In the arbitration between:

SAOU APPLICANT

and

DEPARTMENT OF EDUCATION: LIMPOPO PROVINCE RESPONDENT

ARBITRATOR’S AWARD

1 . DETAILS OF THE HEARING AND REPRESENTATION

1.1 The arbitration hearing was held on 31 July 2002 at Voorwaarts Building at the corner of Hospital and Hans van Rensburg Streets, Pietersburg, Limpopo Province.

1.2 The applicants were represented by Mr. Prinsloo of SAOU.

1.3 The employer party, the Department of Education, Northern Province, was represented by Mr. Maseko from the Department’s Labour Relations department.

2 . ISSUE IN DISPUTE

2.1 When is it reasonable for the department to make payment to the applicants.

3 . BACKGROUND

3.1 The dispute was referred to conciliation and a certificate stating that the dispute remains unresolved were issued. The dispute was referred to arbitration.

4 . EVIDENCE

4.1 A bundle of documents was handed in.

5 . EMPLOYER’S LEGAL ARGUMENT

5.1 Mr. Maseko for the employer argued and submitted that it is common cause that applicants are entitled to claim leave gratuity as per regulation 59(d) of the personnel administration measures.

5.2 He indicated that Section 33(I) of the RSA constitutions states “Everyone has the right to administrative action that is lawful, reasonable and procedurally fair”. The applicants’ entitlement to claim of leave gratuities should be looked at in terms of this section. It is not contested that the applicants are entitled to this claim and the applicants obviously approach the arbitration in order to confirm this claim. Indeed the respondent confirmed that they are entitled to the claim. He said that the issue is whether it is reasonable to delay payment of such entitlement/claim and whether such a delay is just and reasonable in the circumstances. The department is at the moment paying out this entitlement to those who reached the compulsory retirement age, voluntarily retired and those who died. The payment of these claims to the above groups is motivated by the fact that they are groups of people who have no means of livelihoods and/or they are in a desperate situation.

5.3 He indicated that the applicants are presently in employment and do receive salaries. There are no desperation and urgency for them for livelihoods. They can make ends meet at the moment. The claims will be paid once budget permits. He said that they are not using budged constraints as an excuse. He submitted that it is against the above grounds that the arbitrator is urged to determine the reasonableness and fairness of the respondent in delaying the payment of the applicants’ claim.

5.4 He prayed for a ruling that the delay on the part of the respondent in reasonable and fair in the circumstances.

6 . EMPLOYEES’ ARGUMENT

6.1 Mr. Prinsloo for the employees indicated that Schedule 7 of the Labour Relations Act deals with unfair conduct of the employer in relation to the provision of benefits to an employee and the department conceded that the employees are entitled to it.

6.2 He indicated that there are a number of cases where the department says those budget constraints is not a defence. He said that the Public Finance Management Act, Act 19 of 1999 contains a new set of regulations. Paragraphs 8.1.1 and 8.3.2 states that the personnel costs must be met in the budget. He said that the department is not putting budget constraints as a defence but it says it has a hierarchy of commitments. It therefore says that it is not in need of a cash flow at present. He indicated that all the applicants’ ages are such, that they need money. Their children are at universities, etc. He said that it cannot be assumed that the applicants have money as there are many reasons why they need it and besides, they are entitled to it.

6.3 As regards the reasonableness and priorities, it has been noted that the department is paying other people. The department was given a legal opinion to ascertain whether it has a discretion and it is said that the department has no discretion. He said that the administration process should not take up more than a reasonable time. The applicants’ claims were made since 1999.

6.4 He said that if the department concedes that it is entitled to pay, but will not pay, it means that it also says it is not using budget constraints. In light of the above, he cannot understand the department’s reason for not paying. The reasonableness hinges on the question of how long it will take to pay. Five financial years have passed and the department has not budgeted for the past five financial years. He is of the view that the applications in question are not being attended to and it would be reasonable for the department to have made payment a long time ago. Instead, they are simply refusing to pay because they are not saying they have budget constraints. He said that the question of reasonableness must be determined in light of the administration process.

6.5 He submitted that it is found that the department had too much time to process the applicants’ claims. He said that what the department is doing, is totally unfair and unreasonable. He requested that it be found that there is no more time and the department must make payment within 4 weeks of the date of the ruling.

7 . ANALYSIS OF EVIDENCE AND ARGUMENT

7.1 The law that was referred to by the parties regarding this issue was Section 59(d) of the REGULATIONS REGARDING THE STAFFING OF RATIONALISED EDUCATIONAL INSTITUTIONS. 59(d) of the Schedule for Nationalisation of Education: Interim Measures Relating to the Staffing of Rationalised Educational Institutions states as follows:
“59. A leave gratuity, calculated as set out in
regulations 61 and 62, may be paid –
(d) to an educator serving in a permanent
capacity at his or her written request, where
such educator has the option of retiring on
pension before attaining the compulsory
retirement age and does not retire before
attaining such age.”

7.2 The PUBLIC FINANCE MANAGEMENT ACT, 1999: AMENDMENT OF TREASURY REGULATIONS IN TERMS OF SECTION 76 was also referred to. Paragraph 8.1.1 of the said Act states as follows:

“The accounting officer of an institution must ensure that
internal control measures are in place fir payment
approval and processing. These internal controls should
provide reasonable assurance that all expenditure is
necessary, appropriate, paid promptly and is adequate
recorded and reported.”

7.3 8.3.2 states that:
“The accounting officer of an institution must ensure that
the personnel cost of all appointees, as well as promotion
and salary increases, can be met within the budgetary
allocation of the institution.”

7.4 From the above it is clear that the payments are due to the applicants that are reflected on the attached list hereto. The only issue that I had to decide was when was it reasonable to pay the applicants. The law is not clear on when the payment should be made. Section 59(d) referred to above states, that the payment may be made at the applicants’ written request.

7.5 I am of the view that once a request has been made for payment, the payment should be made to the applicant within a reasonable time. From the arbitration hearing it would seem that the only reason that the department has not yet paid, are because they have simply refused to pay for no reason. Even if one considers that the Department of Education is a large department, I see no reason why payments could not be effected to the applicants within three months from the date of their requests. I am also of the view that a substantial period of time has lapsed and this is totally unfair to the applicants.

8 . RULING

8.1 I am therefore of the view that payments be made to the applicants, as reflected on the list attached hereto on or before 20 September 2002.

ARBITRATOR: A M CARRIM
12/02/2002

EDUCATION LABOUR RELATIONS COUNCIL
ARBITRATION AWARD

CASE NUMBER PSES 6005 NP
APPLICANT SAOU
RESPONDENT DEPARTMENT OF EDUCATION NP
NATURE PAYMENT LEAVE GRATUITY
ARBITRATOR ADV J I LE ROUX
DATE OF ARBITRATION 31 JULY 2002
VENUE POLOKWANE

REPRESENTATION:

APPLICANT MR PRINSLOO (SAOU)
RESPONDENT MR MASEKO
AWARD:

I am therefore of the view that payments be made to the applicants, as reflected on the list attached hereto on or before 20 September 2002.

DATE OF AWARD