In a victory for government employees, the Government Employees Pension Fund (GEPF) now has to consult them before changing the formulas that determine the benefits workers get from the fund.
The Supreme Court of Appeal (SCA) on Friday did not mince its words about the GEPF’s attempts to downplay the importance of consultation with employee organisations in determining issues that directly affect their finances.
The GEPF was established to administer and manage pension fund matters and schemes relating to government employees.
The case, brought by the Public Servants Association (PSA) and two of its former members, has its genesis in a 2014 decision by the GEPF’s board to change the formula that determines the actuarial interest for its members — that is, the accrued benefit payable to a member.
The GEPF took the decision after consultation with the relevant minister but did not consult labour before the decision was taken or implemented.
It was only after the fact that the GEPF tried to use the Public Service Co-ordinating Bargaining Council (PSCBC) as the forum to consult post facto on the decision to change the formula, which cost affected members thousands of rand.
However, the rules explicitly state that a decision on the formula should be taken only after consultation. That in turn saw the SCA on Friday review and set aside the decision on the formula, as well as order that the GEPF must now consult employee organisations before a decision is taken.
SCA judge Mahomed Navsa, in a unanimous judgment, made it clear that consultation has to take place with employee organisations.
“Consultation should occur before the decision is made and the party to be consulted should be afforded the opportunity to present a point of view that then must be seriously considered. It does not have to be accepted but it must be considered. Put differently, consultation was a precondition for a valid decision,” Navsa said.
He said attempts by the GEPF to “sanitise” its failure to consult at the bargaining council did not achieve the same result as consultation ahead of the decision.
“The rule is clear about the sequence of events: first consultation, followed by a decision.”
The judge said there must be a good-faith consideration of what the consultation yielded.
“In the present case the invocation of the PSCBC by the GEPF was an ill-advised attempt, not so much as to cure the incurable defect but rather to enforce the GEPF’s will. It was resorted to because the consultation with the various employee organisations proved tedious and burdensome. That much is clear from the GEPF’s own documents,” Navsa said.
PSA spokesperson Reuben Maleka welcomed the judgment and said it benefited all government employees and not just PSA members.
The GEPF has not yet been able to indicate what the effect of the ruling would be on the fund but said it was studying the judgment.
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