CEO recently assisted in a dispute relating to the employer’s failure to increase an employee’s salary, while other employee’s salaries were increased.

The dispute was referred in terms of Section 186(2)(a) of the Labour Relations Act (the “LRA”):

“Unfair Labour practice” means any unfair act or omission that arises between an employer and an employee involving unfair conduct of the employer…. relating to the provision of benefits to an employee.”

 

The fundamental question which must be answered is “what constitutes a ‘benefit’ as contemplated in S186(2)(a) of the LRA?

The matter becomes a little more complicated by Section 65(1)(c) of the LRA which states the following:

“LIMITATION ON THE RIGHT TO STRIKE OR RECOURSE TO LOCK-OUT;

1) No person may take part in a strike or a lock-out or any conduct in contemplation or furtherance of a strike or a lock-out if-

c) the issue in dispute is one that a party has a right to refer to arbitration or the Labour Court in terms of this Act or any other employment law.”

 

It follows that if a dispute may be referred to Arbitration (as a benefit dispute), then an employee may not strike over that dispute in terms of S65(1)(c). Put differently, the benefit dispute will be one relating to rights rather than one of interest, which includes remuneration. It is thus important to make a clear distinction between benefits, which, may derive from a pre-existing and an interest which the employee may want to assert. The more that is included in the scope of benefit, the less the employee will be able to strike about because they can be referred to arbitration.

 

In Gayland v Telkom SA Ltd (1998) 19 ILJ 1624 LC (at22):

“If the term ‘benefit’ is so generously interpreted so as to include any advantage or right in terms of the employment contract, even wages, item 2 (1) (b) would all but preclude strikes and lock-outs. This was not what the legislature had in mind. Therefore, wages and salaries, in other words, remuneration should be excluded from the term ‘benefits.”

 

This approach was, however, overturned by the Labour Appeal Court in Apollo Tyres and put to bed the debate as to whether a benefit is excluded from the definition of remuneration and stated as follows:

“The distinction that the courts sought to draw between salaries or wages as remuneration and benefits are not laudable but artificial and unsustainable. The definition of remuneration in the Act is wide enough to include wages, salaries and most, if not all benefits.”

 

The court thus held that benefits can include remuneration. They went on to say that the term benefit should be interpreted to include a right or entitlement to which the employee is entitled, 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 conclusion, the CCMA concluded that the increase which the employee was seeking falls within the scope of benefit and the CCMA would assume jurisdiction.  It is thus envisaged that almost all disputes between an employer and employees which relate to remuneration in terms of Section 186(2)(a) of the LRA will be able to be referred to the CCMA for arbitration.

 

Article by: Stephen Kirsten

Provincial Manager – Cape Town