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The Labour Courts have recently dealt with two interesting issues concerning the application of the BCEA. The first deals with the calculation of severance pay, with public holidays.

In Zietsman and others v Transnet Limited the employees claimed that Transnet had breached section 41 of the BCEA by failing to include in their severance pay the value of "dealer bonuses" to which they were entitled in terms of a company scheme.

The Company's defence was that it had paid the applicants 2 weeks' remuneration per year of service and that since this amount exceeded the statutory requirement of one week per completed year of service, the Company had more than complied with the Act. Section 41(2) (recall that section 41) of the BCEA establishes the statutory minimum of one week's remuneration per completed year of continuous service payable when an employee is dismissed for reasons related to the employer's operational requirements. Government Notice 691 published on 23 May 2003 lists all the payments that must be brought into account when calculating severance pay.

The Court held that if an employer pays more than the statutory minimum of one week's remuneration for each completed year of service, then the calculation method set out in terms of section 35(5) of the BCEA read with the Government Notice does not apply. It is always open for the parties to agree otherwise, but in this case, there was no such agreement. In the present case, because the employer's severance package was more favourable than the statutory minimum, the Court could not entertain the applicant's claim that their severance packages had been incorrectly calculated in terms of the Act. The application was therefore dismissed.
In a judgment handed down on 15 November 2007, the Labour Appeal Court dealt with the interpretation of the Public Holidays Act 1994 and in particular, section 2 of the Act, which provides that whenever a public holiday falls on a Sunday, the following Monday shall be a public holiday.

In Randfontein Estates Ltd v National Union of Mineworkers, the Union and the Mine had concluded a continuous operation agreement in terms of which production in a continuous operation would take place "seven days a week on all days of the year, excluding public holidays." A dispute arose when a public holiday designated in terms of the Act fell on a Sunday. The Union argued that in terms of the agreement, workers were not obliged to work and should be paid not only in respect of the Sunday but also the Monday, since the effect of section 2 was to declare both days as public holidays. The Mine argued that the Act did not intend that both the Sunday and the Monday should be public holidays when a public holiday falls on a Sunday. In other words, when a public holiday falls on a Sunday the following Monday is substituted as a public holiday and is not to be regarded as an additional public holiday.

The Court disagreed with the Mine's argument and held that the intention of the legislature was not that the number of paid public holidays should be limited to the twelve contained in the Schedule to the Public Holidays Act. Rather, the Act provided that there should be at least twelve public holidays in a calendar year. In this case, the Mine had "hitched its continuous operations agreement to the provisions of the Act" and was therefore obliged to give its employees a paid public holiday on both the Sunday on which the holiday fell, and the following Monday.

November 2007

In this Edition

Zietsman and others v Transnet Limited
Randfontein Estates Ltd v National Union of Mineworkers

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