Benefits and Unfair Labour Practice

The Labour relations act entitles employees to institute action against an employer for what is termed "unfair Labour practice." (Section 186 LRA)

One of the matters where an employee is entitled to take action because of the unfair conduct of the employer is in relation to benefits. However, there is often confusion regarding exactly what can be termed to be a "benefit." In IMATU obo Baker / East London Transitional Local Council, it was held that "benefits" include all material advantages accruing to the employee by virtue of contract of employment, excluding salary or remuneration.

In this particular case, the employee was transferred to another department of the employer, which necessitated that the employee had a greater distance to travel from home to his place of work. The employee contended that he was entitled to compensation for the expenses incurred by this increased travelling distance.

Originally, the applicant was employed by a local municipality, and he bought a house within walking distance of his office. That local municipality was subsequently dissolved, and incorporated into three other local municipalities. This brought about the greater travelling distance that the applicant had to travel from his home to work and back again.

In the arbitration, the Arbitrator observed that the term "benefits" is not defined in the Act. It was held, however, that the legislature intended this term to mean "material advantages accruing to employees by virtue of a contract of employment, other than those included in their remuneration as defined." Remuneration" is defined as any payment in money or even kind, or both in money and kind, made or owing to any person in return for that person working for any other person. (Section 213 LRA).

It was observed further that the applicant's referral in this issue was not based on a demand for a benefit which he did not have - and nor was its based on a dispute regarding a benefit which he did have, but which had been withdrawn by the respondent employer.

Rather, it was based on a demand for a benefit which the applicant claimed he ought to have. In other words, he previously did not have the benefit of the employer contributing towards his travelling costs to and from work, but because of changed circumstances, the applicant now demanded that the employer should contribute towards these costs. In addition, the employer in this instance did offer free transport to the applicant, in the form of a municipal bus, which would collect him and other employees from their homes in the mornings, and return them to their homes in the evenings after work. The applicant turned down this offer on the basis that by using his own transport, he could leave home an hour later in the mornings and arrive home an hour earlier in the evenings.

This reasoning was rejected as being invalid, because the offer made by the employer to provide free transport was a reasonable offer. Coming out of all this, a travel allowance is regarded as a benefit - but in this case, the applicant did not have a travel allowance which had been withdrawn - he was attempting to obtain a travel allowance as a benefit. His claim was accordingly dismissed.

In another case, concerning the non-payment of a merit award by the employer to the employee, it was held that a merit award was something apart from remuneration, and therefore should fall with in the definition of "benefits" as contemplated in section 186 - unfair Labour practice.

In SAPU obo Louw & Others, / South African Police Services, it was held that a "benefit" constitutes a material benefit such as pensions, medical aid, housing subsidies, insurance , social security or membership of a club or society. This view implies that the employer is also a contributor (in whole or in part) to the pensions, provident, or medical aid funds. It was held further that there must be some monetary value for the recipient, and therefore if the employer did not contribute in whole or in part on behalf of the employee, there would be no benefit to the employee.

It was held further that a benefit is something extra, or apart from, remuneration. The concept would seem to include discretionary and performance related bonuses. Lastly, a rather interesting matter where the use of a company car for business and private purposes was ruled not to be a benefit - but rather a"tool of the trade."This concerned Dube / Otis Elevators, where the applicant employee had previously had the use of a company car for business and private purposes, and his use of the company car was subsequently removed.

The matter concerned a transfer in terms of section 197, whereby the applicant had the use of a company car for business and private purposes with the old employer, and this continued with the new employer. However, at a certain stage, the new employer decided that the employee no longer needed a company car for business purposes, and this was therefore withdrawn. The applicant maintained that it was an unfair Labour practice in relation to the provisional benefits, because he is permitted private use of the car, which included using the car when he went on annual leave, was a benefit in terms of section 186.

It was held that the initial purpose of the vehicle, or the initial intention, was to provide the employee with a vehicle for business purposes. The fact that he was permitted to use it for private purposes was only incidental. It was determined that the use of the vehicle for private purposes was not a benefit in terms of section 186 and the case was therefore accordingly dismissed. I have no doubt that between now and December, we will see many more arguments coming up in terms of benefits, where employer's suddenly do not pay bonuses, 13th cheques, or performance ordered bonuses this year.

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