This article was written by Shoneez Gani , a Candidate Attorney at Norton Rose Fulbright South Africa
Section 186(2)(a) of the Labour Relations Act (LRA) states that “unfair labour practice” means any unfair act or omission that arises between an employer and an employee involving – (a) 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.
Over the years, there have been different interpretations as to what arbitrators consider a “benefit” and whether or not the Commission for Conciliation, Mediation and Arbitration (CCMA) has jurisdiction to entertain the matter. For example, in South African Post Office Ltd v CCMA and others (2012) 33 ILJ 2970 (LC) the court noted that while there have been cases which held that an acting allowance does not constitute a “benefit”. The court also referred to case law which states that an acting allowance would constitute a benefit if the employees show that they had a right arising under contract or in law. Furthermore, in Apollo Tyres SA (Pty) Ltd v CCMA and others (2013) 34 ILJ 1120 (LAC) the court noted that the distinction between remuneration and benefits was “… not laudable but artificial and unsustainable”. It was argued that the definition of remuneration in the LRA was wide enough to cover wages, salaries and most if not all wages and benefits, and that many such benefits were an essential part of employment contracts and constituted an integral part of the employment package offered to employees. Lastly, in NUMSA obo Jooste / Atlantis Foundries (Pty) Ltd (2014) 35 ILJ 829 (BCA) the arbitrator ruled that the CCMA did have jurisdiction to deal with a case where the practice of awarding the applicant an acting allowance when he performed work at a higher grade afforded an “advantage”. The dispute to be determined was therefore only whether or not the employer’s decision to withdraw the allowance was fair. The arbitrator relied on case law that a “benefit” could include an advantage or privilege to which the employee was entitled as a right or granted in terms of a policy or practice subject to the employer’s discretion.
More recently in 2016, in Independent Municipal & Allied Trade Union obo Nzimande / Johannesburg Road Agency (JRA) (2016) 25 CCMA 6.7.8, the case concerned an employee who acted as an assistant manager and was paid an acting allowance of 12% of her ordinary salary. She occupied that position for approximately 5 months, but was only paid for the first 3 months. The employee alleged an unfair labour practice, and the employer claimed that the CCMA did not have jurisdiction to entertain the matter, as the acting allowance did not constitute a “benefit”. The Commissioner held (in accordance with the South African Post Service and Apollo cases above) that since the claim arose in contract, it fell within the scope of the “benefits” and the distinction between “benefits” and “remuneration” is an artificial and rigid distinction. The CCMA, therefore, had jurisdiction to hear the matter. On the facts, it was shown that the employer’s policy only allowed for a 3 month acting allowance. Any acting allowance pay beyond that period had to be expressly approved by the Managing Director. The applicant was put under the impression by her superior that she would have been given the additional acting allowance but since this was never approved by the Managing Director, the CCMA found that there was no unfair labour practice.
In conclusion, over the years the CCMA has reached different conclusions as to what constitutes a “benefit”. Previously, arbitrators seemed to take a narrow interpretation by holding that acting allowances are not “benefits”. However, recent judgments seem to agree with the approach that an acting allowance is regarded as a “benefit” if the employee shows a right arising in contract or in law and a strict distinction between “benefit” and “remuneration” is artificial, as the two concepts overlap. Furthermore, a “benefit” is wide enough to include an advantage/privilege enjoyed by the employee. The 2016 judgments by the CCMA uphold this wide interpretation of a “benefit”.