1
REPUBLIC OF NAMIBIA
LABOUR COURT OF NAMIBIA MAIN DIVISION, WINDHOEK
JUDGMENT
In the matter between: Case no: LCA26/2015
NAMIBIA TRAINING AUTHORITYAPPELLANT
and
MARIA NANGOLO-RUKORO1ST RESPONDENT
BM SHINGUADJUA N.O2ND RESPONDENT
Neutral citation:Namibia Training Authorityv Nangolo-Rukoro (LCA26-2015) [2016] NAHCMD 35 (31August2016)
Coram:Narib,AJ
Heard:12August 2016
Delivered:31August 2016
Flynote:State owned enterprise Namibia Training Authority Service benefits. Inflationary adjustment or salary increase. Concurrence of the Minister of Education required both in terms of section 22 (3) of Public Enterprises Governance Act, 2006 and section 23 (a) of the Vocational Education and Training Act, 2008, for such an increase.
Headnote:The appellant is Namibia Training Authority, a state owned enterprise in terms of section 1 read with Schedule 1 of the Public Enterprises Governance Act, 2006. Section 22 (3) of the Public Enterprises Governance Act, 2006 and section 23 (a) of the Vocational Education and Training Act, 2008 both require that the concurrence of the Minister of Education for the determination of the remuneration and other service benefits of the Chief Executive Officer of the appellant.
The respondent, the former Chief Executive Officer of the appellant had obtained an order from the arbitrator, ordering the appellant to grant certain increments in the salary of the respondent, despite the concurrence of the Minister of Education not having been obtained as required by the above statutory provisions.
It was argued on appeal on behalf of the respondent that the respondent was entitled to such increments on the basis of her contract of employment, and further on the basis that similar increments were granted to all the other employees of the appellant. It was further argued that Chapter 3 of the Labour Act, 2007 has more favourable provisions than the above provisions of the Public Enterprises Governance Act, 2006 and the Vocational Education and Training Act, 2008.
Held, that the alleged provisions of the contract of employment relied upon on behalf of the respondent are not established by the evidence on record and the onus was on the respondent to provide such evidence
Held, further that there is no conflict between the provisions Chapter 3 of the Labour Act, 2007 and the above provisions of the Public Enterprises Governance Act, 2006and the Vocational Education and Training Act, 2008.
ORDER
- The appeal succeeds, and the award of the arbitrator, dated 27 March 2015 is hereby set aside.
- There shall be no order as to costs.
JUDGMENT
NARIBAJ:
[1]The appellant in this appeal is a statutory body established in terms of section 4 of the Vocational Education and Training Act, 2008 (Act 1 of 2008), which I shall herein refer to simply as the Vocational Education Act. The appellant is a State-owned enterprise in terms of section 1 read with Schedule 1 to the Public Enterprises Governance Act, 2006 (Act 2 of 2006) as amended. I shall herein refer to the latter Act simply as the Governance Act.
[2]The facts which I set out herein and which I shall rely upon for purposes of this judgment are mostly common cause or appear from documents the contents of which have not been put in dispute.
[3]The respondent was, until 30 June 2015 in the employ of the appellant as its Chief Executive Officer, when her contract of employment lapsed by effluxion of time. On 11 February 2013 the respondent was suspended from her duties by the Board of the Namibia Training Authority (the Board) and remained on such suspension with full remuneration and benefits until her contract of employment lapsed as aforesaid. I am not called upon, in this appeal, to determine the legal validity of the respondent’s suspension and I need not comment on the basis of such suspension even though such basis is referred to in the appellant’s heads of argument.
[4]On 16 November 2011, that is, before the respondent was suspended, the Board approved a recommendation from the respondent to increase the remuneration of all the employees, including that of the respondent by 8%, back dated to April 2011.
[5]The Board also approved a 7% increase for all employees, including the respondent for the year starting April 2012. It seems to me that annual increases were considered and decided upon by the Board during April in a given year.
[6]For the years 2013/2014 and 2014/2015, the respondent was not considered for annual increases on the basis of poor performance or on account of the fact that her performance was not appraised due to the fact that she remained on suspension.
[7]It is not in dispute that all the other employees including the acting Chief Executive Officer of the appellant received increases during these years, be it on account of performance appraisal or as an inflationary adjustment. There is some dispute as to the basis of the increase, but in my view, nothing turns on it. The fact is that such increases were granted to all employees except the respondent.
[8]The respondent was aggrieved by what she perceived to be unfair labour practice by her employer and laid a complaint with the Labour Commissioner.
[9]Conciliation appears to have failed and the matter was referred to arbitration before the Labour Commissioner, as the chairperson. The manner in which the chairperson conducted the arbitration proceedings is rather peculiar and is subject to an attack in these appeal.
[10]From the record before me, it is apparent that the arbitration proceedings commenced on 12 December 2014. After the parties were informed of the procedure that would be followed, including the right to call witnesses and to tender documents into evidence, and the right to make an opening statement and to provide an outline of the respective cases, the respondent was given an opportunity to make an opening statement.
[11]As it turned out, the opening statement was not just an opening statement, because the respondent was allowed to hand up documents which were received and marked as exhibits. This was done without the respondent having taken an oath.
[12]After the respondent’s “opening statement” the appellant was given an opportunity to ask questions in clarification of or for information on the opening statement, that is, to put questions to the respondent for her to ‘clarify or to give you more information on something which she has said, anything which is not clear.’
[13]It was then indicated on behalf of the appellant that the appellant was not ready to ask questions on the many documents which were handed up and that the appellant would require a postponement. The matter was then adjourned.
[14]The arbitration hearing resumed on 17 February 2015, and the respondent was then allowed to hand in additional documents, which she could not provide on the previous occasion. By the end of her “opening statement” the respondent had handed up some 12 or so sets of documents which were marked from exhibit “A”, through to exhibit “M”.
[15]Not only were these documents handed up and marked, but the respondent had the opportunity to read some of the contents into the record, or to explain such contents or to put such documents into context, in support of her claim. In the end, the respondent was satisfied that her case was now fully before the arbitrator and she did not feel the need to call witnesses. In declining to call witnesses, the respondent might have been discouraged by the fact that she was informed by the arbitrator that she had indicated the witnesses she wanted to call, by a letter only, and failed to complete the requisite forms that would have enabled the arbitrator to summon the witnesses. Be that as it may, it is apparent from the record that the respondent was satisfied that the documentary evidence which she submitted through her “opening statement” was sufficient to sustain her case.
[16]When, at the end of the respondent’s opening statement, Mr. Parkhouse, who represented the appellant, was asked whether he has any questions to put to the respondent on what she said, on the documents she presented or whether he wants to proceed to the appellant’s case, he said that he only had one comment. He then took issue with the fact that the respondent had said that she was victimised by the appellant. This was then noted.
[17]In his opening statement on behalf of the appellant, Mr. Parkhouse foreshadowed the defence of the appellant to be that the remuneration of the respondent, as the Chief Executive Officer of the appellant is governed by the provisions of the Governance Act and the Vocational Education Act, as well as the terms of the contract of employment.
[18]He then referred to section 22(3) of the Governance Act, which provides that the remuneration and other service benefits of the Chief Executive Officer and other senior staff of a State-owned enterprise must be determined by the Board with the concurrence of the portfolio Minister, with due regard to the directives laid down in terms of section 4 of the Governance Act.
[19]Mr. Parkhouse further referred to section 23(a) of the Vocational Education Act, which provides that the Board, with the concurrence of the Minister responsible for education, determines the conditions of service, remuneration and other benefits of the Chief Executive Officer, other management staff of the National Training Fund and of the other staff members of the appellant below the management level.
[20]Mr. Parkhouse further referred to clause 3.2 of the Contract of Employment, which is exhibit “G” on the record. It reads as follows:
‘3.2The granting, or otherwise, of an increase is based on the employee’s individual performance as assessed by the Board in terms of the Performance Agreement as well as the Namibia Training Authority’s positioning in the labour market and salary structure.’
[21]When the respondent was given an opportunity to put questions to the appellant’s representative regarding what was said in the opening statement, the only question she asked was whether he could provide the hearing with the concurrence “from the Minister when the inflationary increase was given for the period 2012/2013.’
[22]From the records it is apparent that the appellant called two witnesses, who were examined under oath.
[23]Mr. David Amalwa was the appellant’s first witness.His testimony was that he was employed by the appellant as its Human Resources Manager. He confirmed that during years 2011 and 2012, the appellant granted increases based on the inflation rate, of 8% and 7% respectively, to all the employees, including the respondent. There seems to be some confusion in his testimony, because he states further in his evidence that for the financial year 2013/2014, 7% increase was granted across the board. However, not much turns on this point. The point is that at some stage, all employees, including the respondent received upward adjustments in their income.
[24]His evidence further was that for the financial year 2014/2015 only employees below the E-band received increases, on a sliding scale, the lower level employees having received the highest increases and the upper level employees, in D-Band having received the lowest. Employees in E-Band were seemingly not included, because their increases would be based on performance.
[25]A further witness called on behalf of the appellant was Ms. Florentia Amwenye, a board member of the appellant. She confirmed that an 8% increment in salaries was granted to all the employees of the appellant for the year 2011. She further confirmed that a 7% increment was granted for the year 2012, to all the employees.
[26]Ms. Amwenye further confirmed that no concurrence was obtained from the Minister responsible for education for the above increments in the employees’ salaries.
[27]According to Ms. Amwenye, the respondent did not receive an increment in her salary for the year 2014, because she was suspended and her performance could for this reason not be appraised. She also referred to previous discussions between the Board and the respondent, when the respondent was informed that her performance was not meeting the expectations of the Board. Ms Amwenye further relied on the provisions of the Governance Act and the Vocational Education Act.
[28]The arbitrators’ award is dated 27 March 2015. The arbitrator found in favour of the respondent, principally on the basis that the appellant did not treat all the employees equally, even though the statutory provisions relied upon by the appellant were equally applicable to the other employees, but seemed not to have deterred the appellant in granting the increase which were not compliant with such provisions. It seems to me that even thought not stated in such clear and express terms, the arbitrator relied on the doctrine of estoppel in arriving at his finding. I have to decide whether he was correct.
[29]Mr. Dicks, on behalf of the appellant relies principally on the decision of Lüderitz Town Council v Thomas Shipepe 2013 (4) NR 1039 (LC). That case concerned benefits which were offered to an employee and accepted by him, without such benefits having been approved by the Minister. The benefits were implemented, but when the Minister was informed, the Minister disapproved, and the benefits were then discontinued. When the matter was referred to arbitration before the Labour Commissioner, he found in favour of the employee, ordering reinstatement of the benefits.
[30]On appeal to the Labour Court Smuts, J (as he then was) held that effect had to be given to the provisions of section 27(1)(c)(ii)(bb) of the Local Authorities Act, which require the approval of the Minister responsible for local government be obtained by certain local municipal councils, to determine remuneration of and provide or give pension and other benefits and housing facilities or benefit for or to the Chief Executive Officer or other staff members of a local authority council, town council and village council. The court held that the terms, conditions and benefits given by a local authority to which the above restriction applies, without ministerial approval is invalid and unenforceable.
[31]By similar reasoning, the appellant submits that in the absence of the concurrence by the Minister responsible for education, no increase in the benefits or salary of the respondent may be granted, and that those previous increases relied upon by the respondent were similarly illegal and invalid. By reference to the case of Council of the Municipality of Keetmanshoop v Rooi and Others[1], the appellant submits, in my view, correctly so, that estoppel cannot be used to give legal force to an otherwise illegal act or transaction. In that matter, Miller AJ quoted with approval the following dictum from the case of City of Tshwane Metropolitan Municipality v RPM Bricks (Pty) Ltd[2]: ‘The failure by a statutory body to comply with provisions which the legislative has prescribed for the validity of a specified transaction… cannot be remedied by estoppel because that would give rise to a transaction which is unlawful and therefore ultra vires.’
[32]Mr. Mukonda, on behalf of the respondent attempted to meet the above argument by reference to sections 9, 11(1), 12(1), 29(d) and 50(i)(e) of the Labour Act, 2007, and articles 10, 5 and 25(1) of the Namibian Constitution. If I understand his argument well, he submits that the provisions of the Labour Act are more favourable than the provisions of the Governance Act and the Vocational Education Act, and in view of the provisions of section 9(3) of the Labour Act, the provisions of the Labour Act should prevail. He seemed to argue that annual inflationary adjustments constitute a term of the contract of employment of the respondent, since she received such inflation based salary increases for the years 2011 and 2012, together with all the other employees and she was thus entitled to receive such increases, again with all the other employees for the years 2013, 2014 and a part of 2015.
[33]Mr. Mukonda continued to submit that failure to grant such increases amounts to unilateral alteration of a term of or condition of employment in violation of section 50(1) of the Labour Act, and further constitutes a non-compliance with section 11(1) of the Labour Act, which requires that employer must pay to employee monetary remuneration which the employee is entitled to.
[34]Mr. Mukonda submitted further that failure on the part of the appellant to grant the increases amounts to unlawful deduction from the remuneration due to an employee, contrary to the provisions of section 12(1) of the Labour Act.
[35]Mr. Mukonda could however not point out to me, the basic condition in chapter 3 of the Labour Act which has more favourable provisions than the provisions of section 22(3) of the Governance Act and section 23(a) of the Vocational Education Act.
[36]It seems to me that the fallacy of Mr. Mukonda’s argument lies in the fact that he fails to recognize the difference between the basic terms and conditions provided for in the Labour Act and the terms and conditions provided for by the contract of employment itself. His argument seems to conflate the two and he tries to compare the terms of a contract of employment (if indeed it is such a term) against other statutory provisions.
[37]In my view, the provisions of Chapter 3 of the Labour Act, and in particular, Part B, dealing with remuneration, Part C dealing with ordinary working hours, Part D dealing with leave, Part E dealing with accommodation and Part F dealing with termination of employment, set out minimum standards or conditions for any contract of employment in Namibia. Any contract of employment which provides for terms and conditions, below such minimum standard is for that reason invalid. Such terms and conditions are further considered to be terms and conditions of any contract of employment, unless such a contract of employment has better terms and conditions.
[38]Therefore, Mr. Mukonda’s argument on annual inflationary adjustment in salaries would be correct, if it were established to be a term of the contract of employment, but for the provisions of 22(3) of the Governance Act and section 23(a) of the Vocational Education Act.
[39]However, the contract of employment itself does not lend itself to an interpretation that favours annual inflationary adjustments and in particular, annual increases as a term and condition of employment. Clause 3.1 of the contract reads:
‘3.1Salaries are reviewed annually in February, effective 1 April of each year in accordance with the Namibia Training Authority’s review policy, practice and procedure. Such a review is not an undertaking to increase salaries in general or any individual salary.’