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

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