Hibbert v ARB Electrical Wholesalers (Pty) Ltd case D775/10 [2013] 2 BLLR 189 (LC)

Employers discriminate against employees if the only reason for doing so is age.   Employers thereby breach section 6 of the Employment Equity Act of 1998 [“EEA”] unless there is a legitimate defence such as inherent requirements of the job.   Section 187(1)(f) of the Labour Relations Act of 1995 [“LRA”] makes it automatically unfair to dismiss for that reason.   But then there is the ‘proviso’ in section 187(2)(b) of the LRA which has been interpreted, incorrectly in my opinion, to regard such dismissals as fair ‘if the employee has reached the normal or agreed retirement age for persons employed in that capacity’ and without the need to follow a fair procedure.   In other words the termination is treated as automatic and not as a dismissal, as defined.  It is treated like the expiry of a fixed-term contract of employment.

To give effect to the constitutional right not to be discriminated against the LRA seeks to protect senior citizens by making it automatically unfair to dismiss them based solely on age.   That is all well and good but in an effort to appease employers the LRA sought to provide them with a reason that would not make the dismissal automatically unfair.   But in the process the LRA has been incorrectly interpreted, in my opinion, by purporting to regard certain dismissals based solely on age as fair without employers having to prove that the reason is related to conduct, capacity or based on operational requirements.   On this interpretation employers simply have to prove an agreed or normal retirement age and nothing more.

Properly interpreted surely the ‘proviso’ cannot remove an employee’s right not to be unfairly dismissed nor allow employers to breach section 6 of the EEA where there is no such proviso and only a defence of inherent requirements of the job..

A recent decision of the Labour Appeal Court was discussed in Age discrimination and ‘employment at will’ .

On 27 September 2012 in Hibbert v ARB Electrical Wholesalers (Pty) Ltd case D775/10 [2013] 2 BLLR 189 (LC) the Labour Court decided that the dismissal of an employee who was 64 was automatically unfair and breached section 6 of the EEA.   It was held that the employer had failed to prove that the employee had ‘reached the normal or agreed retirement age for persons employed in that capacity’.   Compensation, but not damages, of R420,000.00 was awarded (equal to 12 months’ salary) and costs.

Having decided that the employer had breached not only the LRA but also the EEA it is not clear what the position would have been if it was decided that there was a normal retirement age.   The EEA does not contain any defence to unfair discrimination other than inherent job requirements.   There is no mention in the EEA of an agreed or normal retirement age.   This issue was not discussed in the judgment of the Labour Court and remains a matter that will need attention in the future.

Extracts from the judgment by Lagrange J with footnotes omitted.

Claim under Employment Equity Act

[24]      The applicant also claimed that he was entitled to further compensation and damages for the employer failing to take action against the person who was responsible for forcing him to retire simply on account of his age, alternatively that the forced retirement constituted unfair discrimination entitling him to further compensation and damages  resulting from his premature retirement.

[25]      In advancing this claim, the applicant placed reliance on the judgments in

  • Evans v Japanese School of Johannesburg  [2006] 12 BLLR 1146; (2006) 27 ILJ 2607 (LC),
  • Bedderson v Sparrow Schools Education Trust [2010] 4 BLLR 363; (2010) 31 ILJ 1325 (LC) and
  • Ehlers v Bohler Uddeholm Africa (Pty) Ltd (2010) 31 ILJ 2383 (LC).

In all these judgments, an automatically unfair dismissal in terms of s 187 of the LRA was also held to amount to unfair discrimination in an employment policy or practice which contravened s 6(1) of the EEA.   If this court finds an employer has unfairly discriminated against an employee under the EEA, it may make an award of compensation and, or alternatively, damages under section 50(1)(d) and (e) read with s 50(2)(a) and (b).

[26]      In Evans’s case the employee who had been retired was retired 4 years prior to the retirement age previously agreed with her.   The court  ordered not only compensation for unfair dismissal of 24 months’ salary, but also damages amounting to approximately two-thirds of what she claimed.   In Bedderson’s case the court accepted that the applicant was entitled to bring distinct claims for compensation under both the LRA and EEA, but it determined the issue of compensation jointly.   No damages were awarded because no evidence was led to support such a claim.   In Ehlers’ case, the court declined to make an award of damages or compensation for unfair discrimination under the EEA in a case involving automatically unfair on account of gender discrimination.   The court acknowledged that a distinct claim of unfair discrimination based on the employer’s conduct prior to the employee’s dismissal might have been made out which would have warranted an award of damages or compensation, but it had not been proven.

[27]      In Wallace v Du Toit [2006] 8 BLLR 757 (LC), the court was alive to the problems of duplicating compensation where the act of unfair discrimination under the EEA is essentially the same act of discrimination on which the claim of automatically unfair dismissal under the LRA is based.   Pillemer, AJ, made the following observations in relation to the matter before him in that case:

“It seems to me that where a solatium is claimed or awarded under the ambit of compensation to compensate for the automatic unfairness of the dismissal, which in this situation embodied the unfair discrimination, and such claim is made in addition to a claim for damages for unfair discrimination arising out of the same facts then there is a duplication that works unfairly against a respondent which a court must be careful to avoid “

[28]      My difficulty with the applicant’s claim under the EEA in this matter raises analogous problems.   As in Wallace, the essence of the discriminatory conduct lies in the dismissal of the applicant on account of his age in the absence of a normal retirement age being established.   To award compensation simply because the employer’s conduct amounts to discrimination warranting compensation under either Act, does not in my mind mean that the employee is entitled to compensation for the same wrong under both.

[29]      That leaves the question of damages.   It can still be argued that even if an employee cannot expect compensation under both the LRA and the EEA, he or she might still be entitled to claim damages for the unfair discrimination under the EEA, which unlike the LRA, recognises such a claim.   Accepting that proposition is correct, the employee must still prove his damages.   As I understood the applicant this was a matter that could be dealt with in further proceedings as to quantum in the event the court was minded to find the respondent liable to pay damages.

[30]      In this case, a fundamental difficulty presents itself which was not an issue in Evans’s case.   In that matter the employer varied an agreed retirement age, so the resulting loss to the applicant clearly would arise from the reasonably foreseeable losses she suffered in consequence of not being employed for the remainder of the period between her actual retirement and the due date of retirement.   In this instance, just as the respondent could not establish a normal retirement date applicable to the applicant, the applicant could also not establish what his due retirement date should be, other than by reference to his own financial planning which was premised on a retirement date at age 65.

[31]      In the absence of a due retirement date, I do not see how it will be possible to determine with any certainty actual damages arising from the applicant’s unilateral retirement by the respondent.   Accordingly, I cannot hold the respondent liable for damages in this matter.   This does not detract from the finding that his retirement in the absence of a normal retirement age being determined for him was unfairly discriminatory.


[34]      The respondent’s dismissal of the applicant on account of his age in the absence of the existence of a normal retirement date, was automatically unfair in terms of s 187 of the LRA and was an act of unfair discrimination in terms of s 6 of the EEA.

[35]      The applicant’s claim for an award of damages under the EEA is dismissed.

[36]      The respondent must pay the applicant an amount of compensation equivalent to twelve months’ remuneration in the amount of R 420, 0000-00 within 15 days of this judgment.

[37]      The respondent must pay the applicant’s costs.