IN THE LABOUR COURT OF SOUTH AFRICA , JOHANNESBURG
Not Reportable
Case No: JR1452/2021
In the matter between:
NATIONAL HEALTH AND ALLIED WORKERS UNION
obo MEMBERS Applicant
and
ADVOCATE RONNIE BRACKS, N.O. First Respondent
PUBLIC HEALTH AND SOCIAL DEVELOPMENT
SECTORAL BARGAINING COUNCIL Second Respondent
NATIONAL DEPARTMENT OF HEALTH
& EIGHT OTHERS Third to Eleventh
Respondents
Heard : 29 O ctober 2024
Delivered : 23 January 2025
This judgment was handed down by agreement between the parties by
circulation to the parties’ legal representatives by e -mail. The date and time for
handing down the judgment is deemed to be 10 h00 on 23 January 2025 .
Summary: application to review award – award reviewed – commissioner was
wrong in finding that Section 198B of the Labour Relations Act 1995 does not
find application to the contracts of Community Health Workers .
2
________________________________________________________________
JUDGMENT
________________________________________________________________
COOK, AJ
introduction
[1] This matter is an opposed review application in which the Applicant, (National
Health and Allied Workers Union [NEHAWU]) , on behalf of its members , who
are Community Health Workers (CHWs) , seeks to review and set aside the
arbitration award under case number PSHS933 -20/21 dated 27 October 2021
(the award ) issued by the First Res pondent ( the commissioner ).
[2] NEHAWU seeks that the award be substituted with the following declarator :
‘It is determined that the contracts of employment of the members of the
applicants whose names are listed in the schedule attached hereto as “A”, are
deemed t o be of an indefinite duration.’1
Background
[3] On 23 March 2021, NEHAWU referred a di spute to the Second Respondent
(the bargaining council ) in terms of Section 198D(1) of the Labour Relations
Act, 66 of 1995 , as amended (the LRA) .2 A certificate of non -resolution was
issued on 26 April 20213. Thereafter , the parties held a virtual “pre-trial” [sic]
conference was held , and a minute was signed on 22 August 2022.4
[4] In terms of the pre -arbitration minute , the following was agreed :
1 Prayer 2 of the notice of motion, page 1 of the pleadings.
2 Annexure “FA3”, pages 62 -68 of the pleadings .
3 Annexure “FA4”, page 69 of the pleadings .
4 Annexure “FA5”, pages 71 -76 of the pleadings .
3
‘…
2. The dispute relates to the interpretation and application of Section
198B of the LRA and, without limitation thereto, more specifically
Section 198B(3).
…
4. In summary, the Applicant contends that the Respondents have
employed its members in contravention of Section 198B(3) of the
LRA, more particularly in that they have been employed by the
Respondents on fixed -term contracts of employment for a period or
successive periods exceeding three months in total.
5. The Respondents deny that they have acted in contravention of
Section 198B(3). The Respondents contend:
5.1 The contracts concluded with each of the CHWs (including
those who are members of the Applicant) are permitted by
statute (in particular the Public Service Act, 1995 read with the
Public Services Regulations, 2016) and a sectoral
determination and/or collective agreement (in particular the
Public Health and Social Development Sectoral Bargaining
Council Resolution 1 of 2018, as amended), as contemplated
in Section 198B(2)(c) of the LRA.
5.2 The Respondents were, as contemplated in Section 198B(3)
read with Section 198B(4)(h) of the LRA, justified in concluding
fixed -term contracts for periods longer than three months, in
that all CHW positions were funded by an external source for a
limited period.
5.3 The appointment of employees on a permanent basis into the
public service/as public servants must be in line with the Public
Service Act and Public Service Regulations .
…
8.1 The respondents contends that they complied with section
198B(3)(b) in that the justification lies in section 198B(4)(h) in
4
that:
4.1.1 The CHW positions were funded by an external
source. ’5
[5] At arbitration, the parties relied on a common bundle. NEHAWU closed its
case without calling any witnesses. The Respondents then called three
witnesses, Mr Sifiso Khumalo, Ms Nancy Mafikeng and M s Lindiwe Fortunate
Madikisela.
The issues the commissioner was required to decide
[6] In terms of the arbitration award , the com missioner recorded :
‘ISSUES TO BE DECIDED :
3. I must determine whether the fixed term contracts between the
Respondents and the community health workers (CHWs) attached
hereto are subject to Section 198B(5) of the Labour Relations Act 66
of 1995 (the LRA), which deems a fixed -term contract to be of
indefinite duration if the fixed -term contract is in contravention of sub -
section (3 ).’6
[7] To answer this question , the com missioner had to determine the following
issues :
7.1 Whether the Public Service Act ( PSA) and its Regulations and/or
resolution 1 of 2018 permitted the Respondents to conclude the fixed -
term contracts, as contemplated in section 198B(2)(c) of the LRA .
7.1.1 If not, were the Respondents justified in concluding fixed -term
contracts for periods longer than three months because the
CHW positions were funded by an external source for a limited
period .
7.1.2 Accordingly, the commissioner had to determine whether the
conditional grant issued by the National Treasury was from an
5 Annexure “FA5”, pages 73 -76 of the pleadings .
6 Page 200 of the pleadings .
5
external source for a limited period .
7.2 However , before this was addressed, the commissioner needed to
determine w hether the Respond ents were entitled to raise the
justification . This required determining whether section 198B(6 )(b) had
been complied with and the consequence s of not complying .
7.3 Finally, i f the com missioner found that 198B (3)(c) was not applicable
and t hat the Respondents had not prov en a justifiable reason, could
the commissioner order permanent employment because the
Respondents failed to comply with the processes contemplated in the
Regulations for appoint ing permanent positions ?
The documentary evidence
PHSDSBC Resolution 1 of 2018
[8] In terms of Resolution 1 of 2018 of the Public Health and Social Development
Sectoral Bargaining Council (PHSDSBC), (titled “AGREEMENT ON THE
STANDARDISATION OF REMUNERATION FOR COMMUNITY HEALTH
WORKERS IN THE DEPARTMENT OF HEALTH”):
‘PURPOSE
3.1 To ensure the standardisation of payment of remuneration for CHWs
in the DoH.
3.2 To ensure adequate protection for the remuneration payment of the
CHWs into Personnel and Salary (PERSAL) system.
3.3 Ensure appropriate implementation and management of recruitment,
selection, appointment, placement, remuneration, skills development,
dispute resolution and occupational health and safety processes for all
members of WBPHCOTs.
…
5.4 The provisions of this agreement shall apply to CHWs for duration of
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twelve (12) months upon signing the agreement.”7
The CHW a greement
[9] The parties agreed that the CHW agreement was a typical contract concluded
between the respondents and all CHWs.8
[10] In terms of the definitions:
‘Resolution 1 of 2018 means the agreement between the Department of
Health and the Labour Unions on the standardisation of the community health
worker remuneration in the Department of Health which was finalised in the
Public Health and Social Development Sectora l Bargaining Council
(PHSDSBC).’
[11] The CHW agreement also contained the following terms:
‘3.1 Notwithstanding the date of signature by the parties, the provisions of
this agreement shall become effective from 1st April 2020 and ending
on the 31st March 2021.
3.2 The Department shall retain the sole discretion to extend this
agreement in terms of clause 3.1.9
…
3.3.4 Any matter arising, which are not specifically provided for
herein, shall be dealt with in accordance with the provisions of
the PHSDSBC Resolution 1 of 2018 and Resolution 1 of
2019.10
3.6 The community health worker acknowledges and understands that:
3.6.1 this agreement is for a fixed -term of 12 (twelve) months and
renewable at the sol e discretion of the Department.’11
The commissioner’s finding
7 Page 93 of the pleadings .
8 Annexure “FA5”, paragraph 14.1, page 77 of the pleadings.
9 Page 105 of the pleadings.
10 Page 105 of the pleadings .
11 Page 106 of the pleadings .
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[12] The commissioner ultimately found:
‘72. In light of the above considerations it is my view that the collective
agreement validates/regulates the fixed term contract. Thus the
contract would not be subject to the provisions in Section 198B (3) –
(7).
73. It is my further view that Section 198B does not find application to the
contracts of CHWs – the Applicants cannot rely on the deeming
provision.’12
Relevant law
[13] In Commissi on for Conciliation, Mediation and Arbitration v Commission Staff
Association and Another , the Labour Appeal Court held:
‘It appears common cause that a commissioner’s award can be reviewed if it
is found that he or she committed a material error of law, either because the
interpretation was unreasonable, or was wrong, and affected the outcome. In
any event, this is consistent with what this Court has held.’13
Section 198B
[14] Section 1 98B of the LRA deals with fixed -term contracts with employees
earning below the earnings threshold by the Minister of Labour in terms of
section 6(3) of the Basic Conditions of Employment Act.
[15] The exclusion provisions of Section 198B(2) were not applicable in this matter
as it was common cause the employees earned below the threshold and the
Respondents employed more than 50 employees.14
[16] Nor was it contended that the nature of the work for which the CHWs are
employed is of limited or definite duration . Accordingly, section 198B(3)(a)
was irrelevant.
[17] The provisions that are relevant to this matter include:
12 Page 213 of the pleadings .
13 [2019] ZAL AC 69; [2020 ] 1 BLLR 9 (LAC) .
14 Paragraphs 6.1 and 6.2, page 74 of the pleadings .
8
‘(2) This section does not apply to –
…
(c) an employee employed in terms of a fixed -term contract which is
permitted by any statute, sectoral determination or collective
agreement.
(3) An employer ma y employ an employee on a fixed term contract or
successive fixed term contracts for longer than three months of
employment only if –
(a) …; or
(b) the employer can demonstrate any other justifiable reason for
fixing the term of the contract.
(4) Without limiting the generality of subsection (3), the conclusion of a
fixed term contract will be justified if the employee -
…
(h) is employed in a position which is funded by an external
source for a limited period; or
…
(5) Employment in terms of a fixed term contract concluded or renewed in
contravention of subsection (3) is deemed to be of indefinite duration.
(6) An offer to employ an employee on a fixed -term contract or to renew
or extend a fixed -term contract, must -
(a) be in writing; and
(b) state the reasons contemplated in subsection (3) (a) or (b).
(7) If it is relevant in any proceedings, an employer must prove that there
was a justifiable reason for fixing the term of the contract as
contemplated in subsection (3) and that the term was agreed. ’
Do the PSA and the regulations permit the respondents to conclude the fixed -term
9
contracts
[18] It was submitted on behalf of the Respondents :
‘What is at the core of the application is whether the first respondent was
correct or not in finding that the collective agreement entered into by and
between the third to the eleventh respondents and the applicant, amongst
other constituent trade unions, in 2018 (Resolution 1 of 2018 -Agreement on
the Standardisation of Remuneration for Community Health Workers in the
Department of Health as amended, (hereinafter "the Collective Agreement")
permitte d the respondents to enter into fixed -term contracts of employment
with the CHWs in excess of three months .’15
[19] Accordingly , the Re spondents relied on the re solution being a collective
agreement that permit ted the CHWs to be employed on fixed term contracts.
Consequently, the Respondents did not make any submissions that the PSA
and Regulations permitted the conclusion of the fixed term contracts. Nor did
NEHAWU refer to any provisions of any other statute s.
[20] NEHAWU , on the other hand , in its submissions , acknowledged that section 8
of the Public Service Act contemplates the possib ility of appointment on a
fixed term contract .16
[21] However, NEHAWU s ubmitted that the statute must be one which itself
permits the fixed term contract s. (NEHAWU provided examples of such
statutes , such as the appointments of municipal manager s and heads of
departments ). NEHAWU argued further that it is not sufficient that the statute
merely empowers an official to conclude a fixed -term contract.17
[22] NEHAWU reasoned:
‘If it were otherwise, the provisions of s. 198B would, despite the provisions of
section 209 (which expressly stipulate that the LRA binds the State) ,
effectively be ineffective against the State. This would be an absurd result. ’
15 Paragraph 6 of the Departments heads, page 2 .
16 Pargraph 89 of NEHAWU’s heads, page 32.
17 Paragraph 94, NEHAWU’s heads, page 34.
10
[23] The Court accepts this argument and finds that the Public Service Act and the
Regulations do not permit the Respondents to emplo y the CHWs on fixed
terms contracts as contemplated in section 198B(2)(c) of the LRA.
Does Resolution 1 of 2018 permit the respondents to conclude the fixed term
contracts
[24] The commissioner was correct in finding that the resolution was a valid ,
binding collective agreement that was incorporated into the employment
agreement.
[25] The purpose of the resolution was inter alia to ensure the standardisation and
protection of payment of remuneration and the management of recruitment,
selection and appointment.
[26] The res olution does not mention fixed term contracts. The resolution only
state s:
‘5.4 The provisions of this agreement shall apply to CHWs for duration of
twelve (12) months upon signing the agreement .’
[27] Under this c lause, the resolution's provisions would only apply to the CHWs
for twelve months. The clause does not permit the CHWs to be empl oyed on
fixed term contracts for twelve months.
[28] Considering the language, context , and purpose of the resolution, nothing
permits th e Departments to conclude fixed term contracts exceeding three
months.
[29] The resolution does not permit the CHWs to be employed in terms of a fixed
term contract. The CHW employment contracts permit this, but they are not
collective agreements.
[30] The Court concurs with the arguments presented on behalf of NEHAWU that
there is a huge leap in logic from the conclusion that because the Resolution
is a collective that binds all CHWs and regulates the employment of all CHWs
11
(as it sets out the recruitment process applicable to them and out their
salaries), therefore, the resolution “validate s/regulates” the fixed term
contracts and, consequen tly, the fixed term contracts are permitted in terms of
section 198B(2)(c) of the LRA. Nothing in the resolution permits the
Respondent s from entering into a fixed term contract for a period exceeding
three months.
[31] The commissioner’s interpretation of the collective agreement was incorrect .
The commissioner was wrong to find that th e agreement permits the
Respondents to employ CHWs on fixed -term contracts exceeding three
month s. This incorrect decision resulted in an unreasonable outcome.
Were the respondents justified in conc luding fixed term contracts
[32] The commissioner found in favour of the Respondents on the basis that the
collective agreement “validates/regulates the fixed term contract” .
Accordingly, the commissioner found the contract would not be subject to the
provi sions of Section 198B(3) – (7).
[33] Based on this finding, the commissioner did not consider whether fixing the
contract term was justified because the CHWs were employed in positions
funded by an external source for a limited period.
[34] Although paragraph 57 of the award reads:
‘Consequently, the Respondents were, as contemplated in Section 198B(3)
read with Section 198B(4)(h) of the LRA, justified including fixed term
contracts for periods longer than 3 months, that all CHW positions were
funded by externa l sources for a limited period.’
[35] If one reads this in the context of the award, it is not the commissioner's
finding but a summary of the respondents' submission s.
Are the respondents entitled to raise the justification
[36] NEHAWU submitted that unless there has been compliance with section 198
B(6), an employer cannot try to justify repeated extensions at a later stage
and that any justification which may otherwise be available to the employer is
12
lost.18
Was there compliance with section 198B(6)
[37] The Respondents submitted that the offer of employment of the CHWs was in
writing , and the reasons were contained in the Collective Agreement , which
was incorporated into their fixed term contracts by reference.19
[38] The resolution n otes that:
‘The National Department of Health (DoH) has set aside funds for conditional
grants to provinces for the implementation of standardisation of CHWs
remu neration as an interim measure.’20
[39] Accordingly , the re ason for the j ustification of the fixed te rm contract being
that the condi tional grants was incorporated by refer ence into the empl oyment
contracts , and as such , the Respo ndent complied with section 198B(6).
[40] In any event , merely because there is non-compliance with 198B(6) (b), this
does not prevent a party from attempting to prove that there was a justifiable
reason for fixing the term of the contract in terms of 198B(7).
Is the conditional grant issued by the national treasury from an external source for a
limited period
[41] In order to justify the reason for fixing the contract term s for longer than three
months , the Respondents relied on the fact that the CHWs were employed in
positions funded by an external source for a limited period.
[42] The Respondents correctly submitted that it was not disputed that the funding
for the employment of the CHWs was a conditional grant approved by the
National Treasury on an annual basis, based on the submission made by the
Executive Authority, and that it is funded for 12 months21.
[43] What was , however, in dispute was whether the co nditional grant was from an
18 Paragraphs 102 and 103 of NEHAWU’s heads, page 36 .
19 Paragraph 16 Respondents heads, page 7 .
20 1.4, page 91 of the pleadings .
21 Paragraph 13 , Respondents’ heads, page 5 .
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external source .
[44] The department receives all revenue from the National Treasury. Madikisela,
in cross -examination, acknowledged that the funding for all public servants in
the public service was sourced from the National Treasury22. The National
Treasury also provided the funding for the conditional grant . The fact that the
grant was conditional does not affect the funding source ; the only distinction is
that the funding is a conditional allocation instead of a normal budget.
[45] The Respondents proved, o n the evidence before the com missioner , that the
CHWs were employed in a position that was funded for a limited period but
not that they were funded from an external source.
[46] In the circumstances , the Re sponden ts failed to prove a justifiable reason as
contemplated in 198 B(7) of the LRA.
Can the commissioner order permanent employment
[47] In terms of section 198B(5), e mployment in terms of a fixed term contract
concluded or renewed in contravention of subsection (3) is deemed to be of
indefinite duration .
[48] A commissioner has the power to grant a declaratory award confirming the
status of an employee as a deemed employee in terms of section 198D of the
LRA.23
[49] Further on the strength of Nowalaza and O thers v Office of the Chief Justice
and A nother24 and Public Servants Association on behalf of PSA member v
National Prosecuting Authority and another25, the Court finds that the
commissioner was permitted to declare that the CHWs ’ employment was of
an indefinite duration despite the failure to comply with the processes
contemplated in the Regulations for appointment to permanent positions.
22 Transcript: p. 86, ll. 11 – 14.
23 Bata SA (Pty) Ltd & another v SA Clothing & Textile Workers’ Union & others [2024] 8 BLLR 866
(LAC) ; (2024) 45 ILJ 1541 (LAC) .
24 [2017] ZALC JHB 234.
25 Public Servants Association on behalf of PSA Member s v National Prosecuting Authority & another
(2012) 33 ILJ 1831 (LAC) ; [2012] 8 BLLR 765 (LAC) .
14
Costs
[50] The Court finds no reason why the norm that costs do not follow the result
should not apply in this matter.
[51] Accordingly, considering all the circumstances, including the law and fairness,
a costs order is not appropriate in this matter .
Order
1. The arbitration award dated 27 October 2021 issued by the First
Respondent under case number BSHS933 -20/21 is reviewed and set
aside.
2. The arbitration award is substituted with the following:
‘It is determined that the contracts of employment of members of the
Applicants whose names are listed in the schedules attached as
Annexure A, are deemed to be of an indefinite duration.’
3. No order as to costs.
__________________
A.L. Cook
Acting Judge of the Labour Court of South Africa
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Appearance s:
For the Applicant: Advocate G . I. Hulley SC
Instructed by: Mametja Attorneys
For the Third to Eleventh
Respondents: L. A. Maisela
Instructed by: The State Attorney, Pretoria