PSES 145 kzn
PSES 145 kzn
Award Date:
25 March 2001
Case Number: PSES 145 kzn
Province: KwaZulu-Natal
Applicant: MR S N PILLAY
Respondent: DEPARTMENT OF EDUCATION
Issue: Unfair Dismissal - Constructive Dismissal
Venue: UMBILO
Award Date: 25 March 2001
Arbitrator: DR R J T McCANN
EDUCATION LABOUR RELATIONS COUNCIL
CASE NUMBER : PSES 145 KZN
In the arbitration between:
S N PILLAY APPLICANT
and
DEPARTMENT OF EDUCATION RESPONDENT
ARBITRATION AWARD
1 . DETAILS OF HEARING AND REPRESENTATION
This arbitration hearing was conducted at the Durban College of Education in Umbilo on 13 March 2001. The Applicant, Mr S N Pillay, partly represented himself while he was assisted in this regard by Mr Dolin Singh, a Union Official for SADTU. Mr T Zulu represented the Department of Education and in this regard was assisted by Mr G N Ngcobo.
2 . ISSUE TO BE DECIDED
.1 The Applicant, Mr Pillay, resigned from the Department of Education with effect from 1 August 2000, having worked for the Education Department for 20 years prior to that. During this 20-year period, Mr Pillay had accrued vacation leave benefits to which he contended he was entitled to compensation. The Education Department has refused to compensate him for leave accrued during this period. Mr Pillay contends that this is unfair and is seeking relief in this regard.
.2 Therefore the issue to be decided is whether the Department of Education will not pay him out compensation for accrued vacation leave benefits, is a fair or unfair labour practice.
.3 A further in limine issue that needed to be decided first, was raised by the Respondent party. Thus, as to whether the ELRC has the jurisdiction to hear this matter, due to the employer/employee relationship being terminated by Mr Pillay’s resignation and therefore, according to the Respondent, no longer falling under the terms of reference of the Labour Relations Act of 1995.
3 . BACKGROUND TO THE ISSUE
Mr Pillay resigned from the Department of Education on 31 July 2000. When he was not paid out compensation, which he contends he is entitled to in regard to accrued vacation leave benefits, he then made application to the Education Labour Relations Council for a conciliation hearing. This conciliation hearing was conducted on 12 February 2001, at which the matter remained unresolved. This matter then went forward for arbitration on 13 March 2001, when the arbitration hearing was conducted.
4 . SURVEY OF EVIDENCE AND ARGUMENT
.1 Employees version
.1 By way of introduction, Mr Pillay set out that he resigned from the profession with effect from 1 August 2000, after having served the Education Department for 20 years. In the 20 years of service, Mr Pillay had accrued vacation leave benefits to which he contended that he is entitled for compensation.
.2 The Education Department had refused to compensate him for leave accrued during this period, notwithstanding there being clear audited records of Mr Pillay’s employment history for the duration of his employment. To counter Mr Pillay’s request, the Department had sited provisions of a collective agreement, Resolution 7/2000 - Improvement in the Conditions of Service of Public Service Employees for 2000/2001 Financial Year, which was concluded at the Public Service Co-ordinating Bargaining Council (PSCBC), and which collective agreement does not provide for payment of leave accrued between 1 July 2000 upon an employee resigning. (This Resolution was submitted as evidence).
.3 Mr Pillay contended that this was unfair and supported his contention with the following arguments:
.1 He commenced by referring to the Basic Conditions of Employment Act 1997 (“BCEA”) and the provision that this makes in regard to all Civil Servants. Thus he submitted that on 2 June 2000 in terms of the provisions of the Basic Conditions of Employment, Schedule 3, item 2 - Application to Public Service, the BCEA, became applicable to all Public Service Employees. This, he said, translated into an effective implementation date of 1 June 2000.
.2 He submitted that it follows that provisions of the BCEA, save in the instance where prevailing Collective Agreements regulate more favourable terms in employment standards than is provided for in this Act, would replace existing agreements (more specifically those less favourable than BCEA provisions), regulating the employment relationship. Thus, it was argued that by virtue of his resignation taking effect on 1 August 2000, Mr Pillay had the good fortune of being covered by the provisions of the BCEA. In this regard, specific reference was made to the BCEA in terms of Chapter 5 - Termination of Employment, Section 36, Notice of Termination of Employment, Subsection (A), (B) where there is expressed provisions for the payment of leave benefits.
.3 He submitted that the Department’s counter-argument was than even though the BCEA came into affect on 1 June 2000, to the Public Service, yet the Collective Agreement (i.e. Resolution 7/2000), between organised labour representing a majority of Civil Servants in the various Public Sector and the State as Employer, concluded this Collective Agreement in the form of Resolution 7/2000 at the Public Service Co-ordinating Bargaining Council. This set out that this agreement specifically makes provision for conditions under which the employer will pay an employee for annual leave accrued before 1 July 2000. However, it was submitted that while Resolution 7/2000 was in effect, this agreement was only concluded sometime in September/October 2000 but, by agreement, it was retrospectively applied with effect from 1 July 2000.
.4 The applicant then referred to page 3 of Resolution 7/2000, the section dealing with leave and specifically with regard to Section 7.3 concerning the pay-out of annual leave accrued before 1 July 2000. Here it was submitted that the resolution in question expressly sets the parameters upon which the employer shall pay accrued leave, that being death, retirement or medical boarding. From this, it was submitted, follows the Department’s argument that Mr Pillay was still in the service of the Education Department when Resolution 7/2000 was retrospectively put into effect. This Resolution does not cover payment upon resignation, and it (the Department) is under no obligation to compensate Mr Pillay.
.5 This pertains to the non-applicability of the scope of agreement as embodied as in 7/2000. In this regard it was submitted that by law, any Collective Agreement, whether concluded at a Bargaining Council or even, for example at a narrow decentralised level in the form of a Recognition Agreement at a workplace, must have a defined scope of application.
.6 In this regard reference was made to the Labour Relations Act, No 66 of 1995, in the Section on Collective Agreements (subsection 23 - Level Affects of Collective Agreements), specifies persons or groups who are bound by the Collective Agreement and conditions under which the agreements apply. The description then from the Act in regard to who is bound by a Collective Agreement, was then submitted. It was then further submitted that it follows that the scope of application of any Collective Agreement can only be drawn from the registered scope of any agreement and that the registered scope can in turn only draw from the employees currently in service. In regard to this Section of the LRA attention was drawn that mention was made of members of the Trade Union. It was submitted that the use of ‘members’ in this instance obviously makes reference to persons currently in the employ of the Public Service and who at the time exercise an employment right by belonging to a Trade Union and mandating the Union to negotiate on their behalf. It was submitted that in this regard Mr Pillay under no circumstances could be classified as an employee as he had exited the service on 1 August 2000. It was further submitted that it must therefore follow:
.1 Mr Pillay cannot be a party to a Collective Agreement.
.2 Mr Pillay cannot be classified as a member of any party.
.3 Mr Pillay did not belong to any labour organisation who was party to Resolution - 2000.
.7 It was submitted that although one of the items made reference to non-members, interpretation of non-members in this instance, expressly made reference to “employees” who are not members. Thus it was further stated that assuming for some reason the parties went beyond the provisions of the LRA and decided to include the category of employees who had resigned and entitled to benefits, no mention of a “non-employee”/non-member is covered in the scope of Resolution 7/2000. In this regard specific reference was made to Resolution 7/2000, page 1, item 2 - Scope, where it reads: “2.1 This agreement applies to the employer and employees” (a) who are employed by the State, and (b) who fall within the registered scope of the PSCBC”.
.8 In effect, it was submitted then that the Department was arguing the applicability of Resolution 7/2000, even though the LRA failed to identify Mr Pillay as belong to the Registered Scope as well as the parties themselves failing to identify the category under which Mr Pillay would fall in their agreement.
.9 As already mentioned, Resolution 7/2000 was effectively concluded in September/October 2000 accepting that deliberations would have ensued prior to the signing of this collective agreement. The Applicant party thus submitted that while not trite or prescribed law, it generally prevails that amendments to acts of parliament/newly revised statutes seldom apply retrospectively. It was argued that the reasoning behind this is that if they were to apply they would interfere with the rights of a party be it direct or indirect. In this regard the applicant was not sure that even by a Collective Agreement, whether the parties could have taken it upon themselves to conclude what tantamount to variations of an Act of Parliament and agreement to its retrospective application.
.10 The application party thus hoped that the arbitrator would accept this argument and dismiss the Departments contention that Resolution 7/2000 is binding on Mr Pillay. In this regard they wished to reinforce their argument that Mr Pillay claim must be entertained solely by applying provisions of the BCEA.
.11 Condition of resignation as a category of termination. The Applicants final argument was that of actually making a comparison with Resolution 7/2000 in respect of paying of accrued leave to the provisions embodied in Chapter 5 in the BCEA that deals with:
.1 Termination of Employment;
.2 the Payment of Termination;
.12 The Arbitrator was asked to consider what Resolution 7/2000 in Section 7.3 - has to say on pay out of annual leave accrued before 1 July 2000. Thus it reads “(a) Employees, in terms of the dispensation applicable prior to the 1st July 2000 have earned audited leave accruals in terms of that dispensation, shall retain the same. The employer shall pay such accrued leave on : i. death; ii. retirement; iii. medical boarding.” Attention was then drawn to Chapter 5 of the BCEA concerning Termination of Employment, Notice of Termination of Employment, Section 37(1) of the BCEA which regulates the terms and conditions of payment or leave benefits. Here it reads:”Subject to Section 38, a contract of employment terminable at the instance of a part to the contract, may be terminated on notice of not less ...”. Again, in Section 40 on payments on termination, in the BCEA reads “On termination of employment, an employer must pay an employee ...”. In this regard, attention was drawn to the fact that only the use of “termination” defines the ending of the employment contract between the employee and the employer in these provisions.
.13 A question was then raised how one defines termination. Thus it was submitted that a concise meaning and interpretation of termination reads “to set a limit, to end, to conclude, to be limited in space by a point of surface, to stop short ..”.
.14 It was submitted that clearly the BCEA intended the generic use of “termination” for the purpose of identifying and catering for all ground upon which termination/separation of the employment relationship occurs. It was submitted that this obviously means to include the category of resignation, and for that matter, maybe even dismissal, retrenchments, on grounds of incapacity, etc. It was stated that alternatively, nowhere in the BCEA, is there any mention to the contrary which limits ones interpretation of termination as to categories of resignation, death or medical boarding as in the case of Resolution 7/2000.
.15 It was thus stated that one therefore arrives at a considered view that Resolution 7/2000, by excluding the category of resignation, a category which is material to this dispute, has caused by a deed, a downward variation of a basic employment standards as enshrined in the BCEA. It was argued that this submission be it unintentional or otherwise has caused Mr Pillay prejudice.
.16 To round off this argument attention was turned to provisions embodied in the BCEA which provide for variations as stated in Chapter 7, Section 49 - Variation by Agreement. Here it reads “49(1) A Collective Agreement concluded in a Bargaining Council may alter, replace or exclude any basic condition of employment if the collective agreement is consistent with the purpose of this Act and the Collective Agreement does not ...”. This section continues from (a) to (f) providing further clarification under which conditions no variation occurs. It was deemed unnecessary to refer to them specifically as they were irrelevant to this dispute. For the purpose of this dispute, it was contended that the above provisions may apply.
.17 At this stage attention was drawn to the purpose of the BCEA. More specifically reference was made to Chapter 1 of the BCEA - the section on the Purpose of this Act. It was stated that it reads:”The purpose of this Act is to advance economic development and social justice by fulfilling the primary objectives of this Act which are - (a) to give effect to and regulate the right to fair labour practices conferred by Section 23(1) of the Constitution - (i) by establishing and enforcing Basic Conditions of Employment; and (ii) by regulating variation ...” It was submitted that the mentioned section must be read and applied in conjunction with each other and in so doing it is argued that it becomes evident that there was never any intention for the Act to allow a downward variation under any circumstances.
.18 In summary, it was submitted that Mr Pillay had legitimately bought the charge of unfair labour practice against the Department on the following grounds:
.1 Mr Pillay cannot be bound by the Collective Agreement as embodied in Resolution 7/2000.
.2 The only appropriate piece of legislation material to Mr Pillay’s claim is the Basic Conditions of Employment Act 1997.
.3 In the event it is ascertained that he is bound by Resolution 7/2000 provisions, but that this Resolution contravenes the BCEA, by causing a downward variation of its (BCEA) provisions, by excluding resignation from its category under which accrued leave benefits is payable.
.4 In conclusion, it was set out that the relief sought was that the Department must pay Mr Pillay all leave benefits accrued and payable upon the point of his resignation. To do this it was asked that the Department must access audited records of Mr Pillay’s employment history and use this as the basis of payment. It was requested that this relief be paid in thirty days of an arbitration award to this effect.
.2 The Employers Version
.1 The employer party first raised a point in limine as to whether the ELRC had the jurisdiction to hear this matter. Their submission was that this Council was established in regard to the Labour Relations Act in terms of Section 37. It was further stated that this Act regulates the Employer/Employee relationship. Thus, it was submitted that once the employer/employee relationship is removed it was argued that the jurisdiction of the Council is removed. It was then submitted that the matter falls outside the ELRC.
.2 In this regard it was submitted that the Applicant resigned from the Department in July 2000. Hence, it was argued that the employer/employee relationship ceased at that stage.
.3 In this regard it was submitted that it was not the case of the Applicant that the termination of his service was unfair, in which case it was submitted that the Act would apply. Instead it was submitted that the applicant alleged that he had some right which his former employer did not fulfil upon termination of his services. Therefore it was the employers representative submission that the employer/employee relationship had ceased and hence the jurisdiction of this Council was ousted. Thus it was further submitted that if there were rights that the employer did not fulfil which were due to the Applicant, the Applicant may pursue these rights in some other form. Hence it was argued that this Council did not have the jurisdiction to hear this matter.
.4 In regard to this in limine matter, the decision was made by the Arbitrator that the ELRC did have the jurisdiction to hear this matter. The reasons for this decision will be included under the section on ‘analysis of evidence and argument’. This matter therefore proceeded onto the arbitration for which the issue was referred. The employers version in this regard is as follows.
.5 It was the employers version that Mr Pillay is not entitled to the relief he sought on the basis that such relief is not covered by the Collective Agreement conducted by the parties at the Bargaining Council. Thus it was submitted that the time of the conclusion of this agreement/matter and when it became applicable on the 1st July 2000 Mr Pillay was still in the employment of the Department.
.6 It was further submitted that he was a member of the Trade Union movement who were signatories to the agreement. Thus it was argued that as such he was bound by the terms of that agreement.
.7 It was submitted that it is common cause that the Basic Conditions of Employment Act does make provision for variation to the Act by Collective Agreement concluded by the parties. In this regard it was submitted that the agreement was in fact concluded as set out by this section of the BCEA. It was further submitted that Resolution 7/2000, being the agreement concluded on 28 September 2000 was also reached. In this regard it was submitted that signatures were MATOSA, NTSWU, FAWUSA, PSA, SATU, SAPU and SAOU. It was further sated that this agreement applied retrospectively from 1 July 2000.
.8 It was submitted that Resolution 7.03 deals specifically with pay out of annual leave accrued before 01 July 2000. In this regard it was set out that it spelt out when an employer would make payment of the annual leave i.e. (1) upon death, (2) on retirement (3) on medical boarding. It was submitted that the applicant did not fall within the abovementioned categories.
.9 It was the Respondent’s submission that if the parties to the agreement had wished than annual payment be made on resignation, they would have included that term in this agreement. However since they did not include it, it was argued that they did not wish it to be applied.
.10 It was submitted that Section 49 of the BCEA (1997) deals with variations of the sections of the Act by agreement. More specifically Section 49 (1) it was submitted states that “A Collective Agreement concluded in a Bargaining Council (2) after, replaced or excluded any basic condition of employment if the collective agreement is consistent with the purpose of this Act and the collective agreement does not - (a) reduce the protection afforded to employees by Section 7, 9 and any regulation made in terms of Section 13; (b) reduce the protection afforded to employees who perform light work in terms of Section 17(3) and (4); (c) reduce an employees annual leave in terms of Section 20 to less than two weeks; (d) reduce an employees entitlement to maternity leave in terms of Section 25; (e) reduce an employees entitlement to sick leave in terms of Section 22-24; (f) conflict with the provisions of Chapter 6".
.11 In this regard it was the Respondents submission that the Collective Agreement concluded by the parties at the Bargaining Council did not infringe on employees rights as minuted in the above section.
.12 It was further submitted that Section 40 of the BCEA deals with payment on termination. Thus Section 40 states “On termination of employment, an employer must pay an employee (a) for any paid time off that the employer is entitled to in terms of Section 10(3) or 16(3) that the employee has not taken; (b) remuneration calculated in accordance with Section 21(1) for any period of annual leave during terms of Section 20(2) that the employee has not taken; and (c) if the employee has been in employment longer than four months in respect of the employees annual leave entitlement during an incomplete annual leave cycle as defined in Section 20(1) - “(i) one day’s remuneration in respect of every seventeen days on which the employee worked was entitled to be paid; or (ii) remuneration calculated on any basis that is at least as favourable to the employee as that calculated in terms of sub-paragraph (i)”.
.13 It was submitted that section 10 of the BCEA deals with overtime. In this regard Section (1) was covered in that “Subject to this chapter an employee may not require or permit an employee - “(a) to work overtime except in accordance with an agreement; (b) to work more than - (i) three hours overtime a day, or (ii) ten hours overtime a week”. It was also the Respondents submission that this was not the case in regard to the applicant here.
.14 It was also submitted that in dealing with this matter the employment of Educators Act of 1998 was also applicable. More specifically the regulation to that Act was referred to and in particular Regulation 59 was a section on leave gratuities. This was as follows “59. Leave Gratuities. A leave gratuity calculates as set out in Regulation 61 and 62, may be paid - (a) to an Educator whose services terminate of the Educator appointed in a temporary capacity in terms of Section 4(3)(b) of the Act on or after attaining the age of 65 years shall also be regarded as retirement on pension; (b) to an Educator as a result of termination of services - (i) in terms of Section 8(1)(a), (b) and (c) of the Act; or (ii) if he or she had been appointed on a contract basis, on account of his/her period of service or his/her voluntary resignation according to the provisions of her contract; (c) to an Educator on termination of service of an Educator appointed in a temporary capacity in terms of Section 4(3)(b) of the Act, after having completed at least five years of uninterrupted satisfactory service, unless special leave for the sake of continuity of service may be granted; (d) to an Educator serving in the permanent capacity at his/her written request, where such Educator has the option of retiring on pension before attaining the compulsory retirement age and who does not retire before such attaining such an age; and (e) when an Educator dies, to the following person(s) or the Estate following in order of precedence: (i) the widow or widower of such an Educator, (ii) the fully dependant children, including a stepchild or lawfully adopted child, in equal shares; (iii) the dependent parent or parents; and (iv) the estate of the deceased”.
.15 It was submitted that Section 8 of the Employers of Educators Act only deals with transfers of Educators and not the resignation of Educators. It was therefore the Respondent parties submission that the Applicant was not entitled to the relief he seeks - as he is not covered by the Act himself, this Act being the BCEA. It was further submitted that what the Applicant was seeking was not covered by agreement concluded in the Bargaining Council. It was further submitted that what the Applicant is seeking was not covered by the regulation to the Employment of Educators Act 76 of 1998.
.16 One other aspect was raised in that it was submitted that the allegation was made that the Collective Agreement had widened the provisions of the Statute. It was questioned whether the Arbitrator had a right to rule on that aspect. Thus it was the Respondents contention that the Arbitrator had no right to rule on that aspect. It was further the Respondent party’s submission that there was no Statute being violated by the Collective Agreement concluded in the Council. This then concluded the Respondent evidence in chief.
.3 Employees Response
.1 The employee submitted that they did not maintain that it was a deliberate exclusion by the Council. It was further submitted that in regard to Section 49 of the BCEA regarding variations, that variations do occur where it is consistent with the BCEA. In this regard it was argued that the BCEA was there for the basic terms. Hence it was not possible for any variation to be a less favourable term. Thus it was argued that this only allows for better conditions and not less favourable conditions.
.2 It was further submitted that the employee party was not sure that Section 10 of the BCEA was relevant in regard to overtime being raised. Thus it was not the Applicant party’s contention that overtime was in dispute.
.3 It was submitted that reference to Employment Education Act was quoted as seeing no provision for this Department to pay Mr Pillay. However it was submitted that this would mean a “downward variation” of the next bit of supreme obligation re employment contract, this being the BCEA.
.4 In regard to the issue being raised about the need to check whether the Arbitrator had the right to make a ruling, it was submitted that the Employee party believed that the Arbitrator has discriminating powers to exercise. Thus it was contended that the breach of employment of employment contract by not paying Mr Pillay was central to this matter. Thus it was submitted that how could the Arbitrator apply his mind if he was not entitled to look at all the facts. Hence it was submitted that the Arbitrator must look at and apply his mind to the BCEA in regard to this matter.
5 . CLOSING ARGUMENTS
.1 Employee Party
.1 Mr Pillay submitted that the employment relationship exists in terms of the contract of employment. This he said is not static and changes in the following ways:
.1 Agreement between the Employer and Employee.
.2 Collective Agreements.
.3 By legislation.
.2 Thus, he submitted that a Contract of Employment can only be changed or reviewed whilst it is in existence for that purpose. Thus it was argued that it cannot be varied where most of its effect does not exist. By that he said he meant that after 31 July 2000, he did not perform any work for the Department of Education, nor did he receive any remuneration from them. Thus he said his relationship with his ex-employer only existed in terms of the payments due to him upon termination of service - and termination of service was the 31st July 2000.
.3 He further submitted that legislation that naturally effects a contract of employment effectively alters that contract of employment from the time the legislation becomes effective. As an example of this he said that if a law was passed concerning maternity leave becoming paid leave from 1 April 2001, then all contracts of employment from 1 April 2001 would necessarily include paid maternity leave from 1 April 2001. Likewise he said that the BCEA became effective from 1 June 2000 and that his states categorically that all accrued annual leave is payable upon a termination of a contract of employment. Therefore he submitted that since his service was terminated on 31 July 2000, then the payments due to him upon termination must be determined by the contract that was in place on 31 July 2000 (i.e. in terms of the BCEA payment of annual leave accrued).
.4 He went on to further submit that after 31 July 2000, there was no contract in place between the Department of Education and himself, except in so far as payment of moneys owing as at 31 July 2000. Beyond that there was no relationship or even a contract. In this regard he then made reference to an example case where an employee may have passed away on 31 July 2000. He said in such an example, effectively the contract had been terminated and the employer would have been obliged to pay out leave accrued. Thus, the employer would not have been able to contend that it would wait for an agreement to be concluded in the future, which subsequently became known as Resolution 7/2000, and then to determine by way of that agreement whether they will pay upon death or not. Therefore the Applicant party was saying that upon termination the Employer must pay as per the contract applicable at the time and not escape from the obligation hoping for agreements from the future that may or may not materialise. It was submitted that such an approach was ludicrous.
.5 By the same token it was submitted, that it is improper for any employer to postpone their current obligations in the hope that future agreements may materially affect the current contracts. Thus, for example, it was submitted that if an employee dies now you need to pay now - and not say there may be a Resolution 8 in two to three months time that may become retrospective, so the employer does not have to pay now.
.6 It was submitted that, in addition, Resolution 7/2000 was in essence a salaries agreement, which include other aspects of the Conditions of Employment - and clearly it intended that the salary increases could be retrospective. The Applicant said that he could not believe that the Employer would intentionally place a downward variation of the BCEA on the back of a salaries agreement, and further, it is not a sated downward variation in the agreement. Instead it was argued that the term resignation was merely omitted. The Applicant said he therefore argued that the omission was not an exclusion.
.7 He said the Employment of Education Act was quoted by the Respondent party. In this regard he said the Section 58 quoted is not legislation. Thus, in fact, he said what was quoted was instead Regulation 58 of the Act. He said the regulation is part of the Contract of Employment because it deals with Terms and Conditions of Employment of Educators regarding a whole host of normal employment contractual matters. He said this was Gazetted which was merely a Government newspaper and annexed or attached to the Act. Thus he said because it was not legislation, collective agreements cannot vary to the extent that it does. He said since the Applicant party regarded it therefore as part of the contract of employment between the State as employer and himself, as he stated earlier this contract of employment would have been automatically adjusted when the BCEA took effect from the 1st June 2000 (i.e. when the Act took effect).
.8 His final statement was that he hoped the Employer would do the right thing after twenty years of loyal service and not abdicate its responsibility to a loyal Employee.
.2 Respondents Argument
.1 The Respondent representative said that all his arguments submitted at an earlier stage still stood. What he now wished to do was to deal with certain aspects raised by the Employee during his closing submissions.
.2 In this regard he wanted to especially focus on Resolution 7/2000 and the BCEA. Thus it was submitted that the Employers position is that Resolution 7/2000 covers the Employee and he was bound by that resolution as it applied on the 1st July 2000.
.3 In this regard where reference had been made to the example of an employee who had died on the 31st July 2000, it was the Respondents representative’s submission that in that situation this was catered for in Resolution 7/2000. Thus in the Resolution 7/2000 it was submitted that it states very clearly that death, retirement or medical boarding is catered for.
.4 It was the Respondents representative’s submission that nothing in the Basic Conditions of Employment Act was violated. Thus no sections were quoted stating that the Employee on resignation would be paid leave gratuities.
.5 It was argued that the BCEA is a guideline to the Employer and Employees as to how they should go about drafting clauses to be inserted in their Contract of Employment. Thus it was not a contract in itself and instead merely set guidelines as to what should be included in the contract of employment - and those sections that may be varied by agreements. It was further submitted that no contract signed between the Employer and the Employee had been placed before the Arbitrator where it specifically says the Employer shall pay the Employee leave gratuities on resignation. As such it was argued that one would rely on legislation as a guidance - and in this regard one would specifically rely on the BCEA and the Employers of Educators Act 76 of 1976 and Regulations pertaining to that Act.
.6 Where the Applicant had argued that the regulations were merely a Government newspaper and not legislation, it was submitted that one must not loose sight of the fact that any legislation that deals with administrative issues will have rules and regulations attached to it. Those rules and regulations clearly assist people responsible for administering terms of the legislation and thus it was submitted that it cannot be argued that the Rules and Regulations regarding an Act of Parliament, should not be followed merely because its in a Government newspaper.
.7 It was the Respondents representative’s submission that Section 59 of the Employment of Educators Act does not cater for payment of leave gratuities on resignation. It was further submitted that there is nothing in the BCEA that has been placed by way of a section before the Arbitrator that this section supports the case made by the Applicant. Therefore it was the Respondent party’s submission that the application be dismissed.
.3 Applicants response
.1 The Applicant said that the example he used about payment upon death pertained to the agreement only being concluded on 28 September 2000, while on 31 July 2000 there was no agreement in place. Thus he said he could have used any form of termination of contract such as retirement and not death as an example. Thus it was submitted that how could this have been effective when you could not wait for such an agreement to be put in place.
.2 He further submitted that he did not say that the regulation should not be followed. Hence instead what he referred to was that the regulations would be part of a contract of employment and when the BCEA became effective the contract of employment would in essence be amended.
.3 Where he said the Respondent party had made reference to the contract being in place when he joined the employer, he said no contract was signed. Thus at that time employment was done by way of the or de regulations in place.
6 . ANALYSIS OF EVIDENCE AND ARGUMENT
.1 Firstly, in regard to the in limine issue raised by the Employer party that the ELRC does not have the jurisdiction to hear this matter, due to the employment contract having been terminated, as already mentioned the ELRC, was ruled to have the jurisdiction to hear this matter. This was because of the following :
.1 My understanding was that this matter pertained to an aspect of the employer/employee employment relationship. In this regard Section 28 of the Labour Relations Act of 1995 re Powers and Functions of Bargaining Councils (of which section 37 refers to Bargaining Councils and Sectors in the Public Service) sets out as one of the powers and functions of such a Council to “(c) To prevent and resolve labour disputes”. The termination clause is part of the contract of employment. A contract of employment is a document that regulates the labour relationship between an employer and employee and it is central to the labour relationship between the parties and consequently plays a pivotal role in dispute resolution.
.2 My understanding is that the employer/employee contract is concluded and thus ceases to exist when all matters pertaining to the termination of contract of employment are concluded. In this instance there still remains a dispute re an alleged unfair labour practice relating to leave pay on resignation. Therefore my understanding is that this contract is not as yet concluded until this issue is resolved. Therefore the employee/employer relationship still exists as long as this dispute exists. In this regard it is within the powers and function of the Bargaining Council to resolve labour disputes. The ELRC is a Bargaining Council in a Sector in the Public Service. Therefore, it is my contention that the ELRC has the jurisdiction to hear this dispute. Therefore I rule that the ELRC has the jurisdiction to hear the dispute referred by the Applicant party concerning this matter.
.2 In regard to the primary dispute referred by the Applicant party pertaining to an alleged under labour practice relating to leave pay and resignation, the following was particularly considered.
.1 Resolution 7/2000 sets out under 7.3 pertaining to pay-out of annual leave accrued before the 1st July 2000 that “(a) Employees who, in terms of the dispensation applicable prior to the 1st July 2000, have earned audited leave accruals in terms of dispensation, shall retain the same”. This clearly indicates that prior to the first of July employees would have been paid out audited leave accruals. This then goes on to indicate that “the employer shall pay such accrued leave on : “(i) death; (ii) retirement; or (iii) medical boarding”. Thus, when this resolution was signed at Benoni on 28 September 2000, these were the three conditions under which annual leave accrued would then be paid out. Furthermore, the implementation date of this agreement was set out to be retrospective to the 1st July 2000. In this regard it is common cause that Mr Pillay resigned on 31 July 2000. Thus, by the time this agreement was ratified by signatures of the various parties on 28 September 2000, he was no longer employed by the Department of Education for almost a two-month period up to that date. However, the implementation was made retrospective to 1 July 2000, which then meant his resignation fell within the time period that this resolution was implemented. As a result of this the Department claimed that he was no longer entitled to any pay out of annual leave accrued as resignation was not one of the three reasons why a person would then be paid such accrued leave. However my understanding is that prior to this Resolution 7/2000 coming into being he would have been entitled to a pay out of annual leave accrued to him.
.2 This presents as being inherently unfair to Mr Pillay in that between 1 August 2000 and 28 September 2000, when the Resolution was signed by all parties concerned he could not have influenced the negotiation process in any way. Thus, during this time period he was no longer an employee of the organisation and as such was no longer a member of the Union that he previously belonged to which was a party to the Bargaining Council negotiation process. Hence he was powerless to influence the decisions made in any way whatsoever, which presents as being inherently unfair. Furthermore, if Mr Pillay had knows what the outcome of what Resolution 7/2000 was going to be, it presents as being more than probably that this would have significantly influenced the decisions that he made in regard to resigning. Thus he may either have resigned at an earlier date before 1 July 2000, or may have decided under such circumstances not to have resigned at all.
.3 Therefore, I conclude that in Mr Pillay’s case, he is not bound by this agreement in the form of Resolution 7/2000 and instead what must apply is the conditions that would have been applicable to him prior to 1 July 2000.
.3 In regard to the Applicants submission that the BCEA should apply as it had an effective implementation date of 1 June 2000, this presents as being valid.
.4 In regard to the BCEA Section 40 regarding “Payments on Termination” does state that “On termination of employment, an employer must pay an employee”. While it does not specifically state that what should be paid is all the annual leave accrued, it does state that what the employee is entitled to be paid is as follows : “(c) if the employee has been in employment longer than four months, in respect of the employee’s annual leave entitlement during an incomplete annual leave cycle as defined in section 20(1) (i) one days remuneration in respect of every 17 days on which the employee worked or was entitled to be paid; or (ii) remuneration calculated on any basis that is at least favourable to the employee as that calculation in terms of paragraph (i).”
.5 This I understand to imply that, according to the BCEA, the employee should be paid out for annual leave accrued whatever the reason for termination of service including resignation.
.6 Furthermore, in this regard Government Notice No R1438 published on the 13th November 1998 pertained to the BCEA, sets out under point 3.2.3 that “An employer must not pay an employee instead of granting leave except on termination of employment.” Again, this is understood as meaning that on termination of employment, an employer is required to pay out annual leave accrued. Therefore I rule that the above in regard to the BCEA does apply in regard to Mr Pillay’s application to the BCEA - and that he is therefore entitled to be paid out for annual leave accrued by him prior to his resignation.
.7 Therefore, I rule that the relief sought in this matter by Mr Pillay, must be met by the Department of Education.
7 . AWARD
The Department of Education must pay Mr Pillay all leave benefits accrued and payable upon the point of his resignation. The Department of Education must access audited records of Mr Pillay’s employment history and use this as a basis of payment. Payment of such monies owing must be made by 31 April 2001.
DR R J T McCANN
PANELLIST
DATE : 25 MARCH 2001
EDUCATION LABOUR RELATIONS COUNCIL
ARBITRATION AWARD
CASE NUMBER PSES 145 kzn
APPLICANT MR S N PILLAY
RESPONDENT DEPARTMENT OF EDUCATION
NATURE PAYMENT OF BENEFITS
ARBITRATOR DR R J T McCANN
DATE OF ARBITRATION 13 MARCH 2001
VENUE UMBILO
REPRESENTATION:
APPLICANT MR S N PILLAY AND MR D SINGH (SATU)
RESPONDENT MR T ZULU
AWARD:
The Department of Education must pay Mr Pillay all leave benefits accrued and payable upon the point of his resignation. The Respondent must access audited records of Mr Pillay’s employment history and use this as a basis of payment. Payment of such monies owing must be made by 31 April 2001.
DATE OF AWARD 25 MARCH 2001
Province: KwaZulu-Natal
Applicant: MR S N PILLAY
Respondent: DEPARTMENT OF EDUCATION
Issue: Unfair Dismissal - Constructive Dismissal
Venue: UMBILO
Award Date: 25 March 2001
Arbitrator: DR R J T McCANN
EDUCATION LABOUR RELATIONS COUNCIL
CASE NUMBER : PSES 145 KZN
In the arbitration between:
S N PILLAY APPLICANT
and
DEPARTMENT OF EDUCATION RESPONDENT
ARBITRATION AWARD
1 . DETAILS OF HEARING AND REPRESENTATION
This arbitration hearing was conducted at the Durban College of Education in Umbilo on 13 March 2001. The Applicant, Mr S N Pillay, partly represented himself while he was assisted in this regard by Mr Dolin Singh, a Union Official for SADTU. Mr T Zulu represented the Department of Education and in this regard was assisted by Mr G N Ngcobo.
2 . ISSUE TO BE DECIDED
.1 The Applicant, Mr Pillay, resigned from the Department of Education with effect from 1 August 2000, having worked for the Education Department for 20 years prior to that. During this 20-year period, Mr Pillay had accrued vacation leave benefits to which he contended he was entitled to compensation. The Education Department has refused to compensate him for leave accrued during this period. Mr Pillay contends that this is unfair and is seeking relief in this regard.
.2 Therefore the issue to be decided is whether the Department of Education will not pay him out compensation for accrued vacation leave benefits, is a fair or unfair labour practice.
.3 A further in limine issue that needed to be decided first, was raised by the Respondent party. Thus, as to whether the ELRC has the jurisdiction to hear this matter, due to the employer/employee relationship being terminated by Mr Pillay’s resignation and therefore, according to the Respondent, no longer falling under the terms of reference of the Labour Relations Act of 1995.
3 . BACKGROUND TO THE ISSUE
Mr Pillay resigned from the Department of Education on 31 July 2000. When he was not paid out compensation, which he contends he is entitled to in regard to accrued vacation leave benefits, he then made application to the Education Labour Relations Council for a conciliation hearing. This conciliation hearing was conducted on 12 February 2001, at which the matter remained unresolved. This matter then went forward for arbitration on 13 March 2001, when the arbitration hearing was conducted.
4 . SURVEY OF EVIDENCE AND ARGUMENT
.1 Employees version
.1 By way of introduction, Mr Pillay set out that he resigned from the profession with effect from 1 August 2000, after having served the Education Department for 20 years. In the 20 years of service, Mr Pillay had accrued vacation leave benefits to which he contended that he is entitled for compensation.
.2 The Education Department had refused to compensate him for leave accrued during this period, notwithstanding there being clear audited records of Mr Pillay’s employment history for the duration of his employment. To counter Mr Pillay’s request, the Department had sited provisions of a collective agreement, Resolution 7/2000 - Improvement in the Conditions of Service of Public Service Employees for 2000/2001 Financial Year, which was concluded at the Public Service Co-ordinating Bargaining Council (PSCBC), and which collective agreement does not provide for payment of leave accrued between 1 July 2000 upon an employee resigning. (This Resolution was submitted as evidence).
.3 Mr Pillay contended that this was unfair and supported his contention with the following arguments:
.1 He commenced by referring to the Basic Conditions of Employment Act 1997 (“BCEA”) and the provision that this makes in regard to all Civil Servants. Thus he submitted that on 2 June 2000 in terms of the provisions of the Basic Conditions of Employment, Schedule 3, item 2 - Application to Public Service, the BCEA, became applicable to all Public Service Employees. This, he said, translated into an effective implementation date of 1 June 2000.
.2 He submitted that it follows that provisions of the BCEA, save in the instance where prevailing Collective Agreements regulate more favourable terms in employment standards than is provided for in this Act, would replace existing agreements (more specifically those less favourable than BCEA provisions), regulating the employment relationship. Thus, it was argued that by virtue of his resignation taking effect on 1 August 2000, Mr Pillay had the good fortune of being covered by the provisions of the BCEA. In this regard, specific reference was made to the BCEA in terms of Chapter 5 - Termination of Employment, Section 36, Notice of Termination of Employment, Subsection (A), (B) where there is expressed provisions for the payment of leave benefits.
.3 He submitted that the Department’s counter-argument was than even though the BCEA came into affect on 1 June 2000, to the Public Service, yet the Collective Agreement (i.e. Resolution 7/2000), between organised labour representing a majority of Civil Servants in the various Public Sector and the State as Employer, concluded this Collective Agreement in the form of Resolution 7/2000 at the Public Service Co-ordinating Bargaining Council. This set out that this agreement specifically makes provision for conditions under which the employer will pay an employee for annual leave accrued before 1 July 2000. However, it was submitted that while Resolution 7/2000 was in effect, this agreement was only concluded sometime in September/October 2000 but, by agreement, it was retrospectively applied with effect from 1 July 2000.
.4 The applicant then referred to page 3 of Resolution 7/2000, the section dealing with leave and specifically with regard to Section 7.3 concerning the pay-out of annual leave accrued before 1 July 2000. Here it was submitted that the resolution in question expressly sets the parameters upon which the employer shall pay accrued leave, that being death, retirement or medical boarding. From this, it was submitted, follows the Department’s argument that Mr Pillay was still in the service of the Education Department when Resolution 7/2000 was retrospectively put into effect. This Resolution does not cover payment upon resignation, and it (the Department) is under no obligation to compensate Mr Pillay.
.5 This pertains to the non-applicability of the scope of agreement as embodied as in 7/2000. In this regard it was submitted that by law, any Collective Agreement, whether concluded at a Bargaining Council or even, for example at a narrow decentralised level in the form of a Recognition Agreement at a workplace, must have a defined scope of application.
.6 In this regard reference was made to the Labour Relations Act, No 66 of 1995, in the Section on Collective Agreements (subsection 23 - Level Affects of Collective Agreements), specifies persons or groups who are bound by the Collective Agreement and conditions under which the agreements apply. The description then from the Act in regard to who is bound by a Collective Agreement, was then submitted. It was then further submitted that it follows that the scope of application of any Collective Agreement can only be drawn from the registered scope of any agreement and that the registered scope can in turn only draw from the employees currently in service. In regard to this Section of the LRA attention was drawn that mention was made of members of the Trade Union. It was submitted that the use of ‘members’ in this instance obviously makes reference to persons currently in the employ of the Public Service and who at the time exercise an employment right by belonging to a Trade Union and mandating the Union to negotiate on their behalf. It was submitted that in this regard Mr Pillay under no circumstances could be classified as an employee as he had exited the service on 1 August 2000. It was further submitted that it must therefore follow:
.1 Mr Pillay cannot be a party to a Collective Agreement.
.2 Mr Pillay cannot be classified as a member of any party.
.3 Mr Pillay did not belong to any labour organisation who was party to Resolution - 2000.
.7 It was submitted that although one of the items made reference to non-members, interpretation of non-members in this instance, expressly made reference to “employees” who are not members. Thus it was further stated that assuming for some reason the parties went beyond the provisions of the LRA and decided to include the category of employees who had resigned and entitled to benefits, no mention of a “non-employee”/non-member is covered in the scope of Resolution 7/2000. In this regard specific reference was made to Resolution 7/2000, page 1, item 2 - Scope, where it reads: “2.1 This agreement applies to the employer and employees” (a) who are employed by the State, and (b) who fall within the registered scope of the PSCBC”.
.8 In effect, it was submitted then that the Department was arguing the applicability of Resolution 7/2000, even though the LRA failed to identify Mr Pillay as belong to the Registered Scope as well as the parties themselves failing to identify the category under which Mr Pillay would fall in their agreement.
.9 As already mentioned, Resolution 7/2000 was effectively concluded in September/October 2000 accepting that deliberations would have ensued prior to the signing of this collective agreement. The Applicant party thus submitted that while not trite or prescribed law, it generally prevails that amendments to acts of parliament/newly revised statutes seldom apply retrospectively. It was argued that the reasoning behind this is that if they were to apply they would interfere with the rights of a party be it direct or indirect. In this regard the applicant was not sure that even by a Collective Agreement, whether the parties could have taken it upon themselves to conclude what tantamount to variations of an Act of Parliament and agreement to its retrospective application.
.10 The application party thus hoped that the arbitrator would accept this argument and dismiss the Departments contention that Resolution 7/2000 is binding on Mr Pillay. In this regard they wished to reinforce their argument that Mr Pillay claim must be entertained solely by applying provisions of the BCEA.
.11 Condition of resignation as a category of termination. The Applicants final argument was that of actually making a comparison with Resolution 7/2000 in respect of paying of accrued leave to the provisions embodied in Chapter 5 in the BCEA that deals with:
.1 Termination of Employment;
.2 the Payment of Termination;
.12 The Arbitrator was asked to consider what Resolution 7/2000 in Section 7.3 - has to say on pay out of annual leave accrued before 1 July 2000. Thus it reads “(a) Employees, in terms of the dispensation applicable prior to the 1st July 2000 have earned audited leave accruals in terms of that dispensation, shall retain the same. The employer shall pay such accrued leave on : i. death; ii. retirement; iii. medical boarding.” Attention was then drawn to Chapter 5 of the BCEA concerning Termination of Employment, Notice of Termination of Employment, Section 37(1) of the BCEA which regulates the terms and conditions of payment or leave benefits. Here it reads:”Subject to Section 38, a contract of employment terminable at the instance of a part to the contract, may be terminated on notice of not less ...”. Again, in Section 40 on payments on termination, in the BCEA reads “On termination of employment, an employer must pay an employee ...”. In this regard, attention was drawn to the fact that only the use of “termination” defines the ending of the employment contract between the employee and the employer in these provisions.
.13 A question was then raised how one defines termination. Thus it was submitted that a concise meaning and interpretation of termination reads “to set a limit, to end, to conclude, to be limited in space by a point of surface, to stop short ..”.
.14 It was submitted that clearly the BCEA intended the generic use of “termination” for the purpose of identifying and catering for all ground upon which termination/separation of the employment relationship occurs. It was submitted that this obviously means to include the category of resignation, and for that matter, maybe even dismissal, retrenchments, on grounds of incapacity, etc. It was stated that alternatively, nowhere in the BCEA, is there any mention to the contrary which limits ones interpretation of termination as to categories of resignation, death or medical boarding as in the case of Resolution 7/2000.
.15 It was thus stated that one therefore arrives at a considered view that Resolution 7/2000, by excluding the category of resignation, a category which is material to this dispute, has caused by a deed, a downward variation of a basic employment standards as enshrined in the BCEA. It was argued that this submission be it unintentional or otherwise has caused Mr Pillay prejudice.
.16 To round off this argument attention was turned to provisions embodied in the BCEA which provide for variations as stated in Chapter 7, Section 49 - Variation by Agreement. Here it reads “49(1) A Collective Agreement concluded in a Bargaining Council may alter, replace or exclude any basic condition of employment if the collective agreement is consistent with the purpose of this Act and the Collective Agreement does not ...”. This section continues from (a) to (f) providing further clarification under which conditions no variation occurs. It was deemed unnecessary to refer to them specifically as they were irrelevant to this dispute. For the purpose of this dispute, it was contended that the above provisions may apply.
.17 At this stage attention was drawn to the purpose of the BCEA. More specifically reference was made to Chapter 1 of the BCEA - the section on the Purpose of this Act. It was stated that it reads:”The purpose of this Act is to advance economic development and social justice by fulfilling the primary objectives of this Act which are - (a) to give effect to and regulate the right to fair labour practices conferred by Section 23(1) of the Constitution - (i) by establishing and enforcing Basic Conditions of Employment; and (ii) by regulating variation ...” It was submitted that the mentioned section must be read and applied in conjunction with each other and in so doing it is argued that it becomes evident that there was never any intention for the Act to allow a downward variation under any circumstances.
.18 In summary, it was submitted that Mr Pillay had legitimately bought the charge of unfair labour practice against the Department on the following grounds:
.1 Mr Pillay cannot be bound by the Collective Agreement as embodied in Resolution 7/2000.
.2 The only appropriate piece of legislation material to Mr Pillay’s claim is the Basic Conditions of Employment Act 1997.
.3 In the event it is ascertained that he is bound by Resolution 7/2000 provisions, but that this Resolution contravenes the BCEA, by causing a downward variation of its (BCEA) provisions, by excluding resignation from its category under which accrued leave benefits is payable.
.4 In conclusion, it was set out that the relief sought was that the Department must pay Mr Pillay all leave benefits accrued and payable upon the point of his resignation. To do this it was asked that the Department must access audited records of Mr Pillay’s employment history and use this as the basis of payment. It was requested that this relief be paid in thirty days of an arbitration award to this effect.
.2 The Employers Version
.1 The employer party first raised a point in limine as to whether the ELRC had the jurisdiction to hear this matter. Their submission was that this Council was established in regard to the Labour Relations Act in terms of Section 37. It was further stated that this Act regulates the Employer/Employee relationship. Thus, it was submitted that once the employer/employee relationship is removed it was argued that the jurisdiction of the Council is removed. It was then submitted that the matter falls outside the ELRC.
.2 In this regard it was submitted that the Applicant resigned from the Department in July 2000. Hence, it was argued that the employer/employee relationship ceased at that stage.
.3 In this regard it was submitted that it was not the case of the Applicant that the termination of his service was unfair, in which case it was submitted that the Act would apply. Instead it was submitted that the applicant alleged that he had some right which his former employer did not fulfil upon termination of his services. Therefore it was the employers representative submission that the employer/employee relationship had ceased and hence the jurisdiction of this Council was ousted. Thus it was further submitted that if there were rights that the employer did not fulfil which were due to the Applicant, the Applicant may pursue these rights in some other form. Hence it was argued that this Council did not have the jurisdiction to hear this matter.
.4 In regard to this in limine matter, the decision was made by the Arbitrator that the ELRC did have the jurisdiction to hear this matter. The reasons for this decision will be included under the section on ‘analysis of evidence and argument’. This matter therefore proceeded onto the arbitration for which the issue was referred. The employers version in this regard is as follows.
.5 It was the employers version that Mr Pillay is not entitled to the relief he sought on the basis that such relief is not covered by the Collective Agreement conducted by the parties at the Bargaining Council. Thus it was submitted that the time of the conclusion of this agreement/matter and when it became applicable on the 1st July 2000 Mr Pillay was still in the employment of the Department.
.6 It was further submitted that he was a member of the Trade Union movement who were signatories to the agreement. Thus it was argued that as such he was bound by the terms of that agreement.
.7 It was submitted that it is common cause that the Basic Conditions of Employment Act does make provision for variation to the Act by Collective Agreement concluded by the parties. In this regard it was submitted that the agreement was in fact concluded as set out by this section of the BCEA. It was further submitted that Resolution 7/2000, being the agreement concluded on 28 September 2000 was also reached. In this regard it was submitted that signatures were MATOSA, NTSWU, FAWUSA, PSA, SATU, SAPU and SAOU. It was further sated that this agreement applied retrospectively from 1 July 2000.
.8 It was submitted that Resolution 7.03 deals specifically with pay out of annual leave accrued before 01 July 2000. In this regard it was set out that it spelt out when an employer would make payment of the annual leave i.e. (1) upon death, (2) on retirement (3) on medical boarding. It was submitted that the applicant did not fall within the abovementioned categories.
.9 It was the Respondent’s submission that if the parties to the agreement had wished than annual payment be made on resignation, they would have included that term in this agreement. However since they did not include it, it was argued that they did not wish it to be applied.
.10 It was submitted that Section 49 of the BCEA (1997) deals with variations of the sections of the Act by agreement. More specifically Section 49 (1) it was submitted states that “A Collective Agreement concluded in a Bargaining Council (2) after, replaced or excluded any basic condition of employment if the collective agreement is consistent with the purpose of this Act and the collective agreement does not - (a) reduce the protection afforded to employees by Section 7, 9 and any regulation made in terms of Section 13; (b) reduce the protection afforded to employees who perform light work in terms of Section 17(3) and (4); (c) reduce an employees annual leave in terms of Section 20 to less than two weeks; (d) reduce an employees entitlement to maternity leave in terms of Section 25; (e) reduce an employees entitlement to sick leave in terms of Section 22-24; (f) conflict with the provisions of Chapter 6".
.11 In this regard it was the Respondents submission that the Collective Agreement concluded by the parties at the Bargaining Council did not infringe on employees rights as minuted in the above section.
.12 It was further submitted that Section 40 of the BCEA deals with payment on termination. Thus Section 40 states “On termination of employment, an employer must pay an employee (a) for any paid time off that the employer is entitled to in terms of Section 10(3) or 16(3) that the employee has not taken; (b) remuneration calculated in accordance with Section 21(1) for any period of annual leave during terms of Section 20(2) that the employee has not taken; and (c) if the employee has been in employment longer than four months in respect of the employees annual leave entitlement during an incomplete annual leave cycle as defined in Section 20(1) - “(i) one day’s remuneration in respect of every seventeen days on which the employee worked was entitled to be paid; or (ii) remuneration calculated on any basis that is at least as favourable to the employee as that calculated in terms of sub-paragraph (i)”.
.13 It was submitted that section 10 of the BCEA deals with overtime. In this regard Section (1) was covered in that “Subject to this chapter an employee may not require or permit an employee - “(a) to work overtime except in accordance with an agreement; (b) to work more than - (i) three hours overtime a day, or (ii) ten hours overtime a week”. It was also the Respondents submission that this was not the case in regard to the applicant here.
.14 It was also submitted that in dealing with this matter the employment of Educators Act of 1998 was also applicable. More specifically the regulation to that Act was referred to and in particular Regulation 59 was a section on leave gratuities. This was as follows “59. Leave Gratuities. A leave gratuity calculates as set out in Regulation 61 and 62, may be paid - (a) to an Educator whose services terminate of the Educator appointed in a temporary capacity in terms of Section 4(3)(b) of the Act on or after attaining the age of 65 years shall also be regarded as retirement on pension; (b) to an Educator as a result of termination of services - (i) in terms of Section 8(1)(a), (b) and (c) of the Act; or (ii) if he or she had been appointed on a contract basis, on account of his/her period of service or his/her voluntary resignation according to the provisions of her contract; (c) to an Educator on termination of service of an Educator appointed in a temporary capacity in terms of Section 4(3)(b) of the Act, after having completed at least five years of uninterrupted satisfactory service, unless special leave for the sake of continuity of service may be granted; (d) to an Educator serving in the permanent capacity at his/her written request, where such Educator has the option of retiring on pension before attaining the compulsory retirement age and who does not retire before such attaining such an age; and (e) when an Educator dies, to the following person(s) or the Estate following in order of precedence: (i) the widow or widower of such an Educator, (ii) the fully dependant children, including a stepchild or lawfully adopted child, in equal shares; (iii) the dependent parent or parents; and (iv) the estate of the deceased”.
.15 It was submitted that Section 8 of the Employers of Educators Act only deals with transfers of Educators and not the resignation of Educators. It was therefore the Respondent parties submission that the Applicant was not entitled to the relief he seeks - as he is not covered by the Act himself, this Act being the BCEA. It was further submitted that what the Applicant was seeking was not covered by agreement concluded in the Bargaining Council. It was further submitted that what the Applicant is seeking was not covered by the regulation to the Employment of Educators Act 76 of 1998.
.16 One other aspect was raised in that it was submitted that the allegation was made that the Collective Agreement had widened the provisions of the Statute. It was questioned whether the Arbitrator had a right to rule on that aspect. Thus it was the Respondents contention that the Arbitrator had no right to rule on that aspect. It was further the Respondent party’s submission that there was no Statute being violated by the Collective Agreement concluded in the Council. This then concluded the Respondent evidence in chief.
.3 Employees Response
.1 The employee submitted that they did not maintain that it was a deliberate exclusion by the Council. It was further submitted that in regard to Section 49 of the BCEA regarding variations, that variations do occur where it is consistent with the BCEA. In this regard it was argued that the BCEA was there for the basic terms. Hence it was not possible for any variation to be a less favourable term. Thus it was argued that this only allows for better conditions and not less favourable conditions.
.2 It was further submitted that the employee party was not sure that Section 10 of the BCEA was relevant in regard to overtime being raised. Thus it was not the Applicant party’s contention that overtime was in dispute.
.3 It was submitted that reference to Employment Education Act was quoted as seeing no provision for this Department to pay Mr Pillay. However it was submitted that this would mean a “downward variation” of the next bit of supreme obligation re employment contract, this being the BCEA.
.4 In regard to the issue being raised about the need to check whether the Arbitrator had the right to make a ruling, it was submitted that the Employee party believed that the Arbitrator has discriminating powers to exercise. Thus it was contended that the breach of employment of employment contract by not paying Mr Pillay was central to this matter. Thus it was submitted that how could the Arbitrator apply his mind if he was not entitled to look at all the facts. Hence it was submitted that the Arbitrator must look at and apply his mind to the BCEA in regard to this matter.
5 . CLOSING ARGUMENTS
.1 Employee Party
.1 Mr Pillay submitted that the employment relationship exists in terms of the contract of employment. This he said is not static and changes in the following ways:
.1 Agreement between the Employer and Employee.
.2 Collective Agreements.
.3 By legislation.
.2 Thus, he submitted that a Contract of Employment can only be changed or reviewed whilst it is in existence for that purpose. Thus it was argued that it cannot be varied where most of its effect does not exist. By that he said he meant that after 31 July 2000, he did not perform any work for the Department of Education, nor did he receive any remuneration from them. Thus he said his relationship with his ex-employer only existed in terms of the payments due to him upon termination of service - and termination of service was the 31st July 2000.
.3 He further submitted that legislation that naturally effects a contract of employment effectively alters that contract of employment from the time the legislation becomes effective. As an example of this he said that if a law was passed concerning maternity leave becoming paid leave from 1 April 2001, then all contracts of employment from 1 April 2001 would necessarily include paid maternity leave from 1 April 2001. Likewise he said that the BCEA became effective from 1 June 2000 and that his states categorically that all accrued annual leave is payable upon a termination of a contract of employment. Therefore he submitted that since his service was terminated on 31 July 2000, then the payments due to him upon termination must be determined by the contract that was in place on 31 July 2000 (i.e. in terms of the BCEA payment of annual leave accrued).
.4 He went on to further submit that after 31 July 2000, there was no contract in place between the Department of Education and himself, except in so far as payment of moneys owing as at 31 July 2000. Beyond that there was no relationship or even a contract. In this regard he then made reference to an example case where an employee may have passed away on 31 July 2000. He said in such an example, effectively the contract had been terminated and the employer would have been obliged to pay out leave accrued. Thus, the employer would not have been able to contend that it would wait for an agreement to be concluded in the future, which subsequently became known as Resolution 7/2000, and then to determine by way of that agreement whether they will pay upon death or not. Therefore the Applicant party was saying that upon termination the Employer must pay as per the contract applicable at the time and not escape from the obligation hoping for agreements from the future that may or may not materialise. It was submitted that such an approach was ludicrous.
.5 By the same token it was submitted, that it is improper for any employer to postpone their current obligations in the hope that future agreements may materially affect the current contracts. Thus, for example, it was submitted that if an employee dies now you need to pay now - and not say there may be a Resolution 8 in two to three months time that may become retrospective, so the employer does not have to pay now.
.6 It was submitted that, in addition, Resolution 7/2000 was in essence a salaries agreement, which include other aspects of the Conditions of Employment - and clearly it intended that the salary increases could be retrospective. The Applicant said that he could not believe that the Employer would intentionally place a downward variation of the BCEA on the back of a salaries agreement, and further, it is not a sated downward variation in the agreement. Instead it was argued that the term resignation was merely omitted. The Applicant said he therefore argued that the omission was not an exclusion.
.7 He said the Employment of Education Act was quoted by the Respondent party. In this regard he said the Section 58 quoted is not legislation. Thus, in fact, he said what was quoted was instead Regulation 58 of the Act. He said the regulation is part of the Contract of Employment because it deals with Terms and Conditions of Employment of Educators regarding a whole host of normal employment contractual matters. He said this was Gazetted which was merely a Government newspaper and annexed or attached to the Act. Thus he said because it was not legislation, collective agreements cannot vary to the extent that it does. He said since the Applicant party regarded it therefore as part of the contract of employment between the State as employer and himself, as he stated earlier this contract of employment would have been automatically adjusted when the BCEA took effect from the 1st June 2000 (i.e. when the Act took effect).
.8 His final statement was that he hoped the Employer would do the right thing after twenty years of loyal service and not abdicate its responsibility to a loyal Employee.
.2 Respondents Argument
.1 The Respondent representative said that all his arguments submitted at an earlier stage still stood. What he now wished to do was to deal with certain aspects raised by the Employee during his closing submissions.
.2 In this regard he wanted to especially focus on Resolution 7/2000 and the BCEA. Thus it was submitted that the Employers position is that Resolution 7/2000 covers the Employee and he was bound by that resolution as it applied on the 1st July 2000.
.3 In this regard where reference had been made to the example of an employee who had died on the 31st July 2000, it was the Respondents representative’s submission that in that situation this was catered for in Resolution 7/2000. Thus in the Resolution 7/2000 it was submitted that it states very clearly that death, retirement or medical boarding is catered for.
.4 It was the Respondents representative’s submission that nothing in the Basic Conditions of Employment Act was violated. Thus no sections were quoted stating that the Employee on resignation would be paid leave gratuities.
.5 It was argued that the BCEA is a guideline to the Employer and Employees as to how they should go about drafting clauses to be inserted in their Contract of Employment. Thus it was not a contract in itself and instead merely set guidelines as to what should be included in the contract of employment - and those sections that may be varied by agreements. It was further submitted that no contract signed between the Employer and the Employee had been placed before the Arbitrator where it specifically says the Employer shall pay the Employee leave gratuities on resignation. As such it was argued that one would rely on legislation as a guidance - and in this regard one would specifically rely on the BCEA and the Employers of Educators Act 76 of 1976 and Regulations pertaining to that Act.
.6 Where the Applicant had argued that the regulations were merely a Government newspaper and not legislation, it was submitted that one must not loose sight of the fact that any legislation that deals with administrative issues will have rules and regulations attached to it. Those rules and regulations clearly assist people responsible for administering terms of the legislation and thus it was submitted that it cannot be argued that the Rules and Regulations regarding an Act of Parliament, should not be followed merely because its in a Government newspaper.
.7 It was the Respondents representative’s submission that Section 59 of the Employment of Educators Act does not cater for payment of leave gratuities on resignation. It was further submitted that there is nothing in the BCEA that has been placed by way of a section before the Arbitrator that this section supports the case made by the Applicant. Therefore it was the Respondent party’s submission that the application be dismissed.
.3 Applicants response
.1 The Applicant said that the example he used about payment upon death pertained to the agreement only being concluded on 28 September 2000, while on 31 July 2000 there was no agreement in place. Thus he said he could have used any form of termination of contract such as retirement and not death as an example. Thus it was submitted that how could this have been effective when you could not wait for such an agreement to be put in place.
.2 He further submitted that he did not say that the regulation should not be followed. Hence instead what he referred to was that the regulations would be part of a contract of employment and when the BCEA became effective the contract of employment would in essence be amended.
.3 Where he said the Respondent party had made reference to the contract being in place when he joined the employer, he said no contract was signed. Thus at that time employment was done by way of the or de regulations in place.
6 . ANALYSIS OF EVIDENCE AND ARGUMENT
.1 Firstly, in regard to the in limine issue raised by the Employer party that the ELRC does not have the jurisdiction to hear this matter, due to the employment contract having been terminated, as already mentioned the ELRC, was ruled to have the jurisdiction to hear this matter. This was because of the following :
.1 My understanding was that this matter pertained to an aspect of the employer/employee employment relationship. In this regard Section 28 of the Labour Relations Act of 1995 re Powers and Functions of Bargaining Councils (of which section 37 refers to Bargaining Councils and Sectors in the Public Service) sets out as one of the powers and functions of such a Council to “(c) To prevent and resolve labour disputes”. The termination clause is part of the contract of employment. A contract of employment is a document that regulates the labour relationship between an employer and employee and it is central to the labour relationship between the parties and consequently plays a pivotal role in dispute resolution.
.2 My understanding is that the employer/employee contract is concluded and thus ceases to exist when all matters pertaining to the termination of contract of employment are concluded. In this instance there still remains a dispute re an alleged unfair labour practice relating to leave pay on resignation. Therefore my understanding is that this contract is not as yet concluded until this issue is resolved. Therefore the employee/employer relationship still exists as long as this dispute exists. In this regard it is within the powers and function of the Bargaining Council to resolve labour disputes. The ELRC is a Bargaining Council in a Sector in the Public Service. Therefore, it is my contention that the ELRC has the jurisdiction to hear this dispute. Therefore I rule that the ELRC has the jurisdiction to hear the dispute referred by the Applicant party concerning this matter.
.2 In regard to the primary dispute referred by the Applicant party pertaining to an alleged under labour practice relating to leave pay and resignation, the following was particularly considered.
.1 Resolution 7/2000 sets out under 7.3 pertaining to pay-out of annual leave accrued before the 1st July 2000 that “(a) Employees who, in terms of the dispensation applicable prior to the 1st July 2000, have earned audited leave accruals in terms of dispensation, shall retain the same”. This clearly indicates that prior to the first of July employees would have been paid out audited leave accruals. This then goes on to indicate that “the employer shall pay such accrued leave on : “(i) death; (ii) retirement; or (iii) medical boarding”. Thus, when this resolution was signed at Benoni on 28 September 2000, these were the three conditions under which annual leave accrued would then be paid out. Furthermore, the implementation date of this agreement was set out to be retrospective to the 1st July 2000. In this regard it is common cause that Mr Pillay resigned on 31 July 2000. Thus, by the time this agreement was ratified by signatures of the various parties on 28 September 2000, he was no longer employed by the Department of Education for almost a two-month period up to that date. However, the implementation was made retrospective to 1 July 2000, which then meant his resignation fell within the time period that this resolution was implemented. As a result of this the Department claimed that he was no longer entitled to any pay out of annual leave accrued as resignation was not one of the three reasons why a person would then be paid such accrued leave. However my understanding is that prior to this Resolution 7/2000 coming into being he would have been entitled to a pay out of annual leave accrued to him.
.2 This presents as being inherently unfair to Mr Pillay in that between 1 August 2000 and 28 September 2000, when the Resolution was signed by all parties concerned he could not have influenced the negotiation process in any way. Thus, during this time period he was no longer an employee of the organisation and as such was no longer a member of the Union that he previously belonged to which was a party to the Bargaining Council negotiation process. Hence he was powerless to influence the decisions made in any way whatsoever, which presents as being inherently unfair. Furthermore, if Mr Pillay had knows what the outcome of what Resolution 7/2000 was going to be, it presents as being more than probably that this would have significantly influenced the decisions that he made in regard to resigning. Thus he may either have resigned at an earlier date before 1 July 2000, or may have decided under such circumstances not to have resigned at all.
.3 Therefore, I conclude that in Mr Pillay’s case, he is not bound by this agreement in the form of Resolution 7/2000 and instead what must apply is the conditions that would have been applicable to him prior to 1 July 2000.
.3 In regard to the Applicants submission that the BCEA should apply as it had an effective implementation date of 1 June 2000, this presents as being valid.
.4 In regard to the BCEA Section 40 regarding “Payments on Termination” does state that “On termination of employment, an employer must pay an employee”. While it does not specifically state that what should be paid is all the annual leave accrued, it does state that what the employee is entitled to be paid is as follows : “(c) if the employee has been in employment longer than four months, in respect of the employee’s annual leave entitlement during an incomplete annual leave cycle as defined in section 20(1) (i) one days remuneration in respect of every 17 days on which the employee worked or was entitled to be paid; or (ii) remuneration calculated on any basis that is at least favourable to the employee as that calculation in terms of paragraph (i).”
.5 This I understand to imply that, according to the BCEA, the employee should be paid out for annual leave accrued whatever the reason for termination of service including resignation.
.6 Furthermore, in this regard Government Notice No R1438 published on the 13th November 1998 pertained to the BCEA, sets out under point 3.2.3 that “An employer must not pay an employee instead of granting leave except on termination of employment.” Again, this is understood as meaning that on termination of employment, an employer is required to pay out annual leave accrued. Therefore I rule that the above in regard to the BCEA does apply in regard to Mr Pillay’s application to the BCEA - and that he is therefore entitled to be paid out for annual leave accrued by him prior to his resignation.
.7 Therefore, I rule that the relief sought in this matter by Mr Pillay, must be met by the Department of Education.
7 . AWARD
The Department of Education must pay Mr Pillay all leave benefits accrued and payable upon the point of his resignation. The Department of Education must access audited records of Mr Pillay’s employment history and use this as a basis of payment. Payment of such monies owing must be made by 31 April 2001.
DR R J T McCANN
PANELLIST
DATE : 25 MARCH 2001
EDUCATION LABOUR RELATIONS COUNCIL
ARBITRATION AWARD
CASE NUMBER PSES 145 kzn
APPLICANT MR S N PILLAY
RESPONDENT DEPARTMENT OF EDUCATION
NATURE PAYMENT OF BENEFITS
ARBITRATOR DR R J T McCANN
DATE OF ARBITRATION 13 MARCH 2001
VENUE UMBILO
REPRESENTATION:
APPLICANT MR S N PILLAY AND MR D SINGH (SATU)
RESPONDENT MR T ZULU
AWARD:
The Department of Education must pay Mr Pillay all leave benefits accrued and payable upon the point of his resignation. The Respondent must access audited records of Mr Pillay’s employment history and use this as a basis of payment. Payment of such monies owing must be made by 31 April 2001.
DATE OF AWARD 25 MARCH 2001