ELRC268-22/23EC

Panelist: Jonathan Gruss
Case No.: ELRC268-22/23EC
Date of Award: 19 September 2022

In the ARBITRATION between:

SAOU obo Wilma Fouche
(Union / Applicant)

and

Department of Education: Eastern Cape

(Respondent)

Applicant’s representative: Ms van Wyk

Respondent’s representative: Mr Lusapho

DETAILS OF HEARING AND REPRESENTATION

1. This dispute was scheduled for arbitration in terms of Section 191(5)(a)(iv) of the Labour Relations Act 66 of 1995 as amended (“the LRA”) read with Clause 69 of the ELRC Constitution : ELRC Dispute Resolution Procedures. The hearing was held virtually via Zoom on Friday, 16 September 2022 and the proceedings were electronically recorded. The applicant, Wilma Fouche through her Union, SAOU referred an unfair labour practice dispute relating to benefits to the ELRC. The applicant was represented by Ms van Wyk an official in the employ of SAOU. The respondent, Department of Education – Eastern Cape was represented by Mr Ndzongo, a Labour Relations Officer.

ISSUE TO BE DECIDED
2. This dispute concerns the refusal and or failure of the respondent to pay the applicant:
2.1 Her capped and audited leave credits on her retirement
2.2 Her pro rata annual bonus.
2.3 Her resettlement expenses arising from moving her place of residence from Middleburg in the Eastern Cape to Malmesbury in the Western Cape on retirement.

BACKGROUND TO THE ISSUES

3. The following facts were agreed to between the parties as common cause.

3.1 The applicant retired on 31 December 2021 and as of date, she had not received her leave gratuity. She was entitled to receive her capped leave gratuity on her retirement.
3.2 When she retired, her annual basic salary was R429 963 and as a consequence thereto, the applicant was entitled to be paid a pro rata bonus for 10 months.
3.3 The applicant based on her retiring was entitled to be reimbursed for her resettlement expenses arising from moving her place of residence from Middleburg in the Eastern Cape to Malmesbury in the Western Cape. The applicant paid JH Retief Transport an amount of R65 000.00 for moving her household. This was after she obtained three quotations from Biddulphs and Stuttaford Van Lines and JH Retief Transport. JH Retief Transport was the cheapest quotation.


4. The Respondent does not dispute the Applicant’s entitlement as well as evidence as contained in her bundle. The delay in payment is because the respondent was waiting for the applicant’s file from archives in order to conduct an audit of the applicant’s leave credits. The respondent was also waiting for the applicant to complete a BAS Entity Maintenance form so that payments may be processed.

SURVEY OF EVIDENCE AND ARGUMENT

5. This is a brief summary of evidence considered as provided for in terms of Section 138(7)(a) of the Act relevant to the dispute at hand.

SURVEY OF EVIDENCE

6 Mr Ayanda Mabuya testified under oath. He is a Chief Personnel Officer at the Cradock Circuit Office. He can confirm that the applicant’s leave record has been audited and she has 46 days capped leave to her credit and that equated to an amount of R75 862.04 that is owing to her. The pro rata service bonus that is owing to the applicant amounts to R29 862.04. The respondent has no problem with the resettlement cost amounting to R65 000.00. Under cross-examination, it was submitted to the witness that the original completed and signed BAS Entity Maintenance Form was couriered to the respondent on 6 September 2022.
ANALYSIS OF EVIDENCE

7 The applicant’s bundle utilised in the arbitration comprises of quotations from Biddulphs, Stuttaford Van Lines and JH Retief Transport as well as the final invoice of JH Retief Transport and proof of the EFT payment dated 25 March 2022 to JH Retief Transport for the amount of R65 000.00. Also in the applicant’s bundle is a copy of the completed and signed BAS Entity Maintenance Form.

8 The dispute was referred in terms of Section 186(2)(a) of the Labour Relations Act (the “LRA”):
“Unfair Labour practice” means any unfair act or omission that arises between an employer and an employee involving unfair conduct of the employer…. relating to the provision of benefits to an employee.”

9 In Apollo Tyres SA (Pty) Ltd v Commission for Conciliation, Mediation & Arbitration & others (2013) 34 ILJ 1120 (LAC), the LAC agreed with the finding in Protekon that Section 186(2) superimposes a duty of fairness irrespective of whether that duty arises expressly or implicitly in the contractual provisions that establish the benefit. The court found the better approach to be to interpret the term 'benefit' to include a right or entitlement to which an employee is entitled (ex contractu or ex lege including rights judicially created) as well as an advantage or privilege which has been offered or granted to the employee in terms of a policy or practice subject to the employer's discretion. This also put paid to the anomaly created by the decision in HOSPERSA, in terms of which an employee who wanted to use the unfair labour practice jurisdiction in s 186(2) relating to promotion or training did not have to show a right to training or promotion, but had to show a right sourced in contract or statute when using the same remedy in relation to the provision of benefits.


10 Chapter H 4.5.3.2 read with H4.5.4 of Personnel Administrative Measures (PAM) (2016) provides that the payout in respect of such leave credits must be made in the event of retirement, including early retirement. The leave payout in respect of educators with capped leave and audited leave credits will be determined in the following manner:

“ ([(A-B) +(C-D) x E + (F x G)}
260.714

Where –
A= represents the educators full annual or pro rata leave entitlement in respect of the previous leave cycle.
B = represents the leave taken in the previous leave cycle
C= represents the pro rata leave entitlement in the current leave cycle.
D= represents the leave taken in the current leave cycle
E= represents the educator’s remuneration (annual basic salary plus 37% and in the case of a member of the MMS, the all-inclusive package) at the last day of duty.
F= represents the capped leave credits
G=represents the educator’s remuneration (annual basic salary only) as at last day of duty”

11 Chapter E2.3.5 (Measures prescribed by legislation not administered by the Minister of Basic Education and Service Benefits which apply to all employees of the State) of the Personnel Administration Measures (PAM) (refers to and thereby incorporate the provisions of PSCBC Resolution 3 of 1999 and 7 of 2000 that deals with service bonuses into the terms and conditions of employment of educators.

12 According to PSCBC Resolution 3 of 1999, as relates to eligibility, an employee shall receive a service bonus if she or he has a permanent contract or a fixed term contract lasting at least three months, unless the contract specifies otherwise, and in the year ending on her or his bonus date, does not resign or undergo discharge due to misconduct. The bonus date for an eligible employee born between April and December shall fall in the month of her or his birthday. The bonus date for an eligible employee born between January and March shall fall in April. The employer shall pay an employee his or her service bonus on the day the employer normally pay salaries in the relevant month. For the calculating of service bonus, the employer shall take into account continued employment in a state department, state or state aided school, or a statue body established by Parliament. If an eligible employee has worked for you up to bonus date, she or he shall receive a month salary of deduction of the GEPF. If an eligible employee has worked for part of the year up to the bonus date, she or he shall receive an equivalent part of her or his monthly salary after deduction of GEPF.

13 According to Clause 10 of PSCBC Resolution 7 of 2000 under the heading payment of birthday bonus, employees whose birthday fall between January and March of each year shall receive their 13th cheque on their birthday month and not in April of each year.

14 In terms of Regulation 88. (1) (a) of the Regulations regarding the terms and Conditions of Employment of Educators, as promulgated by the Minister of Education, a non-pensionable service bonus is payable to educators in terms of this regulation. Sub-regulation (b) provides that an educator who does not quality for leave is excluded from the provisions of this regulation.

15 According to sub-regulation (2) (a), the date of payment of the service bonus referred to in sub-regulation (3) is the date on which an educator’s salary is paid in the month in which his or her birthday falls: Provided that in the case of an educator whose birthday falls during any of the months of January, February or March, his or her service bonus is paid in April.

16 Sub-Regulation (2)(b) provides that an educator whose services terminate for any reason with effect from the day following his or her service bonus pay date, nevertheless qualifies for the service bonus: Provided that a service bonus is not payable to an educator whose services terminate with effect from his or her service bonus pay date or any earlier date, for whatever reason, with the exception of an educator contemplated in sub-regulation (5). Sub-regulation (5) provides that a pro rata service bonus is payable when – (a) the services of an educator is terminated for one of the reasons referred to in sub-regulation (6): Provided that he or she received a service bonus on his or her last service bonus pay date before his or her termination of service; or (b) an educator dies. (6) The reasons for termination of services contemplated in sub-regulation (5)(a) are the following: (a) Retirement at reaching the voluntary or optional retirement age.

17 Regulation 90(1) of the Terms and Conditions of Employment of Educators provides that upon the transfer, appointment or termination of service of an educator in terms of the Act or of his or her death, such an educator or his or her estate, whichever is applicable, shall be compensated by the employer for the reasonable resettlement expenditure actually and necessarily incurred as a result thereof within the framework of the provisions of this regulation and taking into account the following measures and guidelines:

18 I am satisfied that the respondent is indebted to the applicant for the payment of her capped audited leave credit of 46 days that equates to R75 862.04. The respondent is further indebted to the applicant for her pro rata service bonus amounting to R29 417.20 as well as her resettlement costs amounting to R65 000.00. The capped leave credit, pro rata service bonus and the resettlement costs constitute a benefits as contemplated in terms of Section 186 (2)(a) of the LRA. The failure to pay the applicant these benefits amounts to the respondent perpetrating an unfair labour practice.

19. In terms of section 138(9) of the LRA “[a] commissioner may make any appropriate arbitration award in terms of this Act, including, but not limited to, an award-
(a) that gives effect to any collective agreement,
(b) that gives effect to the provisions and primary objects of this Act,
(c) that includes, or is in the form of a declaratory order.” (emphasis added)

20. I must complement the respondent’s representative and his witness for their honesty and integrity in these proceedings that assisted in resolving the dispute between the parties.

21. I therefore make the following award.

AWARD
22. The Respondent, the Department of Education: Eastern Cape has committed an unfair labour practice relating to benefits as it relates to the failure to pay the applicant, Wilma Fouche on her retirement her capped leave, her pro rata bonus and her resettlement costs.

23. The respondent must pay the applicant the following amounts:
23.1 R75 862.04 equating to 46 days audited and capped leave;
23.2 R29 417.20 pro rata bonus;
23.3 R65 000.00, the applicant’s resettlement costs for the reimbursement of the money paid by the applicant to JH Retief Transport.

24. The amounts as referred to in paragraphs 23.1; 23.2 and 23.3 must be paid by no later than 30 November 2022.

Name: Jonathan Gruss
(ELRC) Arbitrator