When does an act of goodwill become a benefit?

Companies are here to do business. They employ employees in certain working conditions on specified terms and conditions of employment. Difficulties arise when the employer, due to various reasons, wishes to change these terms and conditions of employment.  Our labour law differentiates between existing terms and conditions of employment, benefits and work practices. 

Terms and conditions of employment may only be varied by consent or for operational reasons following a s189 process stipulated by the Labour Relations Act. Benefits may be varied or removed for a good reason after a fair process has been followed. Changes to work place practices may be brought about through the exercise of managerial prerogative.

Our labour courts up to our labour appeal court have had divergent opinions on whether an employee may claim a benefit under our unfair labour practice dispensation when he has no claim in contract or law.

On 18 June 2012, Judge Steenkamp in South African Post Office Ltd v Commission for Conciliation, Mediation and Arbitration and others rejected the contention of Judge Lagrange in IMATU obo Verster v Umhlathuze Municipality & others where the court found that a benefit does not need to be established contractually or by legislation but could be anything extra which have been granted at the employer’s discretion

Judge Lagrange in the IMATU matter referred to the labour appeal court decision of Department of Justice v the CCMA, which was decided in 2004.

Judge Steenkamp in the South African Post Office matter referred to the labour appeal court’s decision in Gauteng Provinsiale Administrasie v Scheepers and subsequent labour and labour appeal court decisions. He found that claims pursued as unfair labour practices can only be pursued if the employees can prove that they are entitled to a benefit claimed under contract or statute.

In this matter, Elton Jacobs was employed as a operational manager with the Post Office and was asked to act in a higher authority on a few occasions. His acting allowance was only approved in April 2006 and no further allowances were granted by the applicable authority as per the Post Office policy since then. The employee claimed that others were paid acting allowances but not him. 

The labour court, on interpreting the policy, found that the policy provided a limited right to an acting allowance if it was approved. The fact that approval was required meant that there was no automatic contractual entitlement to the acting allowance.

The court found that the employee had not established a right to an acting allowance contractually or in law beyond the initial 3 month period and to seek an entitlement beyond that would cause it to be an interest dispute.