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[2019] ZASCA 151
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Tertiary Education National Union and Another v Durban University of Technology (796/2018) [2019] ZASCA 151 (22 November 2019)
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THE SUPREME COURT OF
APPEAL OF SOUTH AFRICA
JUDGMENT
Not
Reportable
Case
no:796/2018
In
the matter between:
TERTIARY EDUCATION
NATIONAL UNION
OF SOUTH AFRICA
(TENUSA)
FIRST APPELLANT
NATIONAL EDUCATION HEALTH
AND ALLIED
WORKERS
UNION (NEHAWU)
SECOND APPELLANT
And
DURBAN UNIVERSITY OF
TECHNOLOGY
(DUT)
RESPONDENT
Neutral
citation:
Tertiary Education National Union and Another v
Durban University of Technology
(796/2018)
2019 ZASCA 151
(22
November 2019)
Coram:
Leach, Wallis, Saldulker and Nicholls JJA and Dolamo AJA
Heard
:
6 November 2019
Delivered
: 22
November 2019
Summary:
Merger of technikons in terms of
Higher Education Act 101
of 1997
– council of merged institution to determine conditions
of service
–
post retirement medical
aid subsidy – harmonisation – whether Council of merged
institution approved the payment of
subsidy to employees of one
former technikon who had not previously enjoyed
such a subsidy.
ORDER
On
appeal from:
KwaZulu-Natal Division of the High Court, Durban
(Olsen J, sitting as court of first instance):
The
appeal is dismissed with costs.
JUDGMENT
Wallis
JA (Leach, Saldulker and Nicholls JJA and Dolamo AJA concurring)
[1]
On 1 April 2002 the Natal Technikon and the ML Sultan
Technikon
(ML Sultan) merged to create the Durban Institute of Technology
(DIT). Under its present name of the Durban University
of Technology
(DUT), it is the respondent in this appeal. The appellants are two
trade unions, the Tertiary Education National
Union of South Africa
(TENUSA) and the National Education Health and Allied Workers Union
(NEHAWU). After the merger they, together
with a third union, the
National Union of Tertiary Employees of South Africa (NUTESA),
entered into negotiations with the management
of the DIT with a view
to harmonising the conditions of employment of the employees of the
new merged institution. These negotiations
were known as the
harmonisation process. The question in this appeal is whether and, if
so, on what terms, they arrived at a legally
binding agreement to
afford to certain former employees of ML Sultan a post-retirement
medical aid (PRMA) subsidy.
[2]
The unions’ pleaded case was that an agreement
to provide the
PRMA subsidy was embodied in a document
(Version 7) signed on 4
November 2005 by the then
Principal and Vice-Chancellor of the DIT, Professor Bonganjalo Goba,
and representatives of the three
unions. They contended that on a
proper interpretation of clause 3.7 of Version 7, especially clauses
3.7.2 and 3.7.3, thereof,
the DIT agreed to extend a PRMA subsidy to
former employees of ML Sultan, with the form and manner of the
subsidy to be the subject
of further negotiation. On this basis they
claimed declaratory relief and an order that the DUT engage in bona
fide negotiations
to resolve the issue of the manner and form of
providing the subsidy.
[3]
The DUT agreed that, in the course of the harmonisation
process the
topic of medical aid and the possible extension of the PRMA subsidy
to employees of ML Sultan was discussed. It denied
that an agreement
to grant a PRMA subsidy to those employees was reached or embodied in
Version 7. Furthermore, s 34(3) of the
Higher Education Act 101 of
1997 (the Act) provides that:
‘
The council must
determine the conditions of service, disciplinary provisions,
privileges and functions of the employees of the
public higher
education institution, subject to the applicable labour law.’
It
followed that no binding agreement could be reached on conditions of
service without the approval of the Council of DIT (the
Council). The
DUT contended that, when the Council considered Version 7, it was
aware of the need for further negotiations concerning
medical aid and
the PRMA subsidy and its approval of the other conditions of service
in Version 7 was qualified to ensure that
these matters and three
other issues would be the subject of further negotiations.
[4]
The case was originally pleaded as a purely
contractual claim, but
the parties recognised at the outset of the trial that the issue of
the Council’s approval was crucial
to whether there was a
binding agreement in relation to the PRMA subsidy. Although there was
no formal amendment of the pleadings,
this became the focus of the
trial. Olsen J dismissed the claim with costs. This appeal is with
his leave.
The facts
[5]
Prior to the merger, employees of the Natal Technikon
whose
employment commenced before 31 December 1999 were entitled to a PRMA
subsidy. The latter was discontinued with effect from
1 January 2000.
Employees were entitled to join one of several medical aid schemes
and the PRMA subsidy was 60 per cent of their
contributions, subject
to a maximum based on the membership contributions of Discovery
Health’s Classic Comprehensive option.
This benefit extended to
some 200 employees, who remained in service with DIT after the
merger. By contrast former employees of
ML Sultan, a number of whom
had been in employment before 1 January 2000, enjoyed subsidised
medical aid and a slightly higher
level of subsidy than the employees
of the Natal Technikon, but no PRMA subsidy.
[6]
After the merger, discussions ensued between executive
management and
the three trade unions with a view to harmonising the conditions of
service of employees of the new institution.
In addition the DIT
instituted a Special Voluntary Exit Policy to reduce excessive staff
numbers. We have been given very little
material concerning the
course of these discussions, but it suffices to pick up the
story as it emerges from transcripts
of proceedings at meetings of
various bodies, including the Council, as well as the minutes of
those meetings, from the latter
part of 2004 early in 2005. The
parties accepted the accuracy of these transcripts and minutes.
[7]
The starting point is that from an early stage management
had
concerns about the affordability of inter alia a PRMA subsidy. At a
meeting of the Institutional Forum on 1 November 2004,
management
indicated that it was not willing to subsidise PRMA.
[8]
Around this
time there appear to have been various iterations of the conditions
of service of the new institution. On 17 March 2005
the Council
agreed that the Human Resources Committee meet within one month to
deliberate on the Conditions of Service document.
It is unclear
whether this was Version 7 or 8 of the conditions of service, but
most of the later minutes refer to Version 7. On
31 May 2005 Council
noted that ‘the Conditions of
Service document’
had
been approved on 3 March 2005 at a joint meeting of
the Human Resources and Finance Committees.
[1]
This document, which appears to have been Version 7, was awaiting
input from a statutory body called the Institutional Forum,
which drew its membership from all sectors of
the DIT community. Ms Jappie, a member of the
task team
engaged in the discussions, reported to Council that the trade
unions were insisting that Version 7 had been signed
and was the
document that should be submitted to Council.
[9]
Ms Jappie said that Version 7 had been submitted
to the Human
Resources Committee, which had identified four issues arising from
it, namely, group life insurance, medical aid,
accumulative leave and
housing allowance. The last of these had been resolved and the Deputy
Vice-Chancellor (Resources
and Planning) and
the unions would deal with the issues of group life insurance
and medical aid. The meeting
concluded with Council resolving to
accept Version 7 ‘except for medical aid, group life, leave and
voluntary severance package’
all of which were to be left for
discussion at the next Council meeting on 15 September after
discussion with the unions.
[10]
It is apparent that the broad item of medical aid included
the PRMA
subsidy and counsel did not suggest otherwise. On 20 July 2005
at the Labour Consultative Forum it was reported
that work was being
done to resolve the group life issue, after which attention would
turn to medical aid and PRMA subsidy. There
was no clear agreement on
how medical aid and PRMA should be resolved and it was accepted that
a working group would need to be
established to resolve this. This is
significant because by this stage Version 7 existed, including clause
3.7, yet no-one suggested
that any binding agreement had been
concluded in the negotiations in regard to an extension of the PRMA
subsidy or medical aid
generally.
[11]
The next relevant meeting was that of the Institutional Forum on 6
September
2005. It noted that Version 7 of the Conditions of Service
document had been approved with ‘the 4 issues outstanding viz
Medical aid, Group Life, Post retirement medical aid and Accumulative
Leave’. It also noted that, contrary to
the
intention at the Council meeting on 31
May 2005, the four issues would not serve before
the Council at its
meeting on 15 September 2005. Some concern was expressed over the
fact that Version 7 had been approved by Council
without having a
hard copy before it and the Forum agreed that the correct version of
Version 7 be identified by the Vice-Chancellor’s
office and
signed with every page initialled by all interested
stakeholders. Professor Goba was present at this meeting.
[12]
Nine days later, when the Council met on 15 September 2005, Professor
Goba reported that the outstanding issues concerning conditions of
service, namely, medical aid, group life, leave and voluntary
severance package would be discussed between executive management and
the unions via the labour consultative forum. The following
resolution was taken at this meeting:
‘
(i) unanimously to
rescind its previous decision that approved version 7 of the
conditions of service document because of the irregular
signing
thereof;
(ii)
to request Executive Management and the Unions to fully sign the
version which they previously approved;
(iii)
that the said documents per (ii) above is not to be re/further
negotiated except for the 4 issues
still to be agreed upon namely
medical aid, group life, leave and voluntary severance package;
(iv)
that the duly fully signed document must be headed “Final
Agreed Conditions of Service between
Executive Management and Unions”
without any version reference and serve before the next Council
meeting for approval.’
[13]
The Human Resources Committee met on 13 October 2005. It was
agreed
that the four outstanding items pertaining to the conditions of
service would be dealt with by the Vice-Chancellor, Professor
Goba,
and if there was a need for mediation he should attend to this. It
resolved that the issues agreed upon should be signed
off by both
parties and that there should be a declaration of issues in respect
of which there was no agreement. Professor Goba
was to report this to
the Council at its next meeting.
[14]
Six days later and pursuant to this decision Professor Goba addressed
the following letter to the members of Council and the Human
Resources Committee of Council.
‘
DULY SIGNED
DOCUMENT: FINAL AGREED CONDITIONS OF SERVICE BETWEEN EXECUTIVE
MANAGEMENT AND UNIONS
Background
Council, at its last
meeting on 15 September 2005 requested that the Conditions of Service
be fully signed by Executive Management
and the Unions, except for
the four issues (Medical Aid, Group Life, Accumulative Leave and
Voluntary Severance Package) which
are still subject to further
negotiations.
Steps
Taken
(1)
The Conditions of Service document has been checked, verified and
amended for editorial corrections
by all parties in the Labour
Consultative Forum.
(2)
The Unions
and Executive Management have signed the Conditions of Service
Document, which Council had approved previously on 31
May 2005 (known
as Version 7).
[2]
(3)
While we are mindful that Council raised four issues for further
negotiations, these will form
the basis for further discussions
together with issues that either parties (sic) may raise. When these
discussions are completed,
the Conditions of Service will be duly
amended to reflect such agreement between Management and the Unions.
(4)
Therefore in order to ensure that we have a working Conditions of
Service document
in place, Council is requested to approve the
document circulated to all Council members.’
[15]
The Institutional Forum met again on 14 November 2005.
Professor
Goba was not present and it is not clear whether the
members of the Forum had sight of his letter to Council. The
minute
is slightly contradictory. It recorded that there was a
difference of view between the unions and executive management over
the
status of Version 7. The unions regarded it as a binding
document, while management was of the view that the four issues of
accumulative
leave, medical aid, post retirement medical aid and
group life required further discussion. The contradiction arose
because, in
the following paragraph of the minute, the Forum noted
that ‘Post retirement Medical Aid had been agreed to with a
cut-off
date of 1 January 2000’. The two seem incompatible. The
latter statement was also inconsistent with the resolution taken at
the meeting, which dealt with the issue as if it were unresolved and
still subject to negotiation.
[16]
After much discussion the Forum resolved to support in principle
the
re-signing of Version 7 and directed its executive officer to draft a
letter to Professor Goba asking that the Conditions of
Service
document serve before the Forum prior to being submitted to Council.
He was to be informed that the Forum wished to be
apprised of
progress on the ‘outstanding issues of medical aid, PRMA, Group
Life and Leave’. Furthermore, the Forum
wished to convey its
view that PRMA should be applicable to all staff employed at DIT at
the date of the merger. The latter
demand would have involved a
substantial extension of the limited existing PRMA and went further
than the debate over a PRMA subsidy
in this case, which was confined
to only certain former employees of ML Sultan Technikon.
[17]
Those meetings formed the background to the critical meeting of
Council
on 23 November 2005. Among those attending were Professor
Goba and both his deputies; Messrs Ncengwa and Ori, who were
respectively
the signatories of Version 7 on behalf of NEHAWU and
TENUSA; and Ms Jappie, the task team member who had reported to the
Council
at its earlier meeting on 31 May 2005. Accordingly there were
people present who had been intimately involved on behalf of
executive
management and the unions in the negotiations leading up to
the signature of Version 7. That had
taken place three weeks earlier on 4
November 2005.
[18]
Professor Goba reported that both executive management and the trade
unions had signed the conditions of service document ‘with the
exception of four outstanding issues’. The minute records
that:
‘COUNCIL APPROVED
the final agreed
Conditions of Service document as signed by Executive Management and
the Unions on 2005-11-04, copies of which
have been circulated
previously with the Agenda and noted,
Council
noted that there are four outstanding issues (therefore not contained
in the aforesaid Conditions of Service document) still
to be dealt
with by the Vice- Chancellor.’
No
objections were noted to this resolution.
The issue
[19]
The unions contend that this resolution approved the Conditions of
Service
in Version 7, including the provisions on which they rely in
these proceedings, and that these provisions obliged the DIT as it
then was, and the DUT now, to provide a PRMA subsidy to all former
employees of ML Sultan employed by DIT after the merger,
who
had commenced their employment at ML Sultan prior to 1 January 2000.
Its case was that DIT had agreed to provide the subsidy
and that the
form and manner in which it was to be implemented was to be the
subject of further negotiations.
[20]
The DUT for its part pleaded that the council approved the Conditions
of Service Document (Version 7), subject to the rider that the
provisions relating to medical aid, group life, accumulative leave
and voluntary severance packages had not been agreed and would be the
subject of further negotiation. If and when agreement was
reached on
these issues, the document would be amended accordingly to reflect
that agreement. It otherwise denied the unions’
allegations.
This placed in dispute whether the Conditions of Service document
included on its terms an agreement to provide a
PRMA subsidy to the
former ML Sultan employees. If the Conditions of Service document
included a provision relating to payment
of a PRMA subsidy to the
former ML Sultan employees, it placed in dispute whether the Council
approved that provision. In other
words, was the Council’s
approval qualified to exclude any obligation to provide such a
subsidy?
[21]
It will be
recalled that the pleaded claim was based upon contract alone. Where
a plaintiff alleges that the parties contracted
on certain terms and
the defendant denies one of the alleged terms, whether or not in
conjunction with an allegation of one or
more additional terms, it is
for the plaintiff to prove the contract on which it relies. That is
so even if it requires proof that
an additional term alleged by the
defendant did not form part of the contract.
[3]
It was therefore for the unions to prove that the agreed conditions
of service included an undertaking to provide a PRMA subsidy
and that
Council approved conditions of service including an obligation to
provide such a subsidy.
The conditions of service
document
[22]
The document annexed to the particulars of claim is described on the
front page thereof as:
‘
DURBAN
INSTITUTE OF TECHNOLOGY
CONDITIONS
OF SERVICE OF EMPLOYEES
HIGHER
EDUCATION ACT
(Act
No 101 of 1997)
CONDITIONS
OF SERVICE OF THE
DURBAN
INSTITUTE OF TECHNOLOGY’
The
signatures appear on the last page but, other than identifying the
capacity of the signatories, this page said nothing about
the status
of Version 7. The document made no reference to an agreement and was
not couched in language appropriate to a contract.
The preamble made
it plain that the critical issue was the approval of Council
and its adoption of the conditions of
service in the
performance of its statutory duties.
[23]
The unions based their claim on clause 3.7, which dealt with medical
aid, but before that can be considered it is necessary to note
certain issues concerning the document placed before the court as
an
annexure to the particulars of claim.
[24]
Apart from medical aid, three other issues, namely, group life
insurance,
accumulative leave and voluntary severance packages had
been referred to in Professor Goba’s report to Council dated 19
October
2005 and in the minutes of the Council meeting of 23 November
2005. All of these, together with medical aid, were described as
outstanding issues. However, a feature of the document annexed to the
particulars of claim was that it contained in clauses 3.3
(Group
Life), 6.15 to 6.17 (Accumulative leave) and
Section 10
(Voluntary
Exit Policy), detailed provisions in relation to all three matters.
That immediately evoked the suspicion that this
could not have been
the document that served before the Council at its meeting on 23
November 2005. Instead it appeared to be a
later iteration of that
document, amended to give effect to agreements subsequently
reached (as was common cause) in relation
to these three issues. The
suspicion that this was the case was reinforced by, for example, a
minute reflecting that group life
was resolved by 4 April 2007, some
eighteen months later. Accumulative leave was still the subject of
negotiations in 2009.
[25]
A closer examination of the annexure to the particulars of claim
revealed
that this must have been the case. A number of discrepancies
emerged when it was examined closely. Counsel could proffer no other
explanation than that the document before the court was an amended
version of the document that had served before Council on 23
November
2005. Among the discrepancies were that:
(a)
although the document purported to contain 69 pages, the second page
containing the index was unnumbered
and pages 32 and 68 were blank
and noted not to be on file;
(b)
the clauses from 6.22.1 to 6.24 were missing and should have appeared
on page 32;
(c)
there was no apparent content for the missing page 68 and no reason
why the signature page (page
69) was separated from page 67;
(d)
pages 3, 23, 25, 40 and 53 of the annexure were typed in a different-
sized font to the rest of the
document and, although incomplete, the
text did not always follow on directly from the previous page or to
the following page.
This was the case with page 40, the wording of
which did not follow on from the foot of page 39 and the numbered
sub-clauses on
which did not match the numbering on the following
page.
(e)
The sentence at the foot of page 52 is incomprehensible when read
with the words at the top of
page 53. As it stood it gives an
employee who has been sanctioned and appeals an opportunity ‘to
address the chairperson
of an Appeal as to why the chairperson of the
Disciplinary Hearing made a correct decision’. That is
manifestly absurd, so
something has gone wrong with the
document.
[26]
Counsel for DUT accepted that clause 3.7 was part of the
document
placed before the Council. However, the fact that the
document annexed to the pleadings was not the original document meant
that,
in the process of construing the Conditions of Service, we were
unable to see how the original document dealt with the other three
issues. There is reference in some of the documents to Version 8
having deleted certain items from Version 7 in relation to some
of
the disputed issues. If that were the case it would reinforce the
contention by DUT that the parties had not reached agreement
on these
issues. It would also raise the possibility that Version 7 was a
mixture of agreed matter and union demands on outstanding
issues. We
cannot now tell.
[27]
That background would have been highly relevant to the process
of interpretation of the clause relied on by the union. It was common
cause that when the Council passed the resolution of 23 November
2005
no agreement had been reached on these three issues. If therefore
there were no clauses dealing with these three matters,
or a note
that they were left over for later agreement, that would have
influenced the construction to be given to clause 3.7.
If there were
detailed provisions, such as those that appeared in the annexed
document, it would have been apparent that they merely
represented
the unions’ demands without any agreement having been
concluded.
[28]
These deficiencies in the document significantly complicated
the task
of construing both the relevant clauses and the minutes setting out
the history of Version 7. DUT did not, however, ask
that the appeal
be dismissed on the grounds that, because of their reliance on a
manifestly unreliable document, the unions had
failed to prove the
first element of their case. I accordingly turn to deal with the next
issue being the meaning to be attached
to the clause on which the
unions relied.
The meaning of clause 3.7
[29]
There is nothing in the record to indicate that any attention
was
paid to this at the trial. It was, however, a highly relevant issue
because the unions’ case was that properly interpreted
clause
3.7 afforded the former ML Sultan employees a right to receive a PRMA
subsidy, subject only to the manner and form of the
subsidy being
negotiated. Was that correct? To answer that question it was
necessary to follow a conventional process of interpretation
to
determine the meaning of the clause.
[30]
Clause 3.7 reads:
‘
MEDICAL AID
3.7.1 All
permanent and contract (more than one year) employees have the option
to become members of the medical aid
schemes approved and subsidised
by DIT.
3.7.2 Current
DIT employees who were employees of the former Natal Technikon or ML
Sultan Technikon would enjoy similar
medical aid benefits as agreed
in the harmonisation process.
3.7.3
In respect of post-retirement medical aid subsidy this would be
applicable (as part of the harmonisation
process) to staff who are
currently employees of DIT, provided that they were employed by
either institution prior to 31 December
1999. And further,
post-retirement medical aid subsidy, are subject to prevailing
rules.’
[31]
The pleadings relied on the clause as a whole. Sub-clause 3.7.1,
which
provided that all employees would have the option of joining
one of the medical aid schemes approved and subsidised by DIT, was
unrelated to the issue of the PRMA subsidy. It was concerned with the
position of all employees, both permanent and contract, irrespective
of whether they were previously employed by ML Sultan or Natal
Technikon. They were all to be given the option to become members
on
a subsidised basis of one of the medical aid schemes approved by DIT.
These were not identified and there was nothing to say
that all the
schemes previously approved by the merging parties would be approved
by DIT, or whether new schemes would be identified
for that purpose.
The provision was therefore indeterminate so far as its enforceable
content was concerned. The approved schemes
needed to be identified
presumably through negotiation between executive management and the
unions. From an administrative perspective
DIT would want to limit
the number of approved schemes and would also be concerned at the
costs that would be incurred in subsidising
membership of those
schemes. The level of subsidy would also have to be determined.
[32]
Sub-clause 3.7.2 likewise did not bear directly on the
PRMA
issue. It was concerned with the relative position of former
employees of either ML Sultan or Natal Technikon. They were to
enjoy
similar, but not necessarily identical, benefits. This would have
been couched in that way because there would be a number
of reasons
why employees would be reluctant to move from their existing medical
aid funds. Those that spring to mind would be the
range of benefits
offered, the cost and the fact that this would cause administrative
upheaval. In cases where medical practitioners,
pharmacies and the
like lodged claims directly with the medical aid fund a change of
scheme would require members to change details
with those
practitioners, often at considerable inconvenience. Inertia would
also play a role. But for so long as employees had
different options
it would be impossible for DIT to ensure that everyone received
exactly the same medical aid benefits.
[33]
Two points emerged from this clause. The first was that new employees
after the merger were not necessarily to be treated in the same way
as those who had previously been employed by the merging parties.
This suggested that executive management may have contemplated that
new employees might receive fewer benefits than existing employees.
The second arose from the reference to the former employees enjoying
similar benefits ‘as agreed in the harmonisation process’.
Linguistically this is an ambiguous phrase. It could refer to an
agreement that had resolved the way in which similar benefits
were to
be afforded to former employees. Alternatively, it could refer to an
agreement on the principle of similar benefits, the
terms of which
remained to be worked out in the course of the harmonisation process.
Further alternatively, it could simply identify
an issue that the
parties were looking to reach agreement on in the course of the
harmonisation process.
[34]
The first possibility is improbable for two reasons. The minutes
throughout
the relevant period reflected that medical aid was a topic
on which further negotiations needed to take place. If the entire
issue,
leaving aside the question of the PRMA subsidy, had been
resolved, there is no apparent reason why the terms of that agreement
would not have been incorporated in Version 7. As to which of the
other two is correct, they both required agreement to be reached
through the harmonisation process. It could make little difference
whether there was agreement in principle that the former employees
would receive similar medical aid benefits or whether that was merely
the purpose of the harmonisation process. In both cases that
could
only be achieved by further negotiations. On either basis the clause
was evidence of the absence of agreement rather
than of
agreement having been reached.
[35]
Clause 3.7.3 dealt specifically with the PRMA subsidy. It said that
this
would be applicable ‘as part of the harmonisation process’
to current staff previously employed by either ML Sultan
or Natal
Technikon before 31 December 1999. The significance of that date was
that it was the cut- off date after which the PRMA
subsidy was
withdrawn from Natal Technikon employees. Essentially the unions
relied upon this clause for their primary contention
that clause 3.7
embodied an agreement to provide a PRMA subsidy to former ML Sultan
staff who had been employed prior to the cut-off
date.
[36]
While that might have been a
possible interpretation of clause 3.7.3 had it not
contained the words ‘as part of the harmonisation process’,
it contained those words and some meaning must be given to them. The
obvious meaning, given that the clause was in any event couched
in
language dealing with the future situation (‘would be
applicable’), was that any entitlement to a PRMA subsidy would
only arise when the harmonisation process had proceeded to a stage
where agreement had been reached to provide such a subsidy and
on the
terms thereof.
[37]
Had the position been as contended by the unions one would have
expected
the clause to have been couched in far more definite terms.
If an agreement to pay the subsidy to the additional employees had
been reached, why say ‘in respect of post-retirement medical
aid subsidy this would be applicable’, when what was intended
was ‘A post-retirement medical aid subsidy will be provided’?
Why add the reference to the harmonisation process? To
distil from
the words used a definite obligation to provide a PRMA subsidy
to a group of current employees of DIT,
subject only to
negotiating the form and manner of the
subsidy, stretches the language
beyond reasonable limits. In any
event what is meant by the ‘form and manner of the subsidy’?
This language is not
apt to refer to the amount of the subsidy, which
was necessarily the central issue confronting the DIT in any decision
to afford
such a subsidy to employees who had not previously enjoyed
it. When in later years attempts were made to assess the cost of
extending
a PRMA subsidy to these employees it was calculated at
anywhere between R78 million and over R100 million. As early as
November
2004 the DIT had said that it would not provide a PRMA
subsidy. Where in all the documents was there any indication of their
agreeing
to depart from this stance? The answer is, nowhere.
[38]
Lastly there is the curiously worded sentence at the end of that
clause
reading: ‘And further, post-retirement medical aid
subsidy, are subject to prevailing rules.’ This could only
refer
to the rules governing the subsidy already receivable, but that
subsidy was confined to former employees of Natal Technikon. Those
rules would necessarily deal with the entitlement to subsidy, the
amount of the subsidy and how it was to be calculated and paid.
Even
on the most optimistic version of the unions’ case, none of
this can have been agreed when Version 7 was before Council
on 23
November 2005.
[39]
The only meaning that comes to mind is that the words ‘And
further’
introducing this sentence were intended to convey that
there was an existing situation that was not the subject of debate as
part
of the harmonisation process and was to remain unaltered. This
was the situation involving the former Natal Technikon
employees
who, the record shows, were firmly resistant to any
endeavour to deprive them of the PRMA subsidy. Leaving the first
sentence of
clause 3.7.3 standing alone might have been thought to
introduce uncertainty in regard to their position in the future
discussions
of this issue as part of the harmonisation process,
because it referred to all employees of either institution prior to
31 December
1999. It was natural then to say that, further to the
earlier sentence, the existing position in relation to Natal
Technikon employees
would continue in terms of the existing rules.
[40]
For those reasons I am satisfied that clause 3.7 is not reasonably
capable
of bearing the meaning that the unions wish to attribute to
it. In my view it goes no further than recording that issues of
medical
aid generally, and PRMA subsidy specifically, were still to
be resolved in the harmonisation process. The only caveat to that was
the recordal in the final sentence of clause 3.7.3 that the existing
position in relation to the PRMA subsidy for former Natal
Technikon
employees, whose right to such subsidy was protected by labour
legislation, remained unaltered. That conclusion on its
own would
suffice to cause the appeal to fail, but it is desirable, in view of
the fact that the argument and the judgment in the
high court
largely centred around the
resolution by
Council
on 23 November 2005, to deal with the effect of that resolution.
Did the Council approve
payment of a PRMA subsidy to former ML Sultan employees?
[41]
The minute of Council’s meeting of 23 November 2005 records
that
Professor Goba reported that executive management and the unions
had signed the Conditions of Service ‘with the exception
of
four outstanding issues’. There can be no doubt that these were
the four issues that were recorded in his report to Council
of 19
October 2005, namely, medical aid, group life, accumulative leave and
voluntary severance package. Medical aid included,
but was more
extensive than, the PRMA subsidy. Unlike the remaining conditions of
service these issues had not been resolved in
the course of the
negotiations constituting the harmonisation process.
[42]
The four issues are reflected in the minutes of all the meetings of
Council
and other committees and bodies during 2005 as being
unresolved. Ms Jappie reported to Council on 31 May 2005 that the
four issues
had been raised in the Human Resources Committee and the
Deputy Vice-Chancellor had been mandated to engage with the unions on
two of them, namely, group life and medical aid. Council’s
resolution on 31 May 2005 recorded that Version 7 was approved
except
for group life, medical aid, leave and voluntary severance package.
There is nothing in the record to indicate that any
further progress
was made in respect of these matters before the November meeting of
Council.
[43]
When the Institutional Forum met on 6 September 2005
it recorded that
the four issues were outstanding, with specific mention of the PRMA
subsidy. The subsequent signature of a consolidated
version of the
Conditions of Service (Version 7) flowed from a resolution by the
Forum. They required that this be done at a stage
when the members of
the Forum were well aware that the four issues remained outstanding.
They cannot therefore have regarded the
consolidation and signature
of Version 7 as bringing about agreement on the outstanding issues.
That would have to arise from subsequent
negotiations. As noted above
Version 7 included clause 3.7 before this meeting took place. The
Forum’s minute is incompatible
with it having been of the view
that an agreement had been reached in clause 3.7 to extend the PRMA
subsidy to the former ML Sultan
employees.
[44]
Council met again on 15 September 2005 where Professor Goba reported
that the outstanding issues of medical aid, group life, leave and
voluntary severance package were to be discussed between executive
management and the unions at the Labour Consultative Forum. Clearly
therefore no agreement had been reached on these issues by
that date.
Thereafter he wrote his report to Council saying that the four issues
remained the subject of further negotiation. Executive
management
recorded that as the position at the meeting of the Institutional
Forum on 4 November 2005. That appears to have
been accepted by
the members of the Forum, including the unions, as they instructed
the executive officer of the Forum to write
to Professor Goba asking
for a report on progress on these issues.
[45]
That is how matters stood when Council met on 23 November 2005. For
at
least six months prior to that meeting the relevant bodies within
DIT said that medical aid had not been resolved and needed
further negotiation between management and the unions. At that
meeting they were presented with a report saying that there were
four
outstanding items that had not been agreed. Professor Goba and the
three union representatives signed the conditions of service
in the
knowledge that these items were unresolved. Not surprisingly the
resolution of Council in regard to the approval of the
conditions of
service recorded that there were four outstanding issues still to be
dealt with. In regard to these issues
the minutes said
that they were therefore not contained in the final agreed conditions
of service.
[46]
It is significant that at all these meetings, whether of Council or
the
Institutional Forum, the unions were represented. Yet there is
not a word in the minutes to suggest
that they did not agree with the
repeated statements that the issue of medical aid and PRMA had not
been resolved and was awaiting resolution through further
negotiation. This is entirely in accordance with the evidence
of Mr Ori, who was at the time the chair of TENUSA and represented it
in the negotiations, as well as being a member of Council.
He
explained under cross-examination that clause 3.7 in the signed
document had not changed at all during this period. Although
there
had been discussions about it ‘we hadn’t concluded on
those clauses’. He confirmed that those clauses were
still
subject to further negotiations.
[47]
Mr Ori’s evidence went no further than to say that the
issue of
PRMA was to be harmonised, but this was never done. There is a
difficulty with his evidence. By and large he did not testify
on
these issues from memory, but was led by reference to two
documents to which he was not a party, composed in 2009 and
2013
respectively. People who were not themselves participants in the
negotiations and meetings compiled them. Leading a witness
in this
fashion is merely an indirect way of asking leading questions and
little weight can be attached to evidence obtained in
this manner.
When taken to other documents such as the minutes of the Council
meeting on 31 May 2005 he agreed that the resolution
taken at that
meeting approved Version 7 except for medical aid, group life, leave
and voluntary severance package. This was inconsistent
with any
suggestion that the extension of the PRMA subsidy had been agreed and
was a far cry from suggesting that Council approved
it. Most
importantly he pointed to nothing that occurred in the intervening
six months to alter the position that this issue remained
outstanding
and was not approved by Council. He was also a member of the Human
Resources Committee that on
13 October 2005
resolved that the four outstanding issues be resolved by
the Vice-Chancellor and, if need be,
he could establish a mediation
process to resolve the issue.
[48]
Against this background it is impossible to conclude that
when
Council passed its resolution concerning
conditions of service on
23 November
2005 it was approving the extension of the PRMA subsidy to a group of
former ML Sultan employees.
[49]
That conclusion is reinforced if one looks at subsequent events. A
little
over three months later, at a meeting of the Institutional
Forum on 6 March 2006, a query was raised as to the status and
cut-off
date for the PRMA scheme. The response by the NEHAWU
representative at the meeting was to say that the Labour Consultative
Forum
had agreed that this would be applicable to staff employed
prior to 1 January 2000. Had there been approval by Council of an
agreement
that the subsidy would be paid to all former ML Sultan
employees employed prior to 1 January 2000 one would have expected
the union
representative to have known this and to have said so.
Instead the Forum considered that a different date – the
date
of the merger – was more appropriate and two union
representatives were mandated to raise this at the next meeting of
the
Labour Consultative Forum.
[50]
The next minute in the record is of the Labour Consultative Forum
dated
24 August 2007. In regard to PRMA subsidy it was noted that as
a result of the merger some staff enjoyed this benefit and others
did
not although parity had been reached on other issues. It was agreed
that the matter would remain on the agenda and needed to
be
addressed. Again this was inconsistent with Council having approved
the extension of the PRMA subsidy to the group of former
ML Sultan
employees.
[51]
By February 2008 the Human Resources Committee were resolved that
there
should be no extension of the PRMA subsidy and that endeavours
should be made to extract DUT from its obligations in that regard
to
former Natal Technikon employees. Later meetings of that committee
endorsed this stance. While the fairness of this approach
was
questioned at a meeting of Council on 13 March 2010, there was no
suggestion that the Council had already approved the extension
of the
PRMA subsidy to former ML Sultan employees. At subsequent meetings
where the matter of the PRMA subsidy was discussed if
anything the
parties’ approaches grew further apart. The unions continued to
press for various categories of employees to
be afforded a PRMA
subsidy, while management steadfastly resisted any such extension and
instead sought a way to extract DUT from
its existing commitments in
that regard.
[52]
The inevitable conclusion is that the unions did not prove
the
agreement on which they relied and did not prove that the Council of
DUT approved that agreement or approved the Conditions
of Service
document on terms that included an obligation to extend the PRMA
subsidy to former employees of ML Sultan. That was
the conclusion
reached by Olsen J and in my view he was correct.
[53]
The appeal is dismissed with costs.
M
J D WALLIS
JUDGE
OF APPEAL
Appearances
For
appellant:
K J Kemp SC (with him H S Gani SC)
Instructed
by:
Shepstone & Wylie, Durban;
Claude
Reid Inc, Bloemfontein.
For
respondent: Maurice
Pillemer SC
Instructed
by:
Mathew Francis Inc, Pietermaritzburg
Rossouws
Attorneys, Bloemfontein.
[1]
These committees were established by the Council and reported to it.
[2]
This could not refer to the document before Council on 23 November
2005 as that was only signed on 4 November 2005.
[3]
Kriegler
v Minitzer
1949
(4) SA 821
(AD) at 826-828;
Topaz
Kitchens (Pty) Ltd v Naboom SPA (Edms) Bpk
1976
(3) SA 470
(AD);
Stocks
& Stocks (Pty) Ltd v T J Daly & Sons (Pty) Ltd
1979
(3) SA 754
(A) at 767C
.