The benefits saga: Has it finally been resolved?
The definition of a “benefit” in s186(2)(a) of the Labour Relations Act, No 66 of 1995 (LRA), has plagued our courts since the LRA was promulgated in 1995.
The question about the definition of a benefit has been the subject of at least three Labour Appeal Court (LAC) decisions.
We now have a fourth decision that comes from the LAC interpreting the word “benefit”.
Three LAC decisions, the most recent being as late as 2010, confirmed that for a person to lodge a dispute under s186(2)(a) of the LRA, either at the CCMA or a bargaining council, the employee must be able to illustrate that he has a right to the benefit that arises from a contract, statute or collective agreement. If the employee is unable to illustrate the benefit that arises because of the contract, statute or collective agreement, the CCMA and/or bargaining council will not have the power to decide the dispute.
The employee will have to embark on an industrial action to secure the benefit, or to ensure that he was dealt with fairly.
Understandably, the CCMA, bargaining councils and Labour Court criticise this approach
However, their hands were tied because of the decisions of at least three Labour Appeal Courts.
In the matter of Apollo Tyres South Africa (Pty) Limited v CCMA & Others (unreported), which was handed down on 21 February 2013, the LAC broke ranks with its previous decisions:
- The Court indicated that earlier decisions that defined a benefit were influenced by "policy considerations in order to keep the distinction between disputes of right and conflicts of interests pure and separate compartments".
The LAC opted to follow the Labour Court in their decision in Protekon (Pty) Limited v CCMA & Others (2005) 26 ILJ 1105 (LC):
- In essence, this case held that disputes over the provision of benefits may fall in to two categories:
1. Where the dispute concerns a demand by employees that their benefits are granted or reinstated irrespective of whether the employee's conduct, by not agreeing to grant or in remove the benefit, is considered unfair. This kind of dispute can be settled by industrial action.
2. The dispute may concern the fairness of the employer's conduct. This kind of dispute must be settled by adjudication.
The LAC, having endorsed the approach adopted in Protekon, will certainly see a flood of disputes that are currently being lodged at the CCMA and bargaining council.
How should a bargaining council or the CCMA decide jurisdiction?
A bargaining council or the CCMA must, when they determine if they can exercise jurisdiction over a matter or adjudicate a benefit, first determine whether the employer is attempting to assert an entitlement to:
1. New benefits;
2. New forms of remuneration; or
3. New policies not previously provided for by the employer.
If the employee's claim is based on one of the above three, the CCMA and/or bargaining council do not have the power to determine the dispute - the employee must embark on industrial action.
However, the CCMA or bargaining council may adjudicate a dispute about a benefit
in two instances:
1. The employer fails to comply with the obligation he has towards an employee; and
2. The employer has provided the employee with an advantage or privilege that has been offered or granted according to a policy or practice that is particular to that company.
What types of disputes can be adjudicated by the CCMA?
- A bonus scheme where the employer can decide whether or not to grant a bonus; and
- A car allowance scheme where the employer has the choice about whether or not to grant a car allowance.
Simply put, the CCMA or bargaining council will now have the power to scrutinise any choice that the employer has under a policy, contract, practice or collective agreement. This means that an employer's power may be more eroded than it already is.
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Aadil Patel is the director and national practice head: Employment at Cliffe Dekker Hofmeyr. |
