Solidarity obo Bouwer v SA Tourism and Others (JR687/20) [2022] ZALCJHB 58 (15 March 2022)

IN THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG

Not Reportable

Case no: JR687/20

In the matter between:

SOLIDARITY obo THOMAS IGNATIUS BOUWER

Applicant

and

SA TOURISM

First Respondent

COMMISSION FOR CONCILIATION,

MEDIATION AND ARBITRATION

Second Respondent

ERIC MYHILL N.O

Third Respondent

Heard: 17 February 2022

Delivered: 15 March 2022

JUDGMENT

DEANE, AJ

Introduction

[1] This is an application to review and set aside an arbitration award (Award) issued under the auspices of the second respondent (the Commission for Conciliation, Mediation and Arbitration or CCMA) on 30 March 2020 by the third respondent (Commissioner), under case number GAJB17379-19; and that the matter be referred back to the CCMA to be set down for arbitration de novo before another commissioner.

[2] The arbitration proceedings were referred to the CCMA regarding an unfair labour practice in terms of section 186(2)(a) of the Labour Relations Act[1] (LRA) in respect of a post-retirement medical aid benefit.

[3] The Applicant specifically in its review application requests that the relief granted by the Commissioner be substituted with relief in terms of which it is found that the First Respondent (SA Tourism or SAT) committed an unfair labour practice and that the Applicant is entitled to the post-retirement medical aid benefit.

Material Facts

[4] The record and documents before this Court are quite extensive and detailed. To not burden this judgment, not every detail will be repeated herein, save to refer to that which is strictly relevant.

[5] The facts set out below are common cause between the parties.

[6] The Applicant was employed as a chief financial officer (CFO) by SA Tourism on a fixed-term contract from 17 October 2013 until 30 September 2016.

[7] SAT is a public entity in terms of Schedule 3 the Public Finance Management Act[2] (PFMA).[3]

[8] SAT is managed by the South African Tourism Board (Board) that was established by the Minister of Tourism in terms of section 2 of the now since repealed Tourism Act[4].

[9] The Applicant’s employment and remuneration were determined by the Board and approved by the Minister of Tourism in concurrence with the Minister of Finance.[5]

[10] The Applicant was 56 years old at the commencement of his employment.

[11] It was a material term of the Applicant’s employment contract that he had to be a member of a medical aid scheme.[6]

[12] The founding affidavit relates in detail the Applicant’s roles and responsibilities[7] and will not be repeated herein save to iterate that the Applicant was responsible:

‘(12.1) To implement the provisions of the PFMA and the Tourism Act of 1993 and to alert SA Tourism of any legislative non-compliance.[8]

(12.2) To ensure that in cases where there is non-compliance, he draws this to the attention of SAT in order to ensure compliance.[9]

(12.3) To ensure input into policies including but not limited to the Guaranteed Remuneration and Performance Incentive Policy, General Human Resources Policy, Financial Policies and Supply Chain Policy.[10]

(12.4) To oversee the budget and auditing processes, to give financial advice to the employer and to compile the annual financial statements of SA Tourism’.[11]

[13] The Applicant’s contract was extended on three occasions, and the last fixed-term contract ended on 31 May 2019 when the Applicant left the employ of SA Tourism.

[14] Prior to the Applicant’s employment and on 1 July 2012, the Board approved the Guaranteed Remuneration and Performance Incentive Policy, 2012 (2012 Policy) with the concurrence of the Minister of Tourism.[12]

[15] The 2012 Policy was in operation at the commencement of the Applicant’s employment at SA Tourism.[13]

[16] The contents of the 2012 Policy at clause 15.3.2 provides as follows:

‘The employer will contribute two-thirds of the total medical aid contribution of the employee upon retirement age, disability or death before retirement, provided the employee was contributing to the medical aid prior to retirement, disability or death, and in the service of SA Tourism for a period of [5] five years or more.’

Clause 15.3.3 reads:

‘Retirement age refers to 60 years of age irrespective of gender. At SAT’s [South African Tourism’s] discretion, this can be extended provided that it is approved by the Board.’

[17] On 29 May 2015, the Board approved the Guaranteed Remuneration and Performance Incentive Policy, 2015 (2015 Policy).

[18] Upon the termination of the services of the Applicant, SAT relied on the 2015 Policy and did not pay the Applicant the post-retirement benefit as provided for in the 2012 Policy.

[19] The Applicant subsequently referred an unfair labour practice in terms of section 186(2)(a) of the LRA to the CCMA.

[20] The matter was set down for arbitration on 24 January 2020 and the issue in dispute before the Commissioner was whether the Applicant was entitled to the benefit of SAT contributing two-thirds medical aid payment post the Applicant leaving the employ of SAT on 31 May 2020.

The Award

[21] The Award is quite extensive and detailed amounting to some 30 pages in length and since it is on record, only that which is strictly relevant to this application will be referred to.

[22] In summary, the Commissioner in his award concluded that:

‘Bouwer was thus not entitled to the medical aid benefit he is claiming because the retirement age was 65 when he retired on 31 May 2019 when he had not yet reached the age of 62.’

Grounds for Review

[23] Various grounds for review are submitted and is summarised as that the Commissioner:

23.1 committed misconduct in relation to the duties of the Commissioner as an arbitrator;

23.2 committed a gross irregularity in that he misconstrued evidence and failed to properly apply his mind to

material facts; and

23.3 exceeded his powers.

[24] Therefore it is submitted by the Applicant that the Award issued by the Commissioner, in this instance, constituted a defect as contemplated by sections 145 and 158 of the LRA.

The Test for Review

[25] The decision on the merits of an unfair labour practice dispute stands to be reviewed in the light of whether they were decisions that no reasonable arbitrator could reach and the grounds listed in section 145(2). The test for review which has been authoritatively stated in Sidumo and Another v Rustenburg Platinum Mines Ltd and Others (Sidumo)[14] was reiterated in Herholdt v Nedbank Limited[15] (Herholdt) as follows:

‘In summary, the position regarding the review of CCMA awards is this: A review of a CCMA award is permissible if the defect in the proceedings falls in one of the grounds in section 145(2)(a) of the LRA. For a defect in the conduct of the proceedings to amount to gross irregularity as contemplated by section 145(2)(a)(ii), the Arbitrator must have misconceived the nature of the inquiry or arrived at an unreasonable result. A result will only be unreasonable if it is one that a reasonable Arbitrator could not reach on all the material that was before the Arbitrator. Material errors of fact, as well as the weight and relevance to be attached to particular fact, are not in and of themselves sufficient for an award to be set aside, but are only of any consequence if their effect is to render the outcome unreasonable.’[16]

[26] The test for review is therefore whether the decision reached by the commissioner is one that a reasonable decision-maker could reach in that whether or not the arbitrator’s conclusion fell within a range of decisions that a reasonable decision-maker could make.[17] The reasonableness test is still aptly described in the pre-Sidumo case of Computicket v Marcus NO and Others[18] where it was held that “the question I have to decide is not whether [the arbitrator’s] conclusion was wrong but whether ... it was unjustifiable and unreasonable”.

[27] The test that this Court must apply in deciding whether the arbitrator’s decision is reviewable is whether the conclusion reached by the arbitrator was so unreasonable that no other arbitrator could have come to the same conclusion.

[28] It is on this basis that I proceed with the merits of the application below.

Analysis

The Applicant’s Case

[29] As already mentioned, the Record is quite extensive, and it will serve no purpose to repeat each and every averment and submission made during the arbitration proceedings and by the witnesses. Therefore only that which is strictly relevant for this judgment will be referred to. [30] The crux of this matter is that the Applicant claims that he was entitled to the benefit of SAT contributing to two-thirds of his medical aid post-retirement (benefit). The entitlement of this benefit was purported to be derived by the Applicant from clause 15.3 of SAT’s 2012 Policy that provided for employees who had (a) been employed for more than five years with the employer; (b) contributed to a medical

aid fund and (c) who had reached the age of 60 years; to be entitled to the post-retirement medical aid benefit. This benefit was

available to all employees, irrespective of their type of employment contract, provided that the referred requirements were met.

[31] SAT’s policy must be determined by the Board and such determination must be approved by the Minister of Tourism acting with the concurrence of the Minister of Finance.

[32] The Applicant submits that the process entails that the Board should approve a policy which should then be submitted to the Minister of Tourism and Minister of Finance for approval and concurrence as aforesaid before the policy can be implemented.

[33] Regarding the 2015 Policy, the Board approved the 2015 Policy but the same was not sent to the Minister of Tourism or the Minister of Finance for approval and concurrence in accordance with the Tourism Act.

[35] It is the Applicant’s submission that the 2012 Policy, which indicates the retirement age of 60 years, was the applicable policy during his retirement. SAT relies on the 2015 Policy, which determines that the retirement age is 65.

[36] The Applicant was represented by a union official, Marisa Jansen Van Rensburg (Rensburg). Rensburg argued that the Respondents decision not to award the Applicant with benefits in terms of the 2012 Policy, was irrational, grossly unfair and unreasonable and mala fide in the absence of a bona fide explanation. She further argues that if the totality of the evidence is taken into account and considered, it is clear that the Applicant discharged the onus of proving, on a balance of probabilities, that SAT committed an unfair labour practice and that he is entitled to the relief fought.[19]

[37] Dirk van Schalkwyk (Dirk) testified on behalf of the applicant. Dirk had been employed by the Department of Tourism from about 1995 to November 2015 when he retired. He was chief operating officer and Acting Director-General until the Director-General was appointed. He re-iterated much of the testimony of the Applicant regarding the 2012 and 2015 Policies.

The Respondent’s Case

[38] In summary, it is SATs case that the Applicant was not entitled to and/or did not qualify for this benefit on 31 May 2019 or even earlier. The reason is that the 2012 Policy was replaced by the 2015 Policy which extended the retirement age of employees from 60 to 65 years. This extension occurred on 23 May 2014 when the Minister of Tourism, in concurrence with the Minister of Finance approved the 2015 Policy. Alternatively, the 2015 Policy was approved by SAT on 29 May 2015.

[39] One of the witnesses called to testify on behalf of SAT was Thapedi Mofokeng (Mofokeng), the GM: Human Capital. He submitted that SAT’s decision not to grant the Applicant the benefit sought is not unfair in that his fixed-term contract of employment expired through the effluxion of time prior to him reaching retirement age as per the applicable policy.

[40] He further submitted that as part of the key duties of the Applicant, if it were that the 2015 Policy was invalid because it was not approved by the Minister of Tourism with the concurrence of the Minister of Finance then the Applicant would have failed in his fiduciary duties as a senior manager of SAT to point this out to the Board of SAT. Mofokeng submitted that it is unlikely that the Applicant would have been so negligent.

[41] Mofokeng went on to submit that the Applicant enjoyed the benefits of the amended and approved 2015 Policy.

[42] In the Award, the Commissioner correctly sets out the common cause factors and background to the issue.

[43] He then proceeds to identify the issue to be decided as “[w]hether Bouwer is entitled to the benefit of the respondent contributing two thirds of his medical aid payment post him having left the employ of the respondent on 31 May 2019”.[20]

[44] The Commissioner then sets out the Applicant’s case in detail and summarises the witness’s testimonies and proceeds to do the same with the Respondents/SAT’s evidence. Having had regard to the transcript and the Award, the summary in the Award is a clear and accurate reflection of the testimony and evidence led at the arbitration.

[45] It is clear from a reading of the transcript and Award that the date when the 2012 Policy came into existence as well as when the 2015 Policy was approved by the Minister of Tourism, with the concurrence of the Minister of Finance remain issues in dispute between the parties.

[46] Indeed in the Award the Commissioner, when taking into account the different witnesses testimonies on the implementation of the 2015 Policy,[21] proceeds to conclude that “it is thus difficult to determine with any certainty whether the 2012 Policy or the 2015 Policy was the valid and applicable policy at the time when Bouwer left the employ of the Respondent on 31 May 2019”.[22] He reaches this conclusion only after evaluating the evidence in front of him as per the following statements:

‘Mofokeng insists that this was changed to 65 because the 2015 Policy is valid and it was approved by the Minister of Tourism with the concurrence of the Minister of Finance. He submitted that the respondent provided a coherent explanation for the delay between the date on which the Minister of Tourism finally approved the remuneration policy on 23 May 2014 and 29 May 2015 which was the date when the Chairman of the Board approved the policy on pp.49-65 of A.’[23]

The Commissioner then evaluates the submission of Rensburg and writes:

“Mrs Van Rensburg, on the other hand, argued that the minutes of the REMCO meeting held on 28 May 2015 for approval of the 2015 policy confirms that they were still proposed changes to be considered by the Board in respect of the 2015 Policy. As a result the approvals issued during 2014 could not apply to the 2015 Policy which was only approved by the Board of the respondent on 29 May 2015. It was therefore improbable, if not impossible that the approval letters issued during 2014 by the Ministers of Tourism and Finance applied to the 2015 policy.”[24]

[47] The Commissioner further has regard to the to the record and to the Minister of Tourism’s letter dated 23 May 2014 that was addressed to the Minister of Finance and which reads “the process of finalising this new policy was an extremely comprehensive and often painful process and was consulted widely…”[25] The Commissioner goes on to state that he agrees with Rensburg on the one hand that it is improbable that the ministerial approval provided in 2014 could be applicable to a policy approved by the Board on 29 May 2015, but on the other hand, the Commissioner concludes that Bouwer benefitted from the 2015 Policy after it was approved by the Board on 29 May 2015. The Commissioner found that it was this 2015 Policy that in fact directed payroll and was applied by the Head of Internal Audit. It was found that the Applicant’s job level increased from F1 to F2 and the change in job level also translated to an increase in the Applicant’s salary.[26]

[48] Radikwena Phora (Phora), Head of Internal Audit from January 2017 further testified at the arbitration proceedings that the Applicant had been paid his bonus and salary according to the 2015 Policy. Phora further submits that the salary scales are evident from the 2015 Policy and not the 2012 Policy.[27] This was also confirmed by Mofokeng who further submitted that this discrepancy brings the credibility of the Applicant’s version into question.

[49] It is clear from the evidence and the Transcript that there were indeed differing submissions made but despite averments to the contrary on behalf of the Applicant, the Applicant did indeed benefit under the 2015 Policy in terms of the salary scales and payment of bonuses.

[50] Phora also testified that if the 2015 Policy was not approved, then the Auditor-General would have made a finding of non-compliance on SAT’s monthly payroll, including the annual bonuses that the employees, including the Applicant, had received. Indeed no such finding of non-compliance was noted by the Auditor-General in this regard.

[51] The Commissioner went on to find that “Bouwer failed to discharge the onus on him to prove that he was entitled to the benefit that he claimed”.[28] It is trite that the onus to establish the existence of a decision that constitutes an unfair labour practice rests on the Applicant.[29]

[52] In this case, the Applicant had to show that he was entitled to the benefit claimed.

[53] The conclusion on the part of the Commissioner in terms of the discharge of onus was reached after having regards to the Applicant’s case that although the 2015 Policy was approved by the Board on 29 May 2015, the Applicant submits that there is no evidence that it was approved by the Minister of Tourism with the concurrence of the

Minister of Finance and argues further that consequently, the 2012 Policy is the valid policy in terms of the Tourism Act. The

Commissioner found that “……if Bouwer is correct [herein] it does not assist him because the Board of the respondent did not require Ministerial approval to extend the normal age of retirement.”[30]

[54] In reaching such a conclusion the Commissioner specifically refers to the relevant clauses of the Policies and states that:

‘The second sentence of clause 15.3.3 in both the 2012 and 2015 policies states:

“At SAT’s discretion, this can be extended provided that it is approved by the Board………”’

And that:

‘This refers to the “retirement age” in the first sentence.’[31

[55] The Commissioner then concludes that “the respondent exercised its discretion in 2015 given to it by the approved policy of 2012 to extend the retirement age from 60 to 65. This was approved by the Board on 29 May 2015. No ministerial approval was thus required for the exercise of this discretion.”[32]

[56] It is clear that it was this exercise of discretion that was given to the Board which allowed SAT to extend the retirement from 60 to 65. Based on these discretionary powers, the Commissioner concluded that “Bouwer was thus not entitled to the medical aid benefit he is claiming because the retirement age was 65 when he retired on 31 May 2019…”[33]

[57] In addition, and in pursuance of its’ discretionary power to change the retirement age, it is common cause that on 28 May 2015, the Applicant attended a remuneration committee meeting of SAT where it was proposed that the Board must adopt the retirement age of 65 years as its normal retirement age, instead of 60 years.[34] The Applicant did not raise any objection to this change in the retirement age proposal.[35]

[58] By the Applicant’s own account, as CFO he would have raised any non-compliance to any policies or laws to his employer, SAT. This is also part of his duty as CFO.[36]

[59] From the job description of the Applicant and as part of his duties and responsibilities, the Applicant was aware of SAT’s change in retirement age when he attended various meetings where he represented SAT’s interests.[37] One such meeting was when the Applicant attended an employer’s retirement fund meeting held by the Board on 12 September 2016, where the Board noted, in the presence of the Applicant, that the retirement age changed from 60 years to 65 years. The Board then noted and approved to amend their retirement rules to allow for the change in the retirement age from 60 to 65 years.[38] Once again there was no objection or concerns raised by the Applicant at that meeting.

[60] Indeed, it was the testimony of Mofokeng that it is unlikely that the Applicant would have been negligent in his fiduciary duties in failing to point out that the 2015 Policy was indeed invalid and that it was, therefore, more probable than not that the 2015 Policy was valid and applicable at the time of the Applicant’s departure with the company.

[61] The Applicant also attended SAT’s pension fund meeting with Old Mutual where he participated in the meeting as the employer trustee.[39] The Applicant confirmed during the arbitration proceedings that as the CFO he would have drawn the attention of SAT, as his employer, to specific sections of relevant Treasury instructions or legislation or policies that SAT was not compliant with in order to ensure

compliance. However, he did not do this with reference to the 2015 Policy.[40]

[62] In addition, Mofokeng led evidence that the Applicant was one of the approvers of the 2015 Policy and that his name appears on the document as an approver.

[63] The Applicant further admitted during the arbitration that the Board had the powers to extend the retirement age.[41]

[64] It is therefore clear that the probabilities favour the conclusion reached by the Commissioner that the Board did indeed have the power to extend the retirement age to 65.

[65] Faced with this evidence I cannot conclude that the Commissioner did not understand the evidence and the question of law before him. He was faced with differing points of view and he applied his mind to the matter and reached a conclusion that is not unrelated to the evidence before him. In this instance, the conclusions reached are linked to the evidence presented. There was no misdirection of facts and evidence by the Commissioner since the Commissioner has the duty

to exercise a discretion and to arrive at a conclusion based on the factors before him. Herein, the Commissioner did that and exercised

his discretion in favour of SAT, based on the evidence before him.

[66] If one has regards to the applicable legal principles I cannot accept that the Commissioner’s decision fell outside of the band of decisions to which reasonable arbitrators could reach. In Fidelity Cash Management Service v CCMA and Others[42] Zondo JP applied the Sidumo test thus:

‘The test enunciated by the Constitutional Court in Sidumo for determining whether a decision or arbitration award of a CCMA commissioner is reasonable is a stringent test that will ensure that such awards are not lightly interfered with. It will ensure that more than before, and in line with the objectives of the Act and particularly the primary objective of the effective resolution of disputes, awards of the CCMA will be final and binding as long as it cannot be said that such a decision or award is one that a reasonable decision-maker could not have made in the circumstances of the case. It will not be often that an arbitration award is found to be one which a reasonable decision-maker could not have made but I also do not think that it will be rare that an arbitration award of the CCMA is found to be one that a reasonable decision -maker could not, in all the circumstances, have reached.’

[67] In accordance thereof; in my view, and taking into account the factual evidence, there is simply no basis to interfere with the Commissioner’s findings. The reasons provided by the Commissioner are, in my view, correctly and certainly substantiated by the transcript and record.

[68] Furthermore, the Commissioner’s Award passes the test for reasonableness set out in Herholdt in that it cannot be said to be entirely disconnected with, or unsupported by the evidence. The evidence led at the arbitration

clearly bears out the finding of the Commissioner that the Applicant was not entitled to the medical benefit that he was claiming and that he had failed to discharge the onus on him to prove that he was entitled to the benefit that he claimed.

[69] With regard to costs, taking into account the requirements of law and equity, I believe that this is a matter in which there should be no order as to costs.

[70] In the premises, the following order is made:

Order

1. The Review Application is dismissed.

2. There is no order as to costs.

____________________

T. Deane

Acting Judge of the Labour Court of South Africa

Appearances:

For the Applicant: N. Ras

Instructed by: Union Official

For the Respondent: Adv. L Adams

Instructed by: RW Attorneys

[1] 66 of 1995 as amended.

[2] Act No.1 of 1999, as amended.

[3] Para 14 of the answering affidavit.

[4] Act No. 72 of 1993, section 9 of the Tourism Act No. 3 of 2014 provides that the South African Tourism Board shall continue to

exist as a juristic person despite the repeal of the Act by section 62.

[5] Section 12 of the repealed Tourism Act. See also section 27 of the Tourism Act No. 3 of 2014.

[6] Clause 3 of the the Applicant’s employment contract.

[7] Founding Affidavit, pgs. 10-11.

[8] Para. 23 of the transcript.

[9] Applicant’s heads of argument, p. 5 at para 2.3.4.

[10] Applicant’s heads of argument, p. 5 at para. 2.3.5.

[11] Answering affidavit at para. 57.

[12] Answering affidavit at para. 12.

[13] Answering affidavit at para. 17.

[14] (2007) 28 ILJ 2405 (CC).

[15] 2013 (6) SA 224 (SCA).

[16] Ibid at para. 25.

[17] Sidumo at paras 118-119.

[18] (1999) 20 ILJ 342 (LC) at 346D.

[19] Index, p. 28 at para. 109.

[20] Index, p. 8 at para. 9.

[21] Index, p. 34 at paras 145-146.

[22] Index, p. 35 at para. 150.

[23] Index, p. 34 at para. 145.

[24] Index, pgs. 34-35 at para. 146.

[25] Record, p.108.

[26] Record, p. 71.

[27] Index, p. 22.

[28] Index p. 36 at para. 158.

[29] See: City of Cape Town v SA Municipal Workers Union on behalf of Sylvester and Others (2013) 34 ILJ 1156 (LC) at para. 19 and Department of Justice v Commission for Conciliation, Mediation and Arbitration and Others (2004) 25 ILJ 248 (LAC) at para. 73.

[30] Index, p. 36 at para. 153.

[31] Index, p. 36 at paras 154-155.

[32] Index, p. 36 at para. 156.

[33] Index, p. 36 at para. 157.

[34] Record, pgs. 314, 317 and 319.

[35] Record, p. 32.

[36] Applicants heads of argument, p. 5 at para. 2.3.4.

[37] Record, pgs. 337, 338 and 346.

[38] Ibid.

[39] Record, pgs. 371 and 375.

[40] Transcript, p. 56.

[41] Transcript, g. 76.

[42] [ 2008] 3 BLLR 197 (LAC) at para.100.