Factual background

In 2016, the National Education, Health and Allied Workers’ Union (NEHAWU) demanded an organisational review at the IEC following alleged disparities concerning employees’ positions and terms associated therewith. The IEC then embarked on a job evaluation process in 2018 and appointed Lekoko Consulting to conduct a job grading exercise. Lekoko Consulting issued a report (Lekoko report) which recommended that certain positions be upgraded, while some remained unchanged and others were abolished. The Lekoko report also recommended changes to the salary structures. Following that exercise, the IEC approved the Lekoko report and resolved that a new organisational organogram be implemented in phases. The IEC also communicated to its employees that the new organogram had been approved but issues concerning remuneration and job grading would be dealt with after the 2019 national elections. NEHAWU vehemently opposed this phased approach and demanded that the new organogram be implemented immediately, including the changes to the employees’ remuneration.

An agreement was later concluded between the IEC and NEHAWU, recording that the new organogram would be implemented on 1 September 2019 and that a task team would consult on the salary structure and job grading to be implemented. Once the task team met, it emerged that there were affordability and financial sustainability challenges with implementing the new organogram. Shortly thereafter, the IEC resolved to remain with its existing job grading and remuneration structure and the employees were informed that the new structure was not feasible due to financial constraints. NEHAWU referred an unfair labour practice dispute to the Commission for Conciliation, Mediation and Arbitration (CCMA) in terms of section 186(2)(a) of the Labour Relations Act 66 of 1995.

Legal issue

The issue before the CCMA commissioner was whether the CCMA had jurisdiction to adjudicate the matter and whether the conduct of the IEC amounted to an unfair labour practice. 

Labour Court’s findings and analysis

Jurisdiction

On review, Itzkin AJ upheld the jurisdiction of the CCMA. The Labour Court found that the IEC and NEHAWU had concluded an agreement regarding the implementation of the new organogram which increased employees’ remuneration. Accordingly, the dispute related to an employer’s failure to comply with a contractual obligation relating employees’ benefits. In supporting this stance, the Labour Court relied on Apollo Tyres SA (Pty) Ltd v CCMA and Others (2013) 34 ILJ 1120 (LAC), where the Labour Appeal Court held that the CCMA has jurisdiction to adjudicate an unfair labour practice dispute where such dispute arises from an employer’s failure to comply with a contractual obligation affecting employees’ benefits.

Merits

On the merits, the Labour Court held that the IEC had already agreed to implement the new organogram. The further consultation process was limited to the salary structure and job grading that would apply once the organogram was implemented. It did not give the IEC the ability to resile from the agreement, nor a discretion to decide whether implementation should proceed. The agreement expressly recorded 1 September 2019 as the implementation date. The IEC’s reliance on budgetary constraints did not undo that commitment or cure the unfairness caused by its failure to implement it. Itzkin AJ therefore found that the commissioner’s conclusion that the IEC had committed an unfair labour practice was sustainable.

Key takeaways 

This judgment is a reminder that employers must exercise caution when communicating organisational changes, especially where those changes relate to remuneration or benefits. If an employer adopts resolutions, agrees to implement or communicates a plan to employees, a later failure to implement that plan may result in an unfair labour practice finding. Employers should clearly record whether implementation is subject to affordability, budget approval or any other condition.