One of the goals of introduction of the current Labour Relations Act (LRA) ten years ago was to make it easier for employees to redress unfair practices at the hands of employers. Via mechanisms such as the introduction of the CCMA the law has made procedural access to redress easier than before.
However, the the presence of large gaps in the statutes themselves have made redress more difficult than before. Not only does this lack of clarity sometimes hamper redress it also makes it difficult for employers to know what is legally acceptable.
One example of this problem is the confusion between what is "remuneration? and what is a "benefit?. Clarity as to the dividing line between these two concepts has been made crucial because the LRA gives the CCMA jurisdiction to deal with unfair provision of benefits but withholds the CCMA?s jurisdiction to deal with remuneration disputes.
For example, where an employer withholds any part of an employee?s remuneration payment the employee may not refer such a dispute to the CCMA. Instead the dispute may be referred to the Department of Labour or to a civil court.
However, due to the lack of statutory definition of terms many do not know to which forum they must refer their disputes. For example, while commission payments are very clearly "remuneration? many officials of the Department of Labour are reluctant to accept this.
The Basic Conditions of Employment Act (BCEA) does define "remuneration' as "any payment in money or in kind..' However, the " in kind' portion of this definition renders it so wide that it could include benefits as well. It is therefore not useful in clarifying the dividing line between benefits and remuneration.
Another question that arises is: When does the employer?s duty to provide benefits start and end in terms of the unfair labour practices provisions of the CCMA? Is this obligation limited to benefits that employees already have a right to or does it apply also to new benefits that the employees believe they are entitled to?
It is not only the disputing parties who are unsure of the answer to these burning questions. The courts themselves are unable to agree with each other. For example, in HOSPERSA and Another vs Northern Cape Provincial Administration (CLL Vol. 15 No.1 August 2005) the Labour Appeal Court found that an acting allowance was not, in that case, a "benefit? for purposes of the LRA?s unfair labour practices provision because the right to the acting allowance did not arise from statute or from a contract between employer and employee.
However, in Protekon (Pty) ltd vs the CCMA and others (CLL Vol. 15 No. 1 August 2005) the Labour Court departed form the Labour Appeal Court?s view. The Court found that, even where there was neither a statutory provision nor an express contractual provision giving rise to the right to a benefit the CCMA may still have jurisdiction. That is, where an employer has unfairly exercised its discretion as regards the granting of a benefit the duty of the employer to act fairly could be ".incorporated into a contract of employment by way of a duty to act in good faith'.
While the wording of this finding is confusing it appears to mean that, where the employer has the discretion to confer or not confer a right, the employees may dispute the employer?s decision at the CCMA. This jurisdiction of the CCMA would be based on the grounds that the discretion was exercised unfairly and that the employer has a tacit contractual duty to act fairly.
The bigger question however, is how employers and employees are to separate "remuneration? from "benefit? in the light of the LRA failure to clarify this difference.
Whilst it may be clear that salary, commission and overtime pay fall under the heading of remuneration, and that leave, medical aid and pension are benefits there are many other terms of employment that do not fall neatly into either category.
For example, what are Christmas bonuses, performance incentives, long service awards, vehicle allowances, housing subsidies, leave pay, share options, acting allowances and canteen privileges? Are they benefits, remuneration, perks or none of the above?
One method of distinguishing these concepts might be to accept traditional usage or definitions. That is, historically, salary, overtime and commission have been seen as remuneration. Perhaps then, all other entitlements directly related to these payments should be seen as remuneration while all the rest should, for the sake of simplicity, be classed as benefits.
For example, using this approach, an acting allowance would be part of remuneration because it involves a payment of money to the employee for doing extra work in a similar way to that in which overtime is paid. On the other hand other employment conditions such as performance incentives, housing benefits and Christmas bonuses could be seen as benefits as they are add-ons rather than part of the direct remuneration for work done.
By lvan lsraelstam, Chief Executive of Labour Law Management Consulting. He may be contacted on (011) 888-7944 or 0828522973 or on e-mail address: firstname.lastname@example.org. This article first appeared in The Star.
To book for our 20 April seminar on NEW CHANGES AND DANGERS IN LABOUR LAW in JHB please contact Ronni via (011) 782-3066 or 0845217492.