Distinction between “benefit” and “remuneration”
This distinction is at the core of one specific aspect of what is defined in the Labour Relations Act (LRA) as an ULP. This manifestation of an ULP is described as an unfair act on the part of the employer regarding the provision of benefits to the employee (Section 186(2)(a) of the LRA).
Initially, a strict and narrow approach was followed in order to legally define a “benefit”, namely limiting it to an existing right the employee has in consequence of contract (including a collective agreement), thus ex contractu, as well as an existing right the employee has in consequence of a statutory provision, thus ex lege.
As the law developed through case law and with specific reference to the Labour Court case: IMATU obo Verster v Umhlathuze Municipality & others (2011) LAC and the Labour Appeal Court case: Apollo Tyres South Africa (Pty) Ltd v CCMA & others (2013) LAC, the definition of “benefit” was however broadened as follows to include:
“Existing advantages or privileges to which the employee is entitled ex contractu, ex lege , as well as rights created judicially or granted in terms of policy or practices, subject to the employer’s discretion”.
This much broader definition of benefits resolved many disagreements and controversy, such as confirming that a change in retirement age, instituted by the employer, can be considered as a “benefit” in terms of Section 186(2)(a) of the LRA. It further clarified that, for instance, a principle of natural justice, creating the right to be heard prior to a decision being taken, which potentially could affect one’s rights or interests, commonly known as the “audi alteram partem”-principle, could be included in the concept of a “benefit” by virtue of it being a judicially created right.
It is important to stress that what I am conveying in this blog is an attempt from my side to explain the concept of the ULP as simplistically as possible. In doing so, my understanding of the topic concerned is informed by what my scrutiny of relevant case law has revealed to me. It has to be borne in mind that clearly defining the term “benefit” (arguably the most contentious aspect of the definition of the ULP), was preceded by drawn-out and complex legal argumentation by several legal authorities over time, captured in several court judgements. I am giving you just the essence, which I distilled from scrutinising the relevant case law.