Case  CCT 137/19
[2020] ZACC 03

Hearing Date:      14 November  2019
Judgement Date:  20 March 2020

Post Judgment Media Summary  

The following explanatory note is provided to assist the media in reporting this case and is not binding on the Constitutional Court or any member of the Court.

On Friday 20 March 2020 at 10h000, the Constitutional Court handed down judgment in an application for leave to appeal against the judgment and order of the Labour Appeal Court, which found that the first to fiftieth respondents (respondents) were employees in the public service and were entitled to receive a scarce skills allowance in terms of the scare skills agreement (agreement), a collective agreement concluded within the Public Health and Welfare Sector Bargaining Council (PH&WSBC).

In 1967 and 1975 respectively, the University of Cape Town (UCT) and Stellenbosch University (Universities) each concluded teaching hospital agreements with the erstwhile Provincial Administration of the Cape of Good Hope. In terms of these teaching agreements, Groote Schuur Provincial Hospital would be used by UCT, and Tygerberg Hospital by Stellenbosch University, as teaching hospitals for the training of their respective faculties of medicine. The respondents were employed by the Universities and also worked at the provincial hospitals as Principal and Chief Specialists. In 2004, the PH&WSBC and the State concluded the scarce skills agreement which sought to provide a scarce skills allowance to designated health professionals working in the public health sector hospitals or institutions as managed by the State. The purpose of the agreement was to attract and retain principal and specialist practitioners, who are considered a rare commodity in the field of medicine, such as the respondents. This was to enable them to render their specialist clinical services using their scarce clinical skills in the public health sector for the benefit of members of disadvantaged communities within the provincial hospitals catchment area to whom the Western Cape Department of Health (Department) is obligated to provide service delivery.

In June 2006, the respondents referred a dispute to the PH&WSBC regarding the failure by the applicant, the Western Cape Department of Health (applicant) to pay them the scarce skills allowance. The dispute was dismissed on the grounds that the PH&WSBC did not have jurisdiction to hear the matter as the respondents were said to be employed by the universities and not by the applicant.

The respondents then instituted a claim for the payment of the scarce skills allowance in the Labour Court. The Labour Court found that the respondents were entitled to the scarce skills allowance. Aggrieved by the outcome, the applicant appealed to the Labour Appeal Court. The Labour Appeal Court upheld the appeal and held that the Labour Court did not have jurisdiction to hear the matter.

The respondents thereafter brought a review application to the Labour Court. The Labour Court set aside the initial ruling of the PH&WSBC and remitted the matter for arbitration. The parties agreed to refer the matter to the Commission for Conciliation, Mediation and Arbitration (CCMA). The CCMA held that the respondents were employees within the public service and fell within the jurisdiction of the PH&WSBC and were therefore entitled to the scare skills allowance.

The applicant then applied to the Labour Court to review the CCMA’s award. This application was dismissed and leave to appeal was refused by the Labour Court and only granted on petition by the Labour Appeal Court. The Labour Appeal Court held that the respondents, by virtue of the posts they held as Principal and Chief Specialists at the provincial hospitals, were part of the fixed establishment as defined in the Public Service Act Act 103 of 1994 (PSA) and were therefore part of the public service.

Aggrieved by the Labour Appeal Court decision, the applicant approached the Constitutional Court for leave to appeal. Before the Court, the applicant argued that the respondents are not members of any trade union which was a signatory to the agreement and as such, it is not bound by the collective agreement. Further, it contended that the respondents fall outside the registered scope of the PH&WSBC because they are not employees in the public service. This is because the respondents are appointed by the Universities and are not appointed to, nor do they occupy, posts on the fixed establishment in accordance with the PSA. They are, for that reason, not entitled to the scarce skills allowance which is a benefit arising from the scarce skills agreement. Further, the applicant contended that the award by the Commissioner was based on a material error of law which incorrectly interpreted multiple provisions of the Labour Relations Act 66 of 1995 (LRA).

The respondents argued that the scarce skills allowance was specifically negotiated for persons in their positions and the agreement binds the applicant by virtue of their membership in a trade union which forms part of the Bargaining Council. The respondents further argued that they are entitled to the allowance because they held posts of Principal and Chief Specialists at the relevant public hospitals at the time the agreement was concluded. They, therefore, fall within the express scope of the agreement as they are “designated health professionals working in public sector hospitals”.

In a unanimous judgment penned by Mathopo AJ (with Khampepe ADCJ, Froneman J, Jafta J, Madlanga J, Majiedt J, Mhlantla J, Theron J, Tshiqi J and Victor AJ concurring), the Constitutional Court held that respondents are in fact members of a registered trade union, which was a party to the agreement concluded in the Bargaining Council, by virtue of an agreement concluded between Democratic Nursing Organisation of South Africa – DENOSA – and the South African Medical Association – SAMA – through which both unions agreed to be admitted jointly as a single party to the Bargaining Council. The Court found that it was clear from the wording of the agreement that the scarce skills allowance was negotiated for the direct benefit of the respondents. In terms of this agreement, the respondents employed their scarce skills in rendering clinical services in the public health sector for the benefit of the applicant. The latter undertook liability in terms of the agreement for the payment of the scarce skills allowance. It was undisputed that the respondents performed the duties of principal and chief specialists in the various medical departments within the provincial hospitals on behalf of the applicant. These posts were created for the normal and regular requirements of the relevant hospital departments and are part of the fixed establishment as defined by the PSA. It follows that the respondents are employees of their respective Universities and in the public service, and are thus entitled to have the scarce skills allowance paid to them.


The Full judgment  here