Department of Health: Kwazulu- Natal and Another v Commissioner Ngcengeni and Others (0967/2019) [2022] ZALCD 36 (15 August 2022)

IN THE LABOUR COURT OF SOUTH AFRICA

DURBAN

Case no: D967/2019

Not Reportable

In the matter between:

THE DEPARTMENT OF HEALTH :

KWAZULU-NATAL

First Applicant

DEPARTMENT OF PUBLIC SERVICE

AND ADMINISTRATION

Second Applicant

And

COMMISSIONER V NGCENGENI

First Respondent

PSA obo GOVENDER AND 22 OTHERS

Second Respondent

PUBLIC SERVICES CO-ORDINATING

BARGAINING COUNCIL (“PBCBC”)

Third Respondent

Heard: 19 July 2022

Delivered: 15 August 2022

JUDGMENT

ALLEN-YAMAN AJ

Introduction

[1] The issue before the first respondent concerned a dispute which had been referred to the third respondent in terms of section 24 of the LRA, such dispute having arisen between the first applicant on the one hand, and the second respondent on the other, concerning the interpretation and application of a collective agreement, Resolution 3 of 2009 (‘the Resolution’). The Resolution was an agreement governing a revised salary structure for all occupational categories graded on salary levels 1-12 not covered by any Occupation Specific Dispensation.

[2] The second respondent had contended that certain of its members, being Govender and 22 other employees (who shall be referred to as the employees where it is necessary to refer to them collectively) were entitled to have been paid at a rate higher than that they were then being paid by virtue of the first applicant having failed to have complied with clause 3.6.2.2 of the Resolution.

[3] Pursuant to the dispute having been enrolled for arbitration, the second applicant was joined as an interested party in the proceedings.

[4] The first respondent found in favour of the interpretation accorded to the Resolution by the second respondent and issued an award in the following terms,

‘Award

271. The first and second respondents have incorrectly interpreted and applied clause 3.6.2.2 of Resolution 3 of 2009 when it [sic] failed to grade progress the 23 employees represented by the applicant

272. The respondents are ordered to correctly comply with Resolution 3 of 2009.

273. The respondents are further ordered to accordingly grade progress the said 23 employees retrospectively to the 1st of July on the dated on which each employee completed 15 years since 2001.

274. Furthermore, the respondents are ordered to implement the aforementioned orders by no later than 30 June 2019.'

[5] In these review proceedings, which are unopposed by the respondents, the applicants contend that the first respondent failed to apply his mind to the facts of the matter and thereby committed a gross irregularity. Its is alleged that the first respondents literal interpretation of clause 3.6.2.2 of the Resolution was misplaced and incorrect and that he failed to consider the impact of a certain Directive on the Resolution. In the result, the applicants alleged that another commissioner would have reached a conclusion other than the conclusion reached by the first respondent on the evidence before him.

[6] It is apparent from the Award that no witnesses testified at the arbitration which ensued on 11 March 2019. Whether by agreement on the part of the parties or on the basis of the direction given by the respondent, the interpretation to be accorded to the Resolution by the first respondent, as well as the applicability of the Resolution to the employees, was done on the basis of written submissions made by the second respondent and the applicants individually, with reference to a number of documents which had been presented by the first respondent.

Background

[7] Before 1 July 2001 public service employees participated in a salary progression system known as the 'Rank/Leg Promotion Dispensation.' Under this system, various salary levels were attributed to various grades of work. Applying this system, it was possible for a public service employee to advance several salary levels whilst occupying a post, the grade of which remained

unchanged. This was, of course, subject to compliance with the criteria prescribed for advancement.

[8] This system was abolished on 1 July 2001 in consequence of the effect of the provisions of clause 8.1 of Public Service Co-Ordinated Bargaining Council Resolution 7 of 2000, in terms of which it had been agreed that the Rank/Leg Promotion Dispensation system would terminate on that date, if no new pay progression system had been agreed to before then.

[9] The Resolution was concluded as a collective agreement on 24 July 2009 and became operative retrospectively to 1 April 2009 in respect of the majority of its clauses, and 1 April 2010 in respect of clauses 3.6.2 and 3.6.3 thereof.

[10] The stated objectives of the Resolution were: (1) to give effect to clause 5 of Resolution 1 of 2007 by introducing a revised salary structure for all occupational categories graded on salary levels 1-12 not covered by any Occupational Specific Dispensation, and (2) to introduce a career pathing model and grade progression for identified salary levels.

[11] As is reflected in clause 3.5 of the Resolution it was agreed that the grade progression model then to be utilized was based on three principles; the first being that the granting of posts was based on the outcome of Job Evaluation, the second being the recognition of performance, and lastly,completed continuous years of service on a salary level irrespective of the actual notch within that salary level.

[12] It was moreover expressly stated that the provisions of the Job Evaluation system in the public service were not done away with by virtue of the provisions if the Resolution. As regards the system of Job Evaluation applicable within the public service, this is governed by the Public Service Regulations, 2016, the following provisions thereof having been drawn to the first respondent's attention,

41. Job evaluation and job grading systems-

(1) The Minister shall determine-

(a) a job evaluation and job grading system or systems that shall be utilised in the Public Service to ensure work of equal value is remunerated equally; and

(b) a range of job weights derived from the system or systems for each salary level in a salary scale.

(2) The Minister may-

(a) issue directives on the application of a job evaluation or job grading system or systems;

(b) review the application of job evaluation in the public service;

(c) determine a job or category of jobs that an executive authority must evaluate; and

(d) issue directives that direct the evaluation and grading of any job or category of jobs.

(3) An executive authority may evaluate or re-evaluate any job in his or her department, except-

(a) jobs evaluated and graded by the Minister in terms of subregulation (2)(d); or

(b) jobs determined in terms of an OSD.

43. Grading of posts-

(1) This regulation does not apply to any job determined in of an OSD contemplated in regulation 42

(2) An executive authority shall-

(a) determine the grade of a post to correspond with-

(i) the evaluation of the job by the Minister in terms of regulation

41(2)(d) on a date determined by the Minister;

(ii) jobs determined in terms of regulation 42; or

(iii) if the job was not so evaluated or determined by the Minister, the evaluation of the job by the executive authority in terms of regulation 41 (3).

(b) …

(3) …

(4) …

[13] Although the Regulations to which the first respondent was referred were promulgated in 2016, some six or seven years after the Resolution had become operative, similar Regulations were of application prior those of 2016, which also vested the functionaries mentioned therein with the power to evaluate and grade jobs in the public service.[1]

[14] By 2009 the various posts occupied by the majority of the employees had been evaluated and graded in accordance with the Regulations. With effect from 1 April 2005 all Orderly posts had been graded as level 3 posts. The post of Administration Clerk had been evaluated and attributed job level 3 on 25 May 2005. Later that year, on 3 August 2005 the post of Finance Service Officer had been evaluated and graded as level 4.

[15] In what appears to have been an effort on the part of the Minister of Public Service to achieve uniformity and consistency in the grading of posts which were utilised by more than one Department, a co-ordination process was undertaken with the result that the post of clerk was considered, and in the result, job descriptions and grading levels were established. By way of a Circular issued on 12 December 2012, the Director General for the Department of Public Service issued a Directive to all National and Provincial Departments in this regard. In that Directive the Departments were advised that the outcome of the evaluation process had been identification of two job levels, a Production level clerk and a Supervisory level clerk. The grade attributed to the former level was 5 and the latter, 7.

[16] From this Directive, it was left to each executing authority to translate the posts within their own Departments into one of the two grades which had been identified, with any deviation from the evaluation and grading process to be limited to those cases which were sufficiently unique to justify such deviation.

[17] By 27 February 2013 the Head of the first applicant had considered the matter and issued a Circular, Circular 13 of 2013, addressed to various managers within the first respondent, in which they were appraised of the Directive which had been issued by the Director General in December 2012 and were advised to ensure that any officials who occupied Production level clerk posts were placed on salary level 5.

[18] In June 2013 the Head of the first applicant issued a further Circular, Circular 64 of 2013, in terms of which the recipients thereof were notified that, with reference to Circular 13 of 2013, the implementation date was 1 April 2013 in respect of Production level clerks. Accordingly, all posts which were found to have met the job description for this category of work were, with effect from 1 April 2013, graded at level 5.

[19] Nothwithstanding the levels at which the posts had been graded by 2010, the employees themselves were all paid at a rate higher than the rate applicable to their respective posts, as a consequence of the application of the previous Rank/Leg System of Promotion. The employees employed as Orderlies were paid at the rate applicable to salary level 4, notwithstanding that their substantive posts had been graded at salary level 3. The employees employed as Clerks were paid at the rate applicable to salary level 5, notwithstanding that their posts were graded at level 5 only with effect from 1 April 2013

[20] It was the difference in the rates at which the employees were being paid, by virtue of the salary levels to which they had advanced, and the grading of the posts which they occupied which led to the dispute having been referred to the third respondent, and which resulted in the Award which forms the subject matter of the applicants' review application.

[21] It was the second respondents contention at the arbitration that the first applicant had failed to comply with the provisions of the Resolution. The second respondent contended that the first applicant had failed to advance the employees to the next applicable grade in circumstances in which the employees had all satisfied the requirements for grade progression in terms of the Resolution. It was the second respondent’s case that the employees in question had, by the time of the arbitration, completed a period of 15 continuous years of service at a salary level which then entitled them to be remunerated at the next highest salary level.

[22] The applicants on the other hand denied that the employees were, at the time of the arbitration, entitled to any grade progression. It was the applicants’ case that the employees in question did not meet the requirements for advancement in terms of the Resolution. In regard to those employees whose posts were graded at level3, the Resolution did not permit them to progress to level 4. In regard to those employees whose posts were graded at level 5, the 15 year period of continuous service was to commence with the effect from the date on which the job in question had been graded at the relevant

level, and not with effect from the date on which each employee had been remunerated at the relevant level.

Analysis

[23] The specific clause within the Resolution which proved to be contentious was clause 3.6.2.2, which reads as follows,

With effect from 1 April 2010 (salary adjusted with effect from 1 July annually), an employee on salary level 4,5,6 or 7 who has completed 15 years of continuous service on a salary level, irrespective of the notch, and has obtained at least satisfactory rating in his / her performance assessments (the average assessments over the last 2 year period will determine the performance rating) shall grade (salary level) progress to salary level 5,6,7 or 8 respectively. This not the availability of posts.’

[24] In consideration of the issues which were placed before the first respondent, there were two determinations which were required to be made by him. The first was to determine the meaning and ambit of clause 3.6.2.2 of the Resolution. Having determined its ambit, the second determination which was required to be made was whether the applicants had applied the Resolution incorrectly in relation to each of the individual employees.

[25] The crux of the first issue was then to be determined by interpreting the words ‘salary level’ as used in clause 3.6.2.2: the second respondent advanced an argument that it was intended to refer to the salary level at which the employees had been paid, whilst the applicants argued that it was intended to refer to the level at which the post in question had been graded.

[26] As this concerned the interpretation of an agreement, the first respondent was required to apply certain established principles in relation thereto, one of which he identified to apply certain established principles in relation thereto, one of which he identified yet nonetheless failed to apply.

[27] It was indeed stated in Coopers & Lybrand and Others v Bryant (459/93) [1995] ZASCA 64 that a particular word or phrase ought never to be interpreted in isolation and that,

'According to the 'golden rule' of interpretation the language of the document is to be given its grammatical and ordinary meaning, unless this would result in some absurdity, or some repugnancy or inconsistency with the rest of the instrument.'[2]

[28] The Constitutional Court elaborated upon the necessity, when interpreting a legal instrument, of avoiding consideration of terms in isolation, and the manner whereby reconciliation is to take place in Commercial Workers Union of South Africa v Tao Ying Metal Industries and Others (2008) 29 ILJ 2461 (CC),

‘The proper approach to the construction of a legal instrument requires consideration of the document taken as a whole. Effect must be given to every clause in the instrument and, if two clauses appear contradictory, the proper approach is to reconcile them so as to do justice to the intention of the framers of the document. It is not necessary to resort to extrinsic evidence if the meaning of the document can be gathered from the contents of the documents.[3]

[29] The first respondent reasoning, although not abundantly clear from the Award, appears to have been premised upon his conclusion that it was inconceivable that the awarding of salary increases could have been intended to have been predicated upon the grades attributed to any given post in circumstances in which such a grading exercise had not been undertaken as at 1 April 2010, being the date on which clause 3.6 was to have become operative.

[30] In this, the first respondent failed to appreciate that by 1 April 2010 the posts in question had been graded, and that the grading exercise which had subsequently been conducted in relation to the Clerk posts had been a re­ grading exercise.

[31] Moreover, clause 3.6.2.2 was to be understood within the context of clause 3.6 in its entirety. Firstly clause 3.6 set out the manner in which the Grade Progression Model was, in part, to be based on the principal of job grading. Within clause 3.6 itself certain express limitations were articulated:

1. In terms of clause 3.6.2.3 employees employed on salary levels 3,6 and 10 could advance no further.

2. By virtue of the provisions of clause 3.6.2.4 employees on salaries 4 to 7 could only progress one salary level.

3. By virtue of clauses 3.6.2.5 to 3.6.2.8, employees appointed to posts which were graded on salary levels 4 to 7 could only progress to salary levels 5 to 8 respectively.

4. No employee could grade progress more than one salary level in terms of clause 3.6.2.9.

[32] In consideration of the aforementioned, it is clear that the term ‘salary level’ was intended to apply to the salary level applicable to the grade at which the incumbent had been appointed. To find otherwise, that ‘salary level’ was intended to mean the salary level at which the incumbent was remunerated, would lead to absurd results, and would also conflict with the remaining clauses in the Resolution.

[33] Accordingly, in relation to the employees whose posts were graded at level 3, but who were remunerated at level 4, the result of the meaning attributed to 'salary level' by the first respondent would have been that the employees were then to be remunerated at salary level 5 (if the other requirements were met).This in turn would result in a conflict with clause 3.6.2.3. An anomaly would also arise after 15 years, with newly appointed employees who had been appointed

on grade level 3, being unable to advance any further whilst the employees would have been elevated to a much higher salary level.

This would also have led to a disparity between the employees employed on level 3 and those employed at higher levels who were not permitted in terms of the Resolution to advance more than one salary level.

[34] Similar disparities would apply to the employees who were appointed to posts which were graded at level 5 on 1 April 2013 in circumstances in which they had been remunerated at this level for some time prior thereto, notwithstanding that their respective posts were graded at a lower level.

[35] If clause 3.6.2.2 is considered within the context of the Resolution as a whole, it is clear that meaning given to the words ‘salary level’ therein by the first respondent was untenable and led to

inconsistency with the other clauses on the Resolution.

[36] The first respondents interpretation of clause 3.6.2.2 was premised, not upon consideration of the agreement as a whole, but upon an erroneous assessment of the evidence before him which led to an unreasonable result.

[37] The applicants interpretation of the Resolution was not incorrect and clause 3.6.2.2 had been correctly applied by it. Accordingly, none of the employees had, at the time of the arbitration, been entitled to grade progression in terms of thereof: the employees employed in posts which were evaluated at grade level 3 prior to the implementation of the Resolution had reached the upper ceiling of advancement, and the employees employed in posts which were evaluated at grade level 5 pursuant to the implementation of the Resolution will be required to remain so employed for a further period of 15 years after 1 April 2013 before them will become eligible for advancement to grade level 6, provided that the other qualifying criteria contained in the Resolution are met.

[38] The Award accordingly falls to be reviewed, set aside and corrected.

Costs

[39] The applicants sought costs only in the event of opposition to this application. There having been no such opposition, the issue of costs does not arise.

Order

1. The first respondent’s award under case number PSCB 16-18/19 dated 5 May 2019 is hereby reviewed and set aside and substituted with an order that the applicants correctly interpreted and applied clause 3.6.2.2 of Resolution 3 of 2009.

2. There is no order as to costs

Kelsey Allen-Yaman

Acting Judge of the Labour Court of South Africa

APPEARANCES:

APPLICANT: Ms Z Rasool, briefed by the State Attorney

RESPONDENTS: None

[1] Public Service Regulations, 2001, Chapter 1, Part IV, Job evaluation

[2] At paragraph 9

[3] At paragraph 90