Apollo Tyres SA (Pty) Ltd v CCMA (DA1/11) [2013] ZALAC 3; [2013] 5 BLLR 434 (LAC); (2013) 34 ILJ 1120 (LAC) (21 February 2013) per CJ Musi AJA [Patel JA and Hlophe AJA concurring]

The Labour Appeal Court has provided a broader interpretation to the concept of ‘benefits’ and potentially opened the flood-gates to claims by employees based on unfair conduct.

Shamier Ebrahim, an advocate and law lecturer at Unisa, has written an article published in the Potchefstroom Electronic Law Journal (PER) explaining the implications of the latest judgments. The stated purpose is threefold.

  • ‘Firstly, the facts, arguments and judgment in Apollo are stated briefly.
  • Secondly, the judgment is critically analysed and commented upon.
  • Thirdly, the note concludes by commenting on the way forward for benefit disputes in terms of section 186(2)(a) of the LRA’.

The article by S Ebrahim The interpretation to be accorded to the term “benefits” in section 186(2)(a) of the LRA continues:Apollo Tyres SA (Pty) Limited v CCMA [DA1/11] [2013 ZALAC 3 was first published in [2014] PER 11 and only the summary is included here.

Summary [with links provided courtesy of SAFLII]

“The interpretation to be accorded to the term benefits in section 186(2)(a) of the Labour Relations Act 66 of 1995 (the “LRA”) has come before the Courts on several occasions.  In terms of section 186(2)(a) of the LRA any unfair act or omission by an employer relating to the provision of benefits to an employee falls within the ambit of an unfair labour practice.

In Schoeman v Samsung Electronics SA (Pty) Ltd [1997] 10 BLLR 1364 (LC) the Labour Court (the “LC”) held that the term benefit could not be interpreted to include remuneration.  It stated that a benefit is something extra from remuneration.

In Gaylard v Telkom South Africa Ltd [1998] 9 BLLR 942 (LC) the LC endorsed the decision in Samsung and held that if benefits were to be interpreted to include remuneration then this would curtail strike action with regard to issues of remuneration.

In Hospersa v Northern Cape Provincial Administration (2000) 21 ILJ 1066 (LAC) the issue regarding the interpretation of the term benefits did not relate to whether or not it included remuneration but rather to whether it included a hope to create new benefits which were non-existent.

The Labour Appeal Court (the “LAC”) held that the term benefits refers only to benefits which exist ex contractu or ex lege but does not include a hope to create new benefits.

The LAC adopted this approach in order to maintain the separation between a dispute of interest and one of mutual interest, the latter being subject to arbitration whilst the former is subject to the collective bargaining process (strike action).

In Protekon (Pty) Ltd v CCMA [2005] 7 BLLR 703 (LC) the LC disagreed with the reasoning in Samsung and held that the term remuneration as defined in section 213 of the LRA is wide enough to include payment to employees, which may be described as benefits.

The LC remarked that the statement in Samsung to the effect that a benefit is something extra from remuneration goes too far.  It further remarked that the concern that the right to strike would be curtailed if remuneration were to fall within the ambit of benefits need not persist.

It based this statement on the reasoning that if the issue in dispute concerns a demand by employees that certain benefits be granted then this is a matter for the collective bargaining process (strike action) but where the issue in dispute concerns the fairness of the employer’s conduct then this is subject to arbitration.

It is then no surprise that the issue regarding the interpretation of the term benefits once again came before the LAC in Apollo Tyres South Africa (Pty) Limited v CCMA & others [2013] 5 BLLR 434 (LAC).

The LAC was tasked with deciding if the term could be interpreted to include a benefit which is to be granted subject to the discretion of the employer upon application by the employee. 

In deciding this, the LAC overturned the decisions in Samsung and Hospersa and opted to follow the decision in Protekon.

Apollo is worthy of note as it is the latest contribution from the LAC regarding the interpretation of the term benefits and it is of binding force for the Commission for Conciliation Mediation and Arbitration and Labour Courts in terms of the principle of stare decisis.  The purpose of this note is threefold.

  • Firstly, the facts, arguments and judgment in Apollo are stated briefly.
  • Secondly, the judgment is critically analysed and commented upon.
  • Thirdly, the note concludes by commenting on the way forward for benefit disputes in terms of section 186(2)(a) of the LRA”.