How employees and employers should tackle disputes about allowances

Last week SAA cabin crew downed tools, demanding, among other things, an increase in the daily meal allowance from $131 a day to $170.

With this as background; what should employees and employers know about allowances, and disputes surrounding them?

Ray White (in for Bruce Whitfield on The Money Show) interviewed Hogan Lovells Partner in Employment Law Osborne Molatudi.

Molatudi discussed the following five points:

  • Allowances (i.e. extra payments, either cash or in kind) can be a discretionary (e.g. an incentive bonus, or what is commonly referred to as a 13th cheque) or a contractual entitlement (e.g. a car or transport allowance). To have a claim; allowances must be provided for in a contract, otherwise they will then form part of collective bargaining in the form of demands.

  • Other examples of allowances are discretionary payments (e.g. a tool allowance; a relocation allowance; a meal allowance; a share incentive or discretionary profit-sharing scheme; an entertainment allowance; an education or schooling allowance).

  • In the event of a dispute regarding allowances; employees have a choice to refer an unfair labour practice dispute to the CCMA for arbitration; or opt to go on a protected strike – and this will depend on how they describe the nature of the dispute.

  • The challenging part (in the context of the current SAA strike) is how the dispute is described. Our courts have held that disputes over provision of benefits (comprising allowances) fall into two categories: 1) Where the dispute is not based on an allegation that the granting or removal of that benefit is unfair, strike action is the remedy. 2) Where the dispute concerns the fairness or otherwise of the employer’s conduct, such dispute may be refereed to arbitration.

  • The distinguishing factor is the employer's conduct versus the nature of the employees' demand(s). In the SAA case, the employees are not complaining about the provision of the meal allowance, but they are deadlocked with SAA for refusing to increase it to a particular amount (their demand). In respect of the former – ordinarily, employees would complain that the employer's exercise of discretion in providing the benefit is unfair, whereas in respect of the latter – the complaint is that the employer is refusing to increase it thus making it a dispute of mutual interest and consequently one over which the employees may strike. It should be noted that an employee may not strike alone over a claim for an increase of a particular allowance – it has to be a group of employees acting in concert.

For more detail; listen to the interview in the audio below.

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Article brought to us by Old Mutual.


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