In the arbitration between:

THE NATIONAL PROFESSIONAL TEACHERS ASSOCIATION AND OTHERS (NAPTOSA) APPLICANT

and

THE DEPARTMENT OF EDUCATION RESPONDENT

ARBITRATOR’S AWARD

1 . An arbitration was held at the offices of the Department of Education situate at 123 Schoeman Street, 9th floor, on Friday, 19 June 1998.

2 . At the arbitration both NAPTOSA and the Department of Education were legally represented as follows:

(a) For NAPTOSA : Adv Roelof Du Plessis.

(b) For the Department of Education : Adv H J Fabricius SC assisted by Adv T Kruger.

3 . In terms of an arbitration agreement concluded at Pretoria on or about 22 May 1998, the parties defined the issues upon which I am required to arbitrate to be as follows:

“The dispute relates to the question whether educators who have complete 12 (twelve) months of service on 30 June 1996, and who would have qualified for salary increments or other increments on the pre-revised salary scales on 30 June 1996, should first have been granted a notch increment on the pre-revised salary scales in terms of the general rules of the personnel administration measures applicable to educators prior to the adjustment of the salaries on the revised salary scales as outlined in Annexure “g” of Resolution No. 3 of 1996 of the ELRC …

The award sought is the following : The Department shall grant notch increments on such pre-revised salary scales which applied to educators on 30 June 1996 before an educator’s salary is translated to the revised salary scales which became operative on 1 July 1996.”

4 . The legal representatives of the parties elected not to adduce any oral evidence. Both Mr du Plessis on behalf of NAPTOSA and Mr Fabricius on behalf of the Department of Education presented argument accompanied by written heads of arguments.

5 . In essence, in my view, the argument on behalf of NAPTOSA may be summarised in the following manner : On 13 November 1995 the Minister of Education published certain regulations in the Government Gazette which dealt with various matters but primarily concerned general conditions of services and salaries. The Minister promulgated these regulations in terms of the power vested in him by Section 28 read with Sections 1, 4, 4(1), 5(1) and 9 of the Educators Employment Act of 1994. The following appears in the definition section of the regulations:

“Salary incremental period means a period of 12 months or any other period approved by the Minister which must elapse before an educator’s salary may be increased in accordance with the salary scale applicable to him.”

6 . In Regulation 8 it is provided that the salary of an educator shall be increased by one salary increment within the limits of the salary scale applicable to him or her after completion of each salary incremental period and with effect from the first day of his or her incremental month.

7 . Subsequently, on 22 November 1995, the Education Labour relations Council, a juristic person established in terms of the provisions of Section 6 of the Education Labour relations Act No. 146 of 1993, published its Resolution No. 15 of 1995 entitled “Personnel Administration Measure”. This resolution records an agreement reached by the employer and employee organisations as such are defined in Section 1 of the Education Labour Relations Act No. 146 of 1993, which agreement is in terms of Section 12 of the same Act. Chapter B, Section 7(2)(a) provides as follows:

“Educators who qualify for salary increments or other increments on the pre-revised salary scales with effect from the implementation date, must, after all the formalities for the granting of scale or other increments have been complied with, be granted such salary or other increments in the pre-revised salary scales prior to the adjustment of their salaries on the revised salary scales.”

8 . On 30 April 1996 and in terms of Regulation No. 3 of 1996 of the Education Labour Relations Council, the parties to the Education Labour Relations Council reached an agreement in regard to various matters including salaries. It is Mr du Plessis’ submission that his resolution did not provide at all for any amendment to the general rules applicable to the notch adjustments of salaries for educators and more particularly in this regard did not amend Resolution 15 of 1995 nor the subordinate legislation referred to earlier being the regulations promulgated by the Minister of Education on 13 November 1995. In these circumstances Mr du Plessis continues in the submission that Resolution 15 of 1995 as well as the subordinate legislation was applicable to all educators who qualified for notch increments prior to for the adjustment of salaries on the revised salary scales. He states that the measures in Resolution 15 are neither incompatible nor inconsistent with Resolution 3 of 1996 and would fulfil the function and purpose for which they were enacted, would prevent unfair results, preserve seniority and provide for a smooth transition from the pre-revised to the revised dispensation. Mr du Plessis also relies upon an arbitration award in an arbitration between the Public Services and Administration and various employee organisations being an arbitration award of Professor Mzungulu Nthombeni of 7 April 1997.

9 . The argument submitted by Mr Fabricius SC on behalf of the Department of Education, may, in my view, conveniently be summarised in the following manner : The wording of Resolution 3 of 1996 provided for the amendment of inter alia the existing salary system and the replacement therewith of a new salary grading system. Ex facie the wording of Resolution 3 of 1996, the present system, whatever it may have been would fall by the wayside and a new salary grading system would be introduced with effect from 1 July 1996 as indicated in Annexure “G”. Mr Fabricius argues that Annexure “G” is merely a proposed translation table stating the categories of educators, the existing notch and the proposed notch together with the percentage increase. He continues that in terms of the Personnel Administration Measures applicable until 30 June 1996 as per Government Notice No, 1994 of 1995 published in Government Gazette 16902 of 29 December 1995, the method used to determine salaries was known as the notch-per-annum system. Mr. Fabricius argues that there is no provision in the new salary dispensation as provided for in Resolution 3 of 1996 and as contained, together with other measures, in the Government Gazette of 11 November 1997 for the notch-per-annum system previously applicable nor do the current personnel administration measures contain any transitional measure in respect of a notch increase prior to the new dispensation coming into operation. The applicability of the arbitration award of Professor Mzungulu Nthombeni is challenged and it is contended that this award concerned the interpretations of different agreements differently worded. The award is also challenged on the applicability of the concept of “legitimate expectation” which Professor Nthombeni relied upon in the afore stated arbitration award. In summary therefore it is contended that it is clear from the language of the agreement, being Resolution 3 of 1996, that the parties thereto intended that a new salary structure came into operation, which new structure, to the benefit of the educator employees, would be substituted for the structure as it existed at the time of the conclusion of the agreement. In the alternative, it is argued that should the express wording of Resolution 3 of 1996 as amended not support the argument that the parties expressly agreed that the old salary structure be amended and substituted, it is then submitted that the parties tacitly agreed to such a term. It is argued that the tacit term is to be found in the unexpressed intention of the parties that a new dispensation be negotiated and agreed upon and that the old dispensation be left behind.

10 . It will be apparent from the afore going that it is common cause between the parties to this arbitration that prior to resolution 3 of 1996, salary increments were granted to educators by means of an annual notch increment as defined previously in this award. The real and precise issue, in my view, is whether the provisions of Resolution 3 of 1996 permit of the interpretation that with effect from that day, being 30 April 1996, no educator employee would be entitled to a salary increment based on the notch-per-annum system. It is therefore necessary to analyse the terms of the resolution.

11 . The agreement initially deals with the consensus reached in respect of the right sizing of the public service. In terms of the contents thereof, the parties agreed on a voluntary severance package and certain principles in regard to the filling of vacancies.

12 . The next section of the agreement deals with the redeployment of educators who are in excess.

13 . Sections of the agreement also deal with pension benefits and medical assistance.

14 . At clause 5 there is provision for a new salary grading system. The clearly stated intention is that the salary grading system shall be implemented over a period of three financial years subject to agreement being reached on certain matters referred to in paragraph 9(1)(b). (I interpose to state that I am advised that it is common cause that agreement was reached by the parties on the matters set out in clause 9(1)(b)(i), (ii) and (iii). The agreement pertinently provides that the relevant aspect of the salary grading system and Annexure “H” will apply to educators as indicated in Annexure “E”. It further provides that the salaries of educators in service on 1 July 1996 shall be adjusted with effect from that date as indicated in Annexure “G”.

15 . Clause 9 is a general clause and provides expressly that the agreement shall be subject to the provisions of applicable legislation. It also provides to clause 9.3 that the agreement comes into effect immediately and is valid until 31 March 1999. The Minister was requested in terms of clause 9.5 in terms of Section 12(6)(a) of the Education Labour Relations Act, 1993, to make the agreement binding upon all employers and employees as defined in the Act and to publish those matters that have to be prescribed in terms of the Educators Employment Act Regulations.

16 . In Government Gazette No. 18432 of 11 November 1997, the Minister of Education published the terms and conditions of employment of educators determined in terms of Section 5 of the Educators Employment Act of 1994. At page 18 and in paragraph 8 the following is provided:

“Salary adjustment : 1 July 1996 (implementation of new salary infrastructure)

It should be noted that :

(a) the salary adjustments on 1 July 1996 as set out in the following table was in accordance with the person’s salary as well as his/her post level as on 30 June 1996 … ”

17 . It is clear, in my view, that from the express terms of the agreement as reflected in resolution 3 of 1996, the parties thereto applied their minds to the date of implementation of the new salary grading system. The parties clearly stated that this salary grading system would not come into effect until some two months later. It is my view that insofar as clause 9.4 provided that the agreement came into effect immediately, this cannot in the contract mean in view of the express wording of the parties contained in clause 5.2 read together with Annexure’s “E”. “G” and “H” that the salary system changed as from the date of the agreement, being 30 April 1996. This view is further borne out by an analysis clause (f)(1) at page 7 of Resolution No. 6 of 1996.

18 . It is however not possible to determine from the express wording of the agreement of the parties as contained in Resolution 3 of 1996 what the intention of the parties was in regard to the basis upon which salary and remuneration adjustments would take place in the interim period between the date of the agreement, being 30 April 1996, and the date of implementation of the remuneration adjustments of the agreement, being 1 July 1996, in my view, in these circumstances, an examination of the express terms of the agreement does not exclude the possibility of implying a term in this regard. In Reigate & Union Manufacturing Company 1918 (1) KB 592 at 605 the following is stated:

“A term can only be implied if it is necessary in the business sense to give efficacy to the contract; i.e., if it is such a term that it can confidently be said that if at the time that the contract was being negotiated someone had said to the parties : ‘What will happen in such a case?’ they would both have relied : “Of course so and so will happen; we did not trouble to say that; it is to clear’.”

This test has been applied by the Appellate Division (as it was then known) in a number of cases. In Van den Berg v Tenner 1975 (2) SA 268 (AD) at 277 D, the Court referred with approval to the following statement of Colman J in Techni-Pak Sales (Pty) Limited v Hall 1968 (3) SA 231 (W) at 236-7 :

“It does not matter therefore if the negotiating parties fail to think of the situation in which the term would be required, provided that their common intention was such that a reference to such a possible situation would have evoked from them a prompt and unanimous assertion of the term which was to govern it.”

19 . In analysing the express wording of Resolution 3 of 1996 I am of the view that this is a situation where if the question had been asked “What will be the situation in respect of an educator whose 12 month period occurs 30 April, 30 May and 30 June?”, the inevitable answer would have been that these educators would be entitled to the notch increment prior to the implementation of the new salary system on 1 July 1996. I find support for this view furthermore in the fact that the parties specifically provided that the agreement would be subject to the provisions of applicable legislation. The Regulations promulgated by the Minister of Education on 13 November 1995 (see above) were not and could not be repealed or changed or amended except by the Minister himself. It appears that the Minister did this only on 11 November 1997 and then with retrospective effect to 1 July 1996.

20 . During the arbitration I was compelled to ast of Mr Fabricius whether those educators who completed their 12 month term on 30 April and 30 May 1996 received a notch increment prior to the adjustment of their salaries to the new system on 1 July 1996. Mr Fabricius was of the view that in the absence of any evidence to this effect, I would not be entitled to take this into account. I am of the view, however, that if those educators whose 12 month term was completed on 30 April and 30 May 1996 respectively had not received their notch increments prior to translation to the new salary adjustment system, the dispute would have included the right of these educators to such a notch increment. I believe it is the only reasonable inference to be drawn in the circumstances. I must make it clear, however, that his is a factor which goes to fairness and is not the basis for the conclusion that I have reached in regard to the implied term as stated above.

21 . DETERMINATION

In the light of the facts, reasons and comments as set out hereinbefore, I hereby determine that educators who had complete 12 months of service on 30 June 1996 and therefore qualified for salary increments on the pre-revised salary scales on 30 June 1996 should first have been granted a notch increment on the pre-revised salary scales in terms of the general rules of the Personnel Administration Measures applicable to educators prior to the adjustment of salaries on the revised salary scales as outlined in Annexure “G” of Resolution 3 of 1996 of the Education Labour Relation Council. Accordingly, my award is the following:

“The Department shall grant notch increments on such pre-revised salary scales which applied to educators on 30 June 1996, before an educator’s salary is translated to the revised salary scales which became operative on 1 July 1996.”

22 . In view of the fact that neither of the parties have made an application at the arbitration hearing for an award as to costs, I make no award in respect thereof.

________________________
ADVOCATE GRAHAM E BARLOW
ARBITRATOR : INDEPENDENT MEDIATION SERVICE OF SOUTH AFRICA
29 JUNE 1998

EDUCATION LABOUR RELATIONS COUNCIL
ARBITRATION AWARD

CASE NUMBER PSES GP
APPLICANT NAPTOSA
RESPONDENT DEPARTMENT OF EDUCATION
NATURE CONDITIONS OF EMPLOYMENT
ARBITRATOR ADVOCATE GRAHAM E BARLOW
DATE OF ARBITRATION 19 JUNE 1998
VENUE PRETORIA

REPRESENTATION:

APPLICANT ADV ROELOF DU PLESSIS
RESPONDENT ADV H J FABRICIUS SC & ADV T KRUGER

AWARD:

1 In the light of the facts, reasons and comments as set out hereinbefore, I hereby determine that educators who had complete 12 months of service on 30 June 1996 and therefore qualified for salary increments on the pre-revised salary scales on 30 June 1996 should first have been granted a notch increment on the pre-revised salary scales in terms of the general rules of the Personnel Administration Measures applicable to educators prior to the adjustment of salaries on the revised salary scales as outlined in Annexure “G” of Resolution 3 of 1996 of the Education Labour Relation Council. Accordingly, my award is the following:

“The Department shall grant notch increments on such pre-revised salary scales which applied to educators on 30 June 1996, before an educator’s salary is translated to the revised salary scales which became operative on 1 July 1996.”

2 In view of the fact that neither of the parties have made an application at the arbitration hearing for an award as to costs, I make no award in respect thereof

DATE OF AWARD 29 JUNE 1998