Polokwane Municipality v South African Local Government Bargaining Council and Others (JR 1724/2020) [2022] ZALCJHB 197 (29 July 2022)

THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG

Not Reportable

Case No: JR 1724/2020

In the matter between:

POLOKWANE MUNICIPALITY

APPLICANT

and

SOUTH AFRICAN LOCAL GOVERNMENT

BARGAINING COUNCIL

1ST RESPONDENT

JOSEPH MPHAPHULI

2ND RESPONDENT

IMATU obo MASHABANE DANIEL MALESA

3RD RESPONDENT

Heard: 28 July 2022

Delivered: 29 July 2022

(In view of the measures implemented as a result of the Covid 19 pandemic, this judgement was handed down electronically by circulation to the parties’ representatives, by email. The date on which the judgment is delivered is deemed to be 29 July 2022.)

JUDGMENT

VAN NIEKERK, J

[1] The applicant seeks to review and set aside an arbitration award issued by the second respondent (the arbitrator). In his award, the arbitrator found that the applicant had committed an unfair labour practice when it refused to meet travel allowance claims submitted by the third respondent for travel outside of the area of jurisdiction of the first applicant.

[2] The material facts are not in dispute. The third respondent (the employee) was employed by the Aganang Municipality. The employee’s letter of appointment records what is described as his conditions of service, including hours and place of work, remuneration, leave and the like. He was offered employment by the applicant on 13 September 2016 on terms that provided that ‘conditions of service and benefits shall remain unchanged’. It is not in dispute that while he was employed by the Aganang Municipality, that the municipality had a policy in terms of which employees travelling inside and outside the jurisdiction of the municipality for business purposes received a travelling allowance at the prescribed rate. It is also not in dispute that the applicant’s policy differs, to the extent that employees are entitled to receive a travelling allowance only for travel outside of the applicant’s jurisdiction.

[3] In his award, the arbitrator concluded that the employee was entitled to reimbursement for official travel as contained in the Aganang Municipality’s policy and that the applicant was obliged to reimburse him for all expenses incurred while travelling for business purposes.

[4] The test to be applied on review, given the nature of the dispute between the parties, is one of correctness. In other words, the arbitrator was required to determine whether the applicant had committed an unfair labour practice in the form of unfair conduct by the applicant in relation to the provision of a benefit. The applicant’s case in essence was that the payment of a car allowance in terms of its policy did not constitute a benefit. The answer to that question is either correct or incorrect– the reasonableness threshold does not apply.

[5] In general terms, a ‘benefit’ must arise ex contractu or ex lege. The courts have always defined ‘benefit’ narrowly, so as to avoid the consequence of a limitation on the right to strike in support of improved conditions of employment. In Protekon (Pty) Ltd v CCMA & others [2005] 7 BLLR 703 (LC), this court observed that in terms of many employee benefit schemes, employers enjoy a range of discretionary powers in terms of their policies and rules, and held that the primary purpose of the unfair labour practice protection in relation to employee

benefits was to permit scrutiny of employer discretion. That conclusion was upheld in Apollo Tyres South Africa (Pty) Ltd v Commission for Conciliation Mediation and Arbitration [2013] 5 BLLR 434 (LAC), where the Labour Appeal Court held that a benefit could arise from a contract of employment, or a policy or practice some advantage or privilege arising from a policy or practice where the employer is afforded a discretion in relation to the subject of that policy or procedure (at paragraph 50). What unfairness in this context requires is some failure to meet an objective standard and may be taken to include arbitrary, capricious or inconsistent conduct (at paragraph 52).

[6] In the present instance, the subject of a travelling allowance is not the subject of any contractual term. Both municipalities regulate the payment of the allowance in terms of a policy. The difference in the policies, as I have indicated, is that the Aganang policy permits payment of a travel allowance for business travel both inside and outside of the municipal boundary; in the case of the applicant, payment is limited to travel outside municipal boundaries.

[7] I am not persuaded that the provisions of the respective policies on travelling allowances constitute a benefit for the purposes of section 186 (2)(a) of the LRA. The policies provide for the reimbursement of costs incurred while travelling on the employer’s behalf, rather than a ‘benefit’. Further, there is no exercise of any discretion by the employer in this instance – the terms of the policy are fixed and apply to all employees covered by it. In any event, even if the terms on which a travelling allowance is paid were to constitute a benefit, on the evidence before the arbitrator, the applicant’s conduct cannot be said to have been capricious, arbitrary or inconsistent. As the applicant points out, to allow the employee to claim reimbursements for travel on a different basis to that applicable to other employees would generate inconsistency and dissatisfaction in its workplace.

[8] For the above reasons, in my view, the arbitrator’s award stands to be reviewed and set aside. There is no purpose in remitting the matter for rehearing – the court is in as good a position as a commissioner to make a ruling. Finally, for the purposes of section 162, the requirements of the law and fairness dictate that each party bears its own costs.

I make the following order:

1. The arbitration award issued by the second respondent on 27 August 2020 is reviewed and set aside.

2. The award is substituted by the following:

The referral is dismissed’.

André van Niekerk

Judge of the Labour Court of South Africa

Appearances:

For the Applicant:

LC Nemukula

Instructed by:

Kgatla Inc.

For the respondents:

Union official