Van Schalkwyk v The Chief Financial Officer: The Provincial Treasury, Free State Province
| Jurisdiction | South Africa |
| Judge | Ebrahim J |
| Judgment Date | 05 July 2007 |
| Docket Number | 1570/2007 |
| Court | Orange Free State Provincial Division |
| Hearing Date | 24 May 2007 |
| Citation | 2008 JDR 1066 (O) |
Ebrahim J:
BACKGROUND:
The applicants are employees of the Department of Finance in the Provincial Government of the Free State which is represented in these proceedings by the 1st, 2nd, and 3rd respondents. I shall refer in this judgment to the three respondents conjunctively as "the Department".
During 2001 the Department underwent a restructuring process as a result of which the salary levels of employees including that of the applicants was upgraded. In terms of the new structure posts which were upgraded were accompanied by the appropriate salary increases as approved in October 2001 by the then MEC for Finance, one Dingane, who is no longer in the employ of the Department. Dingane not only approved the increase in salaries but made the said increases retrospective to 1 November 2001.
The new salary structures were implemented in December 2002 alternatively June 2003, when in addition to receiving the new scale salary in accordance with the upgraded job descriptions, affected employees including the applicants were paid the lump sum payment due to them for the period
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1 November 2001 to December 2002, colloquially known in the Department as "back pay".
As is customary, a standard letter informing the applicants of the upgrading and the relevant accompanying increase in salary in each case was sent to each of them on 6 December 2002 by the Department. In the letter their attention was drawn to the fact that it was possible that mistakes could have been made in the upgrading of posts and in the event that this was discovered to be the case, the Department would rectify those mistakes and recover any excess amounts which may have been paid to the applicants. These facts were supported in evidence by way of a copy of that letter annexed to the papers as "NMP1".
In 2003, during an audit proceeding of the Department's accounts by the Auditor General for the 2002/2003 financial year, it was discovered that the retrospective payments of the salary increases made to the applicants as part of the general body of those employees affected by the upgrading process, had been made in contravention of the relevant Public Service Regulations. Pursuant to this discovery in
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October 2003 a request was made to the National Minister of Public Service and Administration, Mrs. Fraser-Moleketi, for authority to condone the breach of the said regulations. She however declined to do so in a written response dated 15 September 2004 and instructed the Department to reverse the retrospective payments and reclaim monies already paid to affected employees including the applicants in terms of the provisions of section 38 of the Public Service Act 1994 (Proclamation 103/94) which provides the legal machinery for the recovery by State Departments of wrongly paid remuneration.
On the papers before me all of the above was common cause as too was the fact that the Promotion of Administrative Justice Act (PAJA) 2000 (Act 3 of 2000) obliged the Department as an organ of State, to ensure that the implementation of the decision to recover the said remuneration was effected in a manner which was procedurally fair namely since such a decision affected the interests of the applicants adversely, they would have to be given a hearing before the salary overpayments were recovered by the Department. To that end they were invited
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by the Department to make representations by way of a General Circular (Circular 49 dated 25 October 2005) which was annexed to the papers as exhibit "NPM3". Subsequently various letters were exchanged between the applicants and the Department and discussions were held by representatives of both parties. The applicants also consulted their union and meetings between the union representatives and representatives of the Department took place during 2006. There are numerous disputes on the papers as to precisely what matters were discussed and agreed between the parties during those meetings and eventually, as a result of continuous deadlock, the Department addressed the applicants directly on 18 December 2006 calling upon each of them to make individual representations on the proposed salary deductions within 30 days of the date of that letter, failing which it would proceed to deduct on a monthly basis, at the rate of 25% per month, the amount of the overpayment until the full amount due and owing to the Department had been settled in the case of each applicant (annexure "J" and "NMP8").
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During January 2007 the applicants each addressed a letter to the Department denying liability for the debt and alleging that the overpayment was made as a result of a decision approved by the Department (through Dingane) and accordingly they do not consent to any deductions being made off their monthly salary in reduction of such overpayment. On 29 March 2007, the Department by way of letter to each of the applicants, informed them of its decision to deduct an amount of R200,00 per month in reduction of the debt from their monthly salary, commencing 15 April 2007.
The applicants thereafter lodged an application in this court on 13 April 2007 for a declaratory order interdicting the Department from utilising the provisions of section 38 of the Public Servants Act 1994 to deduct the amount allegedly wrongly paid to the applicants. Although the application was initially brought on an urgent basis I was asked not to adjudicate the question of urgency in the interest of finality of this matter and in view of its importance to State Departments. I shall accordingly confine myself in this judgment to the issues on the merits.
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Ebrahim J
THE PRINCIPLE OF LEGALITY
There appears to be no serious dispute on the papers that Dingane in authorising and approving the new salary structures with retrospective effect was acting as a public functionary in exercising a public power or performing a public function. This is so despite obvious contradictory allegations in respondents' own answering papers, that, he was acting as a mere executing authority. No more need therefore be said about this and I have accepted that it is common cause between the parties that Dingane's actions fell foursquare within the ambit of the definition of administrative action in section 1(i) of PAJA which provides as follows:
"Any...
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