15 October 2011 by

Unfair labour practices: Benefits - where are we?

The CCMA may arbitrate disputes relating to unfair labour practices involving the provision of benefits to employees. If an employee feels that her employer acted unfairly in the provision of benefits due to her, she may declare a dispute at the CCMA. However, where the benefit is purely discretionary, she has no course of action under section 186(2)(a) of the Labour Relations Act 66 of 1995 (LRA). The interpretation of the term "benefits" has historically been a bone of contention. The Labour Appeal Court (LAC) has adjudicated on its interpretation. Despite this, the Labour Court (the Court) has found a way of departing from this interpretation.

In HOSPERSA v Northern Cape Provincial Administration (2000) 21 ILJ 1066 (LAC) the LAC held that "benefits" may be divided into two categories:

  1. benefits which are the subject of rights-based disputes: and
  2. benefits which are the subject of interest-based disputes.

The first category concerns disputes where the benefit in question is legally due to the employee (either through contract or through some statutory entitlement).

The second category concerns benefits to which the employee is not yet contractually entitled (although he may wish to be). The LAC held that the correct place to raise an interest-based dispute is at the negotiating table (for example, negotiating that each worker receives a free meal per shift). If the employee's contract does not provide for free meals, then the CCMA has no power to adjudicate a claim for free meals because the employee has no right to assert.

In G4 Security v NASGAWU (unreported case DA 3/08), the LAC considered a situation where an employer who had previously provided free meals to his staff subsequently withdrew those free meals. Following the principle laid down in HOSPERSA, the LAC held that the CCMA has no jurisdiction to resolve such a dispute because the parties could not prove that the free meal was ever a term of the employees' contract of employment.

However, two decisions of the Court have departed from the principle laid down in HOSPERSA.

In Protekon v CCMA [2005] 7 BLLR 703 (LC), the Court held that certain travel concessions constituted "benefits" within the meaning of the LRA, even though those concessions were not contractually due to the employees. In this case, the employer's unilateral withdrawal of this benefit, without consultation with the relevant employees, was considered an unfair labour practice and the employees were compensated accordingly.

In the recent case of IMAATU v Umhlathuze Municipality (unreported case D 644/09), the Court follows the decision in Protekon, stating that withholding an acting allowance which was granted to the same employee on a different occasion constituted an unfair labour practice (notwithstanding that the acting allowance was never contractually due to the employee).

The judges in IMAATU and Protekon both consider that HOSPERSA too narrowly confines the definition of interest-based disputes. They consider that interest-based disputes should further be divided into instances where a) the employer regularly exercises a discretion to provide a non-contractual benefit, and b) where no such benefit has existed before.

While the latter should probably be the subject of negotiation, the judges consider that the former may be adjudicated on by the CCMA because the LRA demands that such a discretion be exercised fairly.

However, notwithstanding the more nuanced approach taken by the Court in IMAATU and Protekon, the precedent laid down by the LAC in HOSPERSA and G4 Security is still binding law, despite criticism of it. Until the decision in HOSPERSA is overturned, only a dispute regarding benefits that arises from contract or statute may be arbitrated in the CCMA. Nevertheless, employers are cautioned on a seemingly growing movement to depart from the HOSPERSA judgment.

Employers seeking to amend practices involving the provision of benefits ought to consider the legal impact of such a decision before implementing changes.

Aadil Patel and Mark Meyerowitz

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