Employment law update

Talita Laubscher BIur LLB (UFS) LLM (Emory University USA) is an attorney at Bowman Gilfillan in Johannesburg.

Monique Jefferson BA (Wits) LLB (Rhodes) is an attorney at Bowman Gilfillan in Johannesburg. 

Appeals

In Police and Prisons Civil Rights Union v Minister of Correctional Services and Another [2014] 5 BLLR 481 (LC) the second respondent, a minority trade union, was granted the organisational right of access to the workplace by the Department of Correctional Services. This right entitled the second respondent to convene meetings, gatherings and other activities, as well as the right to represent its members in grievance procedures and disciplinary hearings. 

The applicant union complained about this and argued that the department’s conduct in granting the second respondent organisational rights was in breach of collective agreements. It accordingly referred a dispute to the bargaining council on the basis that the second respondent was not entitled to the organisational rights granted to it. The arbitrator disagreed, and the applicant union then applied for a review of the arbitration award. On 5 September 2013 the Labour Court, per Snyman AJ, reviewed and set aside the arbitration award and substituted it with an order denying the second respondent the organisational rights the department had granted it. On 19 September, the second respondent applied for leave to appeal against the judgment. 

On 7 November 2013, the department confirmed in a circular that it had granted organisational rights to the second respondent union. The applicant union became aware of this on 22 November. It thereupon launched an urgent application to enforce the Labour Court order pending the finalisation of the appeal process on 3 December. 

The Labour Court, per Lallie J, held that when the second respondent filed its application for leave to appeal on 19 September 2013, the judgment of the Labour Court denying the second respondent the organisational rights it had been granted was suspended. This meant that the arbitration award came into operation on that date. Considering the alleged urgency of the application, the court held that any urgency that existed was self-created – the Labour Court order was suspended on 19 September; the applicant union only applied to have the Labour Court order enforced on 3 December, about two and a half months later. The fact that the department’s circular was dated 7 November did not change the fact that the order of the Labour Court was in fact suspended already on 19 September and if the applicant union wanted to enforce the Labour Court’s order, it had to launch its application shortly after 19 September. 

In the circumstances, the application was dismissed for lack of urgency and the application was struck off the roll with costs.

Reinstatement

On 29 November 2012, the Supreme Court reinstated Myers, the applicant in Myers v National Commissioner of the South African Police Service and Another [2014] 5 BLLR 461 (LC), into the position he had held before his dismissal. This retrospective reinstatement followed a lengthy court battle since Myers’ dismissal in July 2007. The South African Police Service (SAPS) argued, however, that it could not reinstate him into that position because the position no longer existed. So, Myers instituted this application arguing that the SAPS was in contempt of court. 

Myers was the commander of the Maitland Dog Unit in Cape Town. He was dismissed after 28 years of service with the SAPS after he had blown the whistle in Die Burger about the condition of police dogs in his unit. The Labour Court reviewed and set aside his dismissal. The SAPS appealed. The Labour Appeal Court (LAC) upheld the appeal. Myers obtained special leave to appeal to the Supreme Court of Appeal (SCA), and in a unanimous judgment, the SCA overturned the judgment of the LAC and held that Myer’s dismissal had been substantively unfair. It ordered the SAPS to reinstate Myers retrospectively into the position he had held before his dismissal and to give him a final written warning valid for 12 months from the date of the SCA order. 

At the time of his dismissal, Myers was employed at the level of a superintendent as unit commander, at salary level 10. At that stage, the SAPS operated two dog units, one at Maitland and one at Faure. After Myers’ dismissal but before the SCA judgment, the SAPS merged the two units. The amalgamated unit was now called the Cape Town K9 unit. It still operated from Maitland, but it now covered a bigger geographical area with greater responsibilities. The commander post of the amalgamated unit was upgraded to salary level 12 at the rank of Colonel (as opposed to the rank of lieutenant-colonel at salary level 10 that Myers occupied at the date of his dismissal). The SAPS argued that Myers was not entitled to be appointed to the post of commander of the combined K9 unit. Myers argued, on the other hand, that the post still existed, but that it was now the bigger post of commander of the combined K9 unit. 

Considering the contempt application, the court, per Steenkamp J, held that it had to be determined whether the SAPS had failed to comply with the SCA’s order and whether such non-compliance was wilful and mala fide. Taking account of the restructuring that happened after Myers’ dismissal, the court held that the combined unit was established in 2009. It was headed by a superintendent at salary level 10. On 1 March 2010, a new commander was appointed after the post became vacant. The new commander, a captain at the time, was promoted to superintendent at level 10. This post was then upgraded to that of colonel at salary level 12. The upgrading was to be implemented during the second phase of the restructuring process and at the time of the contempt application, the incumbent was accordingly still employed at salary level 10. 

The court held that, had Myers not been unfairly dismissed, he would have continued in his post of commander of the K9 unit. The SCA order must, therefore, be interpreted to mean that Myers had to be reinstated into the restructured post of commander of the Cape Town Dog Unit at Maitland at the current salary that the role attracted, coupled with retrospective back-pay. 
Revisiting the contempt question, the court held that the SAPS’ conduct had not been wilful or mala fide. It genuinely believed that it had to place Myers in a position that attracted the same salary that Myers earned at the date of this dismissal. In an effort to achieve finality, the court accordingly dismissed the contempt application but ordered that Myers be reinstated into the role of commander of the Cape Town Dog Unit at Maitland, with retrospective effect to the date of his dismissal.

Moksha Naidoo BA (Wits) LLB (UKZN) is an advocate at the Johannesburg Bar.

Question: 

I am an attorney employed as a professional assistant since 2 May 2007. My employment agreement stipulates that I am ‘entitled to a bonus (13th cheque) which is equivalent to one month’s basic salary which is payable in their birth month’.

However, money was deducted from my bonus (13th cheque) in August 2013. After inquiries I was informed: ‘The new method of calculating a 13th cheque was introduced following adverse finding by external auditors. With this new method employees’ 13th cheque was effectively from 1 July 2013, calculated based on the 1/12th of the basic salaries earned during the bonus cycle.’ 

Because this is a unilateral amendment of my employment agreement, I filed grievances and was told to approach the Commission for Conciliation, Mediation and Arbitration (CCMA) if not satisfied.
Answer: 

I am assuming that with the new method of calculating your bonus, the financial amount you receive is less as compared to what you previously received.

In your circumstances referring an unfair labour practice dispute to the CCMA is one of the options open to you. 

In terms of s 186(2)(a) of the Labour Relations Act 66 of 1995 (LRA), an unfair labour practice is defined as – 
‘any unfair act or omission that arises between an employer and an employee involving –
(a) unfair conduct by the employer relating to the promotion, demotion, probation (excluding disputes about dismissals for a reason relating to probation) or training of an employee or relating to the provision of benefits to an employee’ (my emphasis).

In Trans-Caledon Tunnel Authority v Commission for Conciliation, Mediation and Arbitration and Others [2013] 9 BLLR 934 (LC) the Labour Court, per Marcus AJ, held that an employee who received a bonus less than what he was contractually entitled to, could refer an unfair labour practice dispute, in terms of ‘benefits’ to the CCMA. The fact that the employee’s claim was in fact one involving remuneration, did not deprive the CCMA of jurisdiction to hear the matter. Around the same time as this judgment was delivered, the Labour Appeal Court in Apollo Tyres South Africa (Pty) Ltd v Commission for Conciliation, Mediation and Arbitration and Others [2013] 5 BLLR 434 (LAC), also held that the CCMA has jurisdiction to hear disputes over benefits irrespective of whether the claim in dispute falls within the definition of remuneration. 

In both judgments, the courts held that the issue before the arbitrator is whether the employer’s actions were fair or not. If the employer has a justifiable reason for not acting in terms of an employment contract or past practice, then an arbitrator would find the employee has not suffered an unfair labour practice. Thus, in your matter, the employer would have to explain what adverse findings any external auditor made and why it became necessary to change the calculations in relation to bonuses.

As an alternate you could refer a breach of contract claim to the Labour Court in terms of s 77(3) of the Basic Conditions of Employment Act 75 of 1997 (BCEA), wherein you would seek specific performance. This section reads:

‘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.’ 

However the CCMA will not only deal with your matter far sooner than the Labour Court, but this route will also prove more cost effective for you. 

If your colleagues have also received a lower bonus and also want to pursue legal recourse, then an additional option would be for you and your colleagues collectively to refer a matter of mutual interest to the CCMA in terms of s 64(4) of the LRA. At the centre of your claim would be that the employer unilaterally changed your terms and conditions of employment by reducing your bonuses. The matter would be conciliated and, if unresolved, you and your colleagues could embark on protected strike action in an attempt to force the employer to revert to the previous method of calculating bonuses. This option would be available only if there is more than one employee referring the dispute. A strike, as defined in s 213 of the LRA, requires a ‘concerted’ refusal to work, which means that a single employee cannot embark on strike action. (It would be important to understand that if the employer has changed the method of calculating bonuses in terms of any applicable legislation or collective agreement which it previously had not complied with, then any changes in compliance with the law or collective agreement would not be seen as a matter of mutual interest thus preventing you and others to pursue the option of strike action.)

Question: 
My letter of appointment stipulates my basic salary.  It then continues to stipulate that my medical contribution and annuity payment shall be included in my basic salary.  When I asked for a dummy payslip to see what my nett pay would be, I was provided with a payslip stipulating a basic salary plus medical plus annuity.  The total amount was named ‘gross earnings’ on my payslip and was almost the same as the basic salary on my letter of appointment.  I received two payslips in this order, but then it was changed and my basic salary is now indicated as my total package.

I am confused. What is the proper definition of a basic salary?  How do our courts interpret a basic salary? Should one’s basic salary not include your benefits?  I always thought that my total package or gross earnings would be calculated by adding my benefits to my basic salary? 

Answer: 

The term ‘basic salary’ is not defined in the Basic Conditions of Employment Act 75 of 1997 (BCEA). The BCEA does, however, define ‘remuneration’ in s 1 as ‘any payment in money or in kind, or both in money and in kind, made or owing to any person in return for that person working for any person, including the State’.

My understanding of basic salary is the remuneration you receive for the ordinary hours of work tendered, excluding any overtime. To this, you include your overtime, if any, together with any other benefits you may receive (excluding employer’s contributions) which then gives you your ‘gross pay’.

The term ‘earning’ was defined in the Ministerial Determination GN356 GG25012/14-3-2003 (wherein the Minister of Labour set out the earning threshold to which employees earning above the annual threshold cannot lay legal claim to certain rights in the BCEA), as gross pay generated before deductions but excluding the employer’s contributions for example medical aid, retirement etcetera. (The current Ministerial Determination GN456 GG36620/1-7-2013, does not mention the term ‘gross pay’ but defines earning in the same or similar manner as before.)   

A pro forma wage register as provided in the BCEA can be found alongside.

The first ‘total’ in the register indicates the employee’s gross earnings, which is made up of your basic salary and other benefits.

The term ‘total package’ or ‘cost to company’ refers to the total cost the employee presents to the employer and includes the employer’s contributions to medical aid, retirement etcetera.

NB: PLEASE FIND THE TABLE IN THE PDF

Do you have a labour law-related question that you would like answered? Please send your question to derebus@derebus.org.za