IN THE LABOUR COURT OF SOUTH AFRICA
(HELD AT JOHANNESBURG) CASE NO J3128/01
In the matter between:
THE PROFESSIONAL TRANSPORT WORKERS UNION First Applicant
and others
and
MAGNUM SECURITY (PTY) LTD First Respondent
SECURITY SERVICES EMPLOYERS ORGANISATION Second
Respondent
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JUDGMENT
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JAMMY AJ
1. The Applicants in this matter came before this Court pursuant to an Order
of Court dated 16 th November 2001, the material provision of which reads
–
“The matter is referred to oral evidence on whether the employees, who
are Applicants, have separately or otherwise entered into an agreement
with Magnum prior to 6 March 2001 which entitles them to work a specified
number of hours per week.”
2. The Applicants had applied as a matter of urgency for an Order which, as
amended subsequent to the Order of Court above referred to, read as
follows –
“1 The First Respondent is ordered to restore the terms and conditions of
employment of the Second and Further Applicants that pertained prior to
20 March 2001;
2. The First Respondent is ordered to roster the individual Applicants on five
12 hour shifts per week unless otherwise agreed with the individual
Applicants and for as long as this is not precluded by law;
ALTERNATIVELY
The First Respondent is ordered to roster the individual
Applicants to work at least 55 hours per week unless otherwise agreed
with the individual Applicants and for as long as this is not precluded by
law;
ALTERNATIVELY
The First Respondent is ordered to roster the individual Applicants to work
at least 50 hours per week unless otherwise agreed with the individual
Applicants and for as long as this is not precluded by law.
3. The First Respondent is ordered to compensate the individual Applicants
by paying to them the difference between the amount they would have
earned between 20 March 2001 and the date of Order had they worked 60
actual hours per week, alternatively 55 hours per week, alternatively 50
hours per week during that period and the amount in fact paid to the
individual Applicants during that period”.
3. The First Respondent provides contract guarding services to its customers
and employs the individual Applicants as security officers. Between April
1996 and March 2000, the terms and conditions of employment of the
individual Applicants were regulated by a labour order which provided
weekly working hours, for the grade of employment applicable to the
Applicants, of a maximum of 72, 60 hours of which were “ordinary” hours
of work and 12 hours were overtime. As was a norm in the security
industry at the time, the 72 hour week comprised six 12 hour shifts per
week.
4. On 6 March 2000 Sectoral Determination 3, issued by the Minister of
Labour in terms of the Basic Conditions of Employment Act 1997, became
effective and provided that, for the twelve month period commencing on
that date, employers and security officers were permitted to agree to work
a total of 65 hours per week, of which 10 would be overtime – in other
words, a working week comprising 55 ordinary and 10 overtime hours.
5. A further provision of the Sectoral Determination however was that:
“(a) With effect from one year after the implementation of this
Determination the second transitional phase of schedule three of the Basic
Conditions of Employment Act No 75 of 1997 as amended, comes into
effect, from which time the maximum permissible weekly hours of work for
a Category B security officer will be reduced to fifty;
(b) With effect from two years after the implementation of this
Determination the third transitional phase of schedule three of the Basic
Conditions of Employment Act, Act No 75 of 1997 as amended, comes into
effect from which time the maximum permissible weekly hours of work for
any security officer will be reduced to 45 and the terms “Category A” and
“Category B” will be discontinued.
6. In essence therefore, for the twelve month period from 6 March 2001
employers and security officers were in terms of the Sectoral
Determination permitted to agree to work a total of 60 hours per week, of
which 10 would be overtime hours.
7. Immediately prior to March 2001 and pursuant to the first phase of the
Sectoral Determination, the working hours of the individual Applicants, as
agreed with the First Respondent, were 60 per week. In the context of the
Sectoral Determination, which, as indicated, permitted a maximum of 55
ordinary hours, 5 of those 60 hours per week constituted overtime.
8. During February 2001 the First Respondent issued a notice to all members
of its staff of which the following provisions were relevant to this dispute:
“Reduction of Working Hours
All Staff are reminded that the Private Security Industry hours of work are to be
reduced from 55 to 50 hours per week as from 6 March 2001.
The reduction is in accordance with the Security Industry Basic Conditions of
Employment Act No 75 of 1997.
However it is not practical to have a 50 hour week in certain Sectors of our
business. The Trade Unions are consulted over the practical 48 hour week. This
could mean that you will be required to work 4 days of 12 hour shifts and 3 days
off, with effect from 6 th March 2001”.
9. The express terms of the individual Applicants’ employment were
embodied in an employment contract concluded by each of them with the
First Respondent at the time of their engagement. Two specific clauses of
that contract bear reference in this dispute. They are the following –
“9 Other conditions of service related to rate of pay, work hours, leave
entitlement is governed and regulated by Gazette which is published by
the relevant minister. These conditions will be covered and explained
during induction and will change from time to time in accordance with the
Government Gazette as and when published.
10 Your employment is furthermore conditional to:
…
10.5 placing my services at the disposal of the company in such a manner
that the company can achieve its business objectives”.
10. At the time of the staff directive referred to above, the prevailing
agreement between the parties was, as I have stated, that the individual
Applicants would work 60 hours per week comprising 55 ordinary hours
and 5 hours overtime. The directive was in consequence rejected, the
Applicants contending that they had at no stage agreed to a reduction in
their actual working hours. Their contention was accordingly that
notwithstanding the provisions of the Sectoral Determination requiring a
formal reduction in the maximum ordinary hours from 55 to 50, the
prevailing 60 hour agreement would remain of force and effect, it being an
implied term thereof, as pleaded by them that –
“When the weekly maximum permissible ordinary hours of work prescribed
in the Sectoral Determination were reduced, the number of ordinary hours
to be worked each week would reduce to the new maximum and the
number of overtime hours required to be worked would increase
correspondingly, provided that the total ordinary and overtime hours would
not exceed the maxima prescribed in the Sectoral Determination”.
11. The proposed reduction in ordinary working hours to 48 per week would,
the Applicants therefore contend, constitute a unilateral and unlawful act
on the part of the First Respondent. The Respondents on their part deny
the existence of the alleged implied term relied upon by the Applicants, the
effect of which would be that the 60 hour agreement would remain in force
after 6 March 2001 and be adjusted to provide for 50 ordinary working
hours and 10 overtime hours instead of the 55 ordinary hours and 5
overtime hours prevailing prior to that date.
12. Commendably comprehensive argument was presented by the legal
representatives of the parties, traversing in detail the horological
ramifications of the employment contract, the Sectoral Determinations and
undisputed agreements between the parties, as well as the legal principles
applicable where contracts are alleged to embody terms which are implied
rather than expressed. It is unnecessary, in my view, for me to review
those submissions in detail. The crisp issue, as submitted by Advocate
Reynecke, representing the Respondents, is whether there was in
existence and enforceable and implied term in the conditions governing
the Applicants’ employment which would result in the maintenance of a 60
hour working week as agreed between the parties, the ordinary and
overtime components of which would be subject to adjustment in
compliance with Sectoral Determinations necessitating the alteration of the
ratio of the one to the other. Thus the preMarch 2001 agreement
providing for 55 ordinary hours and 5 overtime hours would, of necessity
from that date be reconstituted so as to establish a maximum of 50
ordinary hours and, to maintain the aggregate, 10 hours of overtime.
13. In essence therefore, the individual applicants contend that the unilateral
reduction by the First Respondent of their total working hours from 60 to
48 per week constituted an unlawful variation of their conditions of
employment which, whilst complying with the maximum ordinary hours of
work which came into effect from 6 March 2001, would radically reduce the
remuneration earned by them, their hourly wage rate remaining unaltered
whilst they would now work 2 ordinary hours less than the prescribed
maximum, with no overtime whatsoever.
14. The alleged existence of such an implied term in the conditions of
employment of the individual Applicants, is rejected by the Respondents.
The working hour scenario at any given time, it is contended, is governed
by clause 9 and, less emphatically, clause 10.5 of the individual
Applicants’ employment contracts.
15. The practical necessity, as a norm in the security industry, for employers to
operate on a 12 hour shift basis, and the cost implications associated with
overtime work, were analysed in considerable detail by Mr A W Botes who,
at all material times, was a member of the executive management of the
Second Respondent. His testimony on behalf of the Respondents was
endorsed in that context by Mr J A Bezuidenhout who is the manager of
the Johannesburg Central Branch of the First Respondent and who dealt
the Johannesburg Central Branch of the First Respondent and who dealt
further with certain variations to that established logistical principle where
the identity and the nature of business of the client concerned dictated this.
16. The reason why, following the promulgation of the Sectoral Determination,
the First Respondent adopted a 4 day, 12 hour, shift system aggregating
48 hours per week, said Mr Bezuidenhout, was because the maintenance
of a 50 ordinary hour plus 10 overtime hour week would be impossible to
administer, creating instability at the site being serviced, the removal of
guards in midshift and the incurring of untenable transport and overtime
costs in an industry where the overall cost of labour is already some 70%
of turnover. The implementation of a “50 plus 10” system would increase
the Respondents’ wage cost by some 8%, a factor which could not be
passed on to clients of the company in the context of the intensely
competitive nature of the industry.
17. The fact that, by reducing the actual working hours applicable to the
Applicants to 48 per week, the First Respondent unilaterally effected a
change to their agreed conditions of employment, is not open to debate.
No provision was made in the 60 hour agreement to cater for that
possibility. In the ordinary course a contract between two parties is a
consensual agreement, capable of amendment only by further agreement
between them, unless its own terms, or circumstances beyond their
individual control, necessitates this.
18. The Respondents’ case in essence, is that both those factors exist in the
present instance. The Sectoral Determination in question prescribed a 50
hour working week for security officers in the category governing the
employment of the individual Applicants. That was a matter beyond the
control of the Respondents. Secondly, such an eventuality is envisaged in
clause 9 of their employment contracts which expressly provides that
clause 9 of their employment contracts which expressly provides that
specified conditions of service, including “work hours”, are “governed and
regulated by Gazette” and will “change from time to time in accordance
with the Government Gazette as and when published”.
19. Clause 10.5 of the contract providing for the placement of the employees’
services “at the disposal of the company in such a manner that the
company can achieve its business objectives” was not, correctly in my
view, advanced by the First Respondent as a further factor justifying the
unilateral change to working hours effected by it. Mr C Todd, who
appeared for the Applicants, submitted, and I agree, that regulation of the
“manner” in which services are to be performed relates, in the context, to
the conduct of the employees rendering those services and not to the
basic conditions of their employment. For that reason, I do not propose to
deal further with that specific line of argument.
20. With regard to clause 9, the Applicants argue that the reference to the
regulation, inter alia, of hours of work by “Gazette which is published by
the Minister”, quite apart from the fact that it is clearly intended to relate to
ordinary hours, cannot preclude agreement between the parties as to the
actual hours to be worked by the employees concerned. There is nothing
either in the Sectoral Determination or in that specific term of the
employment contract, which precludes agreement as to the number of
overtime hours which employees may work in excess of the ordinary hours
prescribed, subject of course to any applicable statutory limitation in that
regard.
21. I am in agreement with that submission, more particularly when regard is
had to paragraph 8 of the Sectoral Determination of 6 March 2000 which
makes express provision for overtime work. It reads as follows:
“Limitation of overtime: An employer shall not require or permit an
employee to work overtime otherwise than in terms of an agreement
concluded by the employer with the employee and such overtime shall not
exceed, in the case of –
(a) a casual employee, 3 hours on any day;
(b) any other class of employee, 10 hours in any week.”
22. On that basis, it will be evident that the preMarch 2001 agreement
between the parties, duly adjusted to establish a “50/10” working week,
would not, if maintained, fall foul in any respect of the provisions of the
Determination which came into effect on that date.
23. Much of the substance of the argument submitted by both parties in the
course of this hearing related to the principles governing, and the factual
existence of, an implied term in the Applicants’ conditions of employment
which would have entitled them to continue working overtime regardless of
various Sectoral Determinations. It does not seem to me however that
this, in the circumstances which I have reviewed, is a material
consideration. I have already made mention of the circumstances in which
an agreement consensually concluded between contracting parties may be
amended or varied unilaterally by either of them. For the reasons which I
have stated, this does not seem to me to be such a case. The existence
of the “60 hour” agreement is not in dispute insofar as it was applicable
immediately prior to March 2001. There is nothing in the Sectoral
Determination which renders that agreement ineffective when the ratio of
ordinary to overtime hours is adjusted to comply with the Determination
whilst maintaining the actual working hours for which that agreement
provides. The necessity to redefine that ratio is one envisaged by clause 9
of the employment contract. The unilateral reduction in actual working
hours effected by the First Respondent, is not.
24. I conclude therefore that the First Respondent was not entitled, on the
basis of any provision of the contracts of employment of the Applicants,
unilaterally to change or vary the actual hours to be worked by them after
6 March 2001, as opposed to the maximum ordinary hours forming a
component thereof, which, as I have stated, then became legislatively
prescribed. Unless amended consensually in proper consultation, the
actual hours which the individual Applicants were entitled to continue to
work remained at 60 and if, of necessity in the light of the Determination,
the overtime component thereof was increased, that issue could not justify
unilateral interference by the First Respondent, whatever the perceived
commercial necessity for it to do so may have been. That, as I have said,
was a matter for consultation and negotiation in the ordinary course of fair
labour practice.
25. For these reasons, and in the context of the amended notice of
application of record in this matter, the order that I make is the
following:
25.1 the First Respondent is ordered to roster the individual Applicants on five
12 hour shifts per week, unless otherwise agreed with the individual
Applicants and for as long as this is not precluded by law;
25.2 the actual working week of 60 hours thereby constituted is to be defined as
to the respective ordinary and overtime components thereof, so as to
comply with the prevailing Sectoral Determination(s) for the private
security sector;
25.3 the First Respondent is ordered to compensate the individual Applicants
by paying to them the difference between the amount they would have
earned between 20 March 2001 and the date of this Order had they
worked 60 hours per week, comprising 50 ordinary and 10 overtime hours,
and the amount in fact paid to the individual Applicants during that period;
25.4 there is no order as to costs
___________________________
B M JAMMY
Acting Judge of the Labour Court
11 April 2002
Representation:
For the Applicants: :
Mr C Todd: Bowman Gilfillan Inc.
For the First Respondent:
Advocate J J Reynecke S.C. instructed by Sampson Okes Higgins Inc.