Section 69 and Section 73 of the Basic Conditions of Employment Act make provisions for parties to a statutory wage dispute to refer such dispute for determination by an arbitrator.
While both processes involve claims for alleged outstanding money and the outcome of both is the same insofar as the Arbitrator will make an Award by either dismissing the claim or granting in favour of the claimants to the extent of the amount which has been proven to be owed. This may lead a layperson to understand the two to be the same dispute, however, this article will set out the differences between the two types of referrals.
Section 69(5) referral
The Section 69 referral involves a compliance order issued against the employer for failure to pay an amount owing to an employee or employees in terms of a governing legislation. Section 69(1) of the Basic Conditions of Employment Act sets out that:
A labour inspector who has reasonable grounds to believe that an employer has not complied with a provision of this Act, the National Minimum Wage Act, 2018, the Unemployment Insurance Act or the Unemployment Insurance Contributions Act may issue a compliance order.
Section 69(2) of the Act stipulates that the Compliance Order must:
A compliance order must set out-
- the name of the employer, and the location of every workplace, to which it applies;
- the provision of this Act and any other Act referred to in subsection (1) that the employer has not complied with, and details of the conduct constituting non-compliance;
- any amount that the employer is required to pay to an employee, or in the case of a failure to pay the national minimum wage, the amount that the employer is required to pay to an employee in terms of section 76A;
- any steps that the employer is required to take including, if necessary, the cessation of the contravention in question and the period within which those steps must be taken; and
- the maximum fine that may be imposed upon the employer in accordance with Schedule Two for a failure to comply with a provision of this Act.
Objecting to a Compliance Order
Section 69(5) states:
An employer must comply with the compliance order within the time period stated in the order, unless the employer refers a dispute concerning the compliance order to the CCMA within that period.
The employer who on good cause has reasons to dispute the compliance order, may refer their objection in terms of Section 69(5), objecting to the whole or part of the compliance order. The objection must be filed within 21 days of receipt of the compliance order, or by way of condonation application for late filing, provided it can be shown on good cause the reason for the lateness.
Upon making a referral, the dispute is dealt with in terms of Section 73, which provides;
- The Director-General may apply to the CCMA for a compliance order to be made an arbitration award if the employer has not complied with the order.
- The CCMA may issue an arbitration award in terms of subsection (1) requiring the employer to comply with the compliance order, if it is satisfied that –
- the compliance order was served on the employer; and
- the employer has not referred a dispute in terms of section 69(5).
The CCMA may issue an arbitration award for a fine against the employer for non-compliance as set out in Section 76A
- Subject to section 76, a fine that may be imposed on an employer who paid an employee less than the national minimum wage, is an amount that is the greater of –
- twice the value of the underpayment; or
- twice the employee’s monthly wage.
- For a second or further non-compliances, a fine that may be imposed on the employer is an amount that is greater of –
- thrice the value of the underpayment; or
- thrice the employee’s monthly wage.
The issue of a fine is a secondary issue and may be argued in mitigation that the fine set down in the compliance order is too onerous given the nature of the non-compliance. The fine may be waivered or reduced from the original compliance order, by way of a settlement agreement, or if it is found that the non-compliance was not a willful or deliberate act.
The process, once set down at the CCMA, follows the standard con/arb process in that the arbitration will immediately proceed if the dispute is unresolved in conciliation.
Section 73A dispute
Section 73A(1) states:
Despite section 77, any employee or worker as defined in section 1 of the National Minimum Wage Act,2018, may refer a dispute to the CCMA concerning the failure to pay any amount owing to that employee or worker in terms of this Act, the National Minimum Wage Act,2018, a contract of employment, a sectoral determination or a collective agreement.
Common referrals in terms of Section 73A include, inter alia:
- Non-payment or short payment of salaries or wages
- Non-compliance with minimum wages as set out in legislation or collective agreements
- Non-payment of leave pay
- Non-payment of notice pay
- Unlawful deductions made against the employee(s) salary/wages
- Non-payment of bonuses in accordance with legislation or arising out of the employment contract.
The employee(s) must file the referral with the CCMA and serve notice on the employer and CCMA. The CCMA must then give at least 21 days’ notice upon setting down the matter. In terms of section 135 of the Labour Relations Act, the process is conducted as a con/arb.
Section 74 of the Basic Conditions of Employment Act provides:
Section 74(2) – If an employee institutes proceeding for unfair dismissal, the Labour Court or the Arbitrator hearing the matter may also determine any claim for an amount that is owing to that employee in terms of this Act or the National Minimum Wage Act, 2018.
Section 74(4) – A dispute concerning any amount that is owing to an employee as a result of a contravention of this Act or the National Minimum Wage Act, 2018 may be initiated jointly with a dispute instituted by that employee over the entitlement to severance pay in terms of section 41 (6).
This provision empowers the Commissioner in a referral for unfair dismissal, or a dispute referred in terms of Section 41 for severance to hear claims for any further outstanding money where such claims do not exceed 12 months.
Article by: Wesley Lazarus
Dispute Resolution Official – George