of the applicant’s post as
a level 8 post. Consequently, the deduction was permissible
both in
terms of the correct contractual position and in terms of s 34(1)(b)
read with s 34(5)(a) of the Basic Conditions of Employment
Act, 75 of
1997 (‘the BCEA’). In addition, the respondent contends
that in any event, the arbitrator effectively decided
issues
underpinning the applicant’s current claim, which accordingly
are
res judicata
in relation to this claim, even though the
award concerned an unfair labour practice.
[6]
I will address the latter issue as it is dispositive of the
applicant’s application. The municipality contends that even
though the cause of action in the arbitration (an unfair labour
practice) is different from the cause of action in this application
(based on alleged unlawful deductions) and therefore does not conform
to the original formulation of the
exceptio res judicata
principle which requires that three conditions must be met, it is
sufficient that the parties in both matters are the same and
same
issue has to be determined in both instances. In its original
formulation the principle only applied if, in effect, the subsequent
proceeding was in respect of the same subject matter and cause of
action and between the same parties, and that judgement had been
given in the original proceedings. The principle has been relaxed to
the extent that the ‘issue estoppel’ is also recognised
as a form of the
exceptio.
[7]
The current thinking on the
principle was recently reaffirmed in
Transalloys
(Pty) Ltd v Mineral-Loy (Pty) Ltd
[1]
,
where the SCA stated:
“
In
Prinsloo
NO & others v Goldex 15 (Pty) Ltd & another
[2012]
ZASCA 28
;
2014 (5) SA 297
(SCA) described the
res
judicata
and the issue estoppel as
follows:
‘
[10]
The expression “res iudicata” literally means that the
matter
has already been decided. The gist of the plea is that the
matter or question raised by the other side had been finally
adjudicated
upon in proceedings between the parties and that it
therefore cannot be raised again. According to Voet 42.1.1, the
exceptio was
available at common law if it were shown that the
judgment in the earlier case was given in a dispute between the same
parties,
for the same relief on the same ground or on the same cause
(
idem
actor
,
idem
res et eadem causa petendi
)
(see eg
National
Sorghum Breweries Ltd (t/a Vivo African Breweries) v International
Liquor Distributors (Pty) Ltd
[2000] ZASCA 159
;
2001
(2) SA 232
(SCA) ([2001]
1 All SA 417)
at 239F – H and the
cases there cited). In time the requirements were, however, relaxed
in situations which gave rise to
what became known as issue estoppel.
This is explained as follows by Scott JA in
Smith
v Porritt and Others
2008
(6) SA 303
(SCA)
para
10:
“
Following
the decision in
Boshoff
v Union Government
1932
TPD 345
the ambit of the
exceptio
res iudicata
has
over the years been extended by the relaxation in appropriate cases
of the common-law requirements that the relief claimed
and the cause
of action be the same (
eadem
res
and
eadem
petendi causa
)
in both the case in question and the earlier judgment. Where the
circumstances justify the relaxation of these requirements those
that
remain are that the parties must be the same (
idem
actor
)
and that the same issue (
eadem
quaestio
)
must arise.
Broadly
stated, the latter involves an inquiry whether an issue of fact or
law was an essential element of the judgment on which
reliance is
placed.
Where the plea of
res
iudicata
is
raised in the absence of a commonality of cause of action and
relief claimed it has become commonplace to adopt the
terminology of
English law and to speak of issue estoppel. But, as was stressed by
Botha JA in
Kommissaris
van Binnelandse Inkomste v Absa Bank Bpk
1995
(1) SA 653
(A)
at
669D, 667J – 671B, this is not to be construed as implying an
abandonment of the principles of the common-law in favour
of those of
English law; the defence remains one of
res
iudicata
.
The recognition of the defence in such cases will however require
careful scrutiny. Each case will depend on its own facts and
any
extension of the defence will be on a case-by-case basis (
Kommissaris
van Binnelandse Inkomste v Absa
(supra)
at 670E – F). Relevant considerations will include questions of
equity and fairness, not only to the parties
themselves but also to
others. . . .”’
(See also
Caesarstone
Sdot-Yam Ltd v World of Marble and Granite 2000 CC & others
[2013]
ZASCA 129
;
2013 (6) SA 499
(SCA) paras 21 and 22.)”
[2]
(emphasis
added)
[8]
In the arbitration award, the arbitrator found that given there was
no electrician’s post at level 8 in the municipality’s
establishment and the absence of other evidence supporting the
applicant’s contention that she had been lawfully appointed
at
that level. This had prompted the letter being written to her on 9
April 2014, which asserted that the letter purportedly appointing
her
on the higher level had been irregularly issued.
[9]
It was an essential part of the arbitrator’s reasoning in
coming to his decision that the applicant was not validly appointed
at level 8 and therefore had suffered no demotion when the anomaly
was corrected. This court cannot consider her entitlement to
the
higher salary without covering the same ground as the arbitrator. I
am satisfied that in so far as she asserts she was lawfully
entitled
to the higher rate of pay the principle of
res juidcata
in the
sense of ‘issue estoppel’ would apply to that question.
[10]
What the arbitrator did not
have to decide in the course of his decision was whether the
deductions made to recover the overpayments
were lawful. That the
court can determine but premised on the finding that she was overpaid
for the period she received a salary
at level 8 and the respondent is
entitled to recover the overpayments from her. In this respect the
decision in
Jonker
v Wireless Payment Systems CC
[3]
applies.
The Labour Court held in
Jonker
that
:
“
[21] In support of her case
that her right had been interfered with the applicant relied on the
provisions of
s 34(1)
of the
Basic Conditions of Employment Act. That
section prohibits an employer from making any deductions from an
employee's remuneration unless the employee agrees in writing.
It is
indeed correct that as a general rule the Basic Conditions Employment
Act prohibits deductions from employees' salaries without
their prior
consent. However, deductions without consent are permitted where they
are permitted by the law, a collective bargaining
agreement and a
court order or arbitration award. In these instances all that the
employer needs to do is to advise the employee
of the error in
payment and the deduction made or to be made. See Papier & others
v Minister of Safety & Security &
others (2004) 25 ILJ 2229
(LC).
[22] In Sibeko v CCMA
(2001) JOL 8001
(LC) Revelas J in dealing with the issue of the deductions said:
'It is indeed so that in terms of the
Basic Conditions of Employment Act, an
employer may not deduct
amounts from the salary or remuneration of an employee without the
employee's consent. Where an employee
was however overpaid in error,
the employer is entitled to adjust the income so as to reflect what
was agreed upon between the
parties in the contract of employment,
without the employee's consent.' ”
[4]
[11]
The applicant relies on
s 34(1)(a)
and (b) of the BCEA. To
contextualise those sections, it is useful to quote
s 34
in its
entirety, viz:
'(1) An employer may not make any
deduction from an employee's remuneration unless -
(a)
subject to subsection (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.
(2) A deduction in terms of subsection
(1)(a) may be made to reimburse an employer for loss or damage only
if -
(a)
the loss or damage occurred in the course of employment and was
due to the fault of the employee;
(b)
the employer has followed a fair procedure and has given the employee
a reasonable opportunity to show
why the deductions should not be
made;
(c)
the total amount of the debt does not exceed the actual amount of the
loss or damage; and
(d)
the total deductions from the employee's remuneration in terms of
this subsection do not exceed one-quarter
of the employee's
remuneration in money.
(3) A deduction in terms of subsection
(1)(a) in respect of any goods purchased by the employee must specify
the nature and quantity
of the goods.
(4) An employer who deducts an amount
from an employee's remuneration in terms of subsection (1) for
payment to another person must
pay the amount to the person in
accordance with the time period and other requirements specified in
the agreement, law, court order
or arbitration award.
(5) An employer may not require or
permit an employee to -
(a)
repay any remuneration except for overpayments previously made by the
employer resulting from an error
in calculating the employee's
remuneration; or
(b)
acknowledge receipt of an amount greater than the remuneration
actually received.
[12]
The deductions made must satisfy the requirements of
s 34(1)
to be
lawful. If no agreement to the deduction is concluded in accordance
with
s 34(1)(a)
then there must be some other source for the legal
authority to make it in terms of
s 34(1)(b)
, which
inter
alia
authorises a deduction ‘permitted in terms of a law’.
Section 34(5)
is a provision in terms of the same Act, which permits
deductions to be made for overpayments, but only if the reason for
the overpayment
was an error in calculating the employee’s
remuneration. The error in this case was not one of calculation but
one relating
to the true level on which the applicant had been
employed, so the employer cannot rely on s 34(5)(a).
[13]
The municipality sought to rely on its powers under s 32(2) of the
Local Government: Municipal Finance Management Act 56 of
2003 (‘the
MFMA’), which states:
“
(2) A municipality must recover
unauthorised, irregular or fruitless and wasteful expenditure from
the person liable for that expenditure
unless the expenditure-
(a) in the case of
unauthorised expenditure, is-
(i)
authorised in an adjustments budget; or
(ii)
certified by the municipal council, after investigation by a council
committee, as irrecoverable and written off
by the council; and
(b) in the case of
irregular or fruitless and wasteful expenditure, is, after
investigation by a council committee,
certified by the council as
irrecoverable and written off by the council.”
Clearly,
the overpayment of the applicant was unauthorised and the respondent
is obliged to recover it. However, that provision
does not
permit the imposition of salary deductions
per se
as a
permissible means of recovering the payments. Accordingly, the
respondent cannot rely on s 32(2) of the MFMA as authority for
the
deductions even though the applicant is obliged to repay the
overpayments. Unless the applicant agrees to waive reliance on
the
judgement and permits the remainder of the overpayment to be
recovered by further deductions, the respondent will have to obtain
a
court order to recover the overpayments.
[14]
However in the circumstances, I have no option but to declare the
deductions made to be unlawful as they were in breach of
s 34(1) of
the BCEA and accordingly must be refunded simply because they were
unlawful, not because the municipality was not entitled
to recover
the overpayment and has not made a counter claim in the alternative.
Hopefully, common sense will prevail to make further
litigation to
that end unnecessary.
[15]
Because of the existence of an underlying obligation to repay the
respondent the overpayments she received, I do not believe
the
applicant should receive more than half her costs for the main
application. In respect of the condonation applications, it
is
equitable that the parties bear their own costs in my view in the
circumstances.
Order
[1]
The First Respondent is interdicted from making further deductions
from the Applicant’s
remuneration as a consequence of or in
relation to the Applicant’s former appointment by the First
Respondent as an electrician,
unless a court orders otherwise or in
terms of an agreement reached in terms of s 34(1)(a) of the Basic
Conditions of Employment
Act, 75 of 1997 (‘the BCEA’).
[2]
The deductions made by the First Respondent from the Applicant’s
monthly remuneration
to recover overpayments made as a result of her
being paid as an Electrician at level 8 instead of level 9 (‘the
overpayments’)
are unlawful by virtue of being in breach of s
34 of the BCEA.
[3]
Within 20 days of this judgement,
3.1 The
First Respondent must reimburse the Applicant R 112, 968.00 as well
as any further deductions
made pursuant to recovery of the
overpayments after 1 September 2016.
3.2 The
First Respondent must pay interest on the amounts payable to the
Applicant in terms of paragraph
3.1 of this order, as prescribed by
the
Prescribed Rate of Interest Act 55 of 1975
with effect from the
date on which each deduction was made from the Applicant’s
monthly remuneration.
[4]
The First Respondent must pay half the Applicant’s costs of
this application.
[5]
Each party must pay their own costs for the condonation applications.
_______________________
Lagrange
J
Judge
of the Labour Court of South Africa
APPEARANCES
APPLICANT:
W
P Schöltz of Schöltz Attorneys
RESPONDENT:
Adv
Mushet instructed by Lebea &
Associates
[1]
(781/2016)
[2017] ZASCA 95
(15 June 2017)
[2]
At para [22].
[3]
(2010) 31
ILJ
381 (LC)
[4]
At 386