SALARY ADJUSTMENT AND BACK PAY?

The case, Eskom Holdings SOC Limited v CCMA (PR 26/20) [2022] ZALC 4 (11 May 2022), concerns an unfair labour practice dispute brought by an employee working in the customer service department of Eskom. The dispute arose from the company's failure to adjust her salary as per their income differentials exercise, despite adjusting the salaries of other employees.

The employer had implemented an income differentials exercise in compliance with the provisions of the income differentials section of the Employment Equity Act (EEA). It was agreed that the employee was eligible for a salary adjustment under the exercise, but due to a system failure, she was not identified as an eligible employee. The company promised to adjust her salary during the next run scheduled for December 2018, but this did not happen.

The employee referred her dispute to the Commission for Conciliation, Mediation, and Arbitration (CCMA) in terms of section 186 (2)(a) of the Labour Relations Act (LRA) on June 7, 2019. She claimed that she had been unfairly treated because her salary was not adjusted, and she was not paid her due amount under the income differentials exercise.

When the CCMA failed to resolve the dispute, it was referred for arbitration. Before the arbitration commenced, the employer challenged the jurisdiction of the CCMA to arbitrate the dispute. The employer argued that the dispute fell outside the scope of section 186(2)(a) of the LRA, as it pertained to equal pay for equal work, which does not constitute a benefit.

The Commissioner dismissed the employer's point and scheduled the matter for arbitration. During the arbitration, the employer again raised an objection, arguing that the CCMA lacked jurisdiction because the dispute related to remuneration and, therefore, did not fall within the scope of an unfair labour practice. This objection was also dismissed.

The Commissioner issued an award on 26 November 2019, finding that the employer had committed an unfair labour practice. The employer was ordered to pay the employee retrospectively from 17 December 2017, as per the income differentials exercise.

The employer applied to the Labour Court (LC) for a review, arguing that the Commissioner erred in dismissing its objections and that the CCMA lacked jurisdiction to arbitrate the dispute.

In its review, the LC considered whether the Commissioner’s alleged error during the arbitration had distorted his decision. Relying on section 138(1) of the LRA, which allows Commissioners to arbitrate disputes in a manner they consider appropriate to ensure fairness and expeditious resolution, the LC found that the Commissioner's error did not result in an incorrect decision, and the Commissioner did not breach section 138(1) in the way he conducted the arbitration.

Finally, the LC held that the employer had failed to provide sufficient reasons for the review and set aside the decision favouring the employee. The application for review was dismissed, and there was no order as to costs.