Do employers have the right to end employment based solely on age when employees reach the normal retirement age for persons employed in that capacity ?
A very important recent judgment of Wallis JA in the Supreme Court of Appeal sheds considerable light on the current approach to interpretation of statutes and contracts, including the nature and interpretation of ‘provisos’.
Labour Relations Act, 1995 and unfair age discrimination
The Labour Relations Act, 1995 section 187 is headed ‘automatically unfair dismissals” and reads (abbreviated):
(1) A dismissal is automatically unfair . . . if the reason for the dismissal is … (f) that the employer unfairly discriminated against an employee, directly or indirectly, on any arbitrary ground, including, but not limited to . . . age;
(2) Despite subsection (1)(f), a dismissal based on age is fair if the employee has reached the normal or agreed retirement age for persons employed in that capacity.
If section 187(2) is in the nature of a proviso or an exception to the general prohibition against unfair discrimination, including age, how can it ever allow employers to base a dismissal only on age and then regard that dismissal as not only automatically unfair but actually as fair, when all dismissals require a fair reason and a fair procedure ?
Independent enacting clauses
The question is then whether that ‘proviso’ qualifies as ‘an independent enacting clause’.
If it cannot be regarded as independent then employees can enforce their right not to be unfairly dismissed and employers will have to prove that the dismissal was fair.
See Premier of the Eastern Cape Province v Sekeleni [2002] 3 All SA 407 (SCA) where Farlam JA is reported to have stated in para 17:
“It is well established that a proviso is not to be treated as what has been described as an independent enacting clause but as being dependent on the main enactment . . . The same approach must apply to other provisions which are in the nature of exceptions to a general provision.”
This issue is relevant because of the following footnote in Labour Relations Law: A Comprehensive Guide (2006, 5th ed Lexis Nexis) at page 394
“133 … On this basis it is also arguable that a retirement policy could be regarded as unfair if it is based solely on age, ie, without reference to the nature of the job or the capacities of the employee. It could also be argued that, as s 187(2)(b) lays down an excepting or qualifying proviso, it cannot be construed as enlarging the scope of s 187(1)(f) by creating a right for an employer to terminate employment based solely on age and with disregard for that employee’s right not to be unfairly dismissed.
See Craies Statute Law 7 ed at 218, quoted with approval in Mphosi v Central Board for Co-Operative Insurance Ltd 1974 (4) SA 633 (AD) at 645. See also Premier of the Eastern Cape Province v Sekeleni [2002] 3 All SA 407 (SCA); … .”
The latest SCA judgment
This leads on to the magisterial and unanimous judgment delivered recently by Wallis JA in Natal Joint Municipal Pension Fund v Endumeni Municipality [2012] JOL 28621 (SCA).
Incidentally Farlam JA was one of the concurring judges.
Because of the importance of the judgment it is necessary to quote important sections of the judgment but leaving out the footnotes which will be found by clicking on the link to the judgment, kindly provided by Saflii.
The proper approach to interpretation
“[17] The trial judge said that the general rule is that the words used in a statute are to be given their ordinary grammatical meaning unless they lead to absurdity. He referred to authorities that stress the importance of context in the process of interpretation and concluded that:
‘A court must interpret the words in issue according to their ordinary meaning in the context of the Regulations as a whole, as well as background material, which reveals the purpose of the Regulation, in order to arrive at the true intention of the draftsman of the Rules.’
Whilst this summary of the approach to interpretation was buttressed by reference to authority it suffers from an internal tension because it does not indicate what is meant by the ‘ordinary meaning’ of words, whether or not influenced by context, or why, once ascertained, this would coincide with the ‘true’ intention of the draftsman. There were similar difficulties in the heads of argument on behalf of Endumeni. In one paragraph they urged us, on the basis of the evidence of the actuary who advised the Fund to adopt the amendment, that the proviso was not intended to cater for ‘a Maltman type of event’ and in another cited authorities for the rule that the ‘ordinary grammatical meaning of the words used must be adhered to’ and can only be departed from if that leads to an absurd result. In view of this it is necessary to say something about the current state of our law in regard to the interpretation of statutes and statutory instruments and documents generally.
[18] Over the last century there have been significant developments in the law relating to the interpretation of documents, both in this country and in others that follow similar rules to our own. It is unnecessary to add unduly to the burden of annotations by trawling through the case law on the construction of documents in order to trace those developments. The relevant authorities are collected and summarised in Bastian Financial Services (Pty) Ltd v General Hendrik Schoeman Primary School.
Present state of the law
The present state of the law can be expressed as follows. Interpretation is the process of attributing meaning to the words used in a document, be it legislation, some other statutory instrument, or contract, having regard to the context provided by reading the particular provision or provisions in the light of the document as a whole and the circumstances attendant upon its coming into existence. Whatever the nature of the document, consideration must be given to the language used in the light of the ordinary rules of grammar and syntax; the context in which the provision appears; the apparent purpose to which it is directed and the material known to those responsible for its production.
Where more than one meaning is possible each possibility must be weighed in the light of all these factors. The process is objective not subjective. A sensible meaning is to be preferred to one that leads to insensible or unbusiness like results or undermines the apparent purpose of the document. Judges must be alert to, and guard against, the temptation to substitute what they regard as reasonable, sensible or business-like for the words actually used. To do so in regard to a statute or statutory instrument is to cross the divide between interpretation and legislation. In a contractual context it is to make a contract for the parties other than the one they in fact made. The ‘inevitable point of departure is the language of the provision itself’, read in context and having regard to the purpose of the provision and the background to the preparation and production of the document.
Consider context and language together
[19] All this is consistent with the ‘emerging trend in statutory construction’. It clearly adopts as the proper approach to the interpretation of documents the second of the two possible approaches mentioned by Schreiner JA in Jaga v Dönges NO and another, namely that from the outset one considers the context and the language together, with neither predominating over the other.
This is the approach that courts in South Africa should now follow, without the need to cite authorities from an earlier era that are not necessarily consistent and frequently reflect an approach to interpretation that is no longer appropriate.
The path that Schreiner JA pointed to is now received wisdom elsewhere. Thus Sir Anthony Mason CJ said:
‘Problems of legal interpretation are not solved satisfactorily by ritual incantations which emphasise the clarity of meaning which words have when viewed in isolation, divorced from their context. The modern approach to interpretation insists that context be considered in the first instance, especially in the case of general words, and not merely at some later stage when ambiguity might be thought to arise.’
More recently Lord Clarke SCJ said ‘the exercise of construction is essentially one unitary exercise’.
[20] Unlike the trial judge I have deliberately avoided using the conventional description of this process as one of ascertaining the intention of the legislature or the draftsman, nor would I use its counterpart in a contractual setting, ‘the intention of the contracting parties’, because these expressions are misnomers, insofar as they convey or are understood to convey that interpretation involves an enquiry into the mind of the legislature or the contracting parties.
The reason is that the enquiry is restricted to ascertaining the meaning of the language of the provision itself. Despite their use by generations of lawyers to describe the task of interpretation it is doubtful whether they are helpful. Many judges and academics have pointed out that there is no basis upon which to discern the meaning that the members of Parliament or other legislative body attributed to a particular legislative provision in a situation or context of which they may only dimly, if at all, have been aware. Taking Parliament by way of example, legislation is drafted by legal advisers in a ministry, redrafted by the parliamentary draftsmen, subjected to public debate in committee, where it may be revised and amended, and then passed by a legislative body, many of whose members have little close acquaintance with its terms and are motivated only by their or their party’s stance on the broad principles in the legislation. In those circumstances to speak of an intention of parliament is entirely artificial.
The most that can be said is that in a broad sense legislation in a democracy is taken to be a reflection of the views of the electorate expressed through their representatives, although the fact that democratically elected legislatures sometimes pass legislation that is not supported by or unpopular with the majority of the electorate tends to diminish the force of this point. The same difficulty attends upon the search for the intention of contracting parties, whose contractual purposes have been filtered through the language hammered out in negotiations between legal advisers, in the light of instructions from clients as to their aims and financial advice from accountants or tax advisers, or are embodied in standard form agreements and imposed as the terms on which the more powerful contracting party will conclude an agreement.
[21] Alive to these difficulties there have been attempts to justify the use of the expression ‘the intention of the legislature’ on broader grounds relating to the manner in which legislation is drafted and passed and the relationship between the legislature as lawgiver and the judiciary as the interpreter of laws. Francis Bennion, an eminent parliamentary draftsman and the author of a standard work on statutory interpretation, says that ‘Legislative intention is not a myth or fiction, but a reality founded on the very nature of legislation’. He bases this on the undoubtedly correct proposition that legislation is the product of the intentional volition of all participants in the legislative process so that:
‘… Acts are produced down to the last word and comma, by people. The law maker may be difficult to identify. It is absurd to say that the law maker does not exist, has no true intention or is a fiction.’
However, that criticism misses the point. Critics of the expression ‘the intention of the legislature’ are not saying that the law-maker does not exist or that those responsible for making a particular law do not have a broad purpose that is encapsulated in the language of the law. The stress placed in modern statutory construction on the purpose of the statute and identifying the mischief at which it is aimed should dispel such a notion. The criticism is that there is no such thing as the intention of the legislature in relation to the meaning of specific provisions in a statute, particularly as they may fall to be interpreted in circumstances that were not present to the minds of those involved in their preparation. Accordingly to characterise the task of interpretation as a search for such an ephemeral and possibly chimerical meaning is unrealistic and misleading.
[22] The other objection raised by Bennion, that the idea that there is no true intention behind an Act of Parliament is undemocratic, suggests that the debate is being conducted at cross-purposes. In a constitutional democracy such as South Africa, or the United Kingdom, which is Bennion’s terrain, no-one denies that statutes and statutory instruments emanating from Parliament and other legislative bodies are the product of the democratic process. Interpretation always follows upon the democratic process leading to legislation and is, in that sense, a secondary and subordinate process. The interpreter does not write upon a blank page, but construes the words written by others. Nor is it denied that the broad purpose of the relevant legislative body (or legislator in the case of regulations or rules made by a functionary) is highly relevant to the process of interpretation, as is the mischief at which the legislation is aimed. Courts have repeatedly affirmed their importance and thereby respect the legislature’s role in a democracy. Courts do not set out to undermine legislative purpose but to give it effect within the constraints imposed by the language adopted by the legislature. If ‘the intention of the legislature’ was merely an expression used to encompass these matters as a form of convenient shorthand perhaps the matter would not have provoked so much comment. But the problem lies in it being said that the primary or ‘golden’ rule of statutory interpretation is to ascertain the intention of the legislature. At one extreme, as has been the case historically, it leads to a studied literalism and denies resort to matters beyond the ‘ordinary grammatical meaning’ of the words. At the other judges use it to justify first seeking to divine the ‘intention’ of and then adapting the language of the provision to justify that conclusion. It has been correctly said that:
‘It is all too easy for the identification of purpose to be driven by what the judge regards as the desirable result in a specific case.’
When that occurs it involves a disregard for the proper limits of the judicial role.
[23] Three Australian judges have sought to explain the use of the expression on other grounds. Gleeson CJ in Singh v The Commonwealth, said:
‘…references to intention must not divert attention from the text, for it is through the meaning of the text, understood in the light of background, purpose and object, and surrounding circumstances, that the legislature expresses its intention, and it is from the text, read in that light, that intention is inferred. The words “intention”, “contemplation”, “purpose” and “design” are used routinely by courts in relation to the meaning of legislation. They are orthodox and legitimate terms of legal analysis, provided their objectivity is not overlooked.’
French JA described the intention of the legislature as ‘an attributed intention based on inferences drawn from the statute itself’ and added that it is ‘a legitimising and normative term’ that ‘directs courts to objective criteria of construction which are recognised as legitimate’. In a broad ranging discussion of the concept, Spigelman CJ concludes that it is acceptable because the interpreter is concerned to ascertain the ‘objective’ will of the legislature or the contracting parties. However, in each instance the expression is being used either as a shorthand reference to something else or to convey a restricted and unrealistic meaning. If interpretation is, as all agree it is, an exercise in ascertaining the meaning of the words used in the statute and is objective in form, it is unrelated to whatever intention those responsible for the words may have had at the time they selected them. Their purpose is something different from their intention, as is their contemplation of the problem to which the words were addressed.
Warning to courts
[24] The sole benefit of expressions such as ‘the intention of the legislature’ or ‘the intention of the parties’ is to serve as a warning to courts that the task they are engaged upon is discerning the meaning of words used by others, not one of imposing their own views of what it would have been sensible for those others to say. Their disadvantages, which far outweigh that benefit, lie at opposite ends of the interpretative spectrum. At the one end they may lead to a fragmentation of the process of interpretation by conveying that it must commence with an initial search for the ‘ordinary grammatical meaning’ or ‘natural meaning’ of the words used seen in isolation, to be followed in some instances only by resort to the context. At the other it beguiles judges into seeking out intention free from the constraints of the language in question and then imposing that intention on the language used. Both of these are contrary to the proper approach, which is from the outset to read the words used in the context of the document as a whole and in the light of all relevant circumstances. That is how people use and understand language and it is sensible, more transparent and conduces to greater clarity about the task of interpretation for courts to do the same.
Which factor should predominate
[25] Which of the interpretational factors I have mentioned will predominate in any given situation varies. Sometimes the language of the provision, when read in its particular context, seems clear and admits of little if any ambiguity. Courts say in such cases that they adhere to the ordinary grammatical meaning of the words used. However that too is a misnomer. It is a product of a time when language was viewed differently and regarded as likely to have a fixed and definite meaning, a view that the experience of lawyers down the years, as well as the study of linguistics, has shown to be mistaken. Most words can bear several different meanings or shades of meaning and to try to ascertain their meaning in the abstract, divorced from the broad context of their use, is an unhelpful exercise. The expression can mean no more than that, when the provision is read in context, that is the appropriate meaning to give to the language used. At the other extreme, where the context makes it plain that adhering to the meaning suggested by apparently plain language would lead to glaring absurdity, the court will ascribe a meaning to the language that avoids the absurdity. This is said to involve a departure from the plain meaning of the words used. More accurately it is either a restriction or extension of the language used by the adoption of a narrow or broad meaning of the words, the selection of a less immediately apparent meaning or sometimes the correction of an apparent error in the language in order to avoid the identified absurdity.
Important guides are apparent purpose and context
[26] In between these two extremes, in most cases the court is faced with two or more possible meanings that are to a greater or lesser degree available on the language used. Here it is usually said that the language is ambiguous although the only ambiguity lies in selecting the proper meaning (on which views may legitimately differ). In resolving the problem the apparent purpose of the provision and the context in which it occurs will be important guides to the correct interpretation. An interpretation will not be given that leads to impractical, unbusinesslike or oppressive consequences or that will stultify the broader operation of the legislation or contract under consideration. “
Specialty Stores v SACCAWU & another [1997] 8 BLLR 1099 (LC)
Page 1112 of [1997] 8 BLLR 1099 (LC)
“The order that the applicant intends to seek ultimately in this Court is one declaring that none of The Hub stores to which the first respondent sent notices purporting to be section 21(1) notices on 2 April 1997 are workplaces as defined in the Act. I do not intend reproducing the definition of a workplace as I have already done so earlier in this judgment.
Mr Wallis argued that the first respondent seeks to rely on that part of the definition of the workplace which is to be found in the second sentence in paragraph (c) of the definition. He said that part of the definition is in the nature of a proviso and, having regard to the true function and effect of a proviso in a statute, it is the second respondent which should have placed itself within the proviso if it sought reliance thereon to argue that the various stores are workplaces.
In this regard Mr Wallis referred to Hira and another v Booysen and another 1992 (4) A 69 (A). There the Court had to deal with provisions which required a teacher not to “publicly, otherwise than at a meeting convened by an association or organisation recognised by the Minister, criticise(s) the administration” (my emphasis).
At 79F Nicholas AJA said that the words in the commas were of the nature of a proviso. In Mpozi v The Central Board for Co-Operative Insurance Ltd, which was also referred to in Hira’s case, Botha JA said at 645C–F:
“According to Craies Statute Law 7th ed at 218– the effect of an excepting or qualifying proviso, according to the ordinary rules of construction, is to except out of the preceding portion of the enactment, or to qualify something enacted therein, which but for the proviso would be within it; and such proviso cannot be construed as enlarging the scope of an enact ment when it can be fairly and properly construed without attributing to it that effect.
Page 1113 of [1997] 8 BLLR 1099 (LC)
In R v Dibdin (1910) P 57 (CA), Lord Fletcher Moulton at 125 in the Court of H Appeal said:
“The fallacy of the proposed method of interpretation (ie to treat a proviso as an independent enacting clause) is not far to seek. It sins against the fundamental rule of construction that a proviso must be considered in relation to the principal matter to which it stands as a proviso. It treats it as if it were an independent enacting clause instead of being dependent on the main enactment. The Courts, as for instance in such cases as Ex parte Partington (1844) 6 QB 649; In re Brockelbank 23 QB 461, and Hill v East and West India Dock Co (1844) 9 App Cas 448 have frequently pointed out this fallacy, and have refused to be led astray by arguments such as those which have been addressed to us, which depend solely on taking words absolutely in their strict literal sense, disregarding the fundamental consideration that they appear in a proviso.”
In the result I am of the opinion that the second part of paragraph (c) of the definition of the word “workplace” in section 213 is of the nature of a proviso. As such it is not an independent clause despite it appearing in a sentence of its own. It provides an exception to the primary part of part (c) of the definition.”
Innovent Rental & Asset Management Solutions (Pty) Ltd v Transnet SOC Ltd (917/2018) [2019] ZASCA 106 (5 September 2019) per Wallis JA
[13] The fallacy in counsel’s argument lay in describing clause 11.2 as a presumption, and treating it as an independent enacting provision when in substance it is a proviso to clause 11.1. The correct approach was set out as follows in Mphosi:[7]
‘According to Craies Statute Law 7th ed at 218 –
“the effect of an excepting or qualifying proviso, according to the ordinary rules of construction, is to except out of the preceding portion of the enactment, or to qualify something enacted therein, which but for the proviso would be within it; and such proviso cannot be construed as enlarging the scope of an enactment when it can be fairly and properly construed without attributing to it that effect”.
In R v Dibdin [1910] P 57 (CA), Lord Fletcher Moulton at 125 in the Court of Appeal said:
“The fallacy of the proposed method of interpretation (ie to treat a proviso as an independent enacting clause) is not far to seek. It sins against the fundamental rule of construction that a proviso must be considered in relation to the principal matter to which it stands as a proviso. It treats it as if it were an independent enacting clause instead of being dependent on the main enactment. The Courts … have frequently pointed out this fallacy, and have refused to be led astray by arguments such as those which have been addressed to us, which depend solely on taking words absolutely in their strict literal sense, disregarding the fundamental consideration that they appear in a proviso.”’
[14] Counsel submitted that this construction was not commercially sensible, because in those circumstances Innovent, as the financier, would have no control over whether there was compliance with a formal decommissioning process laid down by the original manufacturer of the equipment. When, as occurred here, the equipment in final form as installed was purpose-built to fit the client’s needs, in accordance with specifications it had devised, it would be able to circumvent the potential exclusion in clause 11.2 by purposely ensuring that the original manufacturer did not specify any requirements for decommissioning.