IN THE LABOUR COURT OF SOUTH AFRICA
SITTING IN DURBAN
CASE NO D243/04
Date of Hearing: 2004/11/03
Date of Judgment: 2005/01/27
In the matter between
ENFORCE GUARDING (PTY) LTD
APPLICANT
and
MINISTER OF LABOUR 1ST
RESPONDENT
DIRECTOR-GENERAL - DEPARTMENT OF LABOUR 2ND
RESPONDENT
NATIONAL SECURITY & UNQUALIFIED
WORKERS UNION 3RD
RESPONDENT
SA TRANSPORT & ALLIED WORKERS UNION 4TH
RESPONDENT
SECURITY & ALLIED TRADE UNION OF SA 5TH
RESPONDENT
NATIONAL SECURITY WORKERS UNION 6TH
RESPONDENT
EMPLOYEES WHO ARE NOT MEMBERS
OF ANY OF THE AFORESAID 7TH & FURTHER
RESPONDENTS
JUDGMENT DELIVERED BY
THE HONOURABLE MR ACTING JUSTICE NGCAMU
FOR THE APPLICANT: MR G O VAN NIEKERK SC
FOR THE 1ST &
2ND RESPONDENTS: MR M J D WALLIS SC
JUDGMENT
NGCAMU AJ
[1] This is an application for the review of the decision of the
second respondent in refusing the variation of clause 5(9)
of the sectoral determination No 3 applicable to the
security industry.
[2] The application is opposed by the first and second
respondents.
[3] The applicant is involved in the security industry. In February
2000 the Minister of Labour made a sectoral determination
to regulate the working hours in the security industry. The
sectoral determination reduced the number of ordinary
hours to be worked first from 60 to 55 hours per week and
later to 50 hours per week. Overtime was limited to
10 hours per week. A further important item introduced
was the payment for overtime at 1,5 per hour, the ordinary
hours of work.
[4] The introduction of the sectoral determination put the
applicant in a dilemma as it had a shift of five days in and
two days off. This was costly to the applicant if it had to
maintain 60 hours per week. The applicant suggested to
the employees payment of 1,25. The suggestion was
embraced by the unions. The third respondent did not
participate as it did not have the mandate to sign the
agreement from members.
[5] The applicant accordingly made an application for the
variation in terms of section 50(7)(b) of the Basic
Conditions of Employment Act when the third respondent
did not sign the agreement.
[6] The application was refused by the second respondent on the
basis that the conditions of employment should not be less
favourable to the employees. The applicant had two
options open to it. It was either to comply with the
sectoral determination or approach the Court for a review
of the decision.
[7] The applicant set out the three grounds for the review of the
decision. This will be dealt with in this judgment.
Section 50 of the Basic Conditions of Employment Act
allows the Minister of Labour to make a sectoral
determination. These sectoral determinations form part of
the Act and may therefore be varied by the Minister. The
Act is defined as to include the schedules and the
regulations made under the Act. The Minister is therefore
entitled to vary any condition of employment by means of
a sectoral determination applicable to a particular sector. I
now deal with the grounds of review, as set out by the
applicant.
[8] The applicant has submitted as its first ground of review that
in terms of section 50(1) of the Basic Conditions of
Employment Act it is the Minister of Labour who must
determine whether a variation ought to be granted. In the
present case it is the second respondent who refused the
application. It was therefore submitted that there was no
proper delegation of authority by the Minister to the
second respondent and, accordingly, the second
respondent's decision was unlawful and should be
reviewed.
[9] Section 85(1) of the Basic Conditions of Employment Act
provides that:
"(1) The Minister may in writing
delegate or assign to the Director-
General or any employee in the
Public Service of the rank of
Assistant Director or of a higher
rank any power or duty conferred
or imposed upon the Minister in
terms of this Act, except the
Minister's powers in terms of
sections 6(3), 55(1), 60, 83, 87
and 95(2) and the Minister's power
to make regulations."
[10] The Minister, acting in terms of section 85(1), delegated his
powers to the second respondent to make a variation in
terms of section 50. The fact that the delegation has been
made by the Minister is not in dispute.
[11] Annexure MBD1 on page 140, being the delegation, set out
the guidelines for those exercising the delegated authority.
It was argued on behalf of the applicant that the schedule
MBD2 does not provide for the variation concerning
payment of overtime in terms of section 10(1) of the Basic
Conditions of Employment Act. It was also submitted that
it does not provide for payment of overtime. Accordingly,
it was submitted the Director-General did not have
authority.
[12] I do not agree with the submission made by Mr van
Niekerk SC, for the reasons that follow. The Minister, on
document MBD1, specifically stated that he delegated the
powers vested in him to make determinations (variations)
in terms of section 50(1) on the basis as contained in the
schedule. The delegation covers the whole of
section 50(1). This section provides:
"The Minister may, if it is consistent
with the purpose of this Act, make a
determination to replace or exclude
any basic condition of employment
provided for in this Act in respect
of ..."
In terms of this section, any basic condition of employment
may be replaced or excluded.
[13] In the document MBD1 the Minister set out the guidelines
regarding certain section of the Basic Conditions of
Employment Act. The Minister did not provide any
guidelines in respect of payment of overtime and variation
concerning payment of overtime. This is left to the
discretion of the person exercising the delegated authority.
In item 3 of MBD1 the Minister stated the purpose of the
ministerial determination (variations) as being to vary one
or more aspects of conditions to accommodate the specific
needs and circumstances in the workplace. The Minister
was not required to make guidelines on all aspects of
section 10. He granted authority for each application to be
considered on its own merits and motivation. Accordingly
there was proper delegation. It follows that the second
Respondent’s decision was lawful.
[14] As it is not the applicant's case that there is no delegation,
this ground of review should fail.
[15] The letter of refusal of the variation stated:
"In terms of the departmental policy,
an application is only granted if
conditions to the application is (sic)
not in the whole less favourable and
---- that the above could not be
established."
[16] The applicant has submitted that the policy is ultra vires
because it makes it impossible for an application to
succeed. It was further submitted that there would be no
reason for variation if one has to pay extra.
[17] The policy of the Department of Labour as reflected in the
letter of refusal appears to be based on section 50(2)A of
the Basic Conditions of Employment Act, which provides:
"A determination in terms of sub-section (1) may only
be made in respect of section 9 if -
(a) The employee's ordinary hours of work,
rest periods and annual leave are,
on the whole, more favourable to
the employees than the basic
conditions of employment in terms
of section 9, 10, 14, 15 and 20.
(b) The determination -
(i) has been agreed to in a
collective agreement;
(ii) it is necessitated by the
operational circumstances
of the sector in respect of
which the variation is
sought and the majority of
the employees in the sector
are not members of a
registered trade union; or
(iii) applies to the agricultural
sector or the private
security sector."
[18] The policy referred to by the first and second respondents
does not refer to section 50(2)A. There is no basis for the
submission that the policy is derived from the provisions of
section 50(2)A. In my view the Department of Labour may
refer to the provisions of section 50(2)A as guide, in order
to give effect to the purpose of the Act.
D243/04-NB/CD - 8 - JUDGMENT
D243/04-NB/CD - 9 - JUDGMENT
[19] The Act provides for the basic conditions that must be
enjoyed by the employees. It does not provide for
the conditions of employment for every employer. It
is not the purpose of the Act to take away the rights
that the employees enjoy. The policy of the
Department of Labour seeks to prevent a situation
where the rights enjoyed by the employees are being
taken away and ultimately become less favourable to
the employees. The conditions need not be better
and should not be worse.
[20] The applicant's submissions that it has provided a quid
pro quo is that it has paid contributions to the
provident fund which other companies do not pay.
The first and second respondents have countered this
by stating that when the number of hours worked per
week was reduced from 60 to 55, there was a wage
increase which improved the conditions of
employees. The working conditions have been
improved by the stipulation that the employees work
an acceptable number of hours per day. There is
merit in this submission and this has not been
disputed.
[21] With regard to the contributions to the provident fund,
the submission made is that since March 2001 it had
become compulsory that employees contribute to the
provident fund. That being the case, the contributions
made by the applicant are not an additional benefit to
the employees entitling the applicant to exemption of
paying the statutory amount for overtime worked.
The Department correctly refused to accept this
D243/04-NB/CD - 10 - JUDGMENT
submission.
[22] The proposal of an additional two days' leave being
granted as a quid pro quo for the reduction in the
hourly rate of overtime was rejected by the third
respondent. The third respondent felt that it was not
just and equitable in relation to the number of hours
of overtime worked. This proposal was considered by
the second respondent in relation to the objection by
the third respondent. The reason given for the
decision is rational and the Court cannot interfere
with it. The second ground of review should therefore
fail.
[23] The third ground submitted for the review is that the first
and the second respondents did not properly apply
their minds to the information available to them and
committed a gross irregularity. The reason for the
application for the variation is that the applicant paid
its employees less than the amount provided in
section 10(2) of the Act for the period between
6 March 2001 to 15 November 2001.
[24] Section 10(2) of the Act provides that the employees
must be paid at least 1½ times the employee's wage
for overtime worked.
[25] The applicant submitted that it was making in excess of
3% contribution to the provident fund and paid for the
lunch hour, thus making up any shortfall in the
amount paid to the employees, being a shortfall of
0,025%. It was submitted that the first and the
D243/04-NB/CD - 11 - JUDGMENT
second respondents ignored the calculation
submitted in support of the application.
[26] Mr Wallis SC, for the first and second respondents,
submitted that clause 5(9) of the sectoral
determination and section 10 of the Basic Conditions
of Employment Act do not provide for the
contributions to the provident fund being paid in lieu
of the overtime rate of pay of 1,5. The sectoral
determination provides for the number of hours to be
worked by the employees per day and per week, as
well as the rate of payment for ordinary and overtime
hours. It was submitted that the calculations were
aimed at proving the impossible and were not
material in the outcome of the application. The
payment for the meal time was in existence at the
time the sectoral determination was introduced. The
applicant was also making the contributions to the
provident fund. The applicant seeks to have the
existing benefits considered in the exemption for the
payment of the statutory overtime rate.
[27] There is merit in the respondents' submission that one
cannot take away the existing rights in order to
comply with the sectoral determination. The difficulty
with the respondents' submission is that it has not
disputed that the calculations were not taken into
account. The submissions made is that these
calculations were irrelevant to the outcome of the
application.
[28] I disagree with this submission. It was irregular for the
D243/04-NB/CD - 12 - JUDGMENT
first and second respondents to ignore material
submitted for consideration. What the first and
second respondents should have done was to
consider the information and reject it on the merits.
To simply ignore the relevant information submitted
for consideration was a gross irregularity. The
material, if properly considered, could have provided
a basis for a favourable outcome. In the light of the
fact that the relevant information was ignored, I find
that the third ground for the review should succeed
as the first and second respondents committed an
irregularity.
[29] On the question of costs, I have decided that each party
should pay its own costs. The reason for this is that
the respondents were successful in opposing two
grounds of review. The review only succeeded on the
third ground. The opposition was therefore valid. I
have also considered that the issue argued by the
parties was a novel one.
[30] The following order is accordingly made:
(a) The decision made by the second respondent to
refuse the application for a variation of
clause 5(9) of the sectoral determination No 3
applicable to the security industry in terms of
section 50(1) of the Basic Conditions of
Employment Act 1997 be and is hereby
reviewed and set aside.
(b) The application for the variation is referred back
to the first and second respondents for proper
determination.
(c) The service of the application to further
D243/04-NB/CD - 13 - JUDGMENT
respondents is condoned.
(d) Each party is to pay its own costs.
__________
Ngcamu AJ