IN THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
Not reportable
Case No: JR 1425 /2022
In the matter between:
INDEPENDENT COMMUNICATIONS AUTHORITY OF
SOUTH AFRICA (ICASA) Applicant
and
COMMISSION FOR CONCILIATION , MEDIATION
AND ARBITRATION First Respondent
COMMISSIONER DHELIWE MAVUMA N.O Second Respondent
NEHAWU obo MEMBERS Third Respondent
Heard: 10 September 2024
Delivered: This judgment was handed down electronically by circulation to
the parties' legal representatives by email and publication on
the Labour Court’s website. The date for hand -down is deemed
to be on 09 January 2025
JUDGMENT
TLHOTLHALEMAJE, J
Introduction:
[1] In this opposed application, t he applicant (ICASA ) seeks an order reviewing
and setting aside the arbitration award issued by the second respondent
(Commissioner) , acting under the auspices of the second respondent, the
Commission for Conciliation Mediation and Arbitration (CCMA).
[2] In the award, the Commissioner had found that ICASA had committed an
unfair labour practice under section 186 (2)(a) of the Labour Relations Act1, in
that it failed to pay performance and merit bonuses to qualifying members of
NEHAWU (Employees) for the 2019/2020 financial year. ICASA was ordered
to pay to the Employees such bonuses. ICASA seeks a substitution of the
Commissioner’s award, or in the alternative, that the dispute between the
parties be remitted to the CCMA for a re -hearing before another
Commissioner.
Background:
[3] ICASA ’s performance award scheme is governed by its Performance
Management Policy2 and Remuneration Polic y. In accordance with the
Performance Management Policy, if ICASA achieves the percentage
stipulated in the Annual Performance Plan (APP), then it must pay bonuses at
100% . Where employees’ performance exceeds pre -determined performance
standards during the period under review, they qualify for performance
rewards . It is however specifically stipulated in the policy that the rewards are
not an entitlement , but would be based on exceptional performance and
availability of funds.
[4] Where the pre -determined objectives are not met, ICASA’s Accounting
Authority may exercise its discretion on whether to pay performance bonuses,
and if so, on terms considered to be fair and reasonable. Further in
accordance with the Policy, payment of performances bonuses is not a right ,
and ICASA’s Council retains its discretion on whether payments should be
made , flowing from recommendations of the CEO , and also taking into
account the availability of funds .
1 Act 66 of 1995
2 Implemented on 1 April 2018 as approved and authorised in May 2018
[5] There is a dispute in regards to whether the target for 2019/2020 financial
year as set out in the APP was met, and if so, what that target was . It is
however common cause that ICASA achieved 86.8% organisational
performance target for that financial year. The Employees contend that since
the target was set at 80% and that 86.8% was achieved , they were entitled to
100% payment s. ICASA on the other hand contends that based on the overall
objectives and targets according to specific programmes outlined in the APP,
the target was set at 90% and that since only 86.8% was achieved , there was
no obligation to pay performance bonuses . It further contends that there were
employees who qualified for a performance bonus and merit increase based
on their individual performance , and that the Council applied its discretion and
awarded a ‘discretionary once -off gratuity performance reward ’ payment for
2019/2020 FY. The employees however regard the payments made as
gratuity instead of the usual annual performance bonus and increases, which
was something not catered for in the Policies.
[6] It was against the above disputes that the Employees had referred an unfair
labour practice dispute to the CCMA, flowing from which the Commissioner
had found that the performance target for the 2019/2020 financial year was
set at 80%, and that ICASA was therefore required to have paid them 100%
bonuses as well as merit bonuses to those that qualified .
The evidenc e and submissions before the Commissioner and decision
reached:
[7] The evidence on behalf of the Employees by Ms Thabitha Serumola , who is
also a shop steward, was essentially that in accordance with the APP for
2019/2020 financial year, ICASA set the performance target at 80%, which
was signed off by the then Acting Chairperson in January 2019 . She
contended that the APP was the only source of authority for ICASA to set the
annual performance targets , which could not be altered in any other
document .
[8] ICASA’s Senior Manager -Strategi c and Procurement Manage ment (Mr David
Molapo) testified that the 80% target stipulated in the APP for 2019/2020 was
for a five-year plan and not specifically for that financial year . According to
Molapo, the correct target figure was 94.5% based on percentages of
objectives (20%) and an additional 74.5% of the baseline stipulated in the
programmes to be achieved . This contention was further based Foreword in
the APP, where it was stated that ; ‘The Strategic Plan for the fiscal years
2015/16FY to 2019/20FY prioritises and consolidates all priority activities and
projects for the review period under the following strategic outcome -oriented
goals’ , which were identified and listed in the APP .
[9] Molapo denied that the 80% s tated in the foreword of the APP was the
performance target for 2019/2020 and also disputed that the 86.8% reflected
in the Annual Report for that financial year was the actual performance
outcome targeted . He testified that other factors were considered , since the
figure of 86.8% was to be assessed against the outputs that were planned for
that particular financial year, and more specifically, 38 targets that were set
and of which 33 were achieved in that year .
[10] The Commissioner having had regard to the description of Organisational
Performance in the policy, had accepted that if ICASA achieved the
percentages stipulated in the APP, then it must pay performance bonuses at
100%. The Commissioner also had regard to the 2019/2020 Annual Report in
which it was stated that the Authority set a target of 38 targets, and that
86.8% of that was achieved .
[11] The Commissioner found that it was not ICASA’s case that it had applied its
discretion not to pay the performance bonuses and merit increases , or that it
did not have sufficient funds to make the payments. The Commissioner
accordingly concluded that ICASA committed an unfair labour practice on the
basis that the Performance Management Policy made provision for the
payment of 100% bonuses where performance targets were achieved. ICASA
had according to the Commissioner, not produced any form of authority that
set the target for the financial year at 90% , and on the contrary, Molapo’s
testimony that the target was set at 94.5% was not even supported by any
documentation. The actual target that was set in the APP was 80%, and there
was no evidence to support Molapo’s contention that the set target was for a
period over five years.
The review test:
[12] The test on review is well -known as buttressed in Duncanmec (Pty) Limited v
Gaylard NO and Others3. The enquiry into the reasonableness of a decision
involves consideration of the merits , and it has been said that
unreasonableness would warrant interference only if the impugned decision is
of the kind that could not be made by a reasonable decision -maker . It was
added that is not the task of reviewing Court to evaluate the reasons provided
by the arbitrator with a view of determining whether it agrees with them. The
principal enquiry is whether the award itself meets the requirement of
reasonableness , in the sense that there are reasons supporting it s
conclusions .
[13] This Court must therefore determine whether from an assessment of the facts
as a whole, it can be said that the Commissioner’s conclusions f ell outside a
band of reasonableness4. In Makuleni v Standard Bank of South Africa Ltd
and Others5, it was further reiterated that ;
‘The court asked to review a decision of commissioner must not yield
to the seductive power of a lucid argument that the result could be
different. The luxury of indulging in that temptation is reserved for the
court of appeal. At the heart of the exercise is a fair reading of the
award, in the context of the body of evidence adduced and an even -
handed assessment of whether such conclusions are untenable.
3(CCT284/17) [2018] ZACC 29; 2018 (11) BCLR 1335 (CC); [2018] 12 BLLR 1137 (CC); 2018 (6) SA
335 (CC); (2018) 39 ILJ 2633 (CC) at paras 41 - 43
4See S idumo and Another v Rustenburg Platinum Mines Ltd and Others CCT 85/06) [2007] ZACC 22;
[2007] 12 BLLR 1097 (CC); 2008 (2) SA 24 (CC) ; (2007) 28 ILJ 2405 (CC); 2008 (2) BCLR 158 (CC)
at para 79, where it was held;
‘…a commissioner has to determine whether a dismissal is fair or not. A commissioner is not
given the power to consider afresh what he or she would do, but simply to decide whether
what the employer did was fair. In arriving at a decision a commissioner is not required to
defer to the decision of the employer. What is required is that he or she must consider all
relevant circumstances.’
5(JA125/2021) [2023] ZALAC 4; (2023) 44 ILJ 1005 (LAC); [2023] 4 BLLR 283 (LAC) at para 4
Only the conclusion is untenable is a review and setting aside
warranted’.
The grounds of review and evaluation:
[14] ICASA seeks a review of the award on numerous grounds including that the
Commissioner misconstrued the evidence; reached a conclusion that was
irrational; committed gross irregularities; failed to properly apply her mind to
the evidence before her , and/or disregarded that evidence.
[15] The employees in defending the award contend that the Commissioner
understood the nature of the dispute to be determined, considered the
material evidence before her , and reached a decision which is justifiable in
law and consistent with her reasoning . It was further contended that the
grounds of review relied upon by ICASA were akin to an appeal.
[16] Against the above, t he starting point is section 186(2)(a) of the LRA6. In Apollo
Tyres South Africa (Pty) Ltd v Commission for Conciliation Mediation and
Arbitration and Others7, the Labour Appeal Court held that ‘benefits’ within the
context of section 186(2)(a) of the LRA included bonuses, and that the non -
payment thereof could give rise to an unfair labour practice dispute . It was
further held that even where the employer enjoys a discretion in terms of a
policy or practice relating to the provision of benefits , such conduct will be
subject to scrutiny by the CCMA in terms of section 186(2)(a) of the LRA8.
6 Which provides;
“Unfair labour practice” means an unfair act or omission that arises between an employer
and an employee involving unfair conduct by the employer relating to the promotion,
demotion, probation (excluding disputes about dismissals for a reason relating to probation)
or training of an employee or relating to the provision of benefits to an employee”
7 (2013) 34 ILJ 1120 (LAC) ; DA1/11) [2013] ZALAC 23 (21 February 2013) at para 48
8 See also at para 50 where it was held that;
“In my view, the better approach would be to interpret the term benefit to include 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 section 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. In as far as Hospersa , GS4 Security and Scheepers postulate a
different approach they are, with respect, wrong ”
[17] Thus, w here the employer claims that the payment of bonuses was
discretionary or not a guaranteed right, the employee could still claim an
unfair labour practice . This in circumstances where it can be demonstrated
that the discretion was improperly exercised, resulting in unfairness, or where
the employer in exercising its discretion , failed to meet an objective standard,
or acted arbitrarily, capriciously and/or inconsistently9.
The issues in dispute and evaluation :
[18] The parties in this case were in agreement that central to the dispute before
the Commissioner was the exact performance target set by ICASA in the APP
for the 2019/2020 financial year . That dispute revolve d around whether the
target was 80% as alleged by the Employees, or 90% (94.5%) as alleged by
ICASA . Further issues for determination were whether the target was
achieved and/or exceeded; whether the policies catered for gratuity
payments; and whether the achievement of the target was without more,
sufficient to entitle the employees to payment of the performance bonuses.
[19] The policies or instruments governing performance management and rewards
are not in dispute. The interpretation thereof will thus have to be in
accordance with the approach set out in Natal Joint Municipal Pension Fund v
Endumeni Municipality (Endumeni)10.
[20] The Performance Management Policy refers to ‘Organisational Performance’ ,
which is defined as ‘The Authority’s performance target as set out and
9 See Apollo at para 53; National Coalition for Gay and Lesbian Equality and Others v Minister of
Home Affairs and Others (CCT10/99) [1999] ZACC 17; 2000 (2) SA 1; 2000 (1) BCLR 39 at para 11
10 (920/2010) [2012] ZASCA 13; [2012] 2 All SA 262 (SCA); 2012 (4) SA 593 (SCA) at para 18 , where
it was held that;
‘….Interpretation is the process of attributing meaning to the words used in a document ….
having regard to the context provided by reading the particular provision or provisions in the
light of the document as a whole and the circumstances attendant upon its coming into
existence. Whatever the nature of the document, consideration must be given to the
language used in the light of the ordinary rules of grammar and syntax; the context in which
the provision appears; the apparent purpose to which it is directed and the material known
to those responsible for its production. Where more than one meaning is possible each
possibility must be weighed in the light of all these factors. The process is objective, not
subjective. A sensible meaning is to be preferred to one that leads to insensible or
unbusinesslike results or undermines the apparent purpose of the document. ….’
approved, and that if the Organisation achieves the percentage as stipulated
in the APP, then the organisation pays performance bonuses at 100%’
[21] Under clause 6.8 ( ‘Reward and Recognition ’) of that policy , it is provided inter
alia that ICASA must achieve its objectives for consideration of a performance
reward, taking into account the alignment between the organisational
performance and individual performance. In the event that the predetermined
objectives are not achieved , the Accounting Authority may exercise its
discretion on whether to pay performance rewards , and if so, on terms
considered fair and reasonable .
[22] The policy further provides that payment of performance bonuses is at the
discretion of the Council flowing from the recommendations by the CEO, and
further subject to availability of funds. Where employees exceed
predetermined performance standards during the period under review, they
must qualify for performance rewards, based on exceptional performance and
availability of funds .
The set target for 2019/202 0FY:
[23] In the Performance Management Policy, the ‘APP’ is defined as a ‘document
containing the Authority’s five (5) year performance plan with a breakdown of
quarterly targets for the financial year under review’. ‘Targets’ are defined as;
‘The agreed quantitative or qualitative standard(s)’
[24] In the Foreword to the APP, it is provided that amongst the strategic outcome -
oriented goals is to improve organisational service delivery by improving
organisational performance to 80%, and also improving stakeholder and
consumer experience through the monitoring of quality of services and
stakeholder engagement from 10% to 80% by 2020.
[25] Molapo had conceded that any reference to 90% (or 94.5%) target for
2019/2020 is not found either in the APP. He however testified that the figure
of 94.5% was based on goals achieved as per programmes which in turn
dictated and shaped those targets . He further contended that the computation
of that figure had to be gleaned from the body of the APP.
[26] A reading of the transcribed record indicates that Molapo was clearly at pains
in explaining why the target of 80% for the 2019/2020 as can be gleaned from
the foreword in the APP, was not the actual performance target. He made a
distinction between the targets set out in the APP, and those set out in the
START plan . The latter plan gave a long term (five -years) perspective or
vision of ICASA in terms of the framework set by National Government , and
that the 80% in the APP was a target set over five years.
[27] Upon questions from the Commissioner, Molapo further testified that within
the long -term STRAT plan were annual targets set towards that plan, and that
performance bonuses paid to employees annually w ere to be based on the
overall performance of the organisation, and not merely on target set in the
foreword to the APP. According to Molapo, the APP contained a consolidation
of all the targets of individual divisions and programmes , and that the 90%
that was not achieved, even if not specifically in the APP, was arrived after
that consolidation .
[28] According to Molapo, the 90% set indicators which allowed for baselines from
which targets were to be met. He referred to the APP11 under the rubric
‘Programme Performance Indicators and Annual Targets for 2019 ’; where the
baseline of 89% is indicated, with the objective being to improve
organisational performance from 29% by 20% by 2019/2020
[29] Against Molapo’s evidence , it is my view that the proper approach in
determining the target for 2019/2020 as contained in the APP , is to have
regard to its entire contents. The difficulty with the employees’ case is that
they sought to rely on the foreword to the APP to the exclusion of everything
else contained in it. Even under the foreword , reference was made to the
STRAT Plan for 2015/16 – 2019/2020 financial years, which prioritised and
11 At page 43
consolidated all priority activities and projects for the review period under
strategic outcome -oriented goals. These included ‘Universal Service and
Access to Broadband Services (which set a goal of 566MHz to 958MHz by
2020; Access to communication services and affordable prices; improvement
of organisational service and delivery by 80%; improvement of stakeholder
and consumer experience by 80%.
[30] Molapo therefore as a person who was party to the drafting of that APP was
correct in pointing out that the foreword to it is not where the actual targets are
to be found. The APP is a voluminous document and the relevant portions are
from page 41 , and to be read with the Addendum from its page 94 , where the
targets and baselines are set out according to six organised programmes.
Some of the programmes such as Administration are made up of eight sub -
programmes, with each being allocated a baseline performance, and targets.
There are different targets (desired performance) set for each programme
whether quarterly as or yearly, ranging between 80% and 100%, and with
different baselines.
[31] The common trend with the target figures in the programmes as per the
addendum12, is that the baseline s are set at 74.5%, with improvement of
performance of 20% by 2019/2020 being required . The baselines according to
programmes ranged between 20% and 89%.
[32] Arising from the above, the conclusion to be reached is that as indicated in
the APP and its contents, it is apparent that the 80% mentioned in the
foreword to the APP cannot be the actual target upon which any entitlement to
performance bonuses were to be based or calculated. That figure was
applicable to the goal of improving organisational service delivery and
organisational performance as a whole over 2015/16 to 2019/2020 FY . At
most, this could be read from the very definition of the APP in the
Performance Management Policy as indicated on paragraph 23 of this
judgment . Thus a proper determination of targets involves taking into account
12 At page 94
all the programmes that were identified in in both STRAT plan and the APP.
The two instruments cannot be read or considered in isolation contrary to the
Employees’ approach .
[33] It follows that the figure of 80% as stated in the foreword , ought to be read in
context and not to the exclusion of how those targets were to be achieved and
further towards what end. Against the se observations, it follows that the
Commissioner by solely relying on the target of 80% as set out in the foreword
to the APP , without consideration of how the 86.8% in the Annual Plan was
arrived at , clearly failed to properly take into account all the evidence placed
before her. That figure on a proper reading of the foreword encapsulated the
STRAT Plan for 2015/16 to 2019/2020 FY. Furthermore, a proper reading of
the foreword does not in my view specify a set target. This is so in that the
80% figure refers to ‘ improvement’ of organisational performance’ , which is
but one of the strategic outcome -oriented goals in accordance with the
STRAT Plan.
[34] Thus, t he Commissioner’s reliance on the 86 .8% target indicated in the
Annual Report , and her conclusion that the 80% target was exceeded based
solely on the 80% mentioned in the foreword of the APP , was not supported
by the evidence before her. Accordingly, it is concluded that the 80% figure
was in reference to the five -year plan set out against the STRAT Plan, and
could not have been in reference to 2019/2020FY only for the purposes of
annual performance bonus . The correct target figure therefore for
2019/2020FY and as also confirmed in the Annual Report was 90% taking
into account the STRAT Plan. Even if Molapo’s testimony tended to confuse
the actual figure s between 90% and 94.5% , the fact remains that it is unlikely
that the performance figures set out in the 2019/2020 Annual Report , which
was prepared in accordance with the guidelines issued by National Treasury,
could have been manufactured simply to deny the Employees a performance
bonus.
The issues of g ratuity and insufficient funds :
[35] In accordance with clause 6.8.4 in the Performance Management Policy, it is
provided that should ICASA not achieve its pre -determined objectives, its
Accounting Authority may exercise its discretion on whether to pay
performance rewards on terms considered fair and reasonable. The CEO ’s
correspondence indicated gratuities were paid on the basis that not all criteria
as required by the performance management policy were met. The CEO’s
subsequent correspondence indicated that Council resolved not to pay merit
increases and performance bonus in the light of the failure to meet the target,
and further that there was a need to recognise individual performance taking
into account the financial sustainability of the organisation. In the final
correspondence from the CEO on the matter, it was indicated that what was
paid was a ‘ Once -off Gratuity Reward Payment’ , which the Council had
approved based on available budget and availability of funds .
[36] It is correct as found by the Commissioner, that nowhere in the policies was
provision made for gratuit y payment . The parties had further recorded this as
common cause in the pre-arbitration minute. Notwithstanding what was
recorded as common cause, ICASA submitted that the Commissioner
misconstrued the evidence in finding that the gratuity payment was not
catered for in the policy. because of the import of clause 6.8.4 of the Policy .
[37] ICASA’s submissions lack merit for the simple reason that on the principles of
interpretation of documents such as the Policy as set out in Endumeni , one
cannot read into that policy something that was not intended. The policy even
on a plain reading of clause 6.8.4, only refers to ‘performance rewards ’. A
gratuity is a completely separate concept, and ordinarily refers to a token,
which is not provided for in the policy. As already indicated, it was only in the
last correspondence by the CEO to employees on the matter that the payment
was referred to as ‘ Once -off Gratuity Performance Reward’ . In my view
therefore, whether the payment was referred to as a gratuity or performance
reward is neither here nor there, as any payments as per the CEO’s
correspondence were made in accordance with clause 6.8.4 of the policy.
[38] As already indicated, central to the dispute between the parties were the
exact targets set for the purposes of awarding performance bonuses, and
whether those targets were met and/or exceeded . It has been concluded that
based on a proper reading of the APP , the STRAT Plan and the Annual
Report for the 2019/2020FY, the target set was 90%, which was not met.
[39] From a reading of the transcribed record and the cross -examination of Molapo
in particular, the issues surrounding whether ICASA had properly exercise d its
discretion in regards to what was paid to Employees, and whether it had
sufficient funds to pay the performance bonus despite targets not being met ,
were not fully explored with him. It was submitted on behalf of the Employees
in these proceedings that as the Commissioner had found, ICASA’s case was
merely that targets were not met hence bonus payments w ere not made , and
that it was not its case that there was unavailability of funds or that it had
exercised its discretion . Equally so, the Employees’ case was that the targets
were met hence performance bonuses ought to have been paid.
[40] The difficulty however is that the CEO’s correspondence explaining the
reasons why the performance bonuses were not paid , and that why it was
decided to pay the ‘gratuity’ or performance rewards , formed part of the
record before the Commissioner. If the parties in those proceedings confine d
their respective cases to specific issues, those are the issues that ought to be
determined by the Commissioner . In this case the evidence before the
Commissioner was confined to whether the targets were met or not. As
already indicated, the Commissioner’s finding in the affirmative in that regard
is not sustainable, and therefore that ought to have been the end of the
matter . This was so if the Employees failed to challenge the nature of the
discretion or the alleged unavailability of funds . It does not therefore assist the
Employees in review proceedings to argue that a particular issue was not
ICASA’s case and therefore a finding ought to have been made in their
favour.
Conclusions:
[41] Against the observations and conclusions reached in this judgment in the light
of the evidence before the Commissioner , it ought therefore be found that an
even -handed assessment of that evidence reveals that the Commissioner’s
conclusions are untenable. Effectively, the Commissioner’s conclusions in the
light of the totality of the evidence before her, do not fall within a band of
reasonableness . It follows that the award warrants to be reviewed and set
aside.
[42] The voluminous arbitration proceedings record combined with the pleadings
were properly before the Court. I therefore see no reason why the Court
should remit the matter to the CCMA for re -consideration. Accordingly, a
substitution of the Commissioner’s award is equally warranted.
[43] In regard to costs, the parties sough t costs orders against each other. The
Employees were clearly within their rights to defend an award issued in their
favour. In the light of the conclusions reached in this judgment and further
having had regard to the requirements of law and fairness , it is my view that
each party must be burdened with its own costs.
[44] Accordingly , the following order is made:
Order:
1. The arbitration award issued by the Second Respondent under Case
Number GATW12895/21 is reviewed and set aside.
2. The Commissioner’s award is substituted with an order that the failure
by the Applicant (ICASA) not pay to the Third Respondents
(Employees) a performance bonus for 2019/2020FY, did not constitute
an unfair labour practice as contemplated in section 186(2(a) of the
Labour Relations Act.
3. There is no order as to costs.
Edwin Tlhotlhalemaje
Judge of the Labour Court of South Africa
Appearance :
For the Applicant: Adv. A.M Mtembu, instructed by
Mashiane, Moodley & Monama
Attorneys
For the Third Respondent : Ms D Makhaza of Mdluli, Pearce &
Mdzikwa Inc