IN THE HIGH COURT OF NAMIBIA
REPORTABLE
REPUBLIC OF NAMIBIA
LABOUR COURT OF NAMIBIA MAIN
DIVISION, WINDHOEK
JUDGMENT
Case no: LCA 42/2012
In the matter between:
LUDERITZ TOWN COUNCIL
...............................................................APPELLANT
and
THOMAS SHIPEPE
...........................................................................RESPONDENT
Neutral citation: Luderitz
Town Council v Shipepe (LCA 42/2012) [2013] NALCMD 9 (2013)
Coram: SMUTS, J
Heard: 18 March 2013
Delivered: 27 March 2013
Flynote: Disputes referred to
the office of the Labour Commissioner outside the periods referred to
in s86(2) are prescribed. A dispute arose in the present context when
the respondent took issue with the withdrawal of unauthorized
benefits. Benefits to Local Authority employees are invalid if
ministerial approval is not granted for them.
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ORDER
The appeal against the award of the
arbitrator succeeds and his award is set aside in its entirety. No
order is made as to costs.
JUDGMENT
SMUTS, J
This is an appeal against the award
of an arbitrator, given on 18 July 2012. The facts which gave rise
to that award and to this appeal are essentially not in dispute.
The respondent was employed by the
appellant, a local authority established under the Local Authorities
Act, 23 of 1992 (“the local authorities Act”). The
respondent’s employment as a strategic executive was pursuant
to a written offer of appointment which the respondent had accepted.
The offer did however state that it was subject to the provisions of
the Labour Act, the Local Authorities Act and the appellant’s
1995 Personnel Rules.
In terms of his appointment, the
respondent received certain benefits which included a fuel
allowance, insurance cover and an annual motor vehicle licence
renewal fee. But these benefits were discontinued by the appellant
in July 2010. This had followed a letter from the Minister of
Regional and Local Government, Housing and Rural Development (‘the
Minister’) advising that these benefits were without his
approval and thus illegal. As a consequence of the withdrawal of
these benefits, the respondent referred a complaint to the office of
the Labour Commissioner on 15 May 2012.
In the accompanying form, he stated
that the dispute arose in December 2011, being the date upon which
‘the matter was brought to the attention of the Acting Chief
Executive Officer’.
The arbitrator ruled in favour of the
respondent. He ordered the reinstatement of the respondent’s
housing, insurance, motor vehicle and monthly fuel allowances and
further ordered the appellant to pay N$42 502 ‘for losses
suffered during the period the losses were terminated’.
In its opposition to the dispute
before the arbitrator, the appellant took the point that the
arbitrator had no jurisdiction to adjudicate upon the withdrawal of
the benefits, other than the housing benefits, as these had been
withdrawn in July 2010 already. The housing benefit was withdrawn in
2012. It was common cause that the dispute was referred to the
office of the Labour Commissioner in February 2012. The point was
taken that the arbitrator had no jurisdiction to deal with an
alleged unfair labour practice as s 86(2)(b) of the Labour Act, 11
of 2007 (“the Act”) required the referral of disputes of
that nature to be within one year from the date upon which the
dispute arose. For some inexplicable reason the arbitrator referred
to the withdrawal of benefits (other than the housing benefit) as
being in July 2011. Both counsel who appeared before me agreed that
there was no evidence to this effect and that the unequivocal
evidence was however to the contrary, namely that the benefits had
been withdrawn in July 2010. The reference to July 2011 in the
arbitrator’s ruling when dealing with the question of
prescription, if not a typographical error, would in my view clearly
constitute a finding which no reasonable arbitrator could have made
as there was simply no foundation in fact for it. Insofar as it
constitutes a finding of fact by the arbitrator, it cannot thus
stand.
The respondent however contends that
the prescription period should not run from July 2010 but rather
from December 2011 when the respondent had formally raised the
unilateral change to his employment conditions under the attention
of the Acting Chief Executive Officer in a grievance process and
that when no solution was forthcoming from the aggrieved procedure,
then the prescriptive period would commence to run Ms Keulder,
counsel for the respondent, submitted that there had not prior to
that date been a dispute and that the dispute had only arisen then.
Section 86(2) of the Act provides:
‘(2)
A party may refer a dispute in terms of subsection (1) only-
(a)
within six months after the date of dismissal, if the dispute
concerns a dismissal; or
(b)
within one year after the dispute arising, in any other case.’
Mr Maasdorp, who appeared for the
appellant, took a different view. He submitted that upon the
evidence which served before the arbitrator, a dispute had already
arisen at least by 25 July 2010 when the respondent together with
certain of his colleagues who were likewise affected by the
withdrawal of benefits had addressed a letter complaining of that
very fact to the appellant. The fact that there was correspondence
exchanged thereafter and the matter had not become resolved which
eventually led to a grievance procedure being lodged by the
respondent in December 2011, followed up by the referral of his
dispute to the office of the Labour Commissioner in February 2012
would not alter the position that the dispute itself had already
risen by at least 25 July 2011 when the respondent together with
certain of his colleagues took up the issue with his employer, the
appellant. That is thus the date when the dispute arose for present
purposes. Parties are plainly at risk of their causes of action
under the Act prescribing if they do not refer their disputes within
the time periods specified for the two categories in s 86(2) of the
Act.
As was confirmed by this court, the
provisions of s 86(2) are peremptory.
As was stressed in that matter, the provisions of the Act clearly
demonstrate a statutory intention for disputes to be resolved and
determined expeditiously. This is reinforced by the fact that s
86(2), unlike its predecessor in the Labour Act of 1992,
does not provide for the power of amelioration by means of a power
to condone the late filing of any referral, despite the attempt in
Rule 10 of the Rules relating to the Conduct of Conciliation and
Arbitration before the Labour Commissioner.
It follows in my view that the
referral of the dispute concerning the withdrawal of benefits, other
than the housing benefit, was made way outside the time period
prescribed by s 86(2)(b) of the Act. As a consequence the award
based upon the withdrawal of those benefits, is accordingly a
nullity and must thus be set aside.
A further question of law raised by
the arbitrator’s ruling in favour of the respondent which
affected the withdrawal of the housing benefit, was that it was not
open to the respondent to withdraw those benefits offered to the
respondent and that these had constituted valid contractual terms
once accepted by him irrespective of whether there was a ministerial
approval of the benefits (or whether they were authorised by the
Local Authorities Act). The arbitrator further found that it was not
possible for the respondent to ascertain whether those benefits had
been approved at the time that the offer had been made. This factual
finding was challenged on the basis that no reasonable arbitrator
could have arrived at it on the material available to him. The
challenge to that finding would appear to be well founded, given the
seniority of the respondent and the simple question which he could
have asked at the time to the appellant as to whether the terms had
been approved by the Minister, as is required by s 27 of the Local
Authorities Act. Whether it would be reasonable for a person in the
position of the respondent to make such an enquiry in the
circumstances is, of course, another matter. But, as was accepted by
Mr Maasdorp, this question is irrelevant in the context of the
further question as to the legality of the offer and its acceptance
to the extent that it was not approved by the Minister, as is
required by the Local Authorities Act.
In terms of section 27(1)(c)(ii)(bb)
of the Local Authorities Act 23 of 1992, the appellant could only
determine the remuneration of and provide or give pensions and/or
benefits and housing facilities or benefits for the respondent and
with other staff members with the approval of the Minister.
It is common cause that the Minister
did not approve of the benefits offered to the respondent including
the housing benefit and when alerted to them he expressly
disapproved of them.
Mr Maasdorp argued that the absence
of ministerial approval as is expressly required by s
27(1)(c)(ii)(bb) meant that the terms of the offer were illegal and
that they were unenforceable. He referred to a decision of the High
Court in the context of the absence of ministerial approval under s
30(t) of the Local Authorities Act for the sale of immovable
property by a town council. The court found that a town clerk (in
that instance) did not have the authority to sell immovable property
and that the consent of the Minister meant that any sale without
that consent would be null and void ab initio. The court
found that consent in this context was a peremptory requirement for
the validity of such a sale, and that it was the intention of the
legislature that a town council should not be permitted to alienate
their land without the consent of the Minister and that any
agreement without that consent would be invalid.
Mr Maasdorp submitted that the
approval of the Minister is expressly required and is thus a
peremptory requirement under s 27(1)(c)(ii)(bb) and that benefits
offered without such approval would be invalid. He further submitted
that estoppel would not arise. He did say with reference to the
finding of this court in Council of the Municipality of
Keetmanshoop v Josef Rooi and 2 others
where it was stated:
“The
failure by a statutory body to comply with provisions which the
legislature has prescribed for the validity of a specified
transaction cannot be remedied by estoppel because that would give
validity to a transaction which is unlawful and therefore ultra
vires.”
Ms Keulder on the other hand argued
that the approach adopted by the appellant would be contrary to
Articles 10 and 18 of the Constitution
Ms Keulder submitted that it would
lead to discrimination between employees if unilateral amendments to
employment would be permissible to those employed by local
authorities whereas this would not be permissible in respect of any
other employees. This submission however misses the point. If a
benefit is not authorised by law and is thus invalid to that extent,
it would not constitute a unilateral change of conditions of
employment if it were no longer to be paid.
Ms Keulder also submitted that it
would be in keeping with the spirit and tenor of the Labour Act, as
is reflected in the preamble that all employees are to be treated
equally, and that the Act also binds the State and that this
principle would also apply to any persons employed by the State, in
keeping with s 1 of the Act. Ms Keulder referred to the fact that a
local authority is included in the definition of State for the
purpose of s 1 of the Act. Her submissions however primarily relied
upon s 2(4) of the Act which provides that should there be any
conflict between the provision of the Labour Act and the provision
of a law listed in sub-section (5), the provisions of the Act would
prevail to the extent of such a conflict. The laws listed in
sub-section (5) include any law on the employment of persons in the
service of the State which would thus include those employed by
local authorities. Ms Keulder submitted that there was thus a
conflict between the Local Authorities Act and the Labour Act and
that the provisions of the Labour Act should prevail to the extent
of that conflict. Ms Keulder argued that the conflict in question
was that the Local Authority Act requires ministerial approval for a
valid agreement between the appellant and respondent but that this
has the effect of depriving the respondent of benefits previously
received, which is in conflict with the Act. The fallacy of this
argument rests upon the assumption of validity of the benefits
previously provided.
When pressed in oral argument, Ms
Keulder accepted that the conflict in question for the purpose of
her argument would be the approval of the Minister for conditions of
employment offered by local authorities established under the Local
Authorities Act. But that would not in my view constitute a conflict
between the provisions of the Local Authorities Act and the Labour
Act in any proper sense. To require ministerial approval for
conditions of employment of local authorities does not in my view
conflict with the provisions of the Labour Act.
At best for Ms Keulder the complaint
would however rather arise with reference to the manner in which
approval had not been given to terms offered to the respondent. The
requisite of approval by the Minister of conditions of employment of
local authorities which the legislature has seen fit to require,
would not in my view give rise to an inherent conflict of the kind
contemplated by s 2 of the Act, relied upon by Ms Keulder. Instead,
it would seem to me that her complaint would instead appear to lie
against the exercise of the ministerial power and the fairness or
reasonableness of the exercise of that power in the circumstances of
this case.
The complaint cannot be properly
directed at the fact that the legislature has accorded the Minister
the power of approval in s 27 of the terms and conditions of
employment of local authority employees. As was stated by the High
Court in the context of s 30(t), the legislature specifically
reserved such a power of approval to the Minister – in this
instance in respect of employment conditions. This was presumably
enacted to ensure a degree of uniformity within local authority
councils or as a check upon the exercise of the powers of local
authorities in according benefits to the employees. The legislature
made a choice in requiring ministerial approval as a requisite for
the validity of the terms and conditions of employees of local
authorities. Effect must be given to that legislative choice in
providing for ministerial approval for the validity of the terms and
conditions of employment of local authorities. Terms and conditions
(and in this instance benefits), given by local authority councils
without ministerial approval which is a requisite for their validity
would in the absence of that approval be to that extent invalid and
unenforceable as being in clear conflict with the wording of s 27 of
the Local Authorities Act.
It follows that the benefits offered
by the appellant which had not been approved by the Minister were
invalid to that extent as being in conflict with the Local
Authorities Act. The arbitrator’s award seeks to give effect
to such benefits and falls to be set aside in its entirety for this
reason alone. This is quite apart from the fact that the referral of
the dispute in respect of the benefits other than the housing
benefit had in any event prescribed under s 86(2).
It follows that the appeal against
the award of the arbitrator succeeds and his award is set aside in
its entirety. No order is made as to costs.
_______________
D SMUTS
Judge
APPEARANCES
APPELLANT: R Maasdorp
Instructed by Sharon Blaauw Attorneys
RESPONDENT: Ms Keulder
Annerie Keulder Attorneys
Luderitz Town Council v Shipepe (LCA 42/2012) [2013] NALCMD 9 (27 March 2013);