Different views on benefit claims under the unfair labour practice jurisdiction of the CCMA
Johanette Rheeder

The Labour Courts and arbitrators have long wrestled with the question of what constitutes a “benefit” in terms of section 186(2) (b). The definition of an unfair labour practice is contained in section 186(2) (a) of the Labour Relations Act (LRA) and constitutes a precise definition of an unfair labour practice. Therefore, any claim for an unfair labour practice must be covered by the definition, failing which it will not be an unfair labour practice and will not fall within the jurisdiction of the CCMA.


In terms of this section “‘Unfair labour practice’ means any unfair act or omission that arises between an employer and an employee involving; (a) the unfair conduct by the employer relating to the promotion, demotion, probation (excluding disputes about dismissals for a reason relating to probation) or training of an employee or relating to the provision of benefits to an employee; (b) or the unfair suspension of an employee or any other unfair disciplinary action short of dismissal in respect of an employee; (c) or a failure or refusal by an employer to reinstate or re-employ a former employee in terms of any agreement; and (d) an occupational detriment, other than dismissal, in contravention of the Protected Disclosures Act, 2000 (Act 26 of 2000), on account of the employee having made a protected disclosure defined in that Act.”

The question, as to whether a claim for benefits constitutes an unfair labour practice or not, has a specific jurisdictional implication for the applicant employee. It is only when a dispute relates to a “benefit” that the CCMA would have jurisdiction to determine the dispute through conciliation and arbitration. If the dispute relates to “remuneration”, for instance, the CCMA would be deprived of jurisdiction as remuneration does not fall under the definition of “benefit” for the purpose of an unfair labour practice.

A question that has often been asked is whether a performance bonus or an acting allowance falls within the definition of a benefit for the purpose of section 186(2)(a)? The essence of the earlier cases in the Labour Court was that a benefit for the purposes of an unfair labour practice was something other than remuneration. The earlier approach of the Labour Court was a narrow approach, effectively limiting the kinds of disputes that could be referred to the CCMA for arbitration. Initially, the prevailing view was that a benefit is an existing right derived from a contract, collective agreement or statute. This view was based on the distinction between “disputes of right” and “disputes of interest”, the former of which may be resolved by arbitration or litigation, and the latter of which must be resolved by industrial action. Put differently, a court or the CCMA can only enforce existing rights of employees, not the interests employees may claim to have. Those interests can only be enforced by way of collective bargaining - such as wage negotiations. The individual employee who has an interest in some benefit such as an increase, a bonus or an acting allowance, but who cannot convince the CCMA that it is an existing right, only has the avenue of consultation available to him or her to convince the employer to grant this benefit. If the employer refuses, the single employee, who cannot strike, has two options, accept it or find another job! Collectively, employees can bargain for the right.

From recent decisions, it seems that the Labour Court is widening its approach. In IMATU obo Verster v Umhlathuze Municipality & others (2011) 20 LC 1.11.7 and [2011] 9 BLLR 882 (LC), the Court noted that the sole issue before the court was whether the arbitrator’s decision that an acting allowance did not constitute a benefit was right or wrong. The court considered various previous cases and found what the brief review of the case law and academic commentary reveals is; “that there has been a shift in the conceptualisation of the ambit of the unfair labour practice claim, at least in relation to the notion that a prerequisite for bringing such a claim is proof of a pre-existing right”. It is more than that found the court.

The court in Verster looked at the finding in Protekon (Pty) Ltd v CCMA & others (2005) 14 LC 6.7.1 where the court also sought to delineate two distinct classes of benefit that might be claimed under the unfair labour practice jurisdiction, namely, contractual and statutory based benefits which an employer fails to comply with, and discretionary benefits provided by an employer. The court found:

“It follows from this that there are at least two instances in which employer’s conduct in relation to the provision of benefits may be subjected to scrutiny by the CCMA under its unfair labour practice jurisdiction. The first is where the employer fails to comply with a contractual obligation that it has towards an employee in relation to the provision of an employment benefit. The second is where the employer exercises a discretion that it enjoys under the contractual terms of the scheme conferring the benefit.”

In the Verster case the court found that once this conceptual hurdle has been overcome, it stands to reason that a dispute over an acting allowance, in which an employee is claiming that the employer granted to him or others the benefit in similar circumstances on other occasions, and then later unfairly refused to confer the benefit on the occasion in question, will constitute an unfair labour practice, therefore the employer unfairly executed his judgment or prerogative. In this case, the claim did not amount to a demand to make the benefit obligatory in the future. The latter claim, found the court, would properly be the subject-matter of collective bargaining – therefore not an unfair labour practice. The court found that, in adopting the view of an acting allowance that he did, the arbitrator did not consider the later developments in the law. Had he done so he would have taken a broader view of his jurisdiction to determine the dispute before him and would not have dismissed the employee’s claim so easily.

In South African Post Office Ltd v Commission for Conciliation, Mediation and Arbitration and others (2012) 21 LC 1.1.4 and [2012] 11 BLLR 1183 (LC) the court went back to the more conservative approach to require a perquisite right in contract or law. The issue of acting allowance was again considered by the Labour Court in this case. The employee was employed as an operational manager from 1 July 2003 and claimed an acting allowance. The employer had a policy relating to “acting in higher positions”. The Post Office raised two points in limine. It contended that the dispute was not about benefits but remuneration; and that it was about four and a half years late, and was not accompanied by any condonation application. The employee has claimed an acting allowance on numerous occasions since April 2006. It was only approved once in April 2006. Subsequent to that date, no further acting allowances were granted by a general manager, as contemplated by the policy. With respect to the first point in limine, the Commissioner found that the payment of an acting allowance constituted a “benefit” and that it could be dealt with at arbitration as an unfair labour practice.

The court looked at various previous cases such as Northern Cape Provincial Administration v Hambidge NO and others [1999] 7 BLLR 698 (LC) at paras [12]–[17] and SA Chemical Workers Union v Longmile/Unitred (1999) 20 ILJ 244 (CCMA) at 248–253 to determine the definition of salary or wage:

“A salary or wage or payment in kind is an essential element in a contract of service…. The definition of ‘remuneration’ read with the definition of ‘employee’ in section 213 of the Act makes this clear. ‘Remuneration’ in section 213 means: ‘any payment in money or kind or both in money and in kind . . .’ remuneration is an essentialia of a contract of employment. Other rights or advantages or benefits accruing to an employee by agreement are termed naturalia to distinguish them from the essentialia of the contract of employment. Some naturalia are the subject of individual or collective bargaining, others are conferred by law. In my view a benefit may be part of the naturalia. It is not part of the essentialia. ‘Remuneration is different from ‘benefits’. A benefit is something extra, apart from remuneration. Often it is a term and condition of an employment contract and often not. Remuneration is always a term and condition of the employment contract.’

The court found that in the instant case the employee wanted to be paid for acting in the higher position; one carrying more responsibility. It certainly seems fair that she should be so paid. However, a claim that an employer has acted unfairly by not paying the higher rate cannot be said to concern a benefit even if its receipt would be beneficial to the employee. It is essentially a claim or a complaint that the complainant has not been paid more for a certain period for carrying extra responsibilities. It is a salary or wage issue. It is not about a benefit. It is about a matter of mutual interest as it ventured beyond the policy. The interpretation by the Commissioner is wrong in law. It was central to her decision. She did not have jurisdiction to entertain the dispute and to decide it in the way she did.”

The court accepted that a dissenting view was recently expressed by Lagrange J in IMATU obo Verster v Umhlathuze Municipality and others, but found that the learned Judge in the Verster case did not refer to G4S Security Services v NASGAWU and others: Unreported (case no DA 3/08), 26 November 2009, where the LAC confirmed the approach taken in HOSPERSA and another v Northern Cape Provincial Administration (2000) 21 ILJ 1066 (LAC) [also reported at [2000] JOL 6301 (LAC) – Ed] at para [12] per Mogoeng AJA (as he then was), which stated that in order for the respondents to bring a successful claim under Item 2(1)(b) of Schedule 7, they have to show that they have a right arising ex contractu or ex lege. It is only then that, having established the right, the Commissioner would have jurisdiction to entertain the dispute as a dispute of right.

The court found itself bound by the LAC and found that the employee in the present case has not established a right to an acting allowance ex contractu or ex lege beyond the initial three-month period in 2006. In seeking to establish a further entitlement to an acting allowance, the employee has strayed into the realm of a dispute of interest. In these circumstances, the Commissioner had no jurisdiction to entertain an unfair labour practice dispute in terms of section 186(2)(b) of the LRA.

Johanette Rheeder Incorporated