MEC for Public Works and Roads North West and Another v Public Service Co-ordinating Bargaining Council and Others (JR842/17) [2023] ZALCJHB 6 (12 January 2023)

IN THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG

CASE No: JR 842/17

In the matter between:

MEC FOR PUBLIC WORKS AND ROADS

NORTH WEST First

Applicant

MINISTER OF PUBLIC SERVICE

AND ADMINISTRATION Second

Applicant

And

PUBLIC SERVICE CO-ORDINATING

BARGAINING COUNCIL First

Respondent

ANNELIE BEVAN N.O. Second

Respondent

BAOTLWAENG S. D.

Third Respondent

MEKGWE O. E. Fourth

Respondent

MABOGO O. F. Fifth

Respondent

TLHAGENG F. N. Sixth

Respondent

Heard: 26 October 2022

Delivered: 12 January 2023

Summary: Review application – interpretation and application of collective agreement – PSCBC Resolution 3 of 2009 – Commissioner’s award compelling the parties into an agreement other than the agreement they had concluded – award unreasonable.

JUDGMENT

MKWIBISO AJ

INTRODUCTION:

[1]. In this matter, the first and second applicants, namely the MEC for Public Works and Roads, North West and the Minister of Public Service and Administration, respectively, seek to set aside on review an arbitration award by the second respondent (“the Commissioner”), which essentially declared that the third to sixth respondents (“the employees”) could be grade-progressed from grade 5 to grade 7 based on the Commissioner’s interpretation of a collective agreement known as Resolution 3 of 2009 (“the Collective Agreement”).

[2]. The employees were employed by the Department of Public Works and Roads, North West, which Department falls under the leadership of the first applicant. The Department of Public Service and Administration, which falls under the leadership of the second applicant, had been joined to the proceedings at arbitration stage, as the Department under whose auspices certain Circulars had been issued to assist in the interpretation of the Collective Agreement, and due to the interpretation of the Collective Agreement being relevant to the broader public service.

[3]. The Commissioner was under a statutory obligation to interpret the Collective Agreement in a manner that was legally sound, and a failure to do so would amount to the improper performance of a statutory function and, arguably, a material error of law, which would be reviewable. The issue is whether the Commissioner properly interpreted the Collective Agreement.

RELEVANT FACTS:

[4]. The facts of this matter are largely common cause between the parties, to the extent that they agreed to conduct the arbitration proceedings before the Commissioner by way of written submissions supported by relevant documents, without calling witnesses, despite the Labour Appeal Court’s cautioning against such an approach. [1]

[5]. Prior to 01 July 2001, the public service applied a dispensation known as the Rank and Leg Promotion Dispensation, which was a salary progression system and not a grade progression system. In terms of this system, various salary levels would be bundled under one occupation as part of a defined salary growth path. This resulted in workers who were performing the same job being remunerated differently.

[6]. In respect of the occupation of Administration Clerk (Production), the following salary levels were bundled:

6.1 Administration Clerk Grade 1 (salary level 2);

6.2 Administration Clerk Grade 2 (salary level 3);

6.3 Senior Administration Clerk Grade 1 (salary level 4);

6.4 Senior Administrative Clerk Grade 2 (salary level 5);

6.5 Senior Administrative Clerk Grade 3 (salary level 6).

[7]. Over the years, the employees, who were Administration Clerks, progressed through the salary levels of that occupation until they reached salary level 6, which was the last level attached to the occupation. In this regard, three of the employees progressed to salary level 6 with effect from 01 April 2000, whilst the fourth employee progressed to salary level 6 with effect from 01 April 1999.

[8]. The Rank and Leg Promotion Dispensation led to various Administration Clerks being scattered across salary levels 2 to 6 despite performing the same function, with consequent remuneration disparities.

[9]. With effect from 01 May 2001, the Public Service Regulations of 2001 came into effect. These Regulations are divided into seven Chapters, with the issue of job evaluation being regulated in Part IV of Chapter 1. Importantly, the following appears under the heading of job evaluation:

“A. PRINCIPLES

To ensure that work of equal value is remunerated equally, the public service shall increasingly use job evaluation –

(a) to assist in achieving cost-effective work organisation; and

(b) to determine appropriate remuneration” (my emphasis).

[10]. The said Regulations further required the Minister for the Public Service and Administration, being the second applicant in this current matter, to determine a job evaluation system or systems to be used in the public service. Furthermore, an Executive Authority was empowered to evaluate or re-evaluate any job in his or her department. [2]

[11]. The Collective Agreement largely became effective on 01 April 2009. The following provisions of the Collective Agreement are important:

11.1 Clause 1.2 provides that an objective of the Collective Agreement is to “introduce a career pathing model and grade progression for identified salary levels”;

11.2 Clause 3.5 sets out the grade progression model in the following terms:

“Grade Progression Model

3.5 The grade progression model is based on the following principles:-

3.5.1 Posts are graded based on the outcome of Job Evaluation;

3.5.2 Recognition of performance; and

3.5.3 Completed continuous years of service on a salary level irrespective of the notch”;

11.3 Clause 3.6.2, in relevant part, sets out the structure of the grade progression model in the following terms:

“3.6 The model will be structured as follows:

3.6.1 …

3.6.2 Salary levels 4-5; salary levels 5-6; salary levels 6-7 and salary levels 7-8

3.6.2.1 …

3.6.2.2 With effect from 1 April 2010 (salary adjusted from 01 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 … shall grade (salary level) progress to salary level 5, 6, 7 or 8 respectively ….

…

3.6.2.4 Employees can only grade progress from salary levels 4 to 5, or from salary level 5 to 6, or from salary level 6 to 7, or from salary level 7 to 8.

3.6.2.5 When an employee is appointed on a post graded on salary level 4, he/she shall only progress to salary level 5.

3.6.2.6 When an employee is appointed on a post graded on salary level 5, he/she shall only progress to salary level 6.

3.6.2.7 When an employee is appointed on a post graded on salary level 6, he/she shall only progress to salary level 7.

3.6.2.8 When an employee is appointed on a post graded on salary level 7, he/she shall only progress to salary level 8.

3.6.2.9 No employee who was appointed on salary level 4, 5 and 6 can grade progress to salary level 6, 7 and 8 respectively, i.e. grade progress over 2 salary levels. These employees must apply for vacant funded posts graded on those salary levels” (my emphasis).

[12]. On 11 September 2009, Circular No 2 of 2009 was issued by the Department of Public Service and Administration, which was meant to clarify the interpretation of the Collective Agreement. The important parts of this Circular are the following:

12.1 Clause 7.6 sets out the principles upon which the grade progression model is based, in the following terms:

“Salary (Grade) Progression model

7.6 The grade progression model is introduced based on the following principles:

7.6.1 Posts are graded based on the outcome of Job Evaluation, unless

indicated otherwise in the Determination. The grade determined with job evaluation therefore forms the basis from which employees can receive grade progression;

7.6.2 Recognition of performance; and

7.6.3 Completed continuous years of service on a specific salary level”

(my emphasis);

12.2 Clause 7.9 explains the progression of workers on salary levels 4 to 7 in the following terms:

“7.9 Progression of employees on salary levels 4 to 5; salary levels 5 to 6; salary levels 6 to 7 and salary levels 7 to 8 with effect from 1 April 2010

7.9.1 Employees, who occupy posts graded on salary levels 4, 5, 6 or 7 respectively, and who have completed 15 years of continuous service on the particular salary level on which the post is graded, and who have obtained at least a satisfactory rating in their most recent performance assessments, shall progress to salary levels 5, 6, 7 or 8 respectively.

7.9.2 Salary progression is capped to the next higher salary level above

the salary level attached to the post (in terms of the job evaluation system). Therefore, employees can only progress from salary level 4 to 5, or from salary level 5 to 6, or from salary level 6 to 7, or salary level 7 to 8.

7.9.4 In practical terms, this means the following:

(a) When an employee is appointed in a post graded on salary level 4, he/she may only progress to salary level 5 while he/she is occupying a post graded on salary level 4.

(b) When an employee is appointed in a post graded on salary level 5, he/she may only progress to salary level 6 while he/she is occupying a post graded on salary level 5.

(c) When an employee is appointed in a post graded on salary level 6, he/she may only progress to salary level 7 while he/she is occupying a post graded on salary level 6.

(d) When an employee is appointed in a post graded on salary level 7, he/she may only progress to salary level 8 while he/she is occupying a post graded on salary level 7.

7.9.5 Therefore, no employee who was originally appointed in a post graded on salary level 4, 5 and 6 respectively can grade progress to salary level 6, 7 and 8 respectively – therefore grade progress over two salary levels whilst occupying the same graded post” (my emphasis).

[13]. On or about 12 December 2012, the Department of Public Service Administration issued a communication to all national and provincial departments, confirming that the occupation of Administration Clerk (Production), which is occupied by the employees, had been graded at salary level 5. It is not in dispute that the job evaluation process took place in 2012. The relevant parts of the communication read as follows:

“IMPLEMENTATION OF THE CO-ORDINATION PROCESS – BENCHMARK JOB DESCRIPTIONS AND GRADING LEVELS FOR CLERKS

2. The Department of Finance: Gauteng Provincial Administration (former Gauteng Shared Service Centre) embarked on a co-ordination process with regard to the clerk occupation. A coordination committee was established to develop benchmark job descriptions and grading levels for clerks. The coordination committee clustered clerks into five broad categories namely; Human Resources, Finance, Supply Chain Management, Registry and General Administration Clerks. It was determined, based on the way work is generally managed in the departments, that two performer (work) levels were required for each category namely a production and a supervisory level.

3. Benchmark job descriptions were developed for the two performer levels in each of the categories. The information was then utilised to evaluate the jobs. Quality assurance was done on the job evaluation results by a quality assurance panel consisting of panel members from various departments.

4. The outcome of this process was as follows:

JOB

GRADE

REMARKS

Production level clerk

5

In accordance with the

Minister’s directive

contained in circular

16/P dated

12 September 2011

the job score falls in

salary range 5.

5. The coordination process does not detract from the executing authority’s power to manage his/her department, define the posts and determine an organisational structure that suits the service delivery requirements of the environment in which the department operates. If jobs are required that differ from the benchmark job descriptions, it may be created and graded with the job evaluation system. However, clerk jobs appear transversely in the Public Service in all departments and operate within the same regulatory framework and apply the same processes. There is therefore limited scope to define unique clerk posts that justifies different salary grades. Grading similar jobs at different salary grades creates labour relations issues. It also has the effect that the Public Service is in competition with itself for the same employees with resulting unjustifiable higher expenditure” (my emphasis).

[14]. The employees having progressed to salary level 6 with effect from 01 April 1999 and 01 April 2000, attained 15 years in that salary level on 31 March 2014 and 31 March 2015 respectively. They were, however, not grade-progressed to the next salary level, being salary level 7. They referred a dispute regarding the interpretation and application of clause 3.6.2.2 of the Collective Agreement to the first respondent (“the bargaining council”) in July 2016, which dispute culminated in the Commissioner’s award under review in this matter.

[15]. The Commissioner, in upholding the employees’ claim of grade progression to salary level 7, reasoned that the signatories to the Collective Agreement could not have intended to deny workers the opportunity to grade-progress when their posts had not been evaluated at the time of the conclusion of the Collective Agreement and they had progressed to salary level 6 through the Rank and Leg Promotion Dispensation that was abolished by government. This, according to the Commissioner, would take away the whole motivation linked to grade progression. The Commissioner opined that the purpose of grade progression under the Collective Agreement was to provide long-serving workers who met the minimum performance requirements with career advancement through the effluxion of time, because the two factors of long service and performance were within the workers’ control whilst issues of job evaluation fell outside the control of the workers. The Commissioner was of the view that it was blatantly unfair that a process initiated by the employer could deny the workers their career advancement, especially when one takes into account the fact that the employer could at any time re-evaluate a position.

[16]. The intention of the legislature, according to the Commissioner, was to never have a worker prejudiced by the results of a job evaluation exercise. This was because job evaluation concerns itself with a specific post and not the individual occupying the post. In this regard, the Commissioner relied on the following legislated responsibilities of the employer in terms of Part V of Chapter 1 of the Public Service Regulations of 2001:

“C. GRADING AND REMUNERATION

C.4 If the job weight demonstrates that a filled post is overgraded or undergraded, an executing authority shall either effect changes to the work organisation or regrade the post according to the job weight and the relevant collective agreements, as provided in regulation V C.5 to C.7

C8 If an executing authority determines that the salary range of an occupied post exceeds the range indicated by the job weight, she or he shall-

(a) If possible

(i) redesign the job to equate with the job grade; or

(ii) transfer the incumbent to another job on the same salary range; and

(b) abide by relevant legislation and collective agreements”.

[17]. The Commissioner found that there seemed to have been compliance with clause C4 of part V of Chapter 1 of the Public Service Regulations of 2001, in that the post was regraded in accordance with the job weight and the relevant collective agreements. However, the Commissioner found that clause C8 of part V of Chapter 1 of the Public Service Regulations of 2001 was not complied with, because the employees were not transferred to another position in the same salary range and the employees’ positions were not redesigned to equate with the new job weight of their positions.

[18]. The Commissioner found that the main aim of clause 3.6.2.2 of the Collective Agreement was to provide employees who met the minimum performance requirements with a means to grade-progress, based mainly on their continuous service at a specified salary level. She relied on clause 3.6.2.11 of the Collective Agreement, in this regard, which provides that employees who meet the minimum performance requirements shall grade-progress after 15 years. The Commissioner was of the view that job evaluation was a tool to extend the qualifying criterion of length of continuous service, which the parties could not have intended when entering into the Collective Agreement.

GROUNDS OF REVIEW:

[19]. Unsatisfied with the Commissioner’s outcome, the applicants have approached this Court to have the Commissioner’s decision set aside on review.

[20]. In the founding affidavit, the applicants contend that the Commissioner failed to correctly interpret the meaning of clause 3.6.2.2 of the Collective Agreement, read with the relevant provisions of Circular 2 of 2009. The applicants further contend that the Commissioner failed to appreciate that the remuneration of the employees on salary level 6 did not mean that they occupied positions that were graded on salary level 6. In this regard the Commissioner should have found that the grading of the employees’ positions at salary level 5 remained the correct grading, which prohibited them from progressing to a salary level that was two levels above the grading of their positions.

[21]. The employees do not dispute that their occupation of Administration Clerk (Production) was, in 2012, determined through a job evaluation process to be a grade 5 position.

ANALYSIS:

[22]. This being an interpretation dispute, it is important to be reminded of the following dicta of the Supreme Court of Appeal in Endumeni Municipality: [3]

“[18] … Interpretation is the process of attributing meaning to the words used in a document, be it legislation, some other statutory instrument, or contract, having regard to the context provided by reading the particular provision or provisions in the light of the document as a whole and the circumstances attendant upon its coming into existence. Whatever the nature of the document, consideration must be given to the language used in the light of the ordinary rules of grammar and syntax; the context in which the provision appears; the apparent purpose to which it is directed and the material known to those responsible for its production. Where more than one meaning is possible each possibility must be weighed in the light of all these factors. The process is objective not subjective. A sensible meaning is to be preferred to one that leads to insensible or unbusinesslike results or undermines the apparent purpose of the document. Judges must be alert to, and guard against, the temptation to substitute what they regard as reasonable, sensible or businesslike for the words actually used. To do so in regard to a statute or statutory instrument is to cross the divide between interpretation and legislation. In a contractual context it is to make a contract for the parties other than the one they in fact made. The ‘inevitable point of departure is the language of the provision itself’, read in context and having regard to the purpose of the provision and the background to the preparation and production of the document” (my emphasis).

[23]. Further, it is important to re-state the following principles of interpreting collective agreements, confirmed by the Labour Appeal Court in Western Cape Department of Health: [4]

“[22] In interpreting the collective agreement the arbitrator is required to consider the aim, purpose and all the terms of the collective

agreement. Furthermore, the arbitrator is enjoined to bear in mind that a collective agreement is not like an ordinary contract. Since the arbitrator derives his/her powers from the Act he/she must at all times take into account the primary objects of the Act. The primary objects of the Act are better served by an approach that is practical to the interpretation and application of such agreements, namely, to promote the effective, fair and speedy resolution of labour disputes. In addition, it is expected of the arbitrator to adopt an interpretation and application that is fair to the parties” (my emphasis).

[24]. A decision-maker’s sense of fairness cannot be used as a means of compelling parties to a collective agreement into an agreement other than the one they concluded.

[25]. Clearly clause 3.6.2.2 of the Collective Agreement cannot be read in isolation but must be read in the light of the Collective Agreement as a whole.

[26]. The Commissioner’s award does not deny that the employees’ occupation was graded at salary level 5 based on a job evaluation process in 2012. Further, the Commissioner’s award pays no attention to the fact that the grading and job evaluation process was meant to address the remuneration disparities that were caused by the abolished Rank and Leg Promotion Dispensation.

[27]. The Commissioner’s award incorrectly downplays the importance of the grading and job evaluation process. The words used in clauses 3.5 and 3.6.2.5 to 3.6.2.8 of the Collective Agreement make it clear that grading and job evaluation are one of the principles that govern grade progression. Rewarding employees for their length of service is not the only purpose of the Collective Agreement. A reference to job evaluation in these provisions of the Collective Agreement necessarily means the purpose of job evaluation is imported into the Collective Agreement, which purpose is to ensure that work of equal value is remunerated equally as set out in the provisions of the Public Service Regulations of 2001 quoted above. The Commissioner did not at all consider this important principle of equal pay for work of equal value espoused by the requirement of job evaluation in the Collective Agreement. This was a material error on the part of the Commissioner in her interpretation of the Collective Agreement, which resulted in unfairness to the employer party to the Collective Agreement and amounted to unreasonableness in the performance of her statutory function.

[28]. Although clause 3.6.2.2 of the Collective Agreement refers to an employee on a salary level and does not expressly refer to job grading and job evaluation, clauses 3.6.2.5 to 3.6.2.8 of the Collective Agreement clarify that an employee can only grade-progress from the graded position he or she occupies to the next salary level. Clauses 7.6.1 and 7.9 of Circular 2 of 2009, which must be taken into account when interpreting the Collective Agreement, emphasise the same point. The Commissioner’s failure to consider these clauses was a material misdirection that rendered her award unreasonable.

[29]. The Commissioner’s attempt to side-line the requirements of grading and job evaluation constitute making a new contract for the parties other than the one they concluded, and is inconsistent with the following findings of this Court in Tabane: [5]

“[23] … I agree with the submissions made on behalf of the Department that clause 3.5 of the Resolution should be read conjunctively with clause 3.6, which set out the salary structure of the model. Accordingly, the fact that an employee has served 12 cumulative years in a grade is not a basis for an automatic grade progression, as any grade progression is based on a variety of factors, including job evaluation, recognition of performance and obviously the cumulative 12 years.

[29] To the extent that it was submitted on behalf of the Applicant that these circulars were in conflict with the provisions of the Resolution, and further to the extent that the Commissioner had regard to them, it is important to highlight that clause 7. 6 of circular 2 of 2009 provides that the grade progression model is introduced based on the principle that posts are to be graded based on outcome of the job evaluation unless indicated otherwise, and that the grade determined with job evaluation formed the basis from which employees could be grade progressed. This provision cannot by all accounts be in conflict with the provisions of clause 3.5 of the Resolution, which also outlines the principles applicable to grade progression, including that of an outcome of job evaluation. As already indicated however, the Commissioner paid scant regard to these principles or requirements” (my emphasis).

[30]. In a nutshell, the Collective Agreement read with Circular 2 of 2009 does not allow the employees to be grade-progressed to salary level 7 because their positions are not graded at salary level 6 but are graded at salary level 5. The fact that they are remunerated on salary level 6 whilst occupying positions that are graded on a lower salary level is an anomaly the Collective Agreement meant to rectify. Thus, the Commissioner should not have granted the employees a grade-progression to salary level 7 and her decision to do so was based on a material misinterpretation of the Collective Agreement. This Court recently reached a similar conclusion in The Department of Health: KwaZulu-Natal. [6]

[31]. As this was a grade-progression dispute and not a grading dispute, the Commissioner’s reliance on Part V of Chapter 1 of the Public Service Regulations of 2001 was clearly misplaced.

COSTS:

[32]. The general approach in this Court is to not award costs. I see no compelling reason to depart from that approach in this matter.

Order

1. The arbitration award of the second respondent dated 10 April 2017 under case number PSCB226-16/17, is reviewed and set aside.

2. The arbitration award is replaced by an order in the following terms:

“The applicants’ referral is dismissed”.

3. There is no order as to costs.

V.G. Mkwibiso AJ

Acting Judge of the Labour Court of South Africa

APPEARANCES

For the Applicant:

Adv. S. Dlali

Instructed by

the State Attorney, North-West

For the 3rd to 6th Respondents: Adv. M. Ramaili SC

Instructed by Ntsamai

Attorneys

[1] Arends and Others v South African Local Government Bargaining Council and Others (2015) 36 ILJ 1200 (LAC), paragraph [11].

[2] The Public Service Regulations, 2016, which are currently in place, contain provisions that are similar to the Public Service

Regulations, 2001.

[3] Natal Joint Municipal Pension Fund v Endumeni Municipality 2012 (4) SA 593 (SCA); [2012] 2 All SA 262 (SCA), paragraph [18].

[4] Western Cape Department of Health v van Wyk and Others (2014) 35 ILJ 3078 (LAC); [2014] 11 BLLR 1122 (LAC), paragraph [22].

[5] Tabane v Vlieger-Seynhaeve N.O and Others (C27/15) [2017] ZALCCT 43 (28 September 2017), paragraphs [23] and [29].

[6] The Department of Health: KwaZulu-Natal and Another v Commissioner V Ngcengeni and Others (D967/2019) [2022] ZALCD 36 (15 August 2022).