Employment law update – Benefit of the doubt

September 1st, 2012

South African Post Office Ltd v CCMA and Two Others (LC) (unreported case no C293/2011, 18-6-12) (Steenkamp J)

By Moksha Naidoo

Amid conflicting decisions regarding the subject matter in this dispute, the Labour Court was tasked with deciding whether or not an acting allowance constitutes a benefit as contemplated in s 186(2)(a) of the Labour Relations Act 66 of 1995 (LRA), thus giving the Commission for Conciliation, Mediation and Arbitration (CCMA) jurisdiction to hear disputes of this nature.

Section 186(2)(a) reads:

‘“Unfair labour practice” means 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.’

Referring his dispute as one relating to benefits, the employee (third respondent) lodged an unfair labour practice dispute with the CCMA, claiming that his employer (the applicant) had acted unfairly by not paying him an acting allowance from June 2008 to January 2011.

In terms of the applicant’s policy, a person acting in a higher position than his current position will do so for a maximum of three months if approved by a senior manager.

At arbitration, the applicant raised two jurisdictional challenges. Firstly, it argued that the dispute did not relate to benefits and thus the CCMA did not have jurisdiction to hear the matter. Secondly, the dispute was referred outside the prescribed time frame and the absence of a condonation application left the CCMA without jurisdiction.

In a jurisdictional ruling, the commissioner held that an acting allowance constitutes a benefit and therefore the CCMA could arbitrate the dispute. On the issue of condonation, while acknowledging that there were two different versions on when the dispute arose, the commissioner ruled that he did not have to deal with condonation at this stage and deferred the issue to arbitration for evidence to be led by both parties.

On review at the Labour Court, the applicant set out two grounds for why the jurisdictional ruling should be set aside. In its first argument, the applicant persisted in its view that an acting allowance does not constitute a benefit and, as such, the CCMA did not have jurisdiction to hear the matter. Secondly, the applicant argued that the commissioner exceeded his powers by arbitrating the dispute without having made a ruling on condonation.

Dealing with the first ground, the court noted that the CCMA does not have jurisdiction for general unfairness and, therefore, an employee claiming an unfair labour practice at the CCMA must demonstrate that his claim falls under s 186(2).

The court further pointed out that when reviewing a jurisdictional ruling, the test for review, as set out in Sidumo and Another v Rustenburg Platinum Mines Ltd and Others [2007] 12 BLLR 1097 (CC), was not applicable.

The crisp question under these circumstances was whether or not the CCMA or relevant bargaining council had jurisdiction, as opposed to asking whether or not the commissioner’s findings were reasonable.

With that in mind, the court turned its focus to whether an acting allowance constitutes a benefit as contemplated in s 186(2)(a).

The court referred to the Labour Appeal Court (LAC) decision in Hospersa and Another v Northern Cape Provincial Administration [2000] JOL 6301 (LAC), in which Mogoeng AJA, faced with the same question, held that for an employee to claim a benefit under the LRA, that benefit must be a right created in either an employment contract or a collective agreement or by statute. In the absence of such a right, the claim would be for the creation of a new right, which in effect was a matter of mutual interest and hence not arbitrable.

The court also noted that the Hospersa decision was followed in subsequent decisions relating to the term ‘benefit’.

This did not, however, end the matter. The court further had to deal with a dissenting view by Lagrange J in Imatu obo Verster v uMhlathuze Municipality and Others [2011] 9 BLLR 882 (LC), which followed other LAC decisions handed down after the Hospersa decision, in which it was held that a benefit under s 186(2)(a) need not arise from a pre-existing right before the CCMA has jurisdiction. In that matter, Lagrange J held:

‘What the brief review of the case law and academic commentary reveals is that there has been a shift in the conceptualisation of the ambit of the unfair labour practice claim at least in relation to the notion that a prerequisite for bringing such a claim is proof of a pre-existing right. Le Roux argues that a rejection of the narrow approach in Hospersa is implicit even in the majority decision in [Department of Justice v CCMA and Others [2004] 4 BLLR 297 (LAC)]. I agree.’

In the present matter, Steenkamp J highlighted that the uMhlathuze Municipality judgment did not take into account the decision in G4S Security Services v NASGAWU (LAC) (unreported case no DA3/08, 26-11-2009) (Tlaletsi AJA), where the LAC, when addressing the ambit of the term ‘benefits’, reverted to the Hospersa principle.

On this point, Steenkamp J said:

‘Persuasive as the discussion by Lagrange J in uMhlathuze Municipality is, I consider myself bound by the authority of the Labour Appeal Court. The employee in the present case has not established a right to an acting allowance ex contractu or ex lege beyond the initial three-month period in 2006. In seeking to establish a further entitlement to an acting allowance, the employee has strayed into the realm of a dispute of interest. In these circumstances, the commissioner had no jurisdiction to entertain an unfair labour practice dispute in terms of [s 186(2)] of the LRA.’

Turning to the second ground for review, the court held that the failure of the commissioner to first deal with the issue of condonation was a ‘clear misdirection’. With reference to binding authorities, the court held that a commissioner was duty bound to make a ruling on the issue of condonation and not defer the issue to the arbitration stage. The jurisdictional ruling was set aside.

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

This article was first published in De Rebus in 2012 (Sept) DR 52.