THE LABOUR APPEAL COURT OF SOUTH AFRICA, JOHANNESBURG
Not Reportable
Case No: JA33/24
In the matter between:
HEAD OF DEPARTMENT: DEPARTMENT OF
HEALTH, FREE STATE Appellant
and
CHANTELLE VAN DER BIJL & 12 OTHERS First to Thirteenth Respondents
PUBLIC HEALTH AND SOCIAL Fourteenth Respondent
DEVELOPMENT SECTORAL BARGAINING COUNCIL
COMMISSIONER THANDO NDLEBE Fifteenth Respondent
SOUTH AFRICAN MEDICAL ASSOCIATION Sixteenth Respondent
HEAD OF LEGAL: DEPARTMENT OF
HEALTH, FREESTATE Seventeenth Respondent
Heard: 4 September 2025
Delivered: 20 October 2025
Coram: Basson AJA, Tokota et Chetty AJJA
___________________________________________________________________
JUDGMENT
___________________________________________________________________
BASSON, AJA
2
Introduction
[1] The respondents approached the Labour Court in terms of section 158(1)(c)
of the Labour Relations Act 1 (LRA) to have a settlement agreement ,
concluded under the auspices of the Bargaining Council , made an order of
court. The Labour Court granted the application in terms of s 158(1)(c) and,
purporting to give effect to the settlement agreement, further ordered the
appellant to pay the respondents R3 150 918.56 together with interest.
[2] The central issue in this appeal is whether the Labour Court misdirected itself
in ordering the appellant to pay this amount, given that the settlement made
no provision for the respondents’ actuaries to calculate it, and where a
substantial portion of the claimed amount arose after the settlement
agreement had been concluded.
Relevant facts
Resolution 3 of 2009
[3] The first to 13 th respondents (the respondents) are all registered doctors
employed by the appellant – the Department of Public Health, Free State (the
Department). They are represented by the sixteenth respondent – the South
African Medical Association (SAMA).
[4] The conflict between the respondents and the Department arose from a
collective agreement concluded on 7 August 2009 between the Department
and SAMA. Resolution 3 of 2009 (the resolution) introduced an occupational -
specific approach to remuneration and a structured career progression
process for various categories of medical practitioners, which include the
individual respondents. The resolution establishes a performance- based pay
progression mechanism for medical practitioner s, whereby a medical
practitioner can move f rom one salary notch to the next higher salary notch
within their specific salary grade scales. The resolution provides for a biennial
pay progression scheme, equating to a 3% increase in the basic salary, as
outlined in the salary scales and career progression dispensation. The
1 Act 66 of 1995, as amended.
3
resolution permits, in the alternative, for an annual pay progression of 1.5% of
the basic salary where the relevant scale supports such progression. Eligibility
for pay progression depends on the specific medical doctor maintaining
satisfactory performance levels as determined by the department’s
performance management system. Once the criteria are met, the pay
progression becomes effective as of 1 July of the year in which the
requirements were fulfilled. Any disputes pertaining to the interpretation or
implementation of the resolution are to be addressed through the dispute
resolution procedures established by the Bargaining Council.
[5] It is not in dispute that the Department breached this agreement. In January
2019, the respondents referred a dispute to the Bargaining Council. The
dispute concerned the interpretation of the collective agreement in terms of
section 24(2) and 24(5) of the LRA. The respondents claimed that the
Department failed to apply the pay progression to their salaries to the next
salary notch when they qualified for such progression.
[6] The dispute was set down for arbitration on 31 January 2019. On that day ,
SAMA and the Department concluded a settlement agreement in terms of
which the Department agreed to ‘ confirm’ the individual employees’ eligibility
and quantification relating to pay progression by 2 March 2019. It was further
agreed that the Department would approve the payment thereof and make
payment by 1 April 2019. The settlement agreement reads as follows:
‘ …
6.1 The Respondent [Department] shall confirm the eligibility and
quantification (that is, amounts due) to each of the Applicants
[Respondents] insofar as the Pay Progression due to them by
the 2 March 2019. The Respondent will provide this
information in writing to Dr. Hagemeister by 2 March 2019.
6.2 The [Department] will approve the payment of the Pay
Progression due to the [Respondents] and pay same no later
than 1 April 2019.
4
6.3 In the event the [Department] does not honour the above terms
at paragraphs 6.1 and 6.2 the [Respondents] will have a right
to enforce this agreement within 14 days.
6.4 No variation of the Resolution would be binding unless it was
reduced to writing and signed by the parties thereto.
7. No variation of this agreement will be legally binding unless reduced to
writing and signed by the parties.
8. The parties consent to this agreement being made an arbitration
award in terms of s 142A(1) of the Labour Relations Act.
9. The parties agree that in the event of non-compliance of this
agreement, the party defaulting will pay the full costs incurred by the
other party in enforcing the agreement.’
[7] When the Department neither confirmed the respondents ’ eligibility and
quantification relating to pay progression by 2 March 2019, nor approved the
payment thereof by 1 April 2019 , the respondents brought an application to
the Bargaining Council in terms of section 142A of the LRA for the settlement
agreement to be made an arbitration award.
[8] On 22 July 2019, the Bargaining Council, acting in terms of section 142A of
the LRA, dismissed the application. The Commissioner refused to make the
settlement agreement an arbitration award on the basis that it was not
enforceable, as the amounts allegedly due to the respondents in respect of
pay progression had not been quantified. The Commissioner advised that the
settlement agreement be varied to incorporate a quantified pay progression
amount before it could be made an arbitration award. The respondents did not
challenge this ruling on review.
[9] The respondents again approached the Bargaining Council for a variation of
the settlement agreement in terms of section 144 of the LRA. The variation
application was dismissed on the basis that section 144 only applied to the
variation of arbitration awards and rulings and not settlement agreements.
The respondents likewise did not challenge this ruling.
5
[10] In the interim, the respondents appointed their own actuaries to calculate any
outstanding monies owed to them by the Department due to their non-
progression to the next salary scale (the retrospective amount). On 19 May
2020, the respondents delivered a letter of demand to the Department,
demanding payment of R1 217 254.00, an amount calculated by their actuary
as outstanding at the time. They demanded payment of this amount by no
later than 30 June 2020, failing which they would approach the Labour Court.
The Department was also informed that the respondents w ould seek interest
and a costs order. The reports were furnished to the Department. The
Department, however, neither engaged with the respondents nor objected to
the actuaries’ quantification.
[11] After the settlement agreement was concluded, the respondent’s actuaries
prepared a further calculation (the second actuarial report) on the basis that
they now had a new claim against the Department because, since the delivery
of the letter of demand dated 19 May 2020, they had been entitled to a further
pay progression. In September 2020, the actuaries , on behalf of the
respondents, calculated that the y were now entitled to a further amount of
R2 452 900.00 (prospective amount), bringing the total amount (which
included both the retrospective and prospective amount ) due to the
respondents to R3 670 154.00.
[12] Between October 2020 and March 2021, the Department conducted an
internal enquiry and found that the respondents were eligible for the pay
progression on an annual basis at the annual rate of 1.5%. The Department
confirmed that the total amount that was due amounted to R 1 101 044.03.
The Department then proceeded to pay the respondents in accordance with
Resolution 3. Except for two of the respondents, all the respondents had been
paid in full. The two respondents were subsequently paid in full. At the time of
the order by the Court a quo, all the respondents had been paid in
the order by the Court a quo, all the respondents had been paid in
accordance with the Department's calculation.
6
Referral to the Labour Court
Order sought in the Notice of Motion
[13] On 14 October 2020, the respondents referred the dispute to the Labour
Court. In paragraph 1 of the Notice of Motion, the respondents sought an
order declaring that the settlement agreement dated 21 January 2019 be
made an order of court in terms of section 158(1)(c) of the LRA. In paragraph
2 of the Notice of Motion, the respondents sought an order declaring that an
amount of R 3 670 154.00 plus interest at a rate of 7.25% per annum,
calculated from 31 January 2019, was payable to the respondents ‘ under the
Settlement Agreement’.
[14] Although the respondents concede in their papers that the prospective
amount is not contemplated under the settlement agreement, they
nonetheless insist that they ‘seek payment of such amount in a separate
prayer in the Notice of Motion’ . The respondents’ contention is, however,
clearly at odds with what is sought in terms of paragraph 2 of the Notice of
Motion. In that paragraph, an order is sought declaring that the amount
payable to the respondents ‘under the settlement agreement ’ is quantified in
the sum of R3,670,154.00, being the sum of the retrospective and prospective
amounts. Any doubt as to the genesis of the respondents’ claim for payment is
dispelled in the replying affidavit, where the respondents again assert that ‘ the
amount due, owing and payable under the Settlement Agreement is
R3,670,154.00 (less such payments as have, since the filing of the
application, been made to the individual applicants, plus costs and interest)’.
[15] Both the actuarial reports and the Department’s own calculations served
before the Labour Court. In their replying affidavit, the respondents do not
dispute that these payments were made to them. They, however, persist in
contending that, because the Department did not dispute their calculations at
the time when the letter of demand was sent to it , their actuarial reports stood
the time when the letter of demand was sent to it , their actuarial reports stood
uncontested. On that basis, they assert an entitlement to the full amount of R3
670 154.00, less the payments already made. I will return to this submission.
7
Labour Court
[16] The Labour Court made the settlement agreement an order of court in terms
of s 158(1)(c) of the LRA and quantified the amount payable to the
respondents under the settlement agreement at R3 150 918.66. The Labour
Court rejected the Department’s calculation as a mere estimate but accepted
the calculations set out in the respondents’ actuarial reports. The Labour
Court reasoned that, because the respondents had provided these reports to
the Department for consideration prior to this application, and because they
were not disputed at the time, the actuarial quantification remained
unopposed and should be treated as such. The Labour Court further held that
no bona fide dispute arose from the two opposing calculations and that, due
to the failure of the Department to meet its obligations, the respondents were
entitled to assume the Department’s role and take it upon themselves to
quantify the amount due to them by employing actuaries . The Department
was also ordered to pay the costs of the application.
[17] No appeal lies against the order of the Labour Court making the settlement
agreement an order of court in terms of section 158(1)(c) of the LRA. The
parties accept that this part of the order was made correctly. The Department,
however, takes issue with the fact that the Labour Court, in an application
under section 158(1)(c), granted substantive relief to the respondents that
was not provided for in the settlement agreement and in circumstances where
a substantial portion of the relief granted related to amounts that arose only
after the conclusion of the settlement agreement.
Section 158(1)(c)
[18] It is well established that making a settlement agreement an order of court
serves to protect the rights of the parties in that it enables a party to enforce
the agreement through the court’s execution processes or to institute
contempt proceedings in the event of non-compliance. Once made an order of
contempt proceedings in the event of non-compliance. Once made an order of
court, the settlement order, in the words of the Constitutional Court in Eke v
8
Parsons,2 has the same status and force as any other court order and ‘ will be
interpreted like all court orders’:
‘The starting point is to determine the manifest purpose of the order. In
interpreting a judgment or order, the court's intention is to be ascertained
primarily from the language of the judgment or order in accordance with the
usual, well-known rules relating to the interpretation of documents. As in the
case of a document, the judgment or order and the court's reasons for giving
it must be read as a whole in order to ascertain its intention.’3
Further, regarding the effect of a settlement order, the Court held:
‘[31] The effect of a settlement order is to change the status of the rights
and obligations between the parties. Save for litigation that may be
consequent upon the nature of the particular order, the order brings
finality to the lis between the parties; the lis becomes res judicata
(literally, 'a matter judged'). It changes the terms of a settlement
agreement to an enforceable court order. The type of enforcement
may be execution or contempt proceedings. Or it may take any other
form permitted by the nature of the order. That form may possibly be
some litigation the nature of which will be one step removed from
seeking committal for contempt; an example being a mandamus.’
[19] Section 158(1)(c) of the LRA gives effect to this principle by empowering the
Labour Court to make a settlement agreement or arbitration award an order of
court. Making a settlement agreement an order of the court, therefore,
enables a party to compel its enforcement or to enable its execution.
4 This
section does not, however, permit the court to grant substantive relief beyond
what the parties had agreed upon. As pointed out by the Labour Court in
Kolobe v Proxenos (Sophia Restaurant) ,5 ‘[s]ection 158(1)(c) is intended to
achieve little more than to bring to bear the power of enforcement vested in
this Court, as a superior court, which the CCMA does not itself enjoy in
this Court, as a superior court, which the CCMA does not itself enjoy in
relation to the awards made under its auspices ’. Section 158(1)(c), therefore,
2 2016 (3) SA 37 (CC) at paras [29] – [30].
3 Finishing Touch 163 (Pty) Ltd v BHP Billiton Energy Coal South Africa Ltd and Others 2013 (2) SA
204 (SCA) at para [13].
4 SA Post Office Ltd v Communication Workers Union obo Permanent Part -Time Employees (2014)
35 ILJ 455 (LAC) at para [21].
5 [2000] 11 BLLR 1291 (LC) at para [21].
9
only permits the Labour Court to make a settlement agreement an order of
court in order to set in motion the Labour Court’s enforcement procedures: It
is not a vehicle to vary the terms of the settlement agreement , create a new
monetary obligation, or introduce a fresh cause of action.
[20] In the present matter, the respondents approached the Labour Court to claim
a quantification of an amount due that was never agreed upon in the
settlement agreement. The original claim referred to the Bargaining Council
was settled or compromised to provide only for a procedure whereby the
Department would confirm the respondents’ eligibility for pay progression and
quantify the amounts due to them by a specific date. The respondents cannot
now pursue the original claim that was before the Bargaining Council. The
Constitutional Court in Mafisa v Road Accident Fund6 explains:
‘A compromise is an agreement between the parties to prevent or terminate a
dispute by adjusting their differences by mutual consent. It is trite that a
compromise gives rise to new contractual rights and obligations which exist
independently of the original cause of action. Once a compromise is reached,
the parties are precluded from proceeding on the original cause of action
(unless, of course, the compromise provides otherwise).’
[21] On proper construction, the settlement agreement does not provide for
substantive relief to the respondents. The settlement agreement contemplates
only a process for resolving the pay -progression dispute. In the event of non-
compliance, the respondents are afforded a right to enforce the agreement
within 14 days. The obligation to determine eligibility and, thereafter, the
amounts due is , in terms of the settlement agreement, the Department’s
responsibility alone. The settlement agreement does not incorporate any
provision that imposes an obligation upon the Department to pay any
specified amounts. To restate: The Department was merely required to
specified amounts. To restate: The Department was merely required to
confirm the eligibility and pay . By directing payment of amounts not agreed
between the parties, including amounts that arose only after the settlement
was concluded, the Labour Court exceeded the settlement’s scope. It further
erroneously allowed the respondents to usurp the Department’s role by
6 2024 (4) SA 426 (CC) at para [33].
10
determining their own eligibility and quantum and compelling payment thereof.
This new claim can also not form part of the terms of the settlement
agreement.
[22] It should also be mentioned that the respondents proceeded by way of motion
proceedings to have the settlement agreement made an order of court and to
obtain substantive relief flowing from it. Although the Department did not
oppose the relief sought in terms of section 158(1)(c) of the LRA, it raised, at
the outset as a point in limine, the argument that the settlement agreement
does not provide for any calculation of the Department’s indebtedness and
that permitting the respondents to do so would impermissibly vary the
agreement, contrary to clause 7 . For this reason, the Department sought the
dismissal or striking out of prayer 2 of the Notice of Motion at the outset .
Unfortunately, the judgment of the Court a quo is conspicuously silent on this
issue. At no stage does the Labour Court properly assess the terms of the
settlement and engage w ith the question raised on the papers as to whether
the settlement does indeed allow for such interpretation. This ought to have
been the Labour Court’s point of departure. By failing to do so and by
uncritically accepting that the agreement permitted such a calculation, the
Labour Court misdirected itself.
[23] Leaving aside for a moment the misdirection in granting substantive relief not
provided for in the settlement agreement , the Labour Court further erred in
reasoning that, because the Department did not challenge the respondents’
actuarial quantification when afforded an opportunity to do so in a letter of
demand, the quantification should be treated as unopposed. That can never
be so. A failure to respond timeously to a letter of demand cannot, without
more, constitute an unequivocal admission of liability, nor does it justify an
inference that the Department had tacitly admitted the indebtedness .
inference that the Department had tacitly admitted the indebtedness .
Moreover, in treating the respondents’ actuarial calculations as unopposed,
the Labour Court overlooked the fact that the Department, in its answering
affidavit, squarely put the quantification of the amounts allegedly owed in
issue.
11
[24] The Labour Court also erred in dismissing the Department’s schedule, setting
out the amounts it said were owing, as a mere estimate, while accepting the
respondents’ actuarial calculations as conclusive. It did so despite the
actuaries’ express disclaimer that the underlying figures could not be verified
and that their calculations relied on information supplied by SAMA and the
doctors, whether orally or in writing. The Court further misdirected itself in
holding that, because the Department allegedly failed to perform its
obligations, the respondents could unilaterally assume the Department’s role,
obtain third-party pay-progression calculations, and impose those figures on
the Department. The settlement agreement does not permit this: it places the
duty to confirm eligibility and to quantify any amounts due squarely on the
Department. By allowing the respondents to do so, the Court overstepped the
bounds of the settlement agreement.
The Labour Court’s costs order
[25] The Labour Court made an adverse cost order against the Department ,
holding the view that the Department had defended the application with no
basis, and that it ‘ sat on its hands and only made part payment when this
application was launched’ . The Department submitted that both grounds for
the costs order are factually incorrect and therefore the Labour Court
misdirected itself in the exercise of its discretion by awarding costs.
[26] It is not controversial that a costs order made by the Labour Court is
appealable.
7 Costs in the Labour Court are regulated by s 162 of the LRA,
which requires the court, when making a costs order, to have regard to the
requirements of law and fairness.
[27] In deciding whether to order payment of costs, the Labour C ourt may
consider, among others, the conduct of the parties in defending the matter
and during the proceedings before the court. The award of costs is a matter
7 Zungu v Premier of the Province of KwaZulu-Natal and others [2018] 39 ILJ 523 (CC) para [ 25]
(Zungu). Union for Police Security and Corrections Organisation v South African Custodial
Management (Pty) Ltd and others [2021] 12 BLLR 1173 (CC) (Union for Police) and Vermaak v MEC
for Local Government and Traditional Affairs, North West Province and Others (JA15/2014) [2017]
ZALAC 2 (10 January 2017) (Vermaak).
12
which falls within the discretion of the court making such an order, and a court
on appeal will not readily interfere with the exercise of that discretion.
[28] In terms of what has become known as the Zungu-rule,8 it is well established
that costs in the Labour Court do not follow the normal rules relating to costs ,
and in most instances, there will be no order as to costs. Where a court
awards costs, it must give reasons for departing from this general rule.
[29] Having regard to the reasons proffered for granting costs against the
Department, the Court , in my view, erred in finding that the Department did
not have a legitimate basis to oppose the application. At the risk of repetition:
The respondents had approached the Court to obtain substantive relief based
on a settlement agreement that does not provide for such relief. The
respondents further sought substantive relief in respect of a separate claim
that, on their own version, did not arise from the settlement agreement. Also,
at the time when the matter was served before the court, the full amounts
owed, as confirmed by the Department as it was obliged to do in terms of the
settlement agreement, had been paid to the respondents. The Department
therefore had every reason to defend the matter.
[30] An appellate court may interfere only if the discretion was exercised on a
wrong principle, exercised capriciously, or otherwise not judicially. Put
differently, intervention is warranted only where the exercise of the discretion
is vitiated by misdirection or irregularity, or where no court acting reasonably
could have made the order. In applying this principle to the present case, it is
concluded that the Labour Court did not exercise its discretion properly and
did not properly consider the facts on which it reasoned that an adverse costs
order is warranted. This Court may therefore interfere with the award of costs
and make an order that is considered appropriate in the circumstances.
and make an order that is considered appropriate in the circumstances.
Taking into account considerations of law and fairness, the order of the
Labour Court should be substituted with one of no order as to costs.
8 Ibid.
13
[31] With regard to the costs of this appeal, both parties sought a costs order
against the other. I am of the view, with due consideration to law and fairness,
that no order of costs should be made.9
Referral to oral evidence
[32] The respondents submitted that, if unsuccessful, the matter should be
remitted to the Labour Court for the hearing of oral evidence. It is not in
contention that a Court may consider referring a matter for oral evidence
where a timeous application to this effect has been made. Where such an
application is not timeously made, a Court is entitled to proceed with a matter
on the basis that the applicant accepted that factual disputes would be
resolved by applying the principles set out in Plascon -Evans.
10 The
application of this principle, however, presupposes that a genuine dispute
exists on the papers.
[33] Leaving aside, for the moment, whether a bona fide dispute of fact existed on
the papers regarding the quantification of the amounts claimed, there is a
more fundamental reason why this Court should not consider referring the
matter to oral evidence: The respondents seek to enforce a monetary claim
said to arise from the settlement agreement, whereas, on a proper
consideration of that agreement, the founding affidavit, even if accepted, does
not make out a clear case that the settlement agreement supports such a
cause of action. It was for this very reason that the Department raised the
issue as a point in limine in its papers; yet the Labour Court did not engage
with it at all. T he Constitutional Court in Mamadi v Premier, Limpopo and
others
11 explains:
‘It bears emphasis, however, that litigants cannot permissibly apply for referral
to oral evidence or trial 'where the affidavits themselves, even if accepted, do
not make out a clear case, but leave the case ambiguous, uncertain or fail to
make out a cause of action'. In that event, the application should of course
make out a cause of action'. In that event, the application should of course
fail without recourse to Plascon-Evans or oral evidence. But where a case is
9 National Union Mineworkers v East Rand Gold & Uranium Co. Ltd (1991) 12 ILJ 1221 (A) at 1242A -
I.
10 Plascon Evans Paints Ltd v Van Riebeek Paints (Pty) Ltd 1984 (3) SA 623 (A).
11 2024 (1) SA 1 (CC) at para [45].
14
properly made out, the disputes of fact are genuine, far -reaching and
fundamental and cannot be resolved by application of Plascon-Evans, the
proper course in rule 53 proceedings is, in general, referral to oral evidence or
trial.’
[34] In the result, the following order is made:
Order
1. The appeal is upheld with no order as to costs.
2. The order granted by the Labour Court in terms of paragraphs 4, 5, and
6 is set aside and substituted by the following:
“The relief sought in terms of prayer 2 of the Notice of Motion is
dismissed with no order as to costs.”
____________________________
Basson AJA
Tokota AJA and Chetty AJA concur.
APPEARANCES:
FOR THE APPELLANT: Adv Ferose Boda SC & Adv Fundile Sangoni
Instructed by Phatshoane Henny Attorneys.
FOR THE RESPONDENTS: Adv Andrew Redding SC & Adv Riaz Itzkin
Instructed by Cliffe Dekker Hofmeyr