About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Johannesburg Labour Court, Johannesburg
SAFLII
>>
Databases
>>
South Africa: Johannesburg Labour Court, Johannesburg
>>
2019
>>
[2019] ZALCJHB 230
|
|
Khumalo and Others v Medikredit Integrated Healthcare Solutions (Pty) Ltd and Others (J1716/19) [2019] ZALCJHB 230 (29 August 2019)
the
labour court of South Africa,
(held
at JOHANNESBURG)
Not
reportable
case
No: J1716/19
In
the matter between:
SWEETBOY
XOLANI KHUMALO & 65 OTHERS
First
and further Applicants
and
MEDIKREDIT
INTEGRATED HEALTHCARE SOLUTIONS (PTY) LTD
First
Respondent
UNIVERSAL
HEALTHCARE (PTY) LTD
Second
Respondent
CHARTERED
ACCOUNTANTS (SA) MEDICAL AID FUND
Third
Respondent
COMPCARE
MEDICAL SCHEME
Fourth
Respondent
Heard
:
27 August 2019
Delivered
:
29 August 2019
Summary:
(Urgent application – requiring employer and group company to
remain affiliated to medical scheme
– alternatively
interdicting the employer parties from terminating the applicants’
membership of a medical scheme,
pending either the outcome of a
substantive application to be launched in the labour court or the
determination of an unfair labour
practice dispute to be referred to
arbitration)
JUDGMENT
LAGRANGE
J
Introduction
[1]
Judgment in this matter was handed down on 29 August 2019, without
reasons being provided.
The reasons to the order set out at the end
of this judgment are detailed below.
[2]
This is an application launched on an urgent basis on 13 August 2019
for the following relief:
2.1
a final order compelling the first and second respondents
[‘Medikredit’ and ‘Universal’]
to remain
affiliated to the third respondent [‘CAMAF’], a medical
scheme, so that the applicants may retain their membership
of CAMAF,
or
2.2
alternatively, an interdict preventing Medikredit and Universal from
terminating the applicants’
membership of CAMAF pending either
the outcome of a substantive application in this court for final
relief, or the outcome of an
unfair labour practice dispute, referred
under case number GAJB15876-19 to the CCMA.
[3]
At the time the matter was heard, the applicants had not
launched a substantive application
for final relief in this court,
nor had they referred the dispute before the CCMA to arbitration to
determine the unfair labour
practice dispute. Nonetheless, in the
event interim relief pending finalization of either of those
proceedings is granted, the
applicants have committed themselves to
launching the proceedings within fixed time limits.
[4]
In their answering affidavit, the respondents took issue with the
absence of confirmation
that the application had been duly authorized
by all the applicants. However, confirmatory affidavits were filed by
the time the
application was heard and the respondents did not
persist with this preliminary objection.
Background
[5]
The individual applicants are employed by Medikredit and are all
members of CAMAF. In 2015
Universal acquired Medikredit. Universal
administers the medical scheme provided by the fourth respondent,
‘CMS’.
[6]
On 10 October 2018, Medikredit advised the applicants that a decision
had been taken by
the Universal group of companies to standardize
medical aid offerings and to place all employees in the group in the
CMS. On 22
October 2018 the applicants objected to this and referred
an unfair labour practice dispute to the CCMA, whereupon Medikredit
and
Universal indicated that they had abandoned the decision to
disaffiliate from CAMAF. In consequence, the unfair labour practice
dispute was withdrawn.
[7]
However, on 11 January 2019, Universal ‘confirmed’ its
‘provisional’
view to consolidate and standardize all
employee benefits in the group including transferring members from
capital CAMAF to CMS.
A renewed effort to transfer medical aid
benefits from CAMAF to CMS was announced on 11 January 2019. The
letter noted,
inter alia,
that in terms of the employees’
contracts of employment Medikredit was at liberty to affiliate to a
medical scheme of its
choice. It further proposed that consultations
would commence on 11 January on its proposals.
[8]
Employees created a workplace forum to represent them in the
consultations, a step which
Medikredit encouraged.
[9]
Consultations ensued between February and July 2019 with the forum
and on a one-to-one basis
with applicants. The applicants maintain
they continued to object to the proposed changes and the rationale
for making them. A
petition to this effect was submitted on 7 May
2019 rejecting the proposed change in medical benefit schemes owing
to the negative
financial and health risk coverage, which they
claimed it would entail.
[10]
A grievance was also filed on 25 June 2018. This resulted in the
chairperson of the grievance hearing recommending
that Medikredit and
Universal should commence consultations with each individual to
discuss the proposed changes.
[11]
In July 2019 a PowerPoint presentation was made by Medikredit in
which it was stated that the successful
migration from CAMAF to CMS
would be done through a consultation process together with financial
assistance to provide for potential
or exceptional healthcare
shortfalls that members might experience in moving from CAMAF to CMS.
On 10 July 2019, the applicants’
attorneys wrote to Medikredit
and Universal claiming the applicants were still unhappy with the
proposed membership of CMS, which
offered substantially less benefits
that they were presently enjoying, and that they considered the
respondents were engaging in
an unfair labour practice which would be
referred to the CCMA. In particular, they complained that attempts
were being made to
get individuals to agree to the changes in the
one-on-one consultation meetings.
[12]
The letter of 10 July called on the respondents to provide a written
undertaking by 12 July that they would
not make any changes in
respect of staff who currently were members of the CAMAF scheme. The
letter further warned of an urgent
application being brought in the
event that this was not done. This was followed by a similar letter
on 11 July.
[13]
In the respondents’ reply of 12 July it maintained it was
entitled to change the medical schemes of
employees and that, despite
the consultations, it intended to make a decision by 15 July
regarding the change. It further disputed
that the benefits under CMS
were less substantial than under CAMAF. Further, a fund and cover had
been provided for in the event
some employees might be adversely
affected.
[14]
The conciliation of the dispute at the CCMA was scheduled for 7
August. On 25 July the applicants asked for
the outcome of the
decision which was supposed to be taken on 15 July, but on 30 July
the respondents said they had not yet made
a final decision.
Nevertheless, the following day the company announced that it had
decided to implement the migration from CAMAF
to MCS with effect from
1 September 2019. This was followed up by a somewhat inelegantly
worded notice issued on 1 August 2019
to the effect that the
applicants’ CAMAF membership “has been resigned with
effect from 31/08/2019”.
[15]
The conciliation process at the CCMA on 7 August was unsuccessful.
Following the unsuccessful conciliation,
the applicants complained
that the workplace forum was prevented from convening and
representing them.
Existence of a legal
right:
[16]
Applicants claim that at the commencement of their employment they
were entitled to join CAMAF and that the
Medikredit and Universal are
attempting to unilaterally change their conditions of employment.
Insofar as the applicants can point
to any contractual entitlement
allowing them to remain members of CAMAF, it is clause 1.2.2 of the
standard contract of employment
for Medikredit employees, which
states:
“
1.2.2
Medical Scheme
The company requires that
you select at least the minimum cover with one of the schemes that
the company affiliates with….”
As I understand the
applicants’ contention they maintain that this clause is a
once-off election exercised by them and the
reference to “schemes
that the company affiliates with” only refers to schemes the
company is affiliated to at the
time they exercised their election.
On their interpretation, the fact that the company subsequently
affiliates to different schemes
cannot disturb their original choice
of medical scheme membership.
[17]
They also claim they will be substantially prejudiced, which claim is
illustrated by a comparison of the
benefits of the two schemes and as
they say is evidenced by the fact that the respondents recognised
that it was necessary to set
up an assistance fund to provide for
exceptional relief.
[18]
Further, the applicants contend that the transition will entail that
their private medical records would
become known to their employer
because Universal, the holding company of Medikredit, is the scheme
administrator of CMS, and that
Medikredit would effectively have the
discretion whether or not to reject proof claims within the
discretion of the so-called Clinical
Committee.
[19]
The respondents maintain that the applicants are bound by the terms
of the standard contract of employment
applicable to all members of
the Universal group, which provides
inter alia,
that:
“
The
employee agrees to accept membership of the medical aid, GAP cover,
pension funds, and loyalty wellness programmes
as approved by the
employer
.”
(emphasis
added)
Accordingly,
they contend that, irrespective of whether the applicants initially
elected to join CAMAF, they are bound to accept
membership of a
medical scheme currently approved by the employer. Consequently, if
the employer approves membership of a different
medical scheme to the
one which employees currently belong to, they are required to accept
membership of the new scheme. The respondents
also argue that the
same interpretation is applicable to clause 1.2.2 of the standard
Medikredit conditions of employment. It does
appear that both clauses
suggest that membership of a medical scheme is confined to membership
of schemes, which Medikredit
currently
affiliates to or
approves of. If it is within the choice of Medikredit to disaffiliate
from a scheme, it is difficult to see how
the applicants can claim as
a matter of contractual right that they retain their membership of a
scheme despite that.
[20]
Further, the applicants claimed that the respondents’ attempt
to remove them from membership of CAMAF
is a breach of their right to
freedom of association, but this contention was not pursued when the
application was argued. Another
claim, which was also not pressed in
court, was that the mere payment of contributions by them meant they
have a right to choose
their medical aid.
[21]
The
applicants’ alternative claim to a contractual entitlement to
remain members of CAMAF, is that the Medikredit’s
attempt to
disaffiliate from CAMAF and to require them to be members of CMS,
save in those cases where the applicant is a beneficiary
of a
spouse’s medical scheme, amounts to an unfair labour practice.
Having regard to the established principle that such
a determination
can be made in respect of benefits within the discretion of an
employer, there is reason to believe they might
succeed in unfair
labour practice proceedings. See
Apollo
Tyres SA [Pty] Ltd v CCMA & Others
.
[1]
Balance of convenience:
[22]
The applicants claim that having been members of CAMAF for many years
there is no prejudice to the respondents
should they remain members,
whereas if they ultimately establish their right to be members of
CAMAF, but interim relief is refused,
the establishment of that right
in due course would be of no assistance to them if their membership
of CAMAF is terminated in the
interim, because CAMAF is a closed
scheme and can only admit new members who are part of the accounting
profession. Accordingly,
if their membership of the scheme is
terminated it will not be possible simply to resume their membership.
The respondents refused
to cancel the termination notice pending the
outcome of the unfair labour practice claim.
[23]
The respondents claim that their efforts to standardize conditions of
employment across the Universal group
will be hampered by any delay
occasioned by arbitration proceedings and any court proceedings
subsequent thereto. The mere fact
that the applicants were allowed to
remain members of CAMAF for a period of five years after Universal
acquired Medikredit has
no bearing on the balance of convenience.
[24]
In my view, while it is understandable that the respondents do not
want to have a multiplicity of medical
schemes, contribution rates
and benefits to deal with, they have been able to tolerate the
anomalous position of the applicants
for a period of five years. The
additional time that might be lost in awaiting a determination of an
unfair labour practice claim
is unlikely to be inordinately long.
From the applicants’ perspective, it does appear that the
respondents recognize that
the benefits available to the applicants
under CMS are such that additional funds might have to be provided to
deal with possible
shortfalls in benefits that the applicants could
experience once they moved to CMS.
[25]
More importantly, the applicants will irrevocably lose their right to
retain membership of CAMAF if the termination
of their membership
proceeds before the unfair labour practice dispute is determined, as
it is inconceivable that in the event
they are successful, the
arbitrator could require the renewal of their membership of CAMAF,
contrary to the rules of that fund
restricting further admission of
members to members of the accounting profession only.
Existence of alternative
remedies
[26]
The respondents argue that, in so far as the applicants claim the
change in medical scheme membership amounts
to a unilateral change to
conditions of employment they have not invoked the protected strike
mechanism available to them under
section 64 [4] [a] of the Labour
Relations Act, 66 of 1995 (‘the LRA’) to require
Medikredit not to implement any change.
In fact, the applicants
intend pursuing the alternative remedy of obtaining an unfair labour
practice determination. That remedy
might be an alternative, but
direct enforcement of contractual rights would ordinarily be the most
appropriate way of enforcing
those rights by way of an order of
specific performance.
[27]
In any event, the alternative interim relief sought will allow the
applicants to pursue another alternative
remedy.
Order
[1]
The application is dealt with as a matter of urgency in terms of Rule
8 of the Labour Court
Rules and noncompliance with time periods and
provisions relating to service therein is condoned.
[2]
The first and second respondents are interdicted from terminating the
applicants’
membership of the third respondent pending the
finalization of the unfair labour practice dispute under case number
GA JB 15876-19
currently pending in the Commission for Conciliation
Mediation and Arbitration, provided that applicants request that the
dispute
be referred to arbitration no later than 4 September 2019.
[3]
The first and second respondents are jointly and severally liable for
the applicants’
costs, the one paying the other to be absolved.
_______________________
R
G Lagrange
Judge
of the Labour Court of South Africa
APPEARANCES
APPLICANTS:
C
Malan instructed by Bagraim Sachs Attorneys
RESPONDENT:
A
Redding instructed by Cliffe Dekker Hofmeyr Inc
[1]
(2013) 34
ILJ
1120 (LAC) at 1136, para [50].