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Public Service Commission releases Report on Investigation
into the Non-Implementation of Arbitration Awards and Labour
Related Court Orders by Departments and Implications on Labour
Relations
12 October 2017
A. BACKGROUND
In the execution of its oversight function, the PSC
received enquiries and complaints from employees regarding
the non-implementation of arbitration awards and Labour Courts
orders by government departments. The PSC viewed this as a matter
of grave concern because the non-implementation of arbitration awards
and Labour Courts orders has serious implications on the management
of labour relations and human resources management and development
in general. It further undermines the Rule of Law and the provision
of effective and efficient service delivery to the citizens of this
country, and frustrates, amongst others, the effectiveness of the
courts and dispute resolution mechanism legislated by Parliament, and
impugns the authority, legitimacy and dignity of the judiciary.
It is against this background that the Public Service Commission
decided to conduct an investigation, with emphasis being placed
on arbitration awards and labour court orders that were issued
between the 2013/14 and 2015/16 financial years.
The report provides insight on the extent and impact
of non-implementation of arbitration awards and labour
related court orders and elaborates on the challenges
that arise as a result of these transgressions. To
address identified challenges, the report presents
recommendations for consideration and implementation
by different stakeholders.
B. KEY FINDINGS
The challenges identified with the non-implementation
of arbitration awards and Labour Court orders include
non-adherence to prescribed dispute resolution processes
and timeframes; reluctance by government officials to
observe the rule of law as illustrated by the number of
awards taken on review; lack of accountability by relevant
authorities against whom awards and orders are issued; lack
of systems to monitor the management and implementation of
arbitration awards and court orders by all relevant
stakeholders, and poor communication with affected parties
on the reasons for delayed or non-implementation.
The study has also revealed that there is non-implementation
of arbitration awards and Labour Court orders issued against
national and provincial departments, albeit on a moderate scale, while
delayed implementation, which amounts to non-implementation in
legal terms, is a common practice. The study has also confirmed
that delayed and non-implementation of arbitration awards and
Labour Court orders has major financial implications for
departments, unions and employees, and has a negative impact
on labour relations, organisational performance and the overall
welfare and wellbeing of employees.
The departments that participated in the study spent just
over R166 million on litigation costs between the 2013/14
and 20105/16 financial years. Between 2013/14 and 2015/16
departments spent approximately R94 million on compensation
costs. Compensation costs in relation to arbitration awards
alone amounted to just over R57 million over the three year
period, of which national departments incurred just over
R30 million over the three year period. A few departments
spent more than R8,1 million on interest incurred on overdue
arbitration awards and Labour Court orders between 2013/14
and 2015/16 financial years.
C. RECOMMENDATIONS
To address the identified challenges and reduce the
negative impact of non-implementation, the PSC recommends
the following amongst others:
- Overarching policy framework - the Department of
Public Service and Administration (DPSA) should develop
an overarching policy framework and each department should
develop a policy and implementation guide and procedure
to facilitate the effective management of disputes and
implementation of arbitration awards and court
orders. The policy and implementation procedure should
address amongst others, the following:
- Detailed process to be followed in attending to the matter;
- Clarification in relation to the roles of various units and
responsible officials who should attend to the matter;
- Set clear timeframes in line with legal prescripts
governing arbitration awards, court orders and related
issues such as settlement agreements, for the matter to
proceed through the various stages, from scrutiny and
assessment, generation of options and advice to the
leadership, and timeous decision making by the leadership
(i.e. Accounting Officer and Executive Authority), including
prompt engagement on mandates for ongoing cases;
- The process to follow when external legal representation
is required to represent the department and key factors
to consider, such as the value of the award when deciding
on representation for cases that are taken on review or appeal;
- Clear mechanisms to communicate with employees, unions and
bargaining councils;
- Mechanisms to ensure continuous monitoring by and reporting
to the Accounting Officer and Executive Authority;
- Mechanisms to ensure continuous monitoring by and reporting
to the DPSA, and analysis of the data by the DPSA for purposes
of reporting to relevant structures such as the Forum of South
African Directors-General (FOSAD), Cabinet and the PSC to
ensure accountability, enable prompt intervention where
there are challenges and facilitate effective oversight
by the PSC.
- Delegation levels for the approval of mandates (if this
is not addressed in the overall Human Resource and
Financial Delegations); and
- Consequence management for failure to discharge assigned duties.
- Accounting officers – Heads of Department, as Accounting
Officers (AOs) must ensure that employees within their respective
departments comply with the Regulations, collective agreements
and any other statutory obligations incumbent upon it. This
includes ensuring that employees are well capacitated to deal
with arbitration awards and Labour Court orders to avoid default
judgements and non-compliance. Furthermore, HoDs must ensure that
employees and bargaining councils are provided with correct
domicilluim citandi et executanding for the formal service
of legal documentation.
- Office of the State Attorney (OSA) – The OSA should put
in place a proper electronic system to facilitate the speedy
retrieval of information per province, department and issue.
- Dispute Adjudication Bodies - Since departments cited ambiguous
or non-implementable awards as a major reason for non-implementation,
it is important for the dispute adjudication bodies to ensure that
arbitration awards are enforceable in order to be legally valid
and binding on all parties.
- Registrar of Labour and Labour Appeals Court – There are
currently no statistics available on the number of reviews
done by the Labour Courts and it would be helpful that a
case management database similar to the one used by the
CCMA be developed to make it easier to monitor trends
and evaluate the efficiency of the Labour Courts.
- Bargaining Councils - Bargaining councils should
put in place a mechanism to monitor implementation of
arbitration awards as this will enable them to reflect
on the effectiveness of the system and identify strategic
issues for discussion with the employer and key areas
of intervention to facilitate support to key stakeholders
such as employees.
Employees - Employees should empower themselves
and seek the assistance of unions and fellow employees on
the processes to be followed to enforce arbitration awards
and Labour Court orders. The court held that in the event
of non-compliance with a court order by an organ of
state, such non-compliance can be reported to the
Auditor-General or the Public Protector who have powers
to investigate complaints regarding any alleged
maladministration or improper conduct or undue
influence by a person performing a public function.
D. CONCLUSION
The PSC is of the view that this report will
go a long way in addressing the identified challenges
and reduce the negative impact of non-implementation
of arbitration awards and labour related court orders
by departments and implications on labour relations.
The Public Service Commission, as part of its oversight
mandate, will engage with key stakeholders such as national
and provincial departments, Office of the State Attorney,
Registrars of the Labour Courts and bargaining councils
on the contents of the report to ensure buy in and
implementation of the recommendations. In particular, the
findings and recommendations will be deliberated with the
DPSA as the custodian of the public service HRM framework.
For enquiries, please contact: Mr Humphrey Ramafoko; Tel: (012) 352 1196; Cell: 082 782 1730; Email:
HumphreyR@opsc.gov.zaor Ms Z Jiya; Tel: (012) 352 1070; Cell: 072 311 3500; Email:
ZodwaJ@opsc.gov.za
National Anti-Corruption Hotline: 0800 701 701
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