Don’t interfere with your employees’ benefits unnecessarily
Last week, we heard from Aadil Patel, from Cliffe Dekker Hofmeyr, who cleared up the murky area of what the definition of an employee benefit actually is. This week, I’m going to look at a number of cases where employees have taken their employers to the CCMA for “unfair provision of benefits”.
What is “unfair provision of benefits”?
This relates to benefits the employee is entitled to in the course of his employment. These benefits may include, for example, leave, retirement, medical aid, life insurance, funeral benefits and disability benefits.
Examples of unfair provision of benefits could be if the employer:
- Provides benefits to some employees and not others. For example, employers might provide retirement benefits for office workers only or may provide lesser benefits for factory workers.
- Cancels the benefit. For example, an employer who had been giving employees paid study leave might decide to stop providing this benefit. This would mean employees would have to use annual leave or unpaid leave if they need to write or study for examinations.
- Unfairly stops the benefit temporarily. For example, in the case of Van Amstel vs ESKOM (2002, 9 BALR 995):
- The employer stopped paying the employee vehicle allowance while it was in the process of reviewing paying such allowances;
- The employer required the employee to reapply for the allowance.
- When he did so, his application was turned down;
- The CCMA found that the employer had indeed committed an unfair labour practice and ordered the employer to reinstate the benefit.
- Does not facilitate the provision of the benefit to employees. For example, if the employer does not pay the benefit scheme contributions to the service provider of these benefits, said provider might stop the benefits. This will mean that the employees lose those benefits permanently or temporarily.
- Reduces its contribution to the benefit fund, which results in the employee having to pay more. This often occurs when the employer decides to cap its share of the benefit contribution.
For example, when the benefit scheme administrators impose an increase in contributions, the employer might unilaterally decide that, to control costs, it will not increase the portion it contributes on behalf of employees. - Changes its mind about contributing to the benefit schemes of the employee’s dependents.
A case in point is that of Solidarity obo Du Plessis vs ABB Services (2005, 8 BALR 820):
- When the employee joined the business, his employment contract stated that the employer would pay half of the medical aid contributions for himself and his family;
- For a while, the employer kept to this agreement. However, after he got married, the employee discovered that the employer had changed its medical aid policy and no longer paid any contributions for employees’ spouses
- As a consequence, the employee had to bear the full cost of the contribution in respect of his wife.
The employee therefore referred a dispute to the Metal and Engineering Industries Bargaining Council for unfair labour practice.
The arbitrator found the employer’s action was unfair and ordered the employer to: - Pay its portion of all future contributions for the employee’s wife; and
- Refund the employee the amount of the contributions that he had had to pay since his marriage.
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Ivan Israelstam is the Chief Executive Officer of Labour Law Management Consulting. He is known as a leading practitioner in labour law and pragmatic labour relations management with many years experience in corporate human resources management. He has an honours degree from The University of the Witwatersrand and an IPM diploma in Personnel Management and in Training. Contact Ivan: This e-mail address is being protected from spambots. You need JavaScript enabled to view it. . |
