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24 Nov 2021
BY Themba Maduna

What constitutes a “benefit” in terms of section 186(2) of the Labour Relations Act?

Section 186(2)(a) of the Labour Relations Act 66, 1995 (“the LRA”) provides, inter alia that the unfair conduct of an employer relating to the demotion of an employee or relating to the provision of a “benefit” to an employee constitutes an unfair labour practice. What constitutes a benefit for this provision has been considered by numerous arbitration awards and court decisions, often in contradictory terms. In HOSPERSA & another v Northern Cape Provincial Administration, the Labour Appeal Court (“LAC”) adopted a narrow approach as to what constituted a benefit – it had to be something that an employee is entitled to in terms of a contract of employment or collective agreement, or entitled to in terms of a statute. In effect, the LAC sought to maintain the distinction between “disputes over rights” and a “disputes of interest”. The former is capable of adjudication or arbitration, the latter being resolved through collective bargaining.

In Apollo Tyres SA (Pty) Ltd v Commission for Conciliation, Mediation & Arbitration & others (“Appollo Tyres”) the LAC adopted a far wider interpretation. It rejected the view that a benefit was limited to contractual or statutory entitlement in the following terms –

“In my view, the better approach would be to interpret the term 'benefit' to include a right or entitlement to which the 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 an employee in terms of a policy or practice subject to the employer's discretion. In my judgment 'benefit' in s 186(2)(a) of the Act means existing advantages or privileges to which an employee is entitled as a right or granted in terms of a policy or practice subject to the employer's discretion.”

In its recent decision in of Department of Defence v Ruth Farre, the LAC referred with approval to Apollo Tyres in the situation where the employee claimed that the employer had committed an unfair labour practice by demoting her. In this matter the employee concerned, Ms. Ruth Farre had her job reclassified on the strength of the argument that her job was one of a scientific or technical nature, rather than one of an administrative nature. This meant a salary increase. However, at a later date, the decision to reclassify her job as one of a technical nature was rescinded and the original classification of the job as being of an administrative nature was reinstated. To add insult to injury, she was required to repay the salary that she had allegedly been overpaid during the period that her job had been classified as being of a scientific or technical nature.

She then referred an unfair labour practice dispute to the relevant bargaining council arguing that she had been unfairly demoted. The bargaining council found that the employer had committed an unfair labour practice and ordered the employer to restore Ms Farre’s position retrospectively. The employer was unsuccessful in its application to the Labour Court to have the award reviewed and set aside, but was granted leave to appeal to the LAC.

The Labour Appeal Court

In the LAC, the employer argued, inter alia, that an unfair labour practice could only be claimed if a “prior right” had been infringed – this echoing the approach adopted in the HOSPERSA decision. The LAC, regarding Apollo Tyres decision, rejected this argument. It stated that –

“[24] … That she was then ‘transferred’ back to her previous post with the concomitant reduction of salary and obligation to repay ZAR178 88.98 constituted the kind of practice that falls within the scope of principle of an unfair labour practice which does not depend on a priori right as opposed to the assessment of the conduct of the appellant causing significant unfairness to a dedicated employee”.

comment

The Farre decision is authority for the view that the approach adopted in Appollo Tyres also applies in the case of demotion disputes. An employee need not show an entitlement that arises ex contractu or ex lege to be retained in a post.

 

Reviewed by Peter le Roux | Employment | Executive Consultant

Themba Maduna

Employment | Candidate Legal Practitioner

tmaduna@ENSafrica.com

+27 67 415 8059