PUBLIC SERVANTS ASSOCIATION OF SOUTH AFRICA
National Prosecuting Authority Bill (B113 - 97)

POINTS OF DEPARTURE
The PSA comment on the National Prosecuting Authority Bill is limited to the personnel administration and career arrangements of existing officials implicated by the Bill and the continuation of labour relations arrangements which we trust will contribute to a smooth transition into the new envisaged Authority.

PROPOSALS
The proposed amendments to the Bill below underlines the application of the existing law and the proposals can be summarized as follows:

(a) To arrange for the continuation of collective bargaining and the recognition of the parties to collective bargaining.

(b) To subject changes to matters of mutual interest to negotiated agreements.

(c) To extend the authority of the Minister for Justice to determine terms and conditions of employment and service benefits for officials below the level of Director.

(d) To arrange improvement of salary by means of negotiated agreements.

(e) To effect the transition and continued employment of the affected officials in terms of section 197(1)(a) and (2)(a), of the Labour Relations Act, but with the retention of fixed-term employment as contemplated for National Director and Director.

(f) To apply fixed-term employment for Attorneys-General for the first period by means of an agreed arrangement with each of the officials.

(g) To arrange the extension of fixed-term employment of National Director and Director for concurrent periods beyond two fixed-term periods and without any break in service under such circumstances.

(h) To afford, rightfully, to National Director and Director the same pension benefit status as Director-General in the Public Service, as a quid pro quo for the change in long-term employment prospects to fixed short-term employment risks.

(i) To clearly arrange the continued application of terms and conditions of employment until amended by means of negotiated agreements by the President or the Minister.

(j) To remove envisaged arrangements regarding personnel matters which are considered to be in conflict with the existing law.

RELEVANT PRINCIPLES
Applications of the LRA
In terms of section 213(1) read with section 2 and 210 of the Labour Relations Act, 1995, the Public Service Act, 1994 and other relevant legislation regulating the employment of Director: Office of Serious Economic Offences, Attorney-General, Deputy Attorney-General, State Prosecutor or State Advocate and other affected officials (further on referred to as affected officials), the State as legal person is the employer of the affected officials and such persons are - notwithstanding their official status - being regarded as employees for purposes of the application of the Labour Relations Act, 1995 (Act no. 66 of 1995).

Constitutional rights
Notwithstanding the employer/employee relationship and the application of the Labour Relations Act, the affected officials also enjoy the labour relations rights conferred on them in terms of section 23 of the Constitution, 1996, for which purpose they are organised and are - through their Unions - party to the bargaining structures instituted by the Labour Relations Act for the Public Service. These rights entail inter alia -

(a) that such officials' services are designated as essential services;

(b) that they have a right to fair labour practices; and

(c) that they have the right to engage in collective bargaining.

In addition the administrative rights of the mentioned officials might influence the legislative progress of the Bill if the administrative action which is intended with regard to their future employment, terms and conditions of employment, official status of employment etc., is not considered lawful, reasonable and procedurally fair, under which circumstances such action can be reviewed by a court (section 33 of the Constitution).

Application of the law
The consequences of the institution of a National Prosecution Authority will be that the prosecution function of the State will become an autonomous organ of the State outside the Public Service but still part of the Public Service and, most importantly, that all officials affected by this arrangement will be transferred and continue to be employed by this authority. Under these circumstances it is of utmost importance to consider the content and application of section 197 of the Labour Relations Act, which on the relevant content provides as follows:

"(1) A contract of employment may not be transferred from one employer (referred to as the "old employer") to another employer (referred to as "the new employer") without the employee's consent, unless -

(a) the whole or any part of a business, trade or undertaking is transferred by the old employer as a going concern; or

(b).

(2) (a) If a business, trade or undertaking is transferred in the circumstances referred to in subsection (1) (a), unless otherwise agreed, all the rights and obligations between the old employer and each employee at the time of the transfer continue in force as if they were rights and obligations between the new employer and each employee and anything done before the transfer by or in relation to the old employer will be considered to have been done by or in relation to the new employer.

(b) ..........................

(3) An agreement contemplated in subsection (2) must be concluded with the appropriate person or body referred to in section 189(1).

(4) A transfer referred to in subsection (1) does not interrupt the employee's continuity of employment. That employment continues with the new employer as if with the old employer.

(5) The provisions of this section do not transfer or otherwise affect the liability of any person to be prosecuted for, convicted of, and sentenced for, any offence."

Given the existing labour arrangements for the affected officials, the reference to section 189(1) in subsection 197(3) above refers to agreement reached with the registered and recognised trade unions representing the affected officials or individual officials.

At this point it is important to note that negotiations on the transfer of the contract of employment of the affected officials between the representative Unions and the Employer in the Bargaining Council for the Department of Justice have not taken place, under which circumstances the State is compelled to adhere to the provisions of section 197(2)(a), (3) and (4) in full and which necessitate -

(a) provision in the Bill for the unchanged retention of the contract of employment of the affected personnel;

(b) provision for the continuation of all rights and obligations, and

(c) provision for the continuation of employment as if with the old employer.

From the contents of the Bill it is clear that it is the State's intention to drastically change the contract of employment of affected personnel at certain levels of employment with the new authority. This, in terms of section 197(1)(a) and 2(a), requires a negotiated agreement.

Effort to apply the LRA
The PSA and other Unions and the State as employer easily and very successfully apply section 197 in creating autonomy for SARS in terms of the SA Revenue Service Act, 1997, and in regulating the continuation of the contract of employment and employment of that personnel. However, efforts by the PSA to achieve, pro-actively, the same results for the intended Prosecuting Authority and the affected personnel failed in view of the attitude of the representatives of the Department of Justice, who merely indicated that section 197 of the Labour Relations Act is not applicable and that the Department's hands are tied since promulgation of the Bill has now become a political matter. Should this questionable approach legally be the case, the PSA is still at liberty to effectively deal with the Bill, its promulgation and application on the affected personnel in terms of section 33 of the Constitution and Administrative Law rights and the Labour Relations Act, which could indefinitely delay employment intended in terms of this Bill.

The way forward
It is not the intention of the PSA to delay or derail the intended legislation and we have no reason to doubt the goodwill of the Minister for Justice, the Portfolio Committee and Parliament through the intended legislation - not to prejudice the affected officials in their future employment.

The comments and recommended amendments that follow are being made so as not to delay the legislative process and, with regard to the affected personnel, to introduce personnel practices which are conducive to existing law and fair practices, but which also support variation of existing employment contracts as is contemplated in the Bill.

PROPOSALS AND COMMENT ON THE CONTENTS OF THE BILL

CONTINUATION OF BARGAINING ARRANGEMENTS

RECOMMENDATION: Bargaining structure
That the following subclause 7 be added to clause 29:

"(7) (a) That until the Minister of Justice and the employee organisation representing members of the prosecuting authority agree to request the President to designate the National Prosecuting Authority as a sector for the establishment of a bargaining council in terms of section 37(4)(a) of the Labour Relations Act, 1995 (Act No 66 of 1995) and until such designation has taken place and a bargaining council established, the prosecuting authority and the member's representative employee organisations shall, as a transitional arrangement, continue to negotiate or consult in an interim bargaining forum. This will be regarded as being established with effect from the date of the implementation of this Act, for which purpose the constitution of the Bargaining Council for the Department of Justice, with the necessary adjustments required by this arrangement, shall apply with force and effect to such interim bargaining forum as if it is a bargaining council.

(b) The employee organisation parties to the forum are such organisations representing officials referred to in subsection (a) above, that were parties to the Bargaining Council for Justice. The employer representative to the forum shall be appointed by the Director-General for Justice in consultation with the National Director.

(c) The employee organisation parties referred to in subsection (b) are being regarded as having been recognised by the prosecuting authority provided they are registered in terms of the Labour Relations Act.

(d) The procedures contained in the Constitution of the forum must be applied as if they were agreed to procedures for negotiations on all matters of mutual interest."

Comments
Members of the intended prosecuting authority are, through their representative employee organisations, party to the existing bargaining structures for the Public Service. It is also in the interest of the State as employer, as represented by the Minister for Justice, that a proper structure for orderly bargaining and consultation be continued. Even if bargaining arrangements should not be established, members of the prosecuting authority could individually or through their employee organisations enforce - in terms of section 51 read with section 134 of the Labour Relations Act - collective bargaining on matters of mutual interest and effect dispute resolution as contemplated in terms of section 134 if agreement cannot be reached on such matters. Such processes will, however, be disorderly and unmanageable and it is therefore advisable to rather regulate, timeously, structures for the continuation of collective bargaining and consultation. This approach was accepted by the legislator in respect of the SARS personnel - see item 6 of Schedule 2 to the SA Revenue Services Act 1997.

RECOMMENDATIONS ON MATTERS PERTAINING TO BARGAINING -
SECTIONS 18 AND 19

Comments
We have serious reservations regarding the constitutionality and legality of clauses 18(1) and 19(1), 5(b) and (c). These clauses appear to exclude the right of the officials to co-determination through the process of collective bargaining of their terms and conditions of service and other matters of mutual interest. Clause 18(1) stipulates that "The remuneration, allowances and other terms and conditions of service benefits of the National Director and a Director shall be determined by the President:" while in respect of the other officials, i.e. Deputy Director or Prosecutor, the Minister shall determine such salaries.

Also fascinating are the arrangements which are further intended in clause 19 namely -

(a) salaries for Deputy Director and Prosecutor must be published by notice in the Gazette but, as deduced from clause 18(1), not in respect of National Director and Director - see clauses 18(1) and 19(1). This formalistic and cumbersome process is not understood - it is not done in respect of the rest of all other public servants and the question arises why then in respect of these officials;

(b) clause 19(3) establishes the opportunity to introduce retro-actively and once only with one year, improved salaries for Deputy Director and Prosecutor, but not for National Director and Director - this clause in addition creates unnecessary expectations which might not materialize. Instead of this once off possibility which should, for practical considerations, not be established by the intended statutes, it can more practically and persuasively be arranged by means of a negotiated agreement, away from unnecessary outside influence;

(c) the notion as contained in clause 19(4) as to when further salary improvements coupled to that of other groupings should be effected is unnecessary since such decisions should rather be left to the parties to and forces of collective bargaining;

(d) the subjectivity of negotiated agreements for salary improvements to a notification to and decisions by Parliament as is intended by clause 5 which will in fact nullify the validity and enforceability of negotiated agreements and collective bargaining. The question also arises whether if by a process of dispute resolution (arbitration), salaries are improved, Parliament will have the legal powers to terminate such an award - the impression deduced from these clauses is that the drafters of same were ignorant of the constitutional and labour law rights of the relevant officials;

(e) by the provision in clause 19(6) whereby salaries payable shall not be reduced except by an Act of Parliament. This intended arrangement with regard to the reduction part of it flies in the face of the rights pertaining to collective bargaining and negotiated agreements which supersede an Act of Parliament. It is, however, important to note that the affected officials presently, in terms of their existing terms and conditions of employment, enjoy protection by law of their salaries and salary scales which protection should be retained in order to comply with the provisions of section 197 of the Labour Relations Act.

It must also be noted that those officials who are presently part of the personnel appointed in terms of the Public Service Act, enjoy salary improvement protection up to the 1999 financial year in terms of collective agreements and, as in the case of the SARS personnel, this right should be protected.

It is our view that clauses 18 an 19 can be amended so as to recognise the fundamental and legal employee rights of the officials concerned, but without taking away the decisive role which the President and/or the Minister has to fulfill in determining salaries, salary scales, service benefits, terms and conditions of employment etc., of the officials, by amending the relevant clauses as recommended below.

RECOMMENDATIONS

Clause 18.1
That the first sentence of this subsection be amended to read as follow:

"Subject to the provisions of the Labour Relations Act, 1995 (Act no 66 of 1995) and sections 20 and 29 of this Act the allowances and of the National Director and a Director shall be determined by the President: Provided ....................."

Note: With regard to the reference to section 20 above please see comment and recommendation regarding this section 20 below.

Clause 19
(a) That clause 19 be reworded to read as follows:

"(1) Subject to the provisions of the Labour Relations Act, 1995 (Act no. 66 of 1995) the salary of Deputy Director and Prosecutors shall be determined by the Minister which may include different categories of salaries and salary scales.

(2) Subject to the provisions of a negotiated agreement the salary and salary scale of a member of the Prosecuting Authority shall not be reduced without his/her consent.

(3) The salary and salary scale of a member of the Prosecuting Authority shall, up to and including the 1998/99 financial year, not be less favourable than the salary and salary scale applicable to them had they been employed in terms of the repealed employment legislation applicable to them."

CONDITIONS OF SERVICE OF DEPUTY DIRECTOR AND PROSECUTOR,
EXCEPT REMUNERATION - SECTION 20

Comments
By the introduction of clause 20 a totally untenable situation regarding other conditions of service of Deputy Director and Prosecutor is created for these officials and the Minister. These other conditions of service shall, according to clause 20, be determined in terms of the Public Service Act. The question which immediately arises is: How can that ever be possible? If it is intended that in respect of categories of conditions of service the Minister for the Public Service and Administration should act as decision maker, such an intention should be stated clearly. Clause 20, however, creates additional practical problems such as -
(a) excluding the Minister from deciding conditions of service other than salaries for Deputy Director and Prosecutor or to introduce new conditions of service or to amend the existing conditions of service according to the unique circumstances of members of the Prosecuting Authority, while in the case of the National Director and Directors the President is empowered to divert from existing conditions of service, but with due regard to the transitional arrangements;

(b) the fact that many other conditions of service are being decided by other Ministers i.e. pension provisioning, motor finance scheme, subsidized vehicle transport etc., which are not regulated in terms of the Public Service Act, while for the Public Service as a consequence of the amended Public Service Act, the Public Service Regulations, the Public Service Staff Code and other prescripts will be repealed by the new Public Service Regulations in terms of which conditions of service will be regulated and continued in terms of collective agreements; and

(c) subjecting the Minister and members of the Prosecuting Authority to negotiated agreement on conditions of service concluded by other parties who have no interest in the Prosecuting Authority and its officials, which fact is also enforced by the proviso in clause 29(6) in terms of which protection of existing conditions of service is forfeited if a "law or agreement" so stipulates.

Good practice and efficiency demand that the Minister, subject to the provisions of the Labour Relations Act, be empowered to deviate, by means of a negotiated agreement, from existing protected conditions of service in respect of the relevant officials, especially in view of the intended regulating of conditions of service for other Public Servants in the near future.

RECOMMENDATIONS

That clause 20 be amended to read as follows:

"To implement section 29 all members of the Prosecuting Authority shall be subject to the provisions applicable to them prior to the implementation date of this Act as contained in legislation, regulations, codes, collective agreements or other prescripts until replaced by provisions determined by the President in terms of section 18(1), or by the Minister in respect of Deputy Director or Prosecutor, in terms of negotiated agreements in terms of the Labour Relations Act."

TRANSITIONAL ARRANGEMENTS CLAUSE 29(6)

Comments
As discussed above, the affected officials cannot be excluded from the provisions of section 197 of the Labour Relations Act. To promote legal certainty for the affected officials to continue employment with the Prosecuting Authority the applications of section 197 of the Labour Relations Act shall have to be confirmed in clause 29(6) of the Bill.

RECOMMENDED

That clause 29(6) commences to read as follows:

"Subject to the Constitution, this Act and without derogating from the generality and application of section 197(1)(a), (2)(a), (3), (4) and (5) of the Labour Relations Act, all measures ............................... shall continue in operation ............................... until repealed by this Act or a negotiated agreement."

Note: The insertions are the words underlined above.

EMPLOYMENT CONTRACT, TERM OF OFFICE AND STATUS OF NATIONAL DIRECTOR AND DIRECTORS -
CLAUSE 8 AND 13 READ WITH CLAUSE 29(2)

Comments
Legality of clauses
The concerns emanating from the application of clauses 8, in respect of National Director and clause 13 in respect of Director read with clause 29(2), with regard to the determination of the term of office of Director are the following:

(a) The pre-determined fixed term of employment and term of office of National Director and Director, without determining their status regarding their future pension arrangements.

(b) The change contemplated in the employment contract of serving Attorneys-General, whereby the long term employment contract is unilaterally changed to a pre-determined fixed term employment arrangement.

(c) The retro-active implementation of the pre-determined fixed term employment contract.

(d) The rigid arrangement whereby the fixed term of employment up to seven years can be extended for one additional term only, and the omission, except for a person who has reached the age of 65 years, to renew and extend the term of office for a deserving National Director and Director who is younger than 65 years beyond a second term of office, up to the age of 65 years.

(e) The unfortunate use of the word "reappointed" in clause 9(2), for extension or for renewal of term of office, implying a termination of service on expiry of any determined term of office, payment of retirement benefits, a new, fresh appointment on the start of the new extended term of office, and a fresh start for the accumulation of service benefits, instead of the continuation of same with an extended renewed term of office, except for a person who has reached the age of 65 years who "must vacate his or her office", indicating retirement.

As already stated above, section 197(1)(a) and (2)(a), of the Labour Relations Act, apply regarding the continued employment of inter alia existing Attorney-General and the Director: Office of Serious Economic Offences, which compel adherence to the following:

(a) A transfer from the old to the new employer does not interrupt the employees continuity of employment. The employment continues with the new employer as if with the old employer (section 197(4)).

(b) All rights and obligations between the old employer and each employee at the time of transfer, continue in force as if they were rights and obligations between the new employer and each employee (section 197(2)(a)).

(c) Deviation from (a) and (b) above is allowed, if agreement on any variation of the contract of employment was concluded with the appropriate person or body referred to in section 189(1) (section 197(3)).

Apart from sections 197(3) and (4) of the Labour Relations Act, section 23(3) of this Act further provides that where applicable, a collective agreement varies any contract of employment between an employee and employer, who are both bound by a collective agreement. It was with the above provisions in mind and in order to overcome the legal barriers that we are faced with now that the PSA endeavoured to reach agreement on the employment contract of the affected officials, within the appropriate bargaining structures, but which efforts, for whatever reasons, were not supported by the representatives of the Department of Justice and whereby a variation of the contract of employment of the officials under consideration, as contemplated in clauses 8 and 13 read with clause 29(2), becomes legally questionable. It is, nevertheless, conceded that where we are dealing with rationalizing, the status of State functions and other organs of State, regulated by law, into one single autonomous state organ, such arrangement could possibly exclude the application of section 197 of the Labour Relations Act. However, the change of terms and conditions of employment and the employment contract intended by this action can, nevertheless, only be affected by means of a collective agreement between the parties concerned. If this viewpoint is questionable the applicable jurisprudence will have to be decided by the courts. If the legality of the variation of the employment contracts as contemplated in section 8 and 13, is questioned by the officials concerned or their representative bodies, possible action could indefinitely delay promulgation of certain parts of the Bill. The PSA would rather prefer to address and solve such problems prior to the final stages of the legislative processes to the advantage of both the State and the affected officials.

Clarifying the identified concerns and recommendations
As point of departure, we have to emphasize that the PSA is not, in principle, opposed to the fixed term appointment of National Director and Director, on condition that the contemplated conditions of their employment are clearly defined as clarified below:

Pensionable status of National Director and Director
The Bill, especially with regard to clause 8 and 13, contains no indication of the pension arrangements for National Director and Director. Relevant arrangements must be made on this matter in the Bill in view of the fact -

(a) that the long-term contract of employment of the relevant affected officials will be reduced to a pre-determined short period of employment of between one and seven years, with the consequence that the officials' pension planning and expectation of long-term uninterrupted pensionable service are adversely affected and terminated, without a quid pro quo for terminating the officials' legitimate expectation in this regard;

(b) that the official status of the National Director and profile will be higher than that of a Head of Department, if clause 18(1)(a) is observed, while the status and profile of a Director is comparable to that of Director-General, if clause 18(1)(b) read with clauses 15 and 16 is taken into consideration. The similarity of the pension status of National Director and Director to that of Director-General is also derived from the fixed term employment approach which merits additional pension benefits.

With the translation of SARS into an autonomous organ of State, the former Commissioner of SARS then, employed with the grading of Deputy Director-General, was appointed as Commissioner of the new SARS on a fixed-term of office basis and with a pension provision status of Director-General in the Public Service - see section 19(2) of the SA Revenue Service Act, 1997 - which arrangement by means of increased pension arrangements, provides a quid pro quo for the termination of long-term employment expectation to short fixed-term employment arrangements.

RECOMMENDATION
That clause 18 be supplemented by the following subclause 4:

"(4) The National Director and Director are entitled to pension provisioning and pension benefits determined and calculated under all circumstances, as if they are employed as Director-General in the Public Service."

THE EMPLOYMENT CONTRACT, CONTINUATION OR EXTENSION OF TERM OF OFFICE AND CALCULATION OF TERM OF OFFICE - CLAUSES 9, 13 AND 29(2)
The employment on a fixed-term basis of National Director and Director is arranged in terms of clause 9(1) to (4) and clause 13. The continued employment of Attorney-General as Director is provided for in terms of clause 29(1). This continued employment is, however, made subject to subclause (2) which provides -

(a) that an Attorney-General who becomes a Director in terms of subsection (1) shall continue in office for the unexpired portion of his or her term as fixed by section 13; and

(b) for purposes of determening the unexpired period, a Director's date of appointment as Attorney-General prior to commencement of the appointment shall be deemed to be the date of appointment in terms of section 13. Regarding the application of clauses 9(1) to (4), 13 and 29(2), we have to raise the following concerns:

(i) Except for a person who attained the age of 65 years (clause 9.4) provision is lacking regarding the extension of the term of office of the National Director and Director for successive periods not exceeding seven years beyond the two terms provided for in clause 9(1) and (2). Government may later experience this limitation as obstructive to good practice and efficiency.

(ii) The retrospective application of the term of office of Attorneys-General appointed as Director in terms of clause 9(2), read with clause 13 can have the result that the services of some of them can be terminated on the date of commencement of the operation of the intended Act, or otherwise within a relative short period thereafter. This intended arrangement is in conflict with the provisions of section 197, quoted and referred to above as well as legal presumptions against the retro-active applications of legislation which affects a person adversely.

In drawing a comparison between the appointment of National Director and Director, a very clear distinction exists. In the case of the National Director a person has a free choice to accept the appointment or to reject the offer without any prejudice to his/her existing career. In the case of Attorney-Generals, there is no option and they are translated without choice to the new position of Director from a long term contractual arrangement into a fixed term arrangement, which could be any term of office up to seven years. It is our opinion that this intended arrangement will fail, if tested in Court, given the existing rights on employment of Attorney-General. It is our view that clause 9(2) should not be incorporated in the intended legislation and that the first term of office of Attorney-General up to seven years, be agreed to with each individual Attorney-General.

RECOMMENDATION
(a) That clause 29(2) be replaced by the following clause 29(2):

"An Attorney-General who becomes a Director in terms of subsection (1), shall continue in office for a term of office, in accordance with section 13, as agreed to between the President and such Attorney-General."

(b) That clause 9(2) be replaced by the following clauses 9(2):

"2(a) A National Director's term of office as contemplated in subsection (1), may be extended at the expiry thereof for a period or successive periods not exceeding seven years per period, as the President may approve.

(b) The President shall, in writing, inform the National Director at least three calendar months before the expiry date of the term of office, whether he or she proposes to retain the National Director's service for an extended term or not.

(c) If the National Director concerned is informed of such intention to retain his or her services for an extended term, he or she shall, in writing, inform the President within one calendar month from the date of that communication, of his or her acceptance or not of such extended employment.

(d) If the National Director concerned informs the President of his or her acceptance of extended employment, his or her term of office shall be extended by the further period as been agreed to with the President."

(e) If the term of office of the National-Director is not extended by the President the National-Director shall be deemed to have retired in terms of section 17(2)(b) of the Public Service Act, 1994.

(c) That clause 13(2) be replaced by the following clause 13(2):

"Section 9(2) applies with the necessary changes mutatis mutandis to a Director whose term of offices in terms of subsection (1) is about to expire."

CONCLUSION
The above proposals can further be refined and is aimed at creating legal certainty and at eliminating any possible disputes that may arise before or after the legislative processes are finalized.

C H Jansen van Rensburg
GENERAL MANAGER