In the matter between

SAOU obo Smith H Applicant

and

Department of Education: Eastern Cape Respondent

ARBITRATOR: AW Howden

HEARD: 22 November 2019

DATE OF AWARD: 25 November 2019

SUMMARY: Labour Relations Act 66 of 1995 (the LRA) – Section 33A – Enforcement of collective agreements by bargaining councils – ELRC Constitution Clause 69 – Enforcement of collective agreements and of Basic Conditions of Employment Act provisions – whether the Department of Education – Eastern Cape has contravened the provisions of ELRC Resolution 7 of 2001 (PAM Chapter H) in that the Department of Education – Eastern Cape has failed to pay out the educator’s leave gratuity.

ARBITRATION AWARD

DETAILS OF PROCEEDINGS AND REPRESENTATION

1. The dispute was scheduled for arbitration in terms of Section 33A (4) of the Labour Relations Act 66 of 1995 as amended (the LRA) read with Clause 69.5 of the ELRC Constitution: Dispute Resolution Procedures: Annexure C (Collective Agreement No. 6 of 2016). The arbitration was held on 22 November 2019 at the District Offices of the Department of Education – Eastern Cape in Humansdorp.

2. The Applicant, Mr HP Smit – Persal Number 51446570, was present and was represented by Ms V Van Wyk from SAOU.

3. The Respondent, Department of Education – Eastern Cape, was represented by Mr EW Hector from the Labour Relations Department.

ISSUES IN DISPUTE

4. I am required to determine whether the Respondent contravened the provisions of ELRC Resolution 7 of 2001 (PAM Chapter H) in that the Respondent has failed to pay out the Applicant’s leave gratuity.

BACKGROUND TO THE DISPUTE

5. The Applicant was previously employed by the Respondent as a Principal and went on retirement on 31 December 2018.

6. The Applicant has received his pension, however has still not been paid his leave gratuity.

7. The Applicant seeks to have the leave gratuity paid out by the Respondent.

8. The parties handed in a combined bundle for the proceedings.

SURVEY OF EVIDENCE AND ARGUMENT

9. It is common cause between the parties:
– That the Applicant was employed by the Respondent as a Principal prior to his retirement.
– That the Applicant retired on 31 December 2018 in terms of the Employment of Educators Act No 76 of 1998.
– That the Applicant had received his pension benefits.
– That the Applicant had still not received his leave gratuity.
– That the Applicant earned a monthly gross Salary of R42 699.75 prior to retirement.
– That in terms of ELRC Resolution 7 of 2001 Annexure A, Leave Measures, Chapter F paragraph 5, as well as Chapter H Paragraph H4.5 in the PAM: Annual leave accrued prior to 1 July 2000 and during the period 1 July 2000 to 31 December 2001, should be paid out on retirement.
– That the Applicant’s leave gratuity reflected as 92.71 days on the Persal System.

10. At the outset I must point out that this is a brief summary of the evidence which is relevant to the central issues and that I have taken all evidence submitted into account when making my decision.

The Respondent’s Submissions

11. The Respondent’s Representative stated that the Applicant’s file had been submitted to Head Office on 29 October 2019 for payment of the leave gratuity.

12. The Respondent’s Representative further stated that documents (Bank Form/BAS Entity Form) were still outstanding and that the Finance Department would contact the Applicant in this regard.

13. The Respondent’s Representative further agreed with the fact that the Applicant must be paid his leave gratuity.
The Applicant’s Submissions

14. The Applicant’s Representative confirmed that the Respondent had still not paid the Applicant for his leave gratuity.

15. The Applicant’s Representative further stated that the Respondent had originally agreed and has now confirmed that there is in actual fact more days than what was originally seen on the Applicant’s payslip.

16. The Applicant’s Representative further stated that this was a second attempt to resolve the matter as there was a process in July 2019 where the parties had attempted to resolve the matter through a settlement. That the matter was ultimately not resolved and a new referral was made.

17. The Applicant’s Representative further stated that the Respondent should pay interest due to the delay in payment.

ANALYSIS OF THE EVIDENCE AND ARGUMENT

18. It is common cause between the parties that the Applicant’s leave gratuity needs to be paid out by the Respondent.

19. Resolution 7 of 2001 Annexure A, Chapter F Paragraph 5.2 clearly states that:

The payouts in respect of such leave credits shall be made in the event of;
5.2.1 Death
5.2.2 Retirement, including early retirement; or
5.2.3 Medical boarding

20. These same conditions for payout of leave credits are stated in the Personnel Administrative Measure (PAM) document Chapter H Paragraph H.4.5.3.

21. This principle was instilled by the Basic Conditions of Employment Act No 75 of 1997 (BCEA) Section 40 (b), which clearly states:

Payments on Termination

On termination of employment, an employer must pay an employee –
(b) remuneration calculated in accordance with section 21(1) for any period of annual leave due in terms of section 20(2) that the employee has not taken;

22. It is common cause that the Applicant has 92.71 days leave gratuity, which the Respondent after 11 months has still not paid out to the Applicant.

23. The amount due to the Applicant for his leave gratuity is:

Gross Salary per month R42 699.75 ÷ 4.33 = R9 861.37 per week ÷ 5 days work week = R1 972.27 per day.

R1 972.07 per day X 92.71 days accrued leave = R182 849.59

24. The Applicant’s Representative has requested that interest be paid on the amount outstanding. Section 75 of the BCEA provides that an employer must pay interest on any amount due and payable in terms of the BCEA at the rate of interest prescribed in terms of Section 1 of the Prescribed Rate on Interest Act no. 55 1975, to any person to whom a payment should have been made.

25. It is my finding based on the above submissions that the Respondent has contravened Resolution 7 of 2001 by failing to pay out the Applicant’s leave gratuity. I believe the appropriate relief would be to instruct the Respondent to pay out the Applicant’s leave gratuity and therefore make the following award.

AWARD

26. The Applicant, HP Smit – Persal Number 51446570, is instructed to provide the Respondent, Department of Education – Eastern Cape, with the outstanding documents (Bank Form/BAS Entity Form) by no later than 29 November 2019.

27. The Respondent, Department of Education – Eastern Cape, is hereby instructed to pay the Applicant, HP Smit – Persal Number 51446570, the amount of R182 849.59 (One Hundred and Eighty Two Thousand Eight Hundred and Forty Nine Rand and Fifty Nine Cents) less PAYE.

28. The payment mentioned in paragraph (27) above by the Respondent, Department of Education – Eastern Cape, to the Applicant, HP Smit – Persal Number 51446570, must be done by no later than 31 December 2019.

29. Should the payment as mentioned in paragraph (27) above, for whatever reason, not be made by 31 December 2019, the Respondent, Department of Education – Eastern Cape, is to pay interest at 10% on the amount of R R182 849.59 (One Hundred and Eighty Two Thousand Eight Hundred and Forty Nine Rand and Fifty Nine Cents) to the Applicant, HP Smit – Persal Number 51446570 , from 1 January 2020 until date of payment by the Respondent, Department of Education – Eastern Cape, in terms of Section 75 of the BCEA.

Panellist: AW Howden
ELRC