B v F t/a F and Associates (JS219/15) [2016] ZALCJHB 428 (26 October 2016) per Snyman AJ.

The LC awarded substantial compensation to an employee who was dismissed for an invalid and unfair reason which was also automatically unfair.  The dismissal also breached the Employment Equity Act (EEA).  For the purposes of deciding on the remedy the two separate claims based on different causes of action were combined.

It was held that the proviso in s 187(2)(b) of the LRA did not protect the employer because there was no agreed retirement age nor a fixed retirement age in the law firm.

It is strange that Snyman AJ did not query how that proviso could counter an automatically discriminatory dismissal by purporting to treat it as fair if there had been an agreed or usual retirement age.

It seems that by holding that the employee had a valid claim under the EEA it in effect defeated any defence related to an agreed retirement age.  In other words as has been argued by Darcy du Toit many times, in the absence of an inherent requirement of the job or affirmative action, discrimination based solely on age is discriminatory in itself.

It is now time for the labour courts to consider and decide whether the proviso is not in itself invalid for being against public policy and also unconstitutional.

See:

 LC summary:           

  • Automatic unfair dismissal – dismissal based on age – employee simply placed on retirement – whether employee properly placed on compulsory retirement – application of Section 187(2)(b) of the LRA
  • Retirement age – no agreed retirement age – whether normal retirement age exists – principles considered to establish normal retirement age and when it exists in an employer
  • Retirement age – no policy and/or practice regarding retirement age existing in the employer – employer unilaterally determining retirement age – not permitted – employer using retirement to terminate the services of the employee for other reasons
  • Automatic unfair dismissal – no normal retirement age established and section 187(2)(b) thus not applicable – employee’s dismissal based on her age automatically unfair
  • Compensation – compensation for automatic unfair dismissal and discrimination – principles considered – compensation awarded

Excerpts without footnotes

Introduction

[1]   The applicant has instituted a claim in the Labour Court founded on an alleged automatic unfair dismissal in terms of Section 187(1)(f) of the Labour Relations Act (‘the LRA’)[1], for a dismissal based on the applicant’s age. The applicant has also brought a discrimination claim in terms of Section 6(1) as read with Section 50(2) of the Employment Equity Act (‘the EEA’)[2] on the same basis.   The applicant contended that she was simply placed on retirement by the respondent, in circumstances where no retirement age existed, either by agreement, or as a matter of policy or practice.   The applicant also claims her salary for January 2015 and leave pay, which the respondent did not pay.

. . . . .

Was the dismissal automatically unfair?

[15]   As stated above, it is undisputed that the respondent dismissed the applicant on 10 December 2014.  As to the reason for such dismissal, the termination letter and the pleadings make it clear that the dismissal is squarely founded on the applicant’s age.

. . . . .

[44]   Accordingly, I conclude that the respondent has failed to establish the existence of either an agreed or normal retirement age to be applicable in the respondent, and in particular, being applicable to the applicant.  As such, because both of the essential requirements for the application of Section 187(2)(b) are then absent, the defence in terms of this Section is not available to the respondent.  Because the applicant was dismissed based on her age, the applicant’s dismissal has to be automatically unfair as contemplated by Section 187(1)(f) of the LRA, which I hereby determine to be the case.

The discrimination claim

[45]   It is so that even though the applicant’s dismissal was automatically unfair based on her age, these exact same considerations giving rise to this finding can equally substantiate the existence of unfair discrimination as contemplated by Section 6(1) of the EEA[1].  The point is that a dismissal is an employment practice as defined in Section 1 of the EEA, and age is one of the prescribed discrimination grounds in Section 6(1).   Therefore, dismissal based on age is unfair discrimination in the context of an employment practice prohibited by the EEA.

[46]   An automatic unfair dismissal claim and a discrimination claim, even if it is founded on the exact same facts, can exist side by side.  It is competent to institute both claims in one legal proceeding.[2]

[47]   Accordingly, and because the applicant was dismissed based on her age, she was unfairly discriminated against in terms of the EEA, and has a valid claim in this regard as well, entitling her to relief under the EEA.

The issue of relief

. . . . .

[58]   The applicant is also seeking compensation in terms of for being unfairly discriminated against, to which claim the EEA applies.  There is no limit placed on compensation in terms of the EEA.  The compensation that might be awarded must only be just and equitable, as prescribed by Section 50(2) of the EEA which reads:

‘If the Labour Court decides that an employee has been unfairly discriminated against, the Court may make any appropriate order that is just and equitable in the circumstances, including payment of compensation by the employer to that employee; payment of damages by the employer to that employee …’

[59]   In SA Airways (Pty) Ltd v Jansen van Vuuren and Another[1] the Court held:

‘…The EEA draws a distinction between ‘compensation’ and ‘damages’, and does not regard them as the same.

… The intention must have been that they connote different kinds of award.  In my view, the only rational meaning that can be given to the terms is that ‘damages’ connotes a monetary award for patrimonial loss and ‘compensation’ connotes a monetary award for non-patrimonial loss (including a ‘solatium’).’

The Court concluded:[2]

‘In the EEA, ‘damages’ refer to an actual or potential monetary loss (ie patrimonial loss) and ‘compensation’ refers to the award of an amount as a solatium (ie to non-patrimonial loss).  It is conceivable that cases of unfair discrimination may involve actual (or patrimonial) loss for the claimant, as well as injured feelings (or non-patrimonial loss).  …’

The purpose of an award of damages for patrimonial loss by means of a monetary award, is to place the claimant in the financial position he or she would have been in had he, or she, not been unfairly discriminated against.  This is the common purpose of an award of damages for patrimonial loss in terms of the South African law in both the fields of delict and contract.  In the case of compensation for non-patrimonial loss, the purpose is not to place the person in a position he or she would have otherwise been in, but for the unfair discrimination, since that is impossible, but to assuage by means of monetary compensation, as far as money can do so, the insult, humiliation and indignity or hurt that was suffered by the claimant as a result of the unfair discrimination.’

[60]   The applicant is claiming compensation under the EEA, and not damages.  It is thus not about patrimonial loss in this regard, but a solatium for the act discrimination meted out to her by the respondent.   The problem however is that compensation under the LRA for an automatic unfair dismissal normally also includes an element of a solatium, as I have discussed above.

This could lead to the unfortunate result that an employee is double [sic] compensated for the same thing and on the same basis.   Considering that compensation must always be fair to both parties, this balance could be upset in that it could be considered to be unduly unfair towards the employer to make such a double award.