Case Ref no: ELRC333-18/19EC
Date of Award: 24 June 2021
In the arbitration between
NUPSAW OBO THANDANI AND 4 OTHERS APPLICANTS
EASTCAPE MIDLANDS COLLEGE RESPONDENT
Applicants’ representative: Mr S Ngqungwana of NUPSAW
Respondent’s representative: Mr S Mpati
1. The matter was set down for an arbitration hearing on 26 November 2020, 11 December 2020, 16 April 2021, 18 May 2021. The Applicants were represented by Mr S Ngqungwana of NUPSAW. Mr L Mpati represented the Respondent.
2. The Applicants’ dispute was initially referred to the ELRC as SALIPSWU obo Thandani & 10 Others. Subsequently I was advised by Mr Ngqungwana that the union has been changed to NUPSAW and that only 5 of the 11 applicants remained part of the dispute. He informed me that the remaining Applicants are Thandani Ntombifikile, Mavuso Thembisa, Mshuqwana Goodman Luvuyo, Outshiki Babalwa and Wadzanai Rafomayo.
3. There was a dispute regarding whether Ms Rafomayo had locus standi. (I found that Ms Rafomayo does not have locus standi and deal with this matter at paragraphs 30 – 32 below)
4. The remaining Applicants are all lecturers at the Eastcape Midlands College.
5. The Applicants are challenging the fact that their fixed term contracts are continually renewed. According to the referral form the relief sought was that the Applicants should not be treated less favourably than permanent employees in terms of Section 198B(8)(a) of the LRA. Subsequently, during the course of the arbitration hearing the relief sought was permanent employment. (the Section 198B dispute)
6. The Applicants also complained that certain employees who were appointed after them were appointed on ‘indefinite contracts’ by the Respondent. The only indication of an alleged unfair labour practice dispute (ULP) on the referral form was that the bullet point under “Nature of the dispute” for an ULP in terms of Section 186 (2) of the LRA was ticked. Nothing else in the referral form made any mention of an alleged unfair labour practice. There was also no mention of an alleged ULP in the arbitration referral form. Mr Ngqungwana insisted that the ULP dispute was always part of the applicants’ case. (the ULP dispute)
7. Numerous bundles and documents were submitted, marked Bundles A,B,C,D. Mr Ngqungwana also provided contracts of employment for the applicants as well as payslips.
BACKGROUND TO THE DISPUTE
8. The matter was referred to the ELRC on 31 July 2018.
9. On 11 December 2020 Mr Mpati raised certain preliminary issues regarding the jurisdiction of the ELRC to entertain the Section 198B dispute. I requested both parties to file written submissions on the preliminary issues on or before 15 January 2021. Upon receipt of the written submissions it became clear to me that evidence would need to be led in order to determine the jurisdictional points. I therefore informed the ELRC to set the matter down for oral evidence to be heard. I furthermore requested both parties to file additional documentation, most notably the Applicants’ contracts of employment and their payslips. I informed the representatives that in order to avoid a duplication of the evidence and in the light of the fact that practically the entire case revolved around evidence of the jurisdictional point I would listen to all the evidence (including the evidence regarding the ULP dispute) in order to make a determination regarding all the issues in dispute including but not limited to the jurisdictional issue. Evidence was presented on 16 April 2021 and 18 May 2021. Subsequent to the evidence being led I afforded the parties an opportunity to file supplementary heads of argument which I received on 25 May 2021.
ISSUES IN DISPUTE
10. Whether the ELRC has jurisdiction to entertain the Section 198B dispute;
11. Whether the Applicants are treated differently to the permanent employees in terms of Section 198B;
12. Whether the Applicants are entitled to be permanently employed by the Respondent;
13. Whether the Respondent committed an ULP against the Applicants by employing other employees on indefinite contracts instead of them.
14. Ms B Outshiki testified that she has been employed on a contract basis by the Respondent since May 2017. Her contract was continually renewed over this period.
15. Ms Thandani testified that she has been employed on a contract basis since 2015. Her contract had also been continually renewed over this period. Thandani testified that teachers who joined after her were employed on ‘indefinite contracts’ in 2019 instead of her. Thandani said she did not know who received indefinite contracts and who received fixed term contracts.
16. Mr H Olivier, an acting senior lecturer confirmed that certain employees were appointed on indefinite contracts.
17. Ms L Retief, who is employed as a Senior State Accountant by the Department of Higher Education testified regarding the Applicants’ remuneration packages. She testified that the Applicants are employees of the College. She explained that the Applicants’ payslips consists of three parts which include salary, 37% benefits and total earnings. She explained that the salary of the applicants in 2018 was R15480.75 plus Benefits at an amount of R5727.88 which together make up the total earnings of each applicant at R21208.63 per month and R254 503.56 per year for the 2018 year. The Applicants received the 37% as cash, whereas the permanent employees received the 37% as benefits. Ms Retief’s evidence was not disputed by the Applicants.
18. Mr L Sdeba, the Assistant Director HR testified that when the Applicants were employed they taught part-time students. However, the College had to review the programme because of certain challenges and the review process has culminated in the phasing out of the part-time classes. He said that the colleges were given a budget allocation of 63% in terms of the ELRC Collective Agreement No. 5 of 2013. He referred to correspondence from the Chief Financial Officer dated 29 October 2018 that the College had already exceeded its budget allocation of 63%. (Page 95 of Bundle A). Sdeba said that certain posts were advertised on or about the period 2017/2018 but the posts were never filled. He said that a moratorium was placed on the filling of any new vacant positions and the termination of contracts associated with the PPN model and TVET colleges on 9 October 2020. The moratorium is in place for a period of 3 years. (page 24 Bundle A).
During cross-examination Mr Ngqungwana failed to put any details regarding the appointment of employees on indefinite contracts to Sdeba. He merely asked Sdeba why the Applicants were not appointed on indefinite contracts to which Sdeba replied that it was probably because the applicants did not meet the requirements for the positions and that if the applicants did meet the requirements they must tell him. When Ngqungwana put it to Sdeba that the applicants said that certain persons were appointed after them Sdeba said he had no details regarding the proposition put to him. Sdeba said that all posts had to be advertised and that the applicants had to apply for the indefinite contract positions.
ARGUMENTS PRESENTED BY THE PARTIES
19. Mr Mpati referred to Section 198B (2) (a) and (c) of the LRA to support his argument that the ELRC does not have jurisdiction to entertain the Section 198B dispute. Sections 198B (2) (a) and (c) states as follows:
“(2) This section does not apply to-
(a) employees earning in excess of the threshold prescribed by the Minister in terms of section 6 (3) of the Basic Conditions of Employment Act;
( c) an employee employed in terms of a fixed-term contract which is permitted by any statute, sectoral determination or collective agreement.”
20. Mr Mpati argued that the Applicants earned above the threshold of R205 433.50 and that Section 198B was therefore not applicable to them. He argued that remuneration includes benefits. The Applicants earned above the threshold prescribed by the Minister and their remuneration includes the 37% paid to them monthly in lieu of benefits.
21. Mr Mpati furthermore argued that the applicants’ fixed term contracts were permitted by statute and collective agreement.
22. Mr Mpati in his heads of argument stated that the Applicants are employed as lecturers in the employ of the respondent in terms of the Further Education and Training Act, 2006 (Act 16 of 2006) as amended by Further Education and Training Act, 2012 (Act 3 of 2012) which is now the Continuing Education and Training Act, 2012 Act 3 of 2012.
23. Section 20(4) of the Further Education Act permits the Council of the College to establish posts for staff other than the management of staff, which posts are additional to the posts established by the Minister in terms of the Public Service Act, 1994 (Act 103 of 1994) as amended.
24. The positions occupied by the applicants are additional posts which are temporary in nature to the posts established on the organisational structure of the College by the Minister of the Department of Higher Education. This therefore permits the Council to create posts for a fixed period should the job be of a temporary nature. In the circumstances, these posts are informed by the operational requirements of the employer as contemplated in Paragraph 20 of the fixed-terms contracts of the respective applicants which provides that the contracts are subject to a certain number of students registered at the College.
25. Mr Mpati submitted that the Further Education and Training Act, 2006 (Act 16 of 2006) as amended is a statute for the purposes contemplated within the provisions of Sub-Section 2 (c) of the LRA of which the bargaining council does not have the necessary jurisdiction to entertain this dispute.
26. Furthermore, when the applicants were engaged on fixed-term contracts on or about the period 2017/2018 the ELRC Collective Agreement No 5 of 2013 was still effective until 31 March 2020. The fixed-term contracts of the applicants were informed and determined in the face of the ELRC Collective Agreement No 5 of 2013 in which it prescribed a threshold of 63% for the College to employ employees in the organizational structure of the Department of Higher Education. This was with specific reference to Paragraphs 4.1 and 3.1.1 of the ELRC Collective Agreement No 5 of 2013, which was subsequently read together with a directive from the DHET dated 29 October 2018 which stated that the Eastcape Midlands College had exceeded in its Cost of Employment budget of 63% threshold in terms of the Collective agreement.
27. Mr Mpati argued further that the Applicants failed to prove that an ULP was committed against them.
28. Mr Ngqungwana argued that the Respondent violated section 198B. The Applicants earned below the threshold because remuneration does not include benefits. For his argument Mr Ngqungwana relied on Mondi Packaging (Pty) Ltd v Director-General: Labour and others (2010) 13 ILJ 2558 (LAC).
29. He argued that the Further Education and Training Act, 2006 as amended and the CA No 5 of 2013 did not permit the Respondent to continually renew the Applicants’ fixed term contracts and that they were entitled to permanent employment.
30. Mr Ngqungwana argued that the Respondent committed an unfair labour practice against the applicants by employing lecturers who commenced employment after them on indefinite contracts instead of employing the applicants in those positions. He relied on Nowalaza and others v the Office of the Chief Justice and another (J1177/2017) ZALCJHB234 in this regard.
ANALYSIS OF EVIDENCE AND ARGUMENTS
SECTION 198B ARGUMENT
31. Section 198B is applicable only to employees who earn below the earnings threshold as prescribed by the Minister in terms of section 6(3) of the BCEA.
32. It is common cause that the ministerial threshold at the time that the dispute was referred to the ELRC was R205 433.30.
33. After a consideration of the Applicants’ contracts of employment, the Applicants’ salary slips, relevant case law and the ministerial threshold it is clear that the Applicants’ remuneration includes the 37% benefits which were paid to them monthly in lieu of benefits and that the Applicants’ remuneration is above the threshold prescribed by the Minister and that therefore the ELRC does not have jurisdiction to entertain the dispute. My reasons are as follows:
33.1 The fixed term contracts of the Applicants state as follows:
5.1 the employer shall pay the employee a basic salary in the amount of R15480.75 per month. You are entitled to 37% in lieu of benefits calculated on your current salary which amounts to R5727.88.”
I compared the salary slips of the permanent employees to that of the Applicants. The Applicants are paid the same remuneration as the permanent lecturers with the exception that instead of the actual benefits the Applicants are receiving a 37% cash payment in lieu of benefits monthly.
33.2 The case law and ministerial determination confirm that benefits are included in the definition of remuneration.
In the LAC matter of Apollo Tyres SA (Pty) Ltd v CCMA & Others (2013) 34 ILJ 1120 (LAC) the Court confirmed that the definition of remuneration in terms of section 213 of the LRA is wide enough to encompass wages, salaries and most if not all extras or benefits.
The Ministerial determination furthermore confirms specifically that benefits is part of remuneration and states as follows: (page 34 Bundle B)
“Earnings” means the regular annual remuneration before deductions, i.e. income tax, pension, medical and similar payments but excluding similar payments (contributions) made by the employer in respect of the employee: Provided that subsistence and transport allowances received, achievement awards and payments for overtime worked shall not be regarded as remuneration for the purposes of this notice.”
33.3 I explained to Mr Ngqungwana that the case law that he relied on during the proceedings, namely the Mondi matter supra has to do with overtime and is not relevant to the dispute before me.
33.4 When the Applicants referred their dispute to the ELRC they all earned the same basic salary and the same benefits (37% cash in lieu of benefits) in terms of their employment contracts namely: R15480.75 + R5727.88 = R21.208.63 per month = R254,503.56 per year. The Ministerial threshold = R205,433.30 per year. Therefore, the Applicants earned above the ministerial threshold.
33.5 As the Applicants earned above the Ministerial threshold the ELRC does not have jurisdiction to entertain the Section 198B dispute.
33.6 In the light of my finding I do not deem it necessary to deal with the other arguments presented by Mr Mpati regarding the Section 198B dispute.
MS RAFOMAYO’S DISPUTE
34. It is common cause that Ms Rafomayo was employed on several fixed term contracts by the Respondent from 1 April 2016 until 31 August 2018 when her fixed term contract was not renewed by the respondent. Following the non-renewal of the contract, Ms Rafomayo referred a dispute to the ELRC. Commissioner A van der Walt found that Ms Rafomayo was unfairly dismissed in terms of s 186(1)(b)(i) of the LRA and ordered compensation. The Commissioner found as follows: (pages 53 – 58 of Bundle A)
“Evaluation of Evidence and Argument
35. When the applicant’s contract was not renewed, her remuneration was R21 208.63 per month which was made up of R15 480.75 as basic salary and R5 727.88 paid in lieu of benefits. The applicant was appointed to post level 1 every time. The respondent did not renew her fixed-term contract after 31 August 2018, and she referred an unfair dismissal dispute to the CCMA on 26 September 2018. The applicant’s representative contended that the applicant had reasonably expected the respondent to renew her fixed-term contract in terms of section 186(1)(b)(i) of the Labour Relations Act, 1995.
36. Alternatively the applicant contended that she had expected the respondent to retain the applicant in employment indefinitely as from 1 September 2018 in terms of section 186(1)(b) (ii) . The applicant also contended that she enjoyed the protection of the provisions of section 198B of the LRA.
37. It was contended that the amount paid in lieu of benefits was not relevant in the calculation of her remuneration for purposes of the earnings threshold set by the Minister of Labour.
38. This contention is not correct. The total amount of remuneration includes the amount paid in lieu of benefits. This means that the applicant earns above the threshold and section 198B of the LRA does not apply.
39. There is Labour Court authority that an applicant cannot base a claim both on section 198B and section 186(1)(b) simultaneously. In this case the reference to section 198B remained an aside reference, and it was clear from the evidence that the case was in fact squarely based on section 186(1)(b).” (my emphasis)
40. As Mr Ngqungwana represented Ms Rafomayo at the arbitration hearing he was fully aware of the fact that she could not refer both a Section 198B as well as an unfair dismissal dispute to the ELRC. That decision was already made by Commissioner van der Walt in his award. Mr Ngqungwana however persisted with this baseless argument at the arbitration hearing before me. It is furthermore clear that Commissioner van der Walt also found that Ms Rafomayo earned above the threshold and that for that reason section 198B did not apply to her in any event. Ms Rafomayo’s circumstances and salary was exactly the same as that of the applicants before me. The entire dispute regarding section 198B was therefore already dealt with by Commissioner van der Walt in 2019 and should never have proceeded to arbitration.
41. In this regard I refer to the judgment of Snyman AJ in the matter of Nama Khoi Local Municipality v SA Local Government Bargaining Council & others (2019) 40 ILJ 2092 (LC) where the judge states as follows:
“(35)…Section 198D as a dispute-resolution process is not intended to be applied once the employment relationship has terminated. For that, employee parties already have the required protection in the unfair dismissal provisions of the LRA. My view in this regard is further informed by the fact that s 198D does not provide for the kind of relief as contemplated by s193 and 194, which only apply in the case of unfair dismissals and unfair labour practices. The relief that flows from s 198D can only be declaratory relief, which may well be moot if the employment relationship has ended by the time it falls to be decided.”
ALLEGED UNFAIR LABOUR PRACTICE DISPUTE
42. The Applicants failed to prove that the Respondent committed an unfair labour practice against them.
43. Mr Ngqungwana failed to provide any concrete facts regarding the alleged unfair labour practice dispute.
44. The case law that Mr Ngqungwana referred to, namely the Nowalaza matter supra , is not applicable to the matter before me. In that case certain positions were advertised that were already occupied by the applicants in that matter. In the matter before me it appears that certain indefinite contract appointments (of which I do not have any details) were apparently made more than 2 years ago and the Applicants are of the view that they should have been appointed to those positions instead of whoever was appointed. Prior to making a finding in such a matter the persons appointed to the positions should have been joined to the proceedings, which was not done. Furthermore, it is not possible to make a determination of whether the Applicants should have been appointed to the positions if I am not in possession of the details, requirements, proceedings, in short, the facts related to the indefinite contract appointments.
45. The ELRC does not have jurisdiction to entertain the Section 198B dispute.
46. The Applicants failed to prove that an unfair labour practice was committed against them.
47. The matter is dismissed.
SIGNED AND DATED ON 24 JUNE 2021
ADVOCATE L CHAROUX