Can salaries, other benefits be unilaterally removed or reduced?

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IN order for one to understand the application of law in any given situation, there is need to appreciate the nature of Law. Reference will be made to the two main theories of law, namely, the natural law theory and the positivist theory.

The natural law theory views law as inseparable from the precepts of morality, justice or fairness. This school of thought argues that some set of moral principles have inherent validity and authority independent of human authority. Hence, such moral principles are of a higher status than any man-made rules, thereby, qualifying to be natural law. It follows then that any law that crosses the path of natural law is invalid. It is lexiniusta non estlex, meaning an unjust law is not law at all.

On the other hand, the positivist theory contends that law is law regardless of any perception about it. Just or unjust, it is still law. Based on this theory, the law can be good, bad, just and unjust yet remain law.

A good example of such law is the Supreme Court’s interpretation of Section 12 4(a) of the Labour Act, Chapter 28:01 as read with common law. Parliament, from a natural law theory point of view, remedied the onslaught that had resulted in job losses by removing the mischief that had been created by the positivist interpretation of Section 12 4(a) of the Labour Act.

For any law to qualify as law, it must be enforceable by the State. Hahlo HR and Kahn Ellison pose the question: What distinguishes the law of the lawyer from other practical law, like moral law, laws of etiquette and others? Any set of rules governing human conduct and is recognised as binding by the State, as well as being enforceable, it forms the law.

Premised on the two theories, natural law and positivist, one can easily identify where the legislature, judiciary and the executive stand. Either they are pluralist/ natural law theorists or positivist/unitarists.

Back to our discourse: “Can salaries and other benefits be unilaterally removed or reduced?”

The law

The law being referred to in the main is the Labour Act, Chapter 28:01. In fact, labour laws are a benchmark for measuring government and capitalists care for the human factor in the production mill.

Below is a number of sections in the Labour Act that govern the employment or workplace relationship between employers and employees.

supreme court

Section 2a(i) – The purpose of the Act is to advance social justice and democracy at the workplace by;

a) giving effect to the fundamental rights of employees;

e) the promotion of the participation of employees in decisions affecting their interests in the workplace.
Under this dispensation, employees cannot be dismissed for no apparent reason, neither can they be subjected to unilateral decisions made without their involvement.

Section 6(i)(a) – No employer shall pay any employee a wage which is lower than that specified for such an employee by law or by an agreement made under the Act. The Collective Bargaining Agreement (CBA) is binding and, therefore, enforceable. It can, therefore, not be breached without sanction;

Section 8(c) It is an unfair practice for an employer to fail to comply with or implement (i) a collective bargaining agreement;

Section 12a(3) Wages shall be paid at regular intervals on working days, near the workplace. Clearly the ballooning salary arrears witnessed these days are unacceptable.

Section 12(6) No deduction of setoff of any description shall be made from any remuneration except: – as demanded by law or a legal process, when repaying a salary advance or stop orders. No such deductions should exceed 25% of the employee’s gross salary.

Unilateral salary cuts and/or removal of benefits is therefore definitely unlawful.

Section 12a (7) – No aggregate deduction must exceed 25% of the employee’s gross salary. In some instances workers have had their salaries reduced by 50% and this is criminal to say the least.

Section 16(2) Parties may agree on less favourable conditions. Employees’ rights to social security, pensions, gratuities or other retrenchment benefits shall not be diminished without the prior written authority of the minister.

One may argue that this section deals with an organisation being transferred as an ongoing concern. While this may be correct, one can still argue that the intention of the legislature regarding all workers was to jealously guard against unilateral removal of the gains that would have been acquired. Only the minister in a regulatory capacity can authorise a diminishing of benefits subject to parties agreeing to the diminish.

Section 74

1) Parties are empowered to negotiate a collective bargaining agreement;
2) Negotiations may cover any conditions of employment which are of mutual interest to parties;
4) Parties may negotiate or amend the agreement after 12 months of the existence of the current agreement;
5) Collective bargaining agreement shall not contain any provisions that are inconsistent with the Act;
6) Parties may agree to introduce higher rates of pay and more favourable conditions of employment at the expiry of the Collective Bargaining Agreement – care should be taken not to diminish the rights and interests of workers in the process or adversely expose workers.

The emphasis in this section is on the need for parties to agree on any decision made as long as it affects the workers’ working life. Some employers have unilaterally cut salaries, removed gratuities and allowances.

In fact, parties, if they so agree, can diminish salaries and benefits. What this means is that parties at the negotiating chamber, be it works council or employment council, together need to appreciate the gravity of the situation (be it financial or structural) they are faced with and the need to cut costs. Instead some unscrupulous employers have crafted forms that purport that employees have voluntarily agreed to have their salaries cut. Under such deceitful situations, one would want to find out if the works council ever deliberated on the issue, and if not, it would be an indication that the affected workers were coerced into signing such forms.

Section 82: A registered collective bargaining agreement is binding and remains binding despite:

i) Change of employer;
ii) Change of ownership;
iii) Change in the membership or structure, until it is substituted by a new one or terminated by mutual agreement by parties.

At introduction, two theories were looked into , namely natural law and the positivist. From a positivist chair, all labour laws are binding and enforceable. Alternatively, the naturalist frowns at inhuman and unjust practices that employers force on employees.

In terms of section 82, labour laws, by extension, remain binding despite the fact that the employer is now mainly black, ownership has changed. The same applies with trade unions, who continuously change membership by way of natural wastage and others.

In conclusion, the so-called salary rationalisation (salary cuts and removal of benefits) is illegal, immoral and inhuman. The remedy is to enforce the Collective Bargaining Agreement (law) as this entitlement is clearly guaranteed in the Act.

Fellow employers are, hereby, advised that hard times are on us all. Diminishing employees’ rights and benefits is not the panacea to the economic evils besetting us all. Remember, as you go up the ladder you will deal with the holders of the ladder, as you may need them on your way downwards or they will be fodder on which to land should hard times force you out of the kitchen heat.

lMoses Tsimukeni Mahlangu writes in his own capacity and can be reached on zucwuhq@gmail.com for comments.