THE LABOUR COURT OF SOUTH AFRICA, CAPE TOWN
Not Reportable
Case no: C447/2024
In the matter between:
IMATU obo MOSES AND 13 OTHERS Plaintiff
and
CITY OF CAPE TOWN Defendant
Heard: 21 and 22 January 2026
Delivered: 7 August 2026
Summary: A contractual claim in terms of section 77(3) of the Basic Conditions of
Employment Act 75 of 1997, challenging an employer’s decision to stop paying
overtime. Overtime is governed by a policy under which the employer reserved the
right to amend it from time to time. No contractual right established.
JUDGMENT
GANDIDZE, J
Introduction
(1) Reportable: No
(2) Of interest to other Judges: No
7 August 2026
Signature Date
[1] The Independent Municipal and Allied Workers Union (the union) referred a
claim to this court in terms of section 77(3), 1 read with section 77A 2 of the
Basic Conditions of Employment Act 3(BCEA), against the City of Cape Town
(the City) , the employer of fourteen of its members involved in this dispute
(the employees) . The dispute arose because, from the time the employees
commenced employment with the City, they were paid overtime for all hours
worked beyond 40 hours per week, or received time off in lieu of the overtime
hours worked. However, in December 2023, the City advised the union that
from January 2024, the employees would still be required to work overtime
but would not be paid for it . The decision affected employees in Traffic
Services, Metro Police and Events Management. The union launched a n
urgent application challenging the decision, but the application was dismissed
on the ground that it lacked urgency . The current claim to this court followed
in October 2024, and the City opposes it.
[2] The parties agreed to separate the quantum from the merits. Put differently, if
the union and its members succeed with their claim, quantum would still need
to be determined.
Brief background facts
[3] The employees involved in the dispute commenced employment with the City
at various times before January 2024. They were employed at either Task
Grade 14 (T14) or 15 (T15).
[4] The Letter of Permanent Employment (appointment letter) signed by the
employees records that their employment is subject to (i) the City’s Conditions
of Employment for permanent employees, as set out in a summary attached
1 Which provides as follows:
‘(3) The Labour Court has concurrent jurisdiction with the civil courts to hear and determine any matter
concerning a contract of employment, irrespective of whether any basic condition of employment constitutes a
term of that contract.’
2 Which empowers this court to make an order, inter alia:
term of that contract.’
2 Which empowers this court to make an order, inter alia:
‘making a determination that it considers reasonable on any matter concerning a contract of employment in terms
of section 77 (3), which determination may include an order for specific performance, an award of damages or an
award of compensation.’
3 Act 75 of 1997.
to the letter, which provides that overtime work is ‘as per BCEA provisions
and Council’s policy’, and (ii) Delegated powers, relevant resolutions and HR
Policies, as applicable and as amended from time to time. It is common cause
that there is no document setting out ‘Conditions of Service’, other than the
summary attached to the appointment letters.
[5] One of the City’s policies is the Overtime and Payment for Work on Sundays
and Public Holidays System and Procedure (Overtime Policy), now referred to
as the System and Procedure. The versions before the court were 2007,
2013, 2017 and 2023, and copies are available on the City’s intranet or on its
landing page.
[6] From the commencement of their employment until December 2023, the
employees worked in excess of 40 hours per week. Hours worked in excess
of 40 hours per week were regarded as overtime, and, as consideration, the
employees either received an amount equal to their normal hourly rate for the
overtime worked, referred to as a straight time basis, or they could take time
off in lieu of overtime. In December 2023, the employees were informed that,
with effect from January 2024, they would be required to work more than 40
hours per week but would not be paid for overtime. The employees were
informed that this was an instruction that they were required to comply with,
failing which disciplinary proceedings would be instituted. The union advised
the employees to heed the instruction, which they have done to date.
[7] The affected employees do not qualify for overtime pay in terms of the BCEA.
The Overtime Policy provides that employees at T16 and above are not
entitled to overtime pay, and that employees at T13 and below receive
overtime in accordance with the BCEA.
[8] There is no collective agreement governing the payment of overtime at the
City.
Oral evidence
[9] The union filed witness statements from two employees, Keith Moses (Moses)
and Shoukard-Allie Rawoot (Rawoot). These employees also gave evidence
and were cross -examined. It is unnecessary to set out all their evidence, as
most of it was, in any event, common cause.
[10] Moses testified that when the dispute arose, he worked in traffic services. He
was paid overtime for the 24 years he was employed by the City . The removal
of overtime pay resulted in him losing between 12 and 15 per cent of his
earnings. Working overtime affected his ability to meet family commitments,
his social life and his wellbeing. He did not agree to work overtime without
being remunerated for it. Had he been asked, he would have declined.
Although they continued to receive the standby allowance after January 2024,
they were required to work overtime regularly and were not paid for the hours
worked. At the time of the trial proceedings, he had been appointed to the T16
level since January 2026, a level that does not qualify for overtime pay.
[11] Rawoot is employed in Events Management, performing duties that require
his presence on site. Although his working hours are 08h30 to 17h00, most
events assigned to him take place outside working hours, including evenings,
weekends and public holidays, and attendance is compulsory. He referred to
events such as the Rugby Sevens, Cycle Tour, Freedom of the City, Two
Oceans marathon, the memorial service of Nelson Mandela and the funeral
and memorial service of Desmond Tutu, which they organised. They worked
hours in excess of the prescribed 40 hours a week and were paid overtime.
However, since January 2024, he has received only his normal salary, with no
overtime pay or standby allowance. In any given month, overtime can range
from 20 to 70 hours, given that Cape Town is considered the events capital of
the country. As with Moses, the earnings loss is between 12 and 15 percent.
Working overtime negatively impacts his ability to meet family commitments,
his social life and wellbeing. He would never have agreed to work overtime
without remuneration.
[12] The City did not lead any oral evidence.
without remuneration.
[12] The City did not lead any oral evidence.
The union’s contentions
[13] It is the union’s case that the employees’ employment contracts entitle them to
overtime pay, which was Council’s policy until January 2024. The material
term to be paid overtime is either express, implied, or tacit, because when
interviewed for the positions they applied for, employees were expressly
asked whether they were prepared to work overtime and consented on the
basis that they would be remunerated. The employees agreed to work
overtime in return for a consideration, given the effect overtime had on their
lives. Remuneration for overtime was material , or an essentialia, or locatio
conductio operarum of the employment contract. Because they were paid
overtime over several years, it had become practice. The City could reduce or
eliminate overtime but could not insist on employees working overtime when
the correlative obligation to pay overtime had been removed.
[14] The employees did not agree to work overtime without compensation, nor did
they agree that overtime pay could be withdrawn while they were still required
to work overtime, given that overtime is an inherent part of their roles.
[15] The appointment letters record that employment is subject to HR Policies as
amended from time to time, but that the conditions of service do not repeat the
wording ‘as amended from time to time’. Nowhere was it expressly stated that
the City reserved the right to unilaterally amend substantive remunerative
terms. The language of the provision had to be considered in the context,
purpose and the circumstances surrounding the conclusion of the contract.
This was the only sensible and businesslike meaning to be preferred.
[16] As regards the text, the phrase ‘amended from time to time’ was vague and
capable of more than one meaning. The parties disagree on its meaning.
While the City believes it can vary remunerative terms at its pleasure, the
union and the employees believe that, although the City can change policies
from time to time, it is bound by what it agreed when the appointment letters
were issued to employees.
[17] The context of the provision is that an employment relationship is governed
[17] The context of the provision is that an employment relationship is governed
not only by the employment contract. An employer may change work practices
but is prevented from making unilateral changes to the material terms and
conditions of employment. The interpretation of an employment contract must
be informed by the constitutional right to fair labour practices, which requires
balancing the interests of the employer and those of the employees. An
employer cannot instruct an employee to work overtime and, at the same
time, strip the employee of the right to overtime pay.
[18] The Code of Good Practice on the Arrangement of Working Time (Code of
Good Practice) aims to address the impact of extended working hours on
employees, their families and the broader community, which explains why
overtime must be compensated.
[19] Therefore, the instruction to work unpaid overtime is in breach of the
employment contract and the Code of Good Practice. The City could not
unilaterally withdraw the overtime pay.
[20] The union also denies that the Overtime Policy falls within the category of ‘HR
Policies as applicable and as amended from time to time’.
[21] It further alleges that since January 2024, the employees have been required
to work hours in excess of those worked and paid for before January 2024.
[22] The relief sought is a declarator that the City is in breach of the employment
contracts and the Code of Good Practice, and that it must be ordered to pay
the employees for all overtime worked since January 2024 on a straight time
basis, with interest.
The City’s contentions
[23] The summary of the conditions of employment attached to the appointment
letter provides that overtime is dealt with in terms of the BCEA or the City’s
Policy. The Overtime Policy, which is an HR Policy and can be amended from
time to time, regulates the issue of overtime. As it was entitled to do, it
amended the Overtime Policy with effect from January 2024, with the
consequence that overtime pay was abolished for employees at T14 and T15
levels. Hence, it has not breached the employment contracts.
[24] The City disputes that, since January 2024, the employees have been
required to work hours in excess of those worked and paid for before January
2024, and also questions the relevance of that contention to the claim.
Discussion
[25] The parties signed a pre- trial minute in which it was agreed that the facts in
dispute were (i) whether the City’s Overtime Policy falls within the category of
HR Policies as applicable and as amended from time to time, and (ii) whether,
from January 2024 onwards, the City required employees to work unpaid
overtime in excess of the overtime they had worked before overtime pay was
abolished. The actual number of overtime hours worked by the employees
goes to quantum, an issue that will be dealt with only if the employees
succeed in their claim that they are entitled to be paid for overtime worked.
That leaves the first fact in dispute, viz whether the Overtime Policy qualifies
as an applicable HR Policy, as amended from time to time.
[26] The Overtime Policy is indeed an HR Policy, and the union’s contention that it
is not, which was not substantiated, must fail. The fact that since 2017 the
policy has been referred to as System and Procedure, rather than the
Overtime Policy, does not change the fact that it is an HR policy which
regulates overtime.
[27] The pre- trial minute further records the three issues to be decided as (i)
whether the issue that employees have been working more unpaid overtime
since January 2024 is relevant to the employee’s claim; (ii) whether, in
applying the amended Overtime Policy, the City breached a material express,
alternatively tacit, further alternatively an implied term of their employment
contract, as agreed, to be remunerated for overtime worked; and (iii) whether
the City could amend the Overtime Policy as it did.
[28] I have already determined that the actual overtime hours worked by the
employees are relevant for purposes of determining quantum, an issue
reserved for later determination if the employees are successful on the merits.
[29] The next issue is whether the employees have a contractual right to be paid
overtime. No express provision was relied upon to the effect that the
overtime. No express provision was relied upon to the effect that the
employee’s overtime would be paid, and none exists. Rawoot’s own version
was that payment for overtime is not provided for in the appointment letter, but
that there was an agreement that he would be paid overtime. In any event, in
oral argument, Ms Harvey abandoned reliance on an express or implied term
and submitted that payment of overtime was a tacit term of the employment
contract.
[30] As correctly pointed out by Mr Leslie in a further reply, the union’s heads of
argument do not submit that the employees were relying on a tacit term. The
submission was advanced only after the union had heard the City’s
arguments about the weaknesses of relying on an express term, alternatively
an implied term, and, in the further alternative, a tacit term.
[31] Be that as it may, i n SA Maritime Safety Authority v McKenzie
4 (McKenzie),
the court stated the following about tacit terms:
‘[11] A tacit term is a term that arises from the actual or imputed intention of
the parties as representing what they intended should be the
contractual position in a particular situation or, where they did not
address their minds to that situation, what it is inferred they would
have intended had they applied their minds to the question.
[12] In our law as it stands at present the usual test for the existence of a
tacit term is that of the interfering bystander who asks what is to
happen in the particular situation and receives the answer: 'Of course
X will be the position. It is too obvious for us to say so.'
[32] As it relates to paid overtime for the employees concerned, had a bystander
asked whether they have a right to it in perpetuity, the obvious answer, based
on the appointment letter and the summary of the conditions of service, would
have been that it depends on whether the City decides not to amend the
Overtime Policy. This is not a case where both parties considered the issue
but did not declare their assent , or where they would have agreed on the
matter had they thought about it .5 The City thought of the issue and decided
that it would amend the Overtime Policy from time to time. It is the union (s)
and the employees who did not think of the issue. A tacit term cannot be
proved if ‘common intention’ is not established, as in this case. 6 One cannot
4 (2010) 31 ILJ 529 (SCA).
4 (2010) 31 ILJ 529 (SCA).
5 See Airports Company South Africa Ltd v Airport Bookshops (Pty) Ltd t/a Exclusive Books
2016 (1) SA 473 (GJ) at para 26.
6 See Alfred McAlpine & Son (Pty) Ltd v Transvaal Provincial Administration 1974 (3) SA 506 (A) at
531H – 532A.
import a tacit term that ignores or contra dicts an express provision that paid
overtime is dependent on any amendments the City may make to the
Overtime Policy. To do so would amount to creating a new contract for the
parties, other than the one they entered into, which Natal Joint Municipal
Pension Fund v Endumeni Municipality said a court must not do.7
[33] There is no contractual right to paid overtime arising from a tacit term , which
finding is dispositive of the union’s claim.
[34] However, for completeness, the parties agreed that the court must also
determine whether the City could amend the Overtime Policy from time to
time. The issue has already been addressed above. To reiterate, the pre- trial
minute records that the appointment letters issued to the employees state that
employment was subject, inter alia , to HR Policies as applicable and as
amended from time to time. As amended from time to time means that things
can change, and nothing is guaranteed. There is no ambiguity in that phrase,
as Ms Harvey argued.
[35] It has already been determined that the Overtime Policy is an HR policy. As
employment is subject to HR policies as amended from time to time, and the
Overtime Policy is not a product of collective bargaining, the City reserved the
right to amend the Overtime Policy from time to time. There is no requirement
to ‘strike a new bargain’ on the matter, nor is there any requirement to consult
the union or the employees regarding amendments to the Overtime Policy.
The union conceded as much in the urgent application, which was dismissed
for lack of urgency. The concession was correctly made.
[36] In cross- examination, Moses also conceded that the City was entitled to
amend the Overtime Policy, his only issue being that changes must be
preceded by consultation, adding that amending does not mean ‘take away
completely’. None of those contentions has merit. There was no obligation on
the City to consult on the issue before amending the Policy. Contrast this with
the City to consult on the issue before amending the Policy. Contrast this with
amendments to key performance areas, which require consultation before any
amendments are made.
7 2012 (4) SA 593 (SCA) ([2012] 2 All SA 262; [2012] ZASCA 13).
[37] Ms Harvey also conceded that the City could amend the policy and abolish
overtime pay, but that it cannot compel employees to work overtime. The
difficulty with the submission is that the affected employees do not qualify for
overtime pay in terms of the BCEA.
[38] Because the City was entitled to amend the Overtime Policy, by abolishing
paid overtime for employees, it cannot be said to have unilaterally changed
employees’ conditions of employment. The decision in Sun International
Limited and Another v SACCAWU and Others 8, which Ms Harvey relied on in
oral argument, does not assist the union’s case. In fact, the decision goes
against the union’s argument given the court’s finding that:
‘[14] On the evidence before me at this stage there is no suggestion that
the parties have contracted on a basis that serves to fetter the
employer’s right to implement the work practice related to the
upgrading of the Kronos system…’
[39] The same finding must apply in this matter, as the issue of overtime is
governed not by an employment contract but by a policy that the City can
amend from time to time, as it has done. There is no contractual right to
overtime pay.
[40] The evidence was also that the Overtime Policy was amended several times
between 2007 and 2023. It was not the union’s contention that it was
consulted on any of those amendments.
[41] The union also alleged a breach of the Code of Good Practice on the
Arrangement of Working Time but did not specify the provision relied upon. It
is not for the court to go through an entire Code of Good Practice and figure
out which provision was being relied upon. The City must have adopted the
same approach given its silence on the contention.
[42] As I understood Ms Harvey, the submission was also that the Code of Good
Practice requires overtime to be compensated, given its implications for family
life. Again, the provision relied upon was not specified. The Code of Good
life. Again, the provision relied upon was not specified. The Code of Good
Practice could not lay down a principle that contradicts what the BCEA
provides on the issue. There are categories of employees who qualify for paid
8 (J3455/17) [2017] ZALCJHB 501 (31 December 2017).
overtime and those who do not. The employees involved in this dispute do not
qualify for paid overtime in terms of the BCEA.
[43] The further contention that the employees are being forced to work unpaid
overtime is not a claim that can be pursued in terms of section 77(3) of the
BCEA. The union was clear that its cause of action was a contractual breach,
and that is the claim that has been determined. Ms Harvey also submitted that
the union’s case was not that the instruction to work unpaid overtime was
unlawful. The submission was correct given the pleaded case.
[44] Relying on the constitutional right to fair labour practices and the right to fair
dealing to bolster the union’s case need not be considered, as the union is
confined to the pleaded case. T hat finding renders it unnecessary to
determine whether the principles enunciated in SA Maritime Safety Authority v
McKenzie
9, which Mr Leslie relied on , preclude the union from relying on the
constitutional right to fair labour practices. I note, however, that the decision
reiterated, with reference to Gcaba v Minister for Safety & Security & others ,10
that a case is determined based on the pleadings.
Costs
[45] The City sought costs against the union. As this was a breach of contract
claim, the principle that costs follow the result applies. However, the parties
have an ongoing relationship, and it is not inconceivable that the union
brought the claim under pressure from its members. Taking those factors into
account, each party must bear its own costs.
[46] In the premises, I make the following order:
Order
1. The plaintiffs’ claim is dismissed.
9 (2010) 31 ILJ 529 (SCA).
10 [2009] ZACC 26; (2010) 31 ILJ 296 (CC); [2009] 12 BLLR 1145 (CC).
2. Each party will pay its own costs.
_______________________
T. Gandidze
Judge of the Labour Court of South Africa
Appearances
For the Applicant: Advocate S Harvey
Instructed by: MacGregor Erasmus Attorneys
For the Respondent: Advocate G Leslie SC and Advocate HC Nieuwoudt
Instructed by: Timothy and Timothy Inc.