Sneller Verbatim/ssl REPORTABLE
IN THE LABOUR COURT OF SOUTH AFRICA
BRAAMFONTEIN CASE NO: JR1619/01
20020913
In the matter between
ESKOM Applicant
and
Dr R MARSHALL & OTHERS Respondents
J U D G M E N T
LANDMAN J:
1. On 5 July 2001, Commissioner B Dorman of the CCMA
delivered an award in a dispute between Eskom and Dr
Marshall, an employee of Eskom. The commissioner found
that:
(a) Eskom committed an unfair labour practice in terms of item 2 (1)
(b) of the Seventh Schedule to the Labour Relations Act 66 of
1995.
(b) Eskom=s conduct was substantively and procedurally unfair.
(c) Eskom is ordered to pay the sum of R732 011,81 to Dr
Marshall within ten days of receipt of the award.
(d) Eskom is ordered to pay interest on the abovementioned
amount at the rate of 10% per annum from 31 August 1999 to
date of payment.
(e) Eskom is ordered to pay Dr Marshall =s costs of the arbitration
on the Magistrates = Court scale, including the costs of the
hearings held on 29 and 30 May 2001 as well as the costs of
consultation and preparation.
2. Eskom has launched an application in this court. It seeks the
following relief:
(a) Condonation of the late filing of this application.
(b) Declaring that the arbitration award, issued by the
commissioner under the auspices of the CCMA, is a nullity in
that the CCMA lacked jurisdiction to determine the dispute
between Eskom and Dr Marshall.
(c) In the alternative, an order reviewing and setting aside the
award of the commissioner.
(d) Costs.
3. The application for condonation sets out a reasonable explanation for the delay
and related matters. It was granted. Mr Pretorius SC, (with him Mr S A Boda),
appeared for Eskom. He submitted, inter alia, that the commissioner lacked
jurisdiction to arbitrate the dispute under item 2(1)(b) of the Seventh Schedule to
the LRA as the dispute did not concern the unfair conduct of an employer relating
to Athe provision of benefits to an employee. @
4. It is perhaps just as well to quote the provisions of the item at this stage:
A(a) For the purposes of this item, an unfair labour practice
means any unfair act or omission that arises between an employer and an
employee, involving
(b) the unfair conduct of the employer relating to the promotion, demotion or training
of an employee or relating to the provision of benefits to an employee. @
In Legal Aid Board v John NO [1998] 4 BLLR 400 (LC), the
applicant on review, raised for the first time the issue of the
arbitrator's jurisdiction to decide a matter under item 2(1)(b) of
the Seventh Schedule. The court held that although the matter
was not pertinently raised before the arbitration as it was an
issue of jurisdiction, it did not preclude the applicant from raising
the issue at the stage it reached the Labour Court.
5. It follows that Eskom is entitled to raise the jurisdictional point, in the review
application, or as a separate selfstanding application. The authorities are trite that
a court of law or a tribunal that issues an order where it has no jurisdiction to do
so, acts ultra vires . The result is that the order is a nullity. See Immelman v
Keller 1903 20 (SC) 623 and Visser v Van den Heever 1934 CPD 315.
6. If I find that the commissioner lacked jurisdiction to determine the dispute, the award
that he rendered, is a nullity and Eskom would be entitled to the relief sought. The
commissioner viewed the dispute as one relating to a benefit. The commissioner
concluded that the failure of Eskom to pay or afford Dr Marshall, a separation
package was unfair.
7. The principal submission made on behalf of Eskom is that the commissioner had no
jurisdiction to determine the dispute under item 2(1)(b) as the dispute was not one
relating to the provision of benefits to an employee. It was contended that the
refusal by Eskom to pay or provide a separation package was simply not arbitrable
as it concerned a matter of mutual interest.
1.
8. Dr Marshall applied for separation benefits in terms of Eskom's Corporate Guideline
Policy on Separation. This policy was merely a guideline. It did not create any
contractual entitlement on the part of an employee to a separation package. The
material terms of the separation package policy included the following:
"1 Purpose
Separation packages will be considered for the following purposes:
$ To attain affirmative action and employment equity targets;
$ To address the problem of unplaced employees.
2. Separation Benefits
The following benefits and conditions apply to employees who voluntarily apply
for a separation package and to whom separation benefits are granted:
2.1 Early retirement.
2.2 Cash Settlement.
3. Exclusions
Separate packages will not be available to:
$ Employees in scarce job categories.
4. Approval
Application for separation packages must be motivated to and approved by the
relevant Group Executive Director."
9. It is common cause that the policy was amended. In terms of clause 6, the granting of
packages was not to be right or privilege and was said to be entirely within the
prerogative of Eskom.
10. Dr Marshall applied for a separation package. During July 1999 the Executive
Director turned down his application down. Mr Pretorius submitted that (a) at no
time did Dr Marshall contend that he had a contractual right to a separation
package in terms of his contract of employment; (b) nor did he contend that he had
a statutory entitlement to a separation package; and (c) he did not claim an
entitlement to it in terms of any collective agreement binding upon the parties.
11. In Hospera & Another v Northern Cape Provincial Administration (2000) ILJ
1066 (LAC), the court considered whether an employee was entitled to secure
payment of an acting allowance under the provisions of Item 2(1)(b); more
particularly whether such an allowance was a service benefit as contemplated in
this item. The court found that, as there was no contractual entitlement to the
allowance, nor a collective agreement or any statutory entitlement to such an
allowance, the employee could not have secured such an allowance in terms of
item 2(1)(b). The ratio of the judgment appears at pages 10691070. It reads:
"It appears to me that the legislature did not seek to facilitate, through item 2(1)
(b), the creation of an entitlement to a benefit which an employee otherwise does
not have. I do not think that item 2(1)(b) was ever intended to be used by an
employee, who believes that he or she ought to enjoy certain benefits which the
employer is not willing to give to him or her, to create an entitlement to such
benefits through arbitration in terms of item 2(1)(b). It simply sought to bring
under the residual unfair labour practice jurisdiction disputes about benefits to
which an employee is entitled ex contractu (by virtue of the contract of
employment or collective agreement) or ex lege (the Public Service Act or any
other applicable Act.)"
12. The court concluded that to allow an employee to obtain a benefit in terms of this
item, where the employee was not entitled to it, either ex contractu or ex lege ,
would inevitably be a fundamental subversion of the collective bargaining
process. See page 1070FG.
13. Counsel for Dr Marshall, pointed out that in the present proceedings, Eskom, now
represented by different attorneys than those that represented it before the
commissioner, was arguing that the dispute was not arbitrable and on the basis that
the commissioner did not have the jurisdiction to make the award. It was pointed
out that, despite the fact that it clearly appears from the minute of the pre
arbitration hearing, Eskom did not contest that the dispute related to the provision
of benefits to an employee as contemplated by item 2(1)(b). However, it was
properly conceded that Eskom is entitled to raise the question of jurisdiction in
this court, but Eskom is not permitted to contest the relevant issues of fact that
were not in contention before the commissioner.
14. The submission is made that Eskom did not contend, before the commissioner, that it
was entitled to refuse to consider applications altogether or that all employees
were not entitled to apply. Its case was that in the case of socalled Eband
applicants in the transmission group (which included Dr Marshall), the decision to
grant or refuse an application was solely in the discretion of the executive director.
It was submitted, that once it is accepted that Eskom was obliged to consider
applications for the separation benefit, then it follows ex lege or by implication
from the provisions of items 2 and 3 of the Seventh Schedule, that Eskom was
bound to deal with the applications fairly i.e., in terms of a fair procedure and on
fair substantive grounds. It was also submitted that, although Eskom had retained
the discretion to grant or refuse an application, it could not do so without
adherence to the rules of natural justice. Neither could it exercise its discretion
arbitrarily or capriciously or in a manner that was inconsistent as between
different applicants.
15. It was strongly argued that the dictum in the Hospera case, which I have cited above,
does not detract from the fact that the CCMA had jurisdiction to arbitrate the
present dispute. It was boldly submitted that Dr Marshall had a right ex contractu,
arising from the terms and conditions of his contract of employment, to apply for
the separation benefits. It was also stressed that therefore Dr Marshall had a right
ex lege . This, it was contended, obliged Eskom to address Dr Marshall's
application in terms of a fair procedure and to decide it on fair substantive
grounds.
16. Having regard to the facts as they are set out on the papers, as defective as the record
may be, I can find no basis for the contention that Dr Marshall had a right ex
contractu to the separation package.
contractu to the separation package.
17. It was submitted that the dictum, in the Hospera case, relating to a right ex
contractu or a right ex lege is entirely obiter. The Hospera case, so it was argued,
was decided on the basis of very specific provisions of the Public Service Labour
Relations Act. The facts that served before the LAC are not similar to the facts of
the present case. If, in the Hospera case, there had been a written policy
providing that employees in acting positions could apply for, and be granted
acting allowances, it is submitted the employer would have been bound to
consider those applications and to decide them on the basis indicated above.
18. The submission is also made that the interpretation, which Eskom wishes to give to
the Hospera judgment, means that there must be a contractual or statutory right.
But, it is submitted, that if the relief is one to which an applicant is entitled to, in
terms of a contractual or statutory right, the issue of fairness would be irrelevant.
The jurisdiction created by items 2 and 3 would be emasculated. It is further
contended that the LAC did not deal with the case where, absent a right to apply
for certain nonmonetary benefits, e.g., a housing benefit or a protective clothing
benefit or a transport benefit, certain employees were granted the benefit while
others, in identical positions, were not.
19. In labour law there are two poles: disputes of right and disputes of interest. They
rarely meet and their attainment is normally dissimilar. The LAC in the Hospera
case, considered that a benefit, contemplated by a residual unfair labour practice
was situated on the pole occupied by an antecedent right to a benefit. This right
arises ex contractu, ex lege or through a collective agreement. The LAC, correctly
concluded that the other pole, disputes of interest, were not contemplated by the
concept, ie a situation where no benefit exists but the applicant seeks to establish a
concept, ie a situation where no benefit exists but the applicant seeks to establish a
benefit. Such disputes relate to matters of mutual interest and are properly the
subject of negotiation on an individual or collective level.
1.
20. However, in my view there is middle ground between the poles. This is the position
occupied by a spes as regards the enjoyment of a benefit. This spes could be
described, in the words of E Riggs 1988 (36) American Journal of Comparative
Law 395, as a private interest of a status less than a legal right. The spes must be
more than a hope or a wish. It must be, in modern parlance, a legitimate
expectation to a benefit. Importantly this benefit (some advantage or privilege as
comprehended by the normal concept of a benefit) must be a concrete one which
exists. It must be an ascertainable advantage or privilege which has been created
by the employer concerned; or one which the employer has declared it will
consider conferring upon employees.
21. Although legitimate expectation is better known in the context of a fair hearing or
procedure in administrative law, it also has application as regards substantive
matters. Corbett CJ in Administrator Transvaal v Traub & Others 1989 (4) SA
731 (A) at 756HJ quotes the following remarks of Lord Fraser in Council of
Civil Servants Unions & Others v Minister for the Civil Service [1984] 2 ALL
ER 935 (HL) at 943J944A:
A But even where a person claiming some benefit or privilege has no legal right to
it, as a matter of private law, he may have a legitimate expectation of receiving the
benefit or privilege, and, if so, the Courts will protect his expectation by judicial
review as a matter of public law... Legitimate, or reasonable, expectation may
arise either from an express promise given on behalf of a public authority or from
the existence of a regular practice which the claimant can reasonably expected to
continue.@
Corbett CJ says at 758DF:
"As these cases and the quoted extracts from the judgments indicate, the legitimate
expectation doctrine is sometimes expressed in terms of some substantive benefit
or advantage or privilege which the person concerned could reasonable expect to
acquire or retain and which it would be unfair to deny such person without prior
consultation or a prior hearing; and at other times in terms of a legitimate
expectation to be accorded a hearing before some decision adverse to the interests
of the person concerned is taken. (As Prof Riggs put it in the article to which I
have referred (at 404):
> The doctrine of legitimate expectation is construed broadly to protect both
substantive and procedural expectations .=
22. I find support for the view, that a legitimate expectation to a benefit or advantage is
sufficient to constitute a residual unfair labour practice (if unfairly refused) in the
unfair labour practice relating to promotion. An employee who aspires to
promotion, does so with regard to an existing opportunity or vacancy or post. The
employee in question may have a right to promotion, although this would be rare.
But generally, the employee may merely have a legitimate expectation that, if he
or she meets the requirements and beats the competitors, he or she will be
promoted. In the same vein, a residual unfair labour practice relating to unfair
conduct involving training opportunities, similarly does not require, in my
opinion, an antecedent right, to be trained. A legitimate expectation to be
considered for an established training programme presented by the employer or on
behalf of an employer, would suffice.
23. The judgment of Jammy JA in Transnet Ltd v CCMA & Others (2001) 22 ILJ 1193
(LC) par. 20 which relies on the decision in Hospera appears to be to the contrary.
The award handed down by CCMA Commissioner Maritz in Public Servants
Association o.b.o. Geustyn v Provincial Administration: Western Cape (2000)
21 ILJ 700 (CCMA) sets out an approach which in my opinion provides support
for the view which I have taken. At 703 AH Commissioner Maritz says:
"The meaning of >benefits= was considered in a judgment of the Labour Court in
the matter between Schoeman & Another v Samsung Electronics SA (Pty) Ltd
1997 18 ILJ 1098 (LC).
With reference to The Concise Oxford Dictionary (6th ed) a >benefit= is defined
as an >advantage or an allowance to which a person is entitled under insurance or
social security (sickness, unemployment, supplementary benefit) or as a member
of a benefit club or society =.
In the particular case it was succinctly held that a benefit referred to something
extra, apart from remuneration, which may or may not have been covered by the
condition of employment.
In the circular already referred to, which is headed >Application of the special
initiative whereby serving officials are afforded the option to request that their
services be terminated on a voluntary basis = the objective of the administrative
action, which it regulates, is given as the rightsizing of the public service. In a
further circular dated 28 October 1996 interim measures to be adopted by
departmental administrations in respect of vacancies occurring as a result of the
introduction of the special initiative, are dealt with.
In this regard a number of directives were given. Officials leaving who had been
held additional to the establishment and officials in posts that were to be abolished
in terms of the rationalization were not to be replaced. Posts vacated as a result of
the policy could be filled by supernumerary personnel. Posts that could not be so
filled could not be vacated in terms of the policy unless another post of a
comparable monetary value was abolished. Further exceptions related to the filling
of posts to promote representativity.
It is clear from the above that the package was to induce officials to agree to a
separation and that it contemplated that they should be adequately rewarded to
compensate them for leaving a secure position and, in a manner of speaking,
joining the unemployed.
It seems to me that the benefits included in the package were not in any way a
quid pro quo for >services rendered = within the meaning of that term and the
judgment referred to but that the package was clearly an >extra= to the conditions
of employment: an addition to serve as an inducement to terminate that
employment.
In the circumstances the voluntary package, although based on the remuneration
package of the employee as at the termination of the contract, is a benefit as
contemplated in item 2(1)(b) of schedule 7 of the Act and the CCMA has
jurisdiction to resolve the dispute."
24. The LAC's decision in Hospera is binding on me, not simply as a matter of
precedent, but also in terms of the Labour Relations Act. As Dr Marshall does not
have a contractual right to the resignation or separation package, I must find that
the commissioner had no jurisdiction to arbitrate the dispute; even though he had
been led by Eskom to believe that he had such jurisdiction. The award is
consequently a nullity and must be declared to be so.
25. In view of Eskom's role, in agreeing that the issue in dispute fell within the
jurisdiction of the CCMA, or at least in not contesting it, it would be unfair and
unjust to award costs against Dr Marshall.
26. In the premises therefore:
1. The award made by Commissioner Dorman dated 5 July 2001 is declared a nullity.
2. There is to be no order as to costs.
SIGNED AND DATED AT BRAAMFONTEIN THIS 17 th DAY OF
SEPTEMBER 2002.
A A Landman
Judge of the Labour Court
05 September 2002
13 September 2002
Advocate P Pretorius S C and Mr S A Boda instructed by Dison
Ndlovu Attorneys
For the first Respondent Advocate F G Barrie instructed by Brink Cohen Le Roux & Roodt Inc.