28 February 2025 – ELRC668-24/25WC

IN THE EDUCATION LABOUR RELATIONS COUNCIL HELD IN CAPE TOWN

Case No: ELRC 668-24/25WC

In the matter between

A. SMITH Applicant

And

Department of Education Western Cape Respondent

Arbitrator: A.Singh-Bhoopchand
Heard: 28 February 2025
Closing arguments: 9 March 2025

ARBITRATION AWARD

DETAILS OF HEARING AND REPRESENTATION

The arbitration hearing concerning the interpretation and application of a collective agreement was heard virtually on 6 December 2024 and 28 February 2025. The matter was concluded when the parties submitted their closing arguments on 9 March 2025.
Mr Rudolf Baard , a representative of the trade union SAOU represented the employee Dr Smith (“Applicant”). Mr T. Seelamo , a labour relations officer represented the employer (”Respondent”).
Two bundles of documents were submitted as supporting documents. The documents were accepted to be what they purport to be.
The parties also submitted a signed arbitration minute.

BACKGROUND

The relevant factual matrix is straightforward , undisputed and agreed to in the pre-arbitration minute.
The Applicant was employed by the Free State Department of Education as a school principal at a P4 -graded school He sought to be transferred to the Western Cape. By agreement , he was transferred to the Park Primary School , a P3 graded school within the Western Cape Education Department with effect form 01 October 2024. He is currently employed at this school, and he earns a salary of R616 749,00 per annum. His previous salary at the P4 graded school was R755, 988.00 per annum.
The transfer from the P4 graded school to a P3 graded school is deemed a demotion .
The Applicants salary notch was thus reduced from code 335 to 292, a reduction of 43 notches which equates to 21.5%.
There was no break in service when the Applicant was transferred and demoted .
In the Personnel Administration Measures (PAM) of 2016, para. B.8.7 deals with the “salary applicable to an educator who is voluntarily appointed to a lower post level/demotion whose appointment is considered a downgrade from his/her current post (voluntary)”. It further states that “The same provisions in paragraph B.8.5.3 apply.”
10.1. Paragraph B.8.5.3.1 in PAM, 2016 sets out the demotion rule to determine the new salary after demotion.
10.2. Paragraph B 8.5.3.1 (c)(ii) in PAM , 2016 states : “Decrease the salary by 6 notches (6%) for each post level that the current post level is lower than the post(level) occupied before the break in service. For example , the salary of a former post level 3 educator who is reappointed to a post level 1 post must be decreased by 2 x 6 notches”.
On 25 September 2018, ELRC Collective Agreement 2 of 2018 was signed . Its purpose is to amend paragraphs B.8.5.2 and B.8.5.3 of the PAM , 2016. It deals with the determination of salaries for educators who are reappointed after a break in service.
On 2 April 2019, the Department of Basic Education signed a Memorandum setting out the “Business Rules for the Implementation of the Equalization of pay progression for Educators.”
12.1. The first page of the Memorandum states that “HR Practitioners must also note that some sections of PAM may have been affected by these changes. The work on the amendment of PAM is ongoing. In instances where the specific provision of the guidelines is contrary to those of PAM , the provisions of the guidelines should take precedence pending the amendment of PAM.
12.2. Paragraph 4 of the Business Rules specifically deals with applying the 6% rule in cases of appointments , re-appointments, promotions and demotions.
12.3. Paragraph 4.1.1 states that “The principle in this regard is to ensure that any movement up (appointments , promotions ) or down (demotions) the salary scale must be at least 6%.”
On 9 September 2022 , the PAM was amended to include the new provisions of ELRC Collective Agreement 2 of 2018.
In the new PAM , 2022, par B.8.7 stayed the same and still referenced paragraph B.8.5.3 in the PAM.
14.1. Par. B8.5.3.1 in the PAM , 2022 no longer deals with the demotion rule
14.2. Instead , it states that , “ An educator who is re-appointed to a higher post level that the one he/she occupied before the break in service…”
The Applicant argues that the Respondent applied the demotion rule to determine the Applicant’s salary after demotion incorrectly;
15.1. that the Respondent should not have applied Collective Agreement 2 of 2018 to determine the salary of the Applicant but rather that it should have applied the Department of Basic Education Memorandum ( Implementation of the New Salary Scale Resulting from the Provisions of PSCBC Resolution 01 of 2018 on the Equalisation of Pay Progression ) as signed on 2 April 2019, read with the PAM document of 2016 , to determine the Applicant’s salary;
15.2. That the Applicant’s annual salary should’ve been reduced by only 6% (12 notches).
15.3. That the Applicant’s annual salary should’ve been reduced by only 6% (12 notches). That the Respondent should have appointed the Applicant on salary notch R713 367 (code 323) instead of R616 749 (code 292) ;and
15.4. That the Respondent should correct the Applicant’s salary notch accordingly, and re-imburse him the amount lost as a result of the incorrect application of the collective agreement.

ISSUES IN DISPUTE

Whether or not the ELRC Collective Agreement 2 of 2018 applies to the determination of the Applicant’s salary after he was demoted without any break in service.

SURVEY OF EVIDENCE AND ARGUMENT

The Applicant did not lead any evidence as the facts are undisputed. The Respondent called one witness, Mr M.Sake Mahlangu, who is the Chief Education Specialist HR Planning and Conditions of Service.
Mr Mahlangu testified that the salary calculation in respect of employees who have been demoted have always been dealt with in terms of paragraph B8.7 of the PAM and this paragraph was amended in Collective Agreement 2 of 2018. The principle applied on the re-appointment of an educator after a break in service is the same for an educator who did not have a break in service. It has been applied consistently in this manner. It was therefore amended by Collective Agreement 2 of 2018 which was inserted in the 2022 PAM document.
Respondent correctly applied the demotion rule to determine the Applicant’s salary . PAM 2016, paragraph B8.7 refers to paragraph B8.5.3 which in that version of the PAM refers to the reappointment after a break in service.
The is a clear error in PAM in terms of the reference in paragraph 8.7 to paragraph B8.5.3 because of the amendment which came with the Collective Agreement refers to something else. It refers to the re-appointment after a break in service in a higher position which is not in line with what was in PAM 2016 and this issue is currently under consideration for correction in the Bargaining Council. This potential correction is already in Collective Agreement 2 of 2018.
The Respondent is guided by policies and the legislative framework . It therefore acted in terms of Collective Agreement 2 of 2018. The provision on appointments to a lower post or demotion were dealt with in terms of paragraph B8.5.3.1 (2016 version) until this paragraph was amended by Collective Agreement 2 of 2018 “Amendments to paragraphs 8.5.2 and B8.5.3 of the PAM”
The 2022 PAM inserted the sections of Collective Agreement 2 of 2016 under paragraph B.5.2 and sub paragraph B.8.7 of the PAM refers to the old B.8.5.2 1(a) and (b).
The DBE Memorandum is a guideline which cannot take precedence over a Collective Agreement. There is an order of precedence – Acts, Ministerial Determinations , Collective Agreements , and below that is PAM . Guidelines fall below PAM. In instances where there is an error in PAM , the Department returns to the source document which is the Collective Agreement, the Act or a Ministerial Determination. In this case , the source document is the Collective Agreement. The instruction of the Director General does not amend the Collective Agreement.

Cross Examination and Applicant’s Argument

Under cross examination , Mr Mahlangu could not show where in the Collective Agreement it referred to a demotion . He conceded that for the Collective Agreement to apply there must have been a break in service triggered by a resignation or retirement. He also conceded that one of the main reasons that the Collective Agreement was amended and implemented was due to “spike in the number of educators and public servants resigning to access pensions .
Applicant argues that it is clear that the Collective Agreement was drafted with the resulting break in service in mind , and not to deal with cases where an educator’s salary should be determined when they are demoted and where no break in service exists.
Mr Mahlangu could not show where in the amended PAM, 2022 it states that in the event of a demotion , the Collective Agreement should be applied. He conceded that in the 2022 version . paragraph B8.7 referred one to a promotion rule , and that this was a mistake. In his opinion the PAM should refer one to paragraph B.8.5.2 (which relays the prescripts of the Collective Agreement).
It is argued that Mr Mahlangu’s opinion is not supported by the wording of PAM 2022. His argument is therefore flawed , incorrect and irrational. It is also in direct conflict with the DBE’s (his employer’s ) direct instruction as per the Memorandum and Business Rules published in 2019.
If the 2022 PAM should be followed , then it should be followed verbatim. This means that one would start at par. B8.7 (the only rule which instructs one on what to do in the event of a voluntary demotion and then go to par. B8.5.3 , as instructed in par B.8.7. Since par B 8.5.3 delas with an increase in salary due to a promotion , this is obviously a mistake and cannot be implemented.
The only option would be to return to the original intent of par. B8.7 in the 2016 PAM The Memorandum and Business Rules provides the necessary guidance to deal with clear flaws in the 2022 PAM where , amongst other things , the demotion rule is not clearly set out.
It is evident that the DBE did not want the Collective Agreement to be implemented in cases of demotion otherwise they would have stated such in their Memorandum.
Instead , par 4.1 of the Business Rules provides specific instructions for different applications of the 6% rule . Demotions are dealt with separately from those where the Collective Agreement applies (so-called re-appointments).
Mr Mahlangu could not explain why he was contradicting the instruction of the Acting Deputy Director General as per the Memorandum.

ANALYSIS

A dispute over the interpretation of a collective agreement exists when the parties disagree over the meaning of a particular provision . A dispute over the application of a collective agreement arises when parties disagree over whether the agreement applies to a particular set of facts or circumstances. Put differently, the parties disagree about whether a particular provision can be invoked. In determining such dispute, a decision maker is required to apply the so- called golden rule of interpretation by applying the ordinary meaning of words .
The test that applies in interpretation and application disputes has been set out in National Joint Municipal Pension Fund v Endumeni Municipality . The court held that ‘interpretation is the process of attributing meaning to the words used in a document , be it legislation or some other statutory instrument , or contract , having regard to the context provided by reading the particular provision or provisions in the light of the document as a whole and the circumstances attendant upon its coming into existence. Whatever the nature of the document, consideration must be given to the language used in the light of the ordinary rules of grammar and syntax ;the context in which the provision appears ; the apparent purpose to which it is directed, and the material known to those responsible for its production . Where more than one meaning is possible each possibility must be weighed in the light of all these factors. The process is objective and not subjective. A sensible meaning is to be preferred to one that leads to insensible or unbusiness like results or undermines the apparent purpose of the document . The inevitable point of departure is the language of the provision itself , read in context and having regard to the purpose of the provision and the background to the preparation and production of the document. ‘
In Western Cape Department of Health v Van Wyk & Others , the Labour Appeal Court provided the following guidance:
“When interpreting a collective agreement , the arbitrator is enjoined to bear in mind that a collective agreement is not like an ordinary contract , and he/she is therefore required to consider the aim, purpose and all the terms of the collective agreement . The primary objectives of the LRA are better served by an approach which is practical to the interpretation of such agreements , namely, to promote the effective m fair and speedy resolution of labour disputes . In addition, it is expected of the arbitrator to adopt an interpretation that is fair to the parties.
Applying the Law to the Facts
This dispute is effectively about whether or not Collective Agreement 2 of 2018 was correctly applied in determining the salary of the Applicant after he was voluntarily demoted without any break in service. The purpose of the Collective Agreement is clearly outlined in clause 1 thereof which reads as follows:
The purpose of this agreement is to amend and repeal respectively measures regarding the reappointment of educators after a break in service.
Clearly, on a simple reading of the clause and giving the words their ordinary meaning, the agreement cannot apply to the Applicant as he has not had any break in service. This understanding or interpretation of the words in the agreement is bolstered by the testimony of the Respondent’s own witness who said that the amendment came about specifically because of the number of educators and public servants that were retiring or resigning and then electing to return to service. My understanding of this is that the aim was to disincentivize or dissuade such employees by imposing an adverse consequence on their salary notch upon their return. Logically then , there would be no reason for any such adverse consequence to befall on someone who has chosen not to retire or resign but has instead chosen to continue to serve without any break in service. Further, and equally importantly, the Collective Agreement makes no mention of a demotion, voluntary or otherwise.
The remedy that the Applicant seeks is for the arbitrator to determine not only that the Collective was incorrectly applied but to take it a step further and to determine the correct salary notch with reference to the PAM and with the guidance provided in the Director General’s Memorandum. This falls outside the ambit of an interpretation and application of a collective agreement dispute referred in terms of Section 24 of the LRA read together with clause 68 of the ELRC Constitution. The Collective Agreement in dispute does not provide for the calculation of salaries in the particular circumstances relevant to and relating to the applicant. That the Respondent uses the Agreement in dispute in all similar matters as a matter of practice cannot extend the true and correct application of the Agreement.
The Applicant’s desired remedy lies outside of the narrow ambit of this dispute.

In the premises, I make the following award:

AWARD