Employers are often called to appear at the CCMA after failing to pay an employee’s outstanding money. A dispute in terms of Section 73A of the Basic Conditions of Employment Act 75 of 1997, as amended, will be set down as an unobjected Con/Arb process. This means that should parties fail to resolve their dispute during the conciliation process, then the dispute will immediately proceed with the arbitration process. The arbitration procedure may consequently result in an arbitration award issued against an employer, but only for the employer to realise that the parties played on the wrong field as the Applicant was earning above the threshold as contemplated in Section 6(3) of the BCEA.

In the recent judgment of Prestige Campworld (Pty) Ltd t/a Comet Caravans vs Morne Botha (JR2047/20) [2022] ZALCJHB 213, the South African Labour Court was required to determine in a review application whether the CCMA had exceeded its jurisdiction by adjudicating a Section 73A dispute for an Applicant earning above the threshold. The Applicant, in this case, brought a review application in terms of Section 145 of the Labour Relations Act 66 of 1995 (as amended) against the Respondent, having received an award in favour of the first Respondent. The arbitration award issued by the presiding CCMA Commissioner ordered the Applicant to pay the first Respondent a total amount of R48 262.95 as the monetary quantum of outstanding salary.

In reviewing the arbitration award, Honourable Snyman AJ emphasised the importance of correctly determining an employee’s earnings in that the provision of Section 73A (2) of the BCEA constitutes a jurisdictional fact that must first exist before the CCMA exercises its jurisdiction. This provides that claims for any amounts owing to an employee under Section 73A (1) of the BCEA can only be pursued by an employee earning below the threshold as contemplated by Section 6(3) of the BCEA. The Labour Court held that the Commissioner and the CCMA did not have jurisdiction to adjudicate the matter in terms of Section 73A of the BCEA. The Labour Court found that the first Respondent was earning above the determined threshold as contemplated by Section 6(3) of the BCEA, which excluded the Respondent from relying on Section 73A of the BCEA. The arbitration award was consequently set aside and substituted with a Court order stating that the CCMA had no jurisdiction to ‘entertain‘ the first Respondent’s claim.

Importantly to note about this above-cited case is the finding made in Paragraph 14 by the said Honourable Snyman AJ that payments in the form of “commission” are fair game when determining the total annual earnings of an employee in terms of Section 35(5)(a) of the BCEA read with the Government Gazette dated the 23rd of May 2003. Paragraph 14 reads as follows:

“From the above, it is clear that “earnings” is far more than just the fixed salary of the first Respondent, as considered by the second Respondent to be the case. I am satisfied that, as contended by the Applicant, earnings would include commissions earned by the first Respondent. These commissions constitute a cash payment to the first Respondent, which is guaranteed and not discretionary, and which does not fall within the exclusions referred to above. This is, in fact, further confirmed by the provisions of Section 35(4) of the BCEA, which provides that where remuneration is calculated on a basis other than hours worked and fluctuates from time to time, the average earned by the employee over a period of 13 weeks must be used to calculate the remuneration. This certainly contemplates commissions earned. The second Respondent, therefore, got it completely wrong where it came to determining “earnings” for the purposes of section 73A of the BCEA.”

This Labour Court case is a practical reminder that parties, including the CCMA, must first establish whether the referring party earns above or below the threshold. Failure to accordingly determine the earnings of the referring party may only result in the match being officiated by the incorrect referee. Consequently, the match result might not count at the end of the game. This may result in a rematch being scheduled at the correct platform, which may prove costly and time-consuming for all parties involved. It is, therefore, important for employers to note that the current monetary threshold determined by the Minister of Employment and Labour in Section 6(3) of the BCEA is R224 080.30 per annum, which is equivalent to R 18 673.37 per month. Employers are advised to immediately check the Applicant’s payslips to determine if the Applicant is earning above or below the threshold. Should it be ascertained that the earnings are above the threshold, the Commissioner must be notified during the conciliation process to determine if the CCMA has jurisdiction to adjudicate the dispute in terms of Section 73A of the BCEA.

The CCMA is a creature of statute and thus cannot confer upon itself jurisdiction which it does not have and/or allow parties to consent to jurisdiction above its limitations. The principle was well established in the case of SA Rugby Players Association and Others v SA Rugby (Pty) Ltd and Others (2008) 29 ILJ 2218 (LAC) [PAR 40], where the Court correctly stated that: “The CCMA is a creature of statute and is not a Court of law. In principle, it cannot decide on the parameters of its own jurisdiction, but it can only make a ruling for procedural convenience. Whether it has jurisdiction or not to adjudicate a particular matter is a matter to be decided by the Labour Court of South Africa.”

Considering the above, it becomes quite clear that Applicant’s earning below the threshold can refer their dispute to the CCMA in terms of Section 73A of the BCEA. Whereas Applicants earning above the threshold can refer their dispute in terms of Section 77 of the BCEA to the Labour Court, High Court, Magistrates Court, or Smalls Claims Court. Employers are advised to ensure they have been called to play on the right field by first establishing whether the Applicant earns below or above the threshold.

Article By: Zwelakhe Thwala
Dispute Resolution Official – CEO Pretoria