REPORTABLE
REPUBLIC OF NAMIBIA
IN THE LABOUR COURT OF
NAMIBIA
JUDGMENT
Case no: LCA 21/2013
In the matter between
MINISTER
OF AGRICULTURE, WATER & FORESTRY
.................................APPLICANT
and
HAROLD KAVARI N.O. (ARBITRATOR)
..............................................1ST
RESPONDENT
KAHIHA SERUBABEL
..........................................................................2ND
RESPONDENT
THE LABOUR COMMISSIONER
..........................................................3RD
RESPONDENT
Neutral citation: Minister of
Agriculture, Water & Forestry v Kavari & Others (LCA 21/2013)
[2013] NALCMD 27 (29 July 2013)
Coram: Smuts, J
Heard on: 19 July 2013
Delivered on: 29 July 2013
Flynote: Appeal against
arbitrator’s award under s 89 of the Act 11 of 2007. An
arbitrator had ruled that the State was precluded by s 12(1)(a) of
that Act from setting-off sums payable in respect of accumulated
leave and a pro rata portion of an annual bonus against the employees
indebtedness under a study leave agreement upon resignation. The
section precludes deduction from remuneration unless permitted in
terms of a court order of any law. The set-off was expressly
authorised under a Public Service Staff Rule promulgated under s 35
of Act 13 of 1995. The court found the rule constituted subordinate
legislation which in turn was contemplated by ‘any law’
in s 12(1)(a). Appeal upheld.
______________________________________________________________________
ORDER
______________________________________________________________________
That the appeal is upheld and the
arbitrator’s award is set aside and the second respondent’s
referral is thus dismissed.
JUDGMENT
______________________________________________________________________
SMUTS, J
[1] At issue in this labour appeal is
whether the second respondent’s indebtedness to the State under
a study leave agreement can be set-off against an amount due to him
upon his resignation in respect of accumulated leave and a pro rata
portion of an annual bonus. An arbitrator found that s 12(1)(a) of
the Labour Act, 11 of 2007 (the Act) precluded that and ordered the
appellant (State) to pay the amount of N$76 117, 58 plus interest to
him. The appellant has appealed against the award under s 89 of the
Act.
[2] The facts in this appeal are
largely common cause. The second respondent, a former employee of the
appellant, entered into a special study leave with full remuneration
agreement with the latter. In terms of that agreement, the State
financed his tertiary studies and provided him with pay during study
leave. As a counter prestation, the second respondent bound himself
to work for the State for 2 years for every year of study leave
granted. In breach of the agreement, he resigned before completing
that period. He acknowledged that he owed the State N$76 117, 58
representing a pro rata amount owing under the agreement (after
taking into account the period of time he had worked for the State
after completing his studies). The State, (represented by the
Minister of Agriculture, Water and Forestry) contended that the
ministry was entitled to set-off his admitted indebtedness against
the sum owing to the second respondent in respect of accumulated
leave and a pro rata portion of this annual bonus.
[3] The second respondent contested
this and referred this dispute the office of the Labour Commissioner,
claiming that the Act precluded his employer from making the
deduction by way of set-off. An arbitrator was appointed and found in
his favour, holding that s 12(1) of the Act precluded set-off and
directed the appellant to make payment to the second respondent
despite his admitted indebtedness. Section 12(1)(a) provides:
‘(1)
An employer must not make any deduction from an employee’s
remuneration unless-
The
deduction is required or permitted in terms of a court order, or any
law.’
[4] Mr Ndlovu, who appeared for the
appellant, pointed out that the deduction in question was expressly
authorised by a Public Service Staff Rule, handed in at the
arbitration dealing directly with the issue in Chapter D.II where
clause 3.1 provides:
‘The
leave gratuity payable on termination of service should be used as a
set-off against any departmental debt which a stuff member may have,
unless such debt can be recovered by other means, e.g. outstanding
salary and allowances.’
[5] Mr Ndlovu submitted that this
staff rule, promulgated under s 35 of the Public Service Act, 13 of
1995, being subordinate legislation constitutes ‘any law’
for the purpose of s 12 (1)(a) and that the set-off would not be in
conflict with s 12(1)(a) and thus be authorised by that section.
[6] Mr Ndlovu further pointed out that
in the definitions section of the Public Service Act, the Act itself
is defined to include ‘Public Service Regulations and Public
Service Staff Rules mentioned in s 35.’
[7] Mr Nederlof who represented the
second respondent countered by pointing out that the appellant could
only deduct a maximum of a third of the withheld amount under s 12(2)
read with s 12(1)(b) and argued that the appeal should be dismissed.
He further submitted that ‘any law’ would mean acts of
Parliament.
[8] As was pointed out by Mr Ndlovu,
the term ‘any’ gives a very wide meaning to ‘law’.
That term would not in my view be confined to acts of Parliament. Had
the legislature intended such a meaning, that term would have been
used. Instead ‘any law’ is used which certainly carries
with it a far wider meaning.
[9] The first respondent’s
approach is also contrary to the definition of law contained in the
Interpretation Proclamation, 37 of 1920 where ‘law’ is
defined ‘to mean and include any law, proclamation or other
enactment having the force of law’. This would in my view
include subordinate legislation such as regulations or, in this case,
Public Service Staff Rules promulgated under s 35 of the Public
Service Act which are further and in any event expressly included in
the definition of the Act, as constricting part of that Act thus
enjoying the force of law. A wide meaning to the term ‘any law’
in this context also accords with the way in which this phrase has
been interpreted in other unrelated legislation.
[10] It follows in my view that the
Public Service Staff Rule in question constitutes ‘any law’
for the purpose of s 12(1)(a) and that the deduction was authorised
under that section. Given the conclusion I have reached, it is not
necessary for me to consider whether to make an order myself
permitting the admitted indebtedness to be set-off from the
accumulated leave and pro rata portion of the second respondent’s
bonus so as to fall within the ambit of s 12(1)(a) as a court order.
No such application was however directed to me to do so and the
second respondent was also not called upon to meet that eventuality.
[11] It further follows that the
appeal succeeds and the award is set aside.
[12] I accordingly make the following
order:
The appeal is upheld and the
arbitrator’s award is set aside and the second respondent’s
referral is thus dismissed.
___________
DF Smuts
Judge
APPEARANCE
APPLICANT: M. Ndlovu
Instructed by Government Attorney
RESPONDENTS: M. Nederlof
Instructed by Nederlof Inc.
Minister of Agriculture Water & Forestry v Kavari and Others (LCA 21/2013) [2013] NALCMD 27 (29 July 2013);