ELRC697-23/24NW

IN THE EDUCATION LABOUR RELATIONS COUNCIL HELD VIA DIGITAL ZOOM CONFERENCE

Case No: ELRC697-23/24NW

In the matter between

SAOU obo SD PITSO Applicant

and

Education Department of North West Respondent


PANELLIST: Pieter Greyling
Award: 3 May 2024


ARBITRATION AWARD


DETAILS OF HEARING AND REPRESENTATION

1. This matter was set down for arbitration on 18 April 2024 to be dealt with on a virtual platform. The Applicant was represented by Mr A. Pretorius a representative of the referring trade union. The Respondent was represented by Mr M. Keetile an official of the Respondent.


ISSUE TO BE DECIDED

2. The Applicant referred an unfair labour practice dispute on 22 January 2023. The dispute is about the non-payment of remuneration emanating from disciplinary proceedings in which the sanction imposed consisted of a "fine not exceeding one month salary". The Respondent however refused to pay the Applicant the remuneration emanating from allowances and employer contributions to medical aid and pension fund. The Applicant therefore claims the amounts not paid by the Respondent.

BACKGROUND TO THE DISPUTE

3. The Applicant started her employment with the Respondent on 01 January 1986 as a teacher. She is currently the principal of a primary school. During 2023, the Applicant was subjected to a disciplinary enquiry. She was found guilty of the alleged transgressions and the sanction imposed consisted of a warning to be valid for a period of six months and a fine not exceeding one month’s salary. To recover the fine, the Respondent failed to pay the Applicant one month’s salary as well as allowances and fund contributions as a set off against the fine. The Applicant believes that the sanction as imposed by the disciplinary tribunal does not include the allowances and contributions payable by the Respondent.

EVIDENCE AND ARGUMENTS PRESENTED BY THE PARTIES
Evidence by the Applicant

4. The Applicant, Ms D.S. Pitso testified on her own behalf. The following can be highlighted from her testimony:

4.1 The witness stated that she referred a dispute because she believes that the Respondent should make a distinction between salary and benefits payable in terms of the contract of employment. There is a difference between salary and remuneration. When the Respondent deducted the fine, it did not only deduct one month’s salary but all allowances and employer contributions payable in respect of housing, medical aid and pension fund contributions.

4.2 She further explained that the unilateral decision of the Respondent to deduct these amounts resulted in undue hardship as the benefits emanating from the medical aid lapsed until such time as the outstanding premium is paid.

Evidence by the Respondent

5. The Respondent called Mr O.M. Motang as a witness. The following can be highlighted from his testimony:

5.1 The witness is employed by the Respondent as the Human Resources Director. He is involved with the human resources function for the past 12 years. He explained that if an employee is disciplined in the form of the payment of one month’s salary, the sanction is interpreted to include the basic salary and all benefits payable. He referred to pay slips and indicated that the salary is referred to as a gross amount and a net amount. The gross amount includes all benefits payable to a particular employee.

5.2 Under cross-examination, it was pointed out that the PAM policy draws a distinction between salary and benefits. The witness denied that such a distinction exists and that salary includes all benefits payable.

SUBMISSIONS BY THE PARTIES

6. The parties were given the opportunity to submit written heads of argument by no later than 25 April 2024. Both parties submitted arguments, which were considered in the analysis.

ANALYSIS OF EVIDENCE AND ARGUMENT

7. The Applicant on 22 January 2024 referred an unfair labour practice dispute to the Council. The dispute emanates from the fact that the Respondent failed to pay to the Applicant her salary and other entitlements such as allowances and contributions for the month of September 2023. The Applicant was prior to this incident, subjected to disciplinary proceedings and the sanction issued was a warning and a fine not exceeding one month’s salary. The Respondent. in view of the fine, then refused to pay to the Applicant any remuneration for September 2023 as a set-off against the fine imposed. In the end, the dispute boils down to what should be understood by the phrase “a fine not exceeding one month’s salary". The Applicant believes that the phrase only refers to her actual salary and the Department understands the phrase to mean no remuneration payable to the employee for a particular month.

8. The Applicant advised the proceedings that this matter was previously referred, but that the referral was withdrawn as to advises received regarding the nature of this dispute. The Applicant then referred the matter as an unfair labour practice after receiving condonation for the late referral. It is however important to establish what the real dispute between the parties is. A wrong description of the dispute may result in the wrong liberties being imposed at the end. In Commercial Workers Union of South Africa v Tao Ying Metal Industries and others (2009) (2) SA 204 (CC), the Court held that a commissioner must, as the LRA requires, deal with the substantial merits of the dispute. These substantial merits of the dispute can only be done by ascertaining the real dispute between the parties. In deciding what the real dispute between the parties is, a commissioner is not necessarily bound by what the legal representatives say the dispute is. The labels that the parties attach to a dispute cannot change its underlying nature. A commissioner is required to take all the facts into consideration, including the description of the nature of the dispute, the outcome requested by the applicant and the evidence presented during the arbitration. In HOSPERSA obo Tshambi v MEC for Health KwaZulu Natal [2016] 7 BLLR 649 (LAC), the court held that the commissioner must determine the true nature of the dispute by establishing the relevant facts.

9. The Applicant motivated the referral on the basis that the sanction imposed was "hasher" (sic) than what the presiding officer of the disciplinary enquiry intended. With regard to the relief sought, the Applicant reflected in the referral than an award is sought that the fine be deducted in increments over a six-month period and that the benefits deducted be repaid to the Applicant. In her case of argument, it would appear that at this point in time the Applicant has made peace with the actual deduction made in respect of her salary but that she requires the payment of all benefits for the month of September 2023. The benefits consist of the Respondent’s contributions in respect of medical aid, pension fund as well as a housing allowance. It is therefore evident that the dispute does not find its foundation in Section 186(2) of the Labour Relations Act, but rather in the provisions of the Basic Conditions of Employment Act (BCEA) for the payment of salaries and benefits i.e. remuneration. In essence, the dispute is about the enforcement of the provisions of the BCEA.

10. The next question to be asked is whether the Council has jurisdiction to arbitrate such a dispute. The recently amended clause 69 of the Dispute Resolution Procedures provides as follows:
"69.6 Despite clause 69.5 an educator may refer a dispute to the ELRC concerning the failure to pay an amount owing to that employee in terms of the Basic Conditions of Employment Act; the Employment of Educators Act; the Personnel Administration Measures (PAM), or any regulations or subordinate legislation promulgated by the Minister of Basic Education or MEC for Education in in respect of the Province where an educator is employed as it relates to conditions of service, a collective agreement and a contract of employment."

11. It is therefore evident that this Council has jurisdiction to arbitrate this dispute.

12. During the arbitration proceedings, the real issue in dispute turned around the meaning or definition of the word "salary". The Applicant, in is her heads of argument also raised the issue of unauthorised deductions as dealt with in Section 34 of the BCEA. The Employment of Educators Act, 76/98 (EoEA), regulates the employment of, conditions of service and discipline of educators. The particular Act therefore in schedule 2 sets out the disciplinary code and procedures to be followed and applied in respect of educators. Sections 17 and 18 specifically deals with the nature or types of misconduct and the sanctions that may be imposed. Section 18 (3) reads as follows:
"(3) If, after having followed the procedures contemplated in subsection (2), a finding is made that the educator committed misconduct as contemplated in subsection (1), the employer may, in accordance with the disciplinary code and procedures contained in Schedule 2, impose a sanction of -
(a) - (d) ...
(e) a fine not exceeding one month’s salary;
(f) suspension without pay for a period not exceeding three months;
(g) - (i) ..."

13. It is evident from the above-mentioned section that the sanction that was issued in respect of the Applicant was recorded in exactly the same words as used by the mentioned Act. The first stop on the road in establishing the meaning of the word "salary" should therefore be the Act itself. As a point of departure, an important rule of interpretation is to establish the purpose of the relevant provision and to give effect to it. This purpose can either be explicitly stated or can be determined logically and from the full text and context of the provision. It must further be noted that sections of a legislative provision cannot be construed in isolation. The meaning and purpose should be weighed up against the broader text and context of the provision. There are also presumptions in the field of interpretation of statues, including that legislation does not contain futile, nugatory or aimless provisions. Legislation should be interpreted in such a way that no provision is regarded as redundant or superfluous. There is a presumption that unreasonable and absolute results are not intended. Regulations emanating from such legislation must be read and interpreted together with the legislation but they cannot influence the meaning of that legislation (see: Stellenbosch Farmers' Wineries v Distillers Corporation (SA) Ltd and another 1962 (1) SA 458 (A) at 476E-F).

14. The EoEA does not contain a definition of the word salary. It is however to be noted that in Section 18(3)(e)(f) of the Act draws a distinction between "salary" and "pay". It is evident that in respect of subsection (f), the word "pay" intends to say that the particular employee should not receive any remuneration at all due to the fact that the educator is suspended and therefore does not render any service which will entitle him/her to any remuneration. It is therefore evident that the word salary is to mean something different.

15. Chapter 2 of the Act deals with the conditions of service and educator establishments. The heading of Section 4 reads as follows: "Salaries and other conditions of service of educators". The particular section also draws a distinction between salaries and other benefits. It is also to be noted the salary advices issued to educators also draws a clear distinction between salary and other benefits. The advice reflects the amount payable as a home owners’ allowance, which is a benefit for which an educator has to apply for. It also reflects separately the amounts paid by the employer as a contribution to the medical aid and the pension fund. This practice is consistent with the wording of the Act.

16. In view of the above, I must therefore conclude that the word "salary" as used in Section 18(3)(1)(e) of the EoEA refers to basic salary and excludes any payments or contributions in respect of benefits such as housing allowances, medical aid and pension fund contributions. I must therefore conclude that the failure of the Respondent to pay the amounts represented by these benefits at the end of September 2023, reflects a non-compliance with the provisions of the BCEA.

17. Although this matter was not canvassed during the proceedings, the Applicant in her heads of argument argued that the deduction of the fine was done in contravention with Section 34 of the BCEA. In terms of Section 34(1) an employer may not make any deduction from an employee’s remuneration unless the employee in writing agrees to the deduction in respect of a debt specified in the agreement or the deduction is required or permitted in terms of a law, a collective agreement, an order or arbitration award.

18. Subsection (2) provides for an exception regarding the reimbursement by the employee to the employer in respect of damages caused. This particular subsection then provides a specific procedure to establish whether such a deduction may be made and other limitations thereto. It is evident that Subsection 2 will not apply in this particular instance as the indebtedness does not follow from damage caused, but from a statutorily imposed sanction. For all practical purposes, after the sanction was imposed, the Applicant was indebted to the Respondent in the amount of one month's salary.

19. The next question then to be asked is whether the imposed fine constitutes a debt that can be set off in terms of common law against an obligation towards that employee i.e. does the fine constitutes a deduction that is required or permitted in terms of a law as provided for in terms of section 34(1)(b). The basic conditions of a set-off are that;
(1) the existence of a mutual indebtedness must be present,
(2) both parties' debts must be liquidated and be the same in nature and;
(3) both debts must be fully due and payable. (Harms, LTC. Ambler's Precedents of Pleadings 4th ed at 284).

20. The Supreme Court of Appeal in Capricorn Beach Home Owners Association v Potgieter t/a Nilands and Another 2014 (1) SA 46 (SCA), confirmed that set-off is a recognised principle of common law and as such constitutes "a law". The Labour Court in Shenaaz Padayachee v Interpak Books (Pty) Ltd (D243-12)[2014] ZALCD 4, followed the Capricorn decision and held that set-off constitutes a rule of common law which constitutes a "law" for purposes of Section 34(1)(b) of the BCEA. The Respondent was therefore entitled to set-off the fine against salary to be paid as the debt complying with the requirements for a set-off.

21. During the proceedings, the Applicant submitted that she was not paid in respect of the housing allowance which, according to the salary advices of August and October 2023, amounts to R1,691.38. According to the same salary advices, the medical aid contribution of the employer amounted to R1,701.00. The employer's contribution to the Pension Fund amounted to R7,239.75. The remuneration that was not paid to the Applicant amounts to R10,632.13.

AWARD

22. In view of the considerations and conclusions as set out above, I must conclude that the word "salary" as used in terms of the EoEE does not include any other items of remuneration except the basic salary. The Respondent therefore transgressed the provisions of the BCEA by not paying to the Applicant the amount of R10,632.13 at the end of September 2023. In the second instance, it is concluded that the Respondent was entitled to set-off the "fine" against the salary payment to be made at the end of September 2023.

23. It is ordered:

23.1 That the Respondent pays to the Applicant the amount of R10,632.13;

23.2 That the reflected amount be paid to the Applicant by no later than 31 May 2024.

24. I make no order as to costs.


Signature:

Panelist: PIETER GREYLING
Sector: Education Department of North West