The Private Sector Security Provident Fund v Naphtronics (Pty) Ltd

• Jurisdiction: South Africa
• Judge: Landman J
• Judgment Date: 10 August 2007
• Citation: 2007 JDR 0775 (BG)
• Docket Number: 971/05
• Court: Bophuthatswana High Court

Landman J:

[1]

The Private Sector Security Provident Fund ("the Fund") applies for an order compelling the first respondent, Naphtronics (Pty) Ltd ("Naphtronics"), to pay its contributions to the Fund. The second respondent is the Private Security Industry Regulatory Fund. No relief is sought against the second respondent.

[2]

Section 51(1) of the Basic Conditions of Employment Act 75 of 1997 ("the BCEA") enables the Minister of Labour ("the Minister") to establish a sectoral determination

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for any sector which is not covered by a bargaining council. The Minister established Sectoral Determination 3: Private Security Sector, South Africa ("Determination 3"). Determination 3: has been replaced by Sectoral Determination 6: Private Security Sector, South African ("Determination 6"). Clause 24 of Determination 6 provides for the compulsory membership of employers and employees of what is termed the Private Security Sector Provident Fund ("the Fund"). Determination 6 provides for compulsory contributions, the administration of the fund and the fund rules. The Fund is registered in terms of the Pension Fund Act 25 of 1956 ("the PFA").

[3.1]

Section 7D of the PFA sets out the duties of the board of a fund. One of the duties of a board is to "take all reasonable steps to ensure that contributions are paid timeously to the fund in accordance with this Act" (section 7D(d)) of the PFA.

[3.2]

Section 13A of the PFA provides for the payment of contributions and benefits to pension funds. The section states:

"(1)

Notwithstanding any provision in the rules of a registered fund to the contrary, the employer of any member of such fund shall pay the following to the fund in full, namely:-

(a)

Any contribution which, in terms of the rules of the fund, is to be deducted from the member's remuneration,

(b)

Any contribution for which the employer is liable in terms of those rules.

(2)

(a)

The minimum information to be furnished to the fund by every employer with regard to payments of contributions made by the employer in terms of sub-section (1) shall be as prescribed by regulation.

(b)

If that information does not accompany the payment of a contribution, the information shall be transmitted to the fund concerned not later than 15 days after the end of the month in respect of which payment was made."

[3.3]

Any contribution to a fund must be transmitted directly into the fund's bank account

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or otherwise paid not later than seven days after the end of the month for which such a contribution is payable. See section 13A(3)(a)(i) and (ii) of the PFA.

[3.4]

Section 18A of the PFA provides for interest to be paid on any contribution not transmitted into a fund's bank account timeously. The rate of interest charged is the same as the maximum annual finance charge rate which on the date on which the amounts become claimable applies in accordance with section 2(1) of the Usury Act 78 of 1968.

[3.5]

Regulation 33(1), promulgated in terms of section 36 of the PFA, prescribes the minimum information to be furnished by every employer with regard to payment of contributions. It states:

"(1)

Minimum information to be furnished by every employer to the fund with regard to payments of contributions in terms of section 13A(2) of the Act, shall consist of at least the following:

(a)

Initial Contribution Statement:

(i)

Name of the fund; identification of the fund (e.g. registration number); period in respect of which the contribution is payable;

(ii)

Name and address of the employer or pay-point which made the deduction; responsible person to contact at the employer or pay-point;

(iii)

Full name, date of birth, ID number or employer pay number, or other means of identification, date of membership, pensionable emoluments or a member and percentage or amount of contributions, split between member and employer as well as an indication of any additional voluntary contributions paid.

(b)

Subsequent Contribution Statement:

In respect of each contribution period either:

(i)

The information required in paragraph (a)(i) and (ii) above and part of all the information contained in paragraph (a)(ii) above; or

(ii)

a reconciliation with the contribution statement for the previous period showing any differences in the data such as additions as a result of new members, reductions as a result of membership terminations, adjustments as a result

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of changes in pensionable emoluments or the payment of additional voluntary contributions or other information and corrections due to error."

[3.6]

Regulation 33(7) provides that compound interest on late payments shall be calculated for the period from the first day of the month following the expiration of the period in respect of which the relevant amounts payable until receipt by the fund.

[4]

The Rules of the Fund provides that:

(a)

employers in the Private Security Sector shall participate in the Fund. See Rule 3.1;

(b)

employees in the Private Security Sector shall participate in the Fund; and

(c)

each member shall make a monthly contribution to the Fund at a rate of 5% of his salary. The member's contribution must be deducted by his employer and paid to the Fund within seven days after the end of the month in respect of which the contributions were made. See Rule 4(1).

Jurisdiction

[5]

During the argument of this matter on 21 May 2007, I raised the question whether this court has jurisdiction to entertain the Fund's claim given that:

(a)

the Fund was established by a Sectoral Determination made by the Minister in terms of section 55(3) read with section 55(4)(m) of the BCEA;

(b)

section 77(1) of the BCEA provides that " ... the Labour Court has exclusive jurisdiction in respect of all matters in terms of this Act ... "; and

(c)

on the face of it, the applicant's claim may possibly involve a "matter in terms of the BCEA".

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[6]

The relevant subsections of section 77 of the BCEA read:

"(1) Subject to the Constitution and the jurisdiction of the Labour Appeal Court, and except where this Act provides otherwise, the Labour Court has exclusive jurisdiction in respect of all matters in terms of this Act, except in respect of an offence specified in sections 43, 44, 46, 48, 90 and 92.

(5) If proceedings concerning any matter contemplated in terms of subsection (1) are instituted in a court that does not have jurisdiction in respect of that matter, that court may at any stage during proceedings refer that matter to the Labour Court."

[7]

The application was postponed to 28 June 2007 for the hearing of oral argument on the jurisdictional point.

[8]

The vexed question of the overlapping jurisdiction of the Labour Court and High Court, in the context of the Labour Relations Act 66 of 1995 ("the LRA"), has formed the subject of a series of judgments in the High Court, Supreme Court of Appeal and the Constitutional Court. See Fedlife Assurance Ltd v Wolfarrdt [2001] 12 BLLR 1301 (SCA) at paras 25-27; Fredericks & Others v MEC for Education & Training, Eastern Cape & Others (2002) 23 IJL 81 (CC) at para 32-33; Denel (Pty) Ltd v Vorster (2004) 25 IJL 659 (SCA) at para 16; United National Public Servants Association of SA v Digomo NO (2005) 26 IJL 1957 (SCA) at paras 4-5; Media 24 Ltd & Another v Grobler [2005] 7 BLLR 649 (SCA) at para 76 and Transnet Ltd & Others v Chirwa [2007] 1 BLLR 10 (SCA) at paras 30-44.

[9]

The judgments concern the interpretation of section 157 (1) of the LRA, which reads:

"Subject to the Constitution and section 173, and except where this Act provides otherwise, the Labour Court has exclusive in respect of all matters that elsewhere in terms of this Act or in terms of any other law are to be determined by the Labour Court." (My emphasis.)

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[10]

Mr Myburgh, who appeared for the Fund, submitted that the predominant principle emerging from the judgments is that the resolution of a jurisdictional controversy like the one in questions lies in an assessment of the nature and formulation of the applicant's claim or cause of action. He contended that provided the applicant's claim, as formulated, does not purport to be one that falls within the exclusive jurisdiction of the Labour Court, the High Court has jurisdiction even if the applicant's claim could also have been formulated as a claim falling within the Labour Court's exclusive jurisdiction. See United National Public Servants Association of SA v Digomo NO (2005) 26 ILJ 1957 (SCA) at paras 4-5 and the unreported judgment Boxer Superstores Mthatha v Mbenya (2007) 79 (SCA) at para 5.

[11]

Section 77 of the BCEA has been interpreted in Molapo Technology (Pty) Ltd v Schreuder & Others (2002) 23 ILJ 2031 (LAC); University of the North v Franks & Others [2002] 8 BLLR 701 (LAC) and Molato & Others v DMG Construction CC (2004) 25 ILJ 675 (T).

[12]

In DMG Construction, Hartzenburg J, Botha J and Du Plessis J held that:

"[9]

Section 77(1) of the [BCEA] confers exclusive jurisdiction on the Labour Court 'in respect of all matter in terms of this Act'. In terms of s 77(1) of the [BCEA] the High Court does not have jurisdiction directly to enforce the provisions of s 37(4). The right not to be dismissed otherwise than writing is a right conferred on employees in terms of s 37(4) and its direct enforcement manifestly is a matter 'in terms of' the [BCEA]. Since that is so, it serves no purpose for this court to consider whether s 37(4) is peremptory or not.

[10]

The provisions of s 77(4), on which Mr Beaton fell back for his final stance, provide that the provisions of subsection (1) do not prevent a party to a civil action or an arbitration to establish that a basic condition of employment...