Comair Ltd scored a decisive victory in the Labour Court last month when it persuaded the Labour Court to review and set aside a decision by the Director-General, Department of Labour [“the DG”]. The Department and the Minister initially applied to the Labour Court for a declaratory order to the effect that Comair had refused or failed to comply with section 20 of the Employment Equity Act 55 of 1998 ( “the EEA”) by failing to prepare and implement an employment equity plan.
Comair counter-applied and obtained an order, with costs, reviewing and setting aside (a) the recommendation by the DG dated 15 March 2007 in terms of section 44(b) of the EEA; and (b) the decision by the DG in terms of section 45 of the EEA to refer Comair’s alleged non-compliance with the recommendation to the Labour Court. A number of passages will be quoted with the addition of some emphasis and the omission of footnotes.
In Director-General, Department of Labour v Comair Ltd [2009] JOL 24060 (LC) dated 11 August 2009 per Basson [AC] J the Labour Court had to decide 3 issues: (a) whether the DG is accountable through review proceedings for actions taken in the exercise of the powers vested in the DG under the EEA; (b) if so, whether the DG properly exercised the public power bestowed and applied to Comair in terms of the EEA; and (c) if not whether the decision should be set aside.
Basson J pointed out the EEA gave effect to section 9 of the Constitution and more particularly, to the constitutional notion of equality which embraces both formal and substantive equality.
Basson J is reported to have stated:
“[12] In order to promote and ensure adherence to the goal of employment equity, the EEA thus places an obligation on every designated employer to implement affirmative action measures for people from the designated groups. As such the EEA contains a mandatory obligation to implement affirmative action measures for people from the designated groups. These obligations entail the adoption of affirmative action measures as contemplated by section 15 et seq of the EEA. … In order to ensure that designated employers comply with these mandatory provisions and to ensure compliance with the ultimate purpose of the EEA, the EEA, through its labour inspectors and the DG are clothed with monitoring and enforcement powers”.
“[13] Chapter V of the EEA provides for monitoring enforcement and legal proceedings. Chapter V grants labour inspectors who act in terms of the EEA the power to enter, question and inspect as provided for in sections 65 and 66 of the Basic Conditions of Employment Act17 (hereinafter referred to as “the BCEA”)”.
“[15] In terms of section 43 of the EEA, the DG is entitled to conduct a review of an employer in order to determine whether or not the employer is compliant with the EEA. This power of review is provided for in section 43 of the EEA. Subsequent to the review in terms of section 43 the DG may either approve a designated employer’s employment equity plan or make a recommendation to an employer in writing stating the steps that the employer must take in connection with the implementation of the equity plan in order to ensure compliance with the EEA; the period within which those steps must be taken and any other prescribed information. If the DG is not satisfied with the steps that an employer has taken in its endeavours to comply with its obligations in terms of Chapter III of the EEA (either in terms of section 43(2) or the recommendation in terms of section 44(b) of the EEA), the DG may refer the employer’s conduct to the Labour Court in terms of section 45 of the EEA … “.
The enforcement mechanisms provided for by the EEA comprise 3 steps (a) monitoring by employees and the trade union representatives within the workplace and reporting to any of the persons listed in section 34 of the EEA including but not limited to the DG or a labour inspector; (b) investigative procedures conducted by labour inspectors in terms of section 35 of the Labour Relations Act, 1995 [“the LRA”]; and (c) applying to the Labour Court in terms of section 45 of the EEA.
In dealing with reviews by the DG in terms of section 43 of the EEA Basson J stated:
“[26] Parallel with the process of compliance instituted by labour inspectors, it appears that the DG may also conduct a review to determine whether an employer is complying with the EEA. This form of review is an administrative function performed by the DG. In terms of the powers designated to the DG, the DG may request the employer to submit (to the DG) a copy of its current analysis or employment equity plan.
The DG may also have insight into any books, records, correspondence, documents or information that could reasonably be relevant to a review of the employer’s compliance with the EEA. The DG may also conduct meetings with the employer to discuss their pursuit of the employment equity plan and any matters relating to compliance with the EEA. This process may also include meetings with any employee or trade union consulted with in terms of section 16 of the EEA”.
“[27] Subsequent to the review by the DG, the DG may approve a designated employment equity plan; or make a recommendation to the employer in writing stating what steps should be taken in connection with an employment equity plan and appropriate time frames in which that must be achieved”.
“[28] If an employee fails to comply with the DG’s recommendations, the DG “may” refer the matter to the Labour Court. Implicit therein is the power to decide whether it is appropriate to refer the matter to the court, or to utilise other enforcement mechanisms contemplated by the EEA”.
“[29] The Labour Court has exclusive jurisdiction to determine any dispute about the interpretation or application of the EEA. The Labour Court also has the power to order compliance with any provision of the EEA including a request made by the DG to make a compliance order an order of court”.
The Labour Court has the power to review any function provided for in this Act: [section 50(1)(h) of the EEA which reads
“Except where this Act provides otherwise, the Labour Court may make any appropriate order including – . . . (h) reviewing the performance or purported performance of any function provided for in this Act or any act or omission of any person or body in terms of this Act on any grounds that are permissible in law; . . .]”.
There was a dispute as to whether section 50(1)(h) of the EEA empowers the Labour Court to review the performance of the functions of the DG in terms of EEA but Basson J decided:
“[32] It is thus clear from the aforegoing that the EEA empowers certain State officials (labour inspectors and the DG of Labour) with powers to investigate and ensure compliance with the provisions of the EEA.
In exercising its powers and responsibilities in terms of the EEA, these individuals are required to bring value judgments on the degree of compliance as well as the pace at which the objectives of the EEA are being accomplished. This is especially clear from the provisions of section 43 of the EEA”.
Basson J also dealt with section 42 of the EEA (assessment of compliance) and stated:
“[33] Section 42 of the EEA provides the framework against which the DG will assess compliance with the EEA in respect of employment equity policies and programmes. At the outset it should be noted that his section clearly places an obligation upon the DG to assess certain factors in evaluating compliance”.
Section 42 of the EEA reads as follows:
“In determining whether a designated employer is implementing employment equity in compliance with this Act, the Director-General or any person or body applying this Act must, in addition, to the factors stated in section 15, take into account all of the following: (a) the extent to which suitably qualified people from and amongst the different designated groups are equitably represented within each occupational category and level in that employer’s workforce in relation to the– (i) demographic profile of the national and regional economically active population; (ii) pool of suitably qualified people from designated groups from which the employer may reasonably be expected to promote or appoint employees; (iii) economic and financial factors relevant to the sector in which the employer operates; (iv) present and anticipated
economic and financial circumstances of the employer; and (v) the number of present and planned vacancies that exist in the various categories and levels, and the employer’s labour turnover; (b) progress made in implementing equity by other designated employers operating under comparable circumstances and within the same sector; (c) reasonable efforts made by a designated employer to implement its employment equity plan; (d) the extent to which the designated employer has made progress in eliminating employment barriers that adversely affect people from designated groups; and (e) any other
prescribed factor.”
“[34] It is clear from the aforegoing that the EEA instructs the DG to take into consideration a number of factors before arriving at a decision. I am in agreement with the submission that this matrix of considerations allows and in fact forces the official to bring a sound judgment to bear in assessing compliance with the EEA. What is further clear from this section is the fact that the requirements or factors must be weighed cumulatively. In this regard this section specifically states that “all” of the factors must be taken into account. A labour inspector or the DG can therefore not exercise a discretion without taking into account the factors in section 15 of the EEA and those listed in section 42 of the EEA”.
Comair submitted that the DG has patently not taken into account all of the considerations as set out in and required by section 42 of the EEA.
After referring to the vexing issue as to whether the Labour Court may review the functions of the DG in terms of the EEA Basson J held: that it is not necessary to decide whether or not a review is competent in terms of section 145 of the LRA, PAJA or even the common law. “Section 50(1)(h) of the EEA makes it, in my view, clear that the Labour Court may make any appropriate order including: ‘. . . reviewing the performance or purported performance of any function provided for in the Act or any act or omission of any person or body in terms of the Act on any grounds that are permissible in law’”.
Basson J agreed with the submission that the focus of the review is whether there are grounds “permissible in law” to review the decision by the DG to issue the recommendation and to refer the matter to the Labour Court and that in exercising this power “the DG is exercises a public power susceptible to control by the courts in accordance with fundamental principles of constitutionalism and administrative law”.
With regard to the merits of the review Basson J agreed with Comair’s submission that the DG’s recommendation does not reflect an application of mind to the matter and that even more supportive of the argument “is the fact that there is no indication from the recommendation that the DG complied with the mandatory instruction contained in section 42 of the EEA. There is no indication that the DG even considered the factors which the DG is obliged to consider in terms of section 42 of the EEA. There is, for example, no indication that the DG requested Comair to submit (to the DG) a copy of its current analysis or employment equity plan (section 43(2) of the EEA)”.
It is further instructive to quote 2 further passages from the judgment:
“[45] Mr Mokhare, on behalf of the applicant [DG], submitted that it does not matter whether or not the DG was right or wrong in arriving at its decision. According to the submission it is “irrelevant” and the only avenue open for the respondent [Comair] is to come and defend itself before this Court in the main application. Mr Mokhare also argued that the factors listed in section 42 of the EEA is merely an assessment tool and not decisive. It was further argued that even if those factors (contained in section 42) were not taken into account that does not mean that the recommendation must be set aside. In further advancing this argument, it was argued that this Court should not follow a formalistic approach but that this Court should follow a holistic approach”.
“[46] I have several difficulties with this argument. The first is the plain language used in section 42 namely that the DG in “applying this Act, must, in addition to the factors stated in section 15, take into account all of the following [section 42(a)–(e) of the EEA]”. There is no doubt from a plain reading of this section that there is a mandatory duty upon the DG to consider these factors. It is clear from the documents filed by the State Attorney that these factors were not considered. The only question that therefore remains is whether or not this Court has the power to review the exercises of the functions of the DG. This is not a question of being formalistic or following a holistic approach. The DG either exercised his functions properly or he did not. Whether this Court can review the exercise of this function is a legal question and not a policy consideration. I have already indicated that I am of the view that the Labour Court can review”.