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[2019] ZALCJHB 53
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Health and Others Services Personnel Trade Union of South Africa (HOSPERSA) and Others v MEC - Free State Province and Others (JR580/2015) [2019] ZALCJHB 53 (15 March 2019)
IN
THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
Not reportable
Case No: JR 580/2015
In the matter between:
HEALTH AND OTHER
SERVICES PERSONNEL
TRADE UNION OF SOUTH
AFRICA (HOSPERSA)
First Applicant
GERRIT DE VILLIERS AND
OTHERS
Second – Further
Applicants
and
THE MEC-FREE STATE
PROVINCE
First Respondent
THE DEPARTMENT OF
HEALTH – FREE STATE
Second Respondent
EVODIA NTSOAKI THOBALA
N.O
Third Respondent
PUBLIC HEALTH AND
SOCIAL DEVELOPMENT
SECTORAL BARGAINING
COUNCIL
Fourth Respondent
Delivered:
15 March 2019
JUDGMENT
TLHOTLHALEMAJE,
J
Introduction
and background:
[1]
The applicants seek an order reviewing and setting aside the
arbitration
award issued by the third respondent (Arbitrator) under
the auspices of the fourth respondent (PHSDSBC) dated
25 February 2015.
They further seek that the arbitration
award be substituted with an order that the first and second
respondents restore the overtime
regime which applied to the
individual applicants (The Dentists) prior to April 2014, and to
be paid the commuted overtime
calculated according to that regime
retrospectively from April 2014 to the date of this order, and
to continue payment on
that basis until such time as a new overtime
regime is agreed upon after proper consultation with all the relevant
parties. In
the alternative, the applicants seek an order compelling
the parties to engage with one another and negotiate in good faith
with
a view to reaching agreement on what overtime regime is to be
applied to the Dentists.
[2]
The
Dentists are employed by the second respondent (Department) in
various Hospitals and Clinics in the Free State Province. They
are
designated as performing essential service under section 71 of the
Labour Relations Act. They had referred a dispute to the
PHSDSBC
alleging unilateral changes to their terms and conditions of
employment.
The
dispute was referred to the PHSDSBC in terms of section 64(4) of the
Labour Relations Act (LRA)
[1]
.
When
conciliation failed, the matter came before the Arbitrator for
arbitration.
[3]
At the arbitration proceedings, the applicants’ case was as
follows;
3.1
In terms of their contracts of employment, the Dentists’ normal
working
hours were stipulated as 40 hours per week. Thus, any hours
worked over and above were to be compensated by way of overtime pay.
3.2
Since July 1996, the Dentists together with other medical
practitioners
were paid what was referred to as ‘commuted
overtime’, which was based on payment for a fixed number of
hours of overtime
each month as distinct from payment of an amount
for overtime pay calculated on actual number of hours worked.
3.3
The system effectively involved payments of a fixed amount monthly,
over and
above their normal remuneration, calculated on the basis of
their normal hourly remuneration rate times 1.3 for 16 hours per
week,
irrespective of the actual number of overtime hours performed
by an employee.
3.4
The logic behind the system or arrangements according to the
applicants was
that it saved the Department the administrative burden
of processing monthly claims submitted by individual Dentists. They
contend
that the arrangements of paying commuted overtime became a
term of their contracts of employment, even though they were at times
required to sign written contracts which was parallel to the ordinary
contracts of their employment dealing specifically with overtime.
In
the end however, whether the Dentists signed such contracts on an
annual basis or not was immaterial, as they were still paid
commuted
overtime.
3.5
The above arrangements were justified as the work that the Dentists
performed
and the functions of their posts required of them to be
available outside of the normal working hours, and to make themselves
available
to deal with emergency cases after hours, including having
to work in clinics on Saturdays according to a roster.
3.6
In
March 2014, the Department issued a circular stating that with
effect from 1 April 2014, the commuted overtime
would no
longer be paid to the Dentists without valid contracts for such
payments
[2]
. The applicants
contend that this amounted to a unilateral change to the terms and
conditions of employment, as it was a drastic
change which had the
effect of suddenly reducing the amount of pay the Dentists had been
used to receiving by 34.21%. They further
contend that this was done
without any consultation with Organised Labour representing the
Dentists to negotiate a new overtime
regime.
3.7
They further contended that despite the withdrawal of commuted
overtime, the
Dentists still continued to work the same hours as
before, whilst being paid just short of two thirds of what they were
paid before
April 2014.
[4]
The MEC and the Department had not called any witnesses at the
arbitration
proceedings. Their case however by way of submissions was
that;
4.1
There was no unilateral change to the Dentists’ terms and
conditions of
employment, but that all that was done was to act in
good faith and correct an error that was committed by the Department
in the
implementation of the National Policy on Commuted Overtime for
Medical & Dental Personnel.
4.2
The Policy was meant to regulate the management of the commuted
overtime for
medical personnel, and in accordance with its
provisions, the Dentists were required to enter into contracts or
agreement to work
commuted overtime, which contracts were granted
annually
albeit
not automatically.
4.3
The Auditor-General had in that financial year raised concerns that
the payment
of overtime to the Dentists in the previous years was not
in accordance with the provisions of the National Policy as they were
paid for overtime that they had not claimed. To that end, the
payments as were done in the past were viewed as irregular,
constituting
fruitless and wasteful expenditure.
4.4
The
Dentists were not at all prevented from performing overtime and to be
compensated, but that a
proviso
was that they were required to enter into contracts with the
Department as envisaged in the provisions of the Policy. A copy of
the Policy
[3]
was presented to
the Arbitrator during proceedings, and the specific provisions relied
upon were;
4.4.1
Clause 4.2, which provided that it would be necessary for all
participants in the commuted overtime remuneration
system to complete
commuted overtime contracts;
4.4.2
In terms of clause 4.4.7, all commuted overtime contracts of medical
personnel would be reviewed annually
on an individual basis by the
responsible Chief Directors in collaboration with the Heads of
Clinical Departments, in terms of
the operational need for such
overtime work, and that all renewed contracts would be authorised by
the Head of Department of Health
or his/her delegate.
4.4.3
Clause 5.4 provided that employees were expected to work in excess of
normal working hours in exceptional
circumstances such as in
emergency, and not due to factors such as personnel turnover, and
that the employer was not in a position
to compel employees to
perform overtime duties in the absence of an agreement.
4.4.4
Clause 6.4 provides that medical personnel wishing to participate in
the commuted overtime in specific groups
were required to complete
overtime contracts to be verified by the Heads of Clinical
Departments as measured against the need for
overtime services in the
clinical departments. Effectively, the Heads of Departments were
responsible for the approval of individual
contracts and were also
accountable to the Auditor-General for the effective control of the
overtime system.
4.4.5
Clause 7.4.3 provided that actual time worked was to be recorded in
the register every time a Dentist was
called to the hospital for
clinical work.
4.4.6
Clause 7.4.4 provided that Dentists were to be compensated at
applicable overtime hourly rate for actual
hours worked.
4.5
The Department and MEC submitted that none of the Dentists were
compelled to
enter into a contract on the commuted overtime.
4.6
Following concerns arising from the Auditor-General’s report,
the Department
had consulted with the Dentists with a view of
implementing the Policy correctly. They had been requested to enter
into contracts
but had however refused to do so.
4.7
The Dentists could therefore not claim a right to be paid commuted
overtime
as they had not complied with the provisions of the Policy,
and had further not demonstrated that they had actually worked
overtime,
which overtime was to be recorded in the register.
The
award and grounds of review
:
[5]
Having heard the evidence of Doctors Henro Burger and Christo van der
Merwe, and further having accepted that central to the determination
of the dispute were the provisions of the National Policy on
Commuted
Overtime for Medical and Dental Personnel which governed commuted
overtime, the nub of the Arbitrator’s conclusions
was that;
5.1
The applicants failed to prove that their terms and conditions of
employment
were unilaterally changed on the basis that participation
by the Dentists in the system (of overtime) was voluntary;
5.2
The Dentists were required to conclude separate contracts with the
Department
which were to be reviewed annually.
5.3
The Dentists were requested to apply for the new commuted overtime
contracts,
but had declined do so.
[6]
The applicants contend that the arbitration award is reviewable as
the
Arbitrator should have made an award directing the parties to
engage with each other and to negotiate in good faith with a view
of
reaching agreement on the issue. This was in circumstances where it
was further submitted that the Arbitrator ignored or failed
to take
into account;
6.1
The fact that the Dentists were over the years paid commuted overtime
without
being required to conclude any separate contracts, and thus a
tacit term to their original contracts of services was established.
6.2
The adoption of the Policy did not automatically affect the Dentists’
contracts of employment or amend their terms, nor did it justify a
unilateral change to their terms and conditions of their employment.
6.3
Since the Policy was to impact on the terms and conditions of the
contracts
of employment, it was supposed to have been discussed with
organised labour before its implementation.
6.4
There was no evidence of what the exact status of the Policy was
(
i.e
., whether a draft or a directive issued by the Minister
for the Public Service and Administration in terms of section 3(2) of
the
Public Service Act (Proclamation 103).
6.5
There was no evidence that the Department had requested the Dentists
to apply
for new commuted overtime contracts but had refused to do
so.
6.6
A proper reading of the Auditor-General’s report relied upon by
the Department
did not reveal a finding that by paying the Dentists
commuted overtime as was done until March 2014, those payments
were irregular,
which constituted fruitless and wasteful expenditure.
In this regard, it was argued that the Auditor-General had merely
stated
that ‘it might’ be deemed irregular expenditure.
6.7
Following the Auditor-General’s report, the Department had not
adduced
any evidence to establish that it had followed the
recommendations made therein, including management assessment, or
obtained legal
opinion on the matter.
[7]
In response to the grounds of review, the submissions made on behalf
of
the MEC and the Department were that;
7.1
The Arbitrator understood the nature of the dispute that was before
her, and
there was no basis for any conclusion to be reached that she
had misconceived the nature of the enquiry;
7.2
There was a Policy in place which governed commuted overtime and that
participation
in the scheme was voluntary;
7.3
The Dentists who participated in the scheme were required to enter
into contracts
which were reviewed annually, and that payments
were made for actual overtime work performed in terms of the policy.
They
had failed to produce proof that they had indeed performed
actual overtime.
7.4
To the extent that the Department had omitted to review and enter
into new commuted
overtime contracts with the Dentists, that omission
was picked up by the Auditor-General, and the Department had to act.
7.5
Since the Dentists could still be paid overtime provided that they
entered into
contracts with the Department and had rendered actual
overtime work in accordance with the Policy, it could not be said
that there
was any unilateral change to their terms and conditions of
employment.
The
legal framework and evaluation:
[8]
Central to
any determination of a dispute under section 64(4) and (5) of the LRA
is whether the applicants have demonstrated that
unilateral changes
were effected to the Dentists’ terms and conditions of their
employment contracts, and secondly, that
there was no consent to the
changes
[4]
. It follows that if
it is found that no changes were effected to the terms and conditions
of the employment contract, that should
be the end of the matter.
[9]
Aligned to
the above enquiry however is whether what is alleged to have been
changed falls squarely within the ambit of
part
and parcel of the terms and conditions of employment of the Dentists’
contract of employment
[5]
. In
determining this issue, the Courts have further drawn caution that a
distinction ought to be drawn between a work practice
as it exists
and a term and condition of employment
[6]
.
This is premised on the basic principle that whilst the
terms
and conditions of employment cannot merely be changed at the whim of
the employer, work practices on the other hand are by
their nature
subject to the employer’s prerogative
[7]
.
[10]
Thus, the issue is whether there was a contractual
right, based either on the employment contract or collective
agreement, providing
a right to the Dentists, expressly, tacitly or
impliedly, against unilateral change to working terms and conditions.
[11]
For the purposes of the facts of this case
therefore, the issue is whether the applicants or the individual
Dentists have demonstrated
any term/condition contained in their
contracts of employment that accords them a vested right to work and
be entitled to commuted
overtime pay as was the position before
1 April 2014.
[12]
The
applicants’ case was that commuted overtime had resulted in a
tacit terms to their contracts of employment, which could
not be
overridden by the Department’s Policy as implemented from
1 April 2014. As I understood the argument, the
applicants
rely on a tacit term based on a long-standing practice in regards to
commuted overtime. In
CEPPWAWU
obo Konstable & others v Safcol
[8]
the Court held that a long-standing practice and yearly custom did
not form an employment condition, unless the parties’
intention
was to create a contractual right.
[13]
As I further understood the evidence before the Arbitrator, the
Department’s National
Policy on Commuted Overtime for Medical &
Dental Personnel has always been applicable. The evidence of both
Doctors Burger
and Van der Merwe was to acknowledge that they had
entered into individual commuted contracts which were approved in the
past,
and further that this was in accordance with the Policy. It
follows that any rights to commuted overtime and pay accordingly
accrued
in accordance with the provisions of that Policy.
[14]
The arrangement or system of paying the Dentists commuted overtime as
was the position
before 1 April 2014 came about purely for
the purposes of convenience. It might as well be added that this came
about
as a result of some
officials in the
Department failing to do what was required of them insofar as the
administrative functions regarding the implementation
of the Policy
was concerned. These officials with a view of avoiding additional
administrative payroll burden of calculating
and paying
overtime for actual hours of overtime performed, had then adopted a
system to pay employees a flat rate on the basis
of 16 hours of
overtime per week. In the course of so doing, none of the prescripts
of the applicable Policy were implemented.
[15]
The above lapses and omissions to comply with the provisions of the
Policy in my view could
not have created a tacit term in the
contracts of employment of the Dentists for a variety of reasons,
including that the Department
is enjoined to manage public finances
in accordance with the provisions of the PFMA and other strict
Treasury Regulations. That
much is clear from clause 4.1 of the
Policy which provides that the Head of the Department as Accounting
Officer must ensure that
he/she must implement and maintain effective
and efficient systems of financial and risk management and internal
control measures.
To that end, the commuted overtime system as part
of a remuneration system was subject to periodic review in order to
reduce the
risk of irregular expenditure and/or financial misconduct.
In accordance with that aim, under clause 4.2 of the Policy, all
participants
in the commuted overtime remuneration system were
required to complete commuted overtime contracts. The Department had
obviously
failed in that regard, but it cannot be read from those
lapses and omissions that the common intention of the parties was to
make
the arrangements in regards to commuted overtime as they were
prior to April 2014, terms and conditions of the Dentists’
employment.
[16]
When the Auditor-General raised alarm bells about the manner with
which commuted overtime
was managed, and upon a realisation that an
amount of R8.5m was declared as overpayment to the Dentists as a
result of these lapses,
surely the MEC and the Department were
compelled to take action and ensure compliance with the provisions of
the Policy when implementing
and making payments for commuted
overtime.
[17]
The applicants’ contentions that a proper reading of the
Auditor-General’s
report relied upon by the Department did not
reveal a finding that by paying the Dentists commuted overtime as was
done until March 2014,
those payments were irregular, which
constituted fruitless and wasteful expenditure, or that the
Auditor-General had merely stated
that ‘it might’ be
deemed irregular expenditure are misplaced. The Auditor-General’s
audit finding was that the
R8.5m was deemed to be an overpayment,
which finding on its own was sufficient for the Department and the
MEC to take action. Any
red lights highlighted in the
Auditor-General’s report ought to be acted upon.
[18]
Whether the Department had equally not followed
the
recommendations made in the audit report, including management
assessment, or obtained legal opinion on the matter is equally
inconsequential in that the source of any concerns regarding the
overpayments was basically the non-compliance with the provisions
of
the Policy. Any legal opinion sourced would in any event have
resulted in the invariable conclusion that the provisions of the
Policy ought to be implemented in full. In the end, it did not assist
t
he applicants to now challenge the status of either the
Policy or the Auditor-General’s report or how the MEC and the
Department
had reacted to that report.
[19]
In conclusion, there is no basis for any finding to be made that the
Arbitrator’s
award is reviewable on the basis that she had
either misconstrued the nature of the enquiry or had arrived at a
finding that is
not sustainable or reasonable on the facts and
material placed before her. The contention that the Department or the
MEC ought
to have engaged or consulted Organised Labour before
implementing the spirit and letter of the Policy is equally
misplaced, as
all that the Department had done was to implement the
provisions of the Policy, which had always been in place, and which
is something
it had failed to do in the past. Thus, any disputes
surrounding whether the applicants were invited for consultations on
the matter
and had declined the invitation does not take the matter
any further, specifically since on the facts, there was no basis to
conclude
that unilateral changes to terms and conditions of
employment had been effected.
[20]
In the end, the applicants had not been able to point to any term
contained in a collective
agreement or in the Dentists’
contracts of employment that accorded them a vested right to a
payments of overtime pay as
done prior to 1 April 2014.
They had vested rights with regard to maximum working hours, and the
basis of any rights
in respect of any commuted overtime or pay could
only have been if there was compliance with the provisions of the
Policy, which
meant that they were required to enter into contracts
with the Department in that regard. That right had not been changed
or infringed,
as the practice of non-compliance with the Policy as
was the case prior to April 2014 could not have been converted into a
contractual
right. Ultimately, requiring the Dentists to enter into
contracts in order to participate in the commuted overtime scheme did
not
amount to a unilateral change in their terms and conditions of
employment.
[21]
In the light of the above conclusions, it follows that the review
application ought to
fail. I have further had regard to the
requirements of law and fairness in regards to the issue of costs.
The MEC and the Department
did not strenuously argue for costs, and
in the light of a continuing relationship between the parties, any
costs order is deemed
to be inappropriate in the circumstances.
[22]
Accordingly, the following order is made;
Order:
1. The
applicants’ application to review and set aside the arbitration
award issued by the third respondent under
case number PSHS79-14/14
dated 25 February 2015 is dismissed.
2. There is
no order is to costs.
___________________
Edwin
Tlhotlhalemaje
Judge
of the Labour Court of South Africa
APPEARANCES:
For
the Applicants:
P.J Blomkamp SC
Instructed
by:
Llewellyn Cain Attorneys
For
the First and Second Respondents:
B.S Mene
Instructed
by:
State Attorney, Bloemfontein
[1]
Section
64(4) of the LRA reads:
“
Any
employee who or any trade union that refers a dispute about a
unilateral change to terms and conditions of employment to a
council
or the Commission in terms of subsection (a) may, in the referral,
and for the period referred to in subsection (1)(a)
–
(a)
require the employer not to implement unilaterally the change to the
term and condition of employment; or
(b)
if the employer has already implemented the change unilaterally,
require the employer to restore the terms and
conditions of
employment that applied before the change.”
[2]
The
Circular reads:
‘
Approval
has been granted to phase out commuted overtime with Dentists. All
Dentists must be informed that as from 1 April 2014,
they do not
have a valid contract for the payment of commuted overtime anymore”
[3]
Annexure
‘AS2’ Vol 3 of the Index bundle
[4]
Staff
Association for the Motor & Related Industries (SAMRI) v Toyota
of South Africa Motors (Pty) Ltd
(1997)
18 ILJ 374 (LC)
at
p379A-B:
[5]
Unitrans
Supply Chain Solutions (Pty) Ltd v SA Transport and Allied Workers
Union and Others
(2014)
35 ILJ 265 (LC) at para 13
[6]
See
Ram
Transport SA (Pty) Ltd v SATAWU and Another
[2011]
JOL 26805
(LC); Johannesburg Metropolitan Bus Services (Pty) Ltd v
SAMWU and Others
[2011] 3 BLLR 231
(LC);)
[7]
See
A
Mauchle (Pty) Ltd t/a Precision Tools v NUMSA
[1995]
4 BLLR 11
(LAC);
Apollo
Tyres South Africa (Pty) Ltd v National Union of Metalworkers of
South Africa (‘NUMSA’) and Others
[2012] 6 BLLR 544 (LC)
[8]
[
2003]
3 BLLR 250
(LC). See also
Edcon
Ltd v Commission for Conciliation, Mediation and Arbitration and
Others
[2017] 4 BLLR 391
(LC); (2017) 38 ILJ 1660 (LC)