Ndudula v Metrorail Prasa (Western Cape) (C1012/2015) [2017] ZALCCT 12 ; [2017] 7 BLLR 706 ; (2017) ILJ 2565 (LC) (30 March 2017) per Coetzee AJ.
The LC declined to uphold a claim of alleged ‘unfair’ discrimination on an arbitrary ground as provided in EEA sec 6(1).
The employer erred in paying new employees more than existing employees on the same decision-making level. But the complainants failed to identify any “ground”, simply purporting to rely on the employer’s error and contending that it fell within a new third category of ‘grounds’. The LC held that parliament did not introduce a third category of grounds upon which employees could challenge the conduct of employers. The LC disagreed with the following opinion in Du Toit Labour Relations Law: A Comprehensive Guide 6th ed (LexisNexis 2015) at 683:
“The reintroduction of the prohibition of discrimination on ‘arbitrary’ grounds cannot be understood as merely reiterating the existence of unlisted grounds, which would render it redundant. To avoid redundancy, ‘arbitrary’ must add something to the meaning of ‘unfair discrimination’. Giving it the meaning ascribed to it by Landman J in Kadiaka[1] – that is, ‘capricious’ or for no good reason – would broaden the scope of the prohibition of discrimination from grounds that undermine human dignity to include grounds that are merely irrational without confining it to the latter.”
Comment:
The judgment appears to ignore the binding effect of ILO Convention 111. The criterion in respect of an impugned ‘distinction, exclusion or preference’ on an unlisted ground as well as a listed ground is whether that measure ‘has the effect of nullifying or impairing equality of opportunity or treatment in employment or occupation’. It is dealt with in detail in Du Toit at page 681 onwards.
Excerpts from judgment (without footnotes)
The background
[4] The respondent with effect from 1 January 2014 promoted and appointed two more employees as section managers. The applicants were aggrieved because these two newly appointed section managers were appointed on a higher salary or scale of remuneration than that of the applicants.
[5] The applicants lodged three group grievances on 1 December 2014, 9 December 2014 and 27 January 2015. The grievances were not resolved and the applicants referred the matter to the CCMA on 5 August 2015.
[6] The respondent on 17 August 2015 by letter informed the two section managers that their salaries had been reviewed and that they had been appointed at an incorrect scale (the correction). They were further informed that their salaries were to be reduced to the correct scale effective from 1 September 2015.
[7] The parties further agreed as follows:
“This correction was implemented on the basis that the amount by which they had been overpaid would not be recovered from them, which decision was based on the fact that a precedent had been set when, in similar circumstances, employees, with the assistance of legal advisers negotiated a settlement on such basis with the respondent.”
[8] The applicants pleaded their discrimination case as follows:
“The Individual Applicants are performing the same work as the two newly appointed Section Managers and despite having longer years’ of service, they are being paid substantially less than the newly appointed section managers. The individual Applicants have been and are being discriminated against regarding the different terms and conditions of employment for a reason unknown to them. Whatever the reason are (sic) as may be advanced by the Respondent, the different treatment of employees who performs (sic) the same work and there being no other justifiable reasons for such differentiation amounts to an act of direct discrimination or alternatively to indirect discrimination. Newly appointed employees are enjoying more substantial terms and conditions of employment for no other reason (s) than that they are newly employed employees.”[1]
[9] The applicants formulated the relief they sought as based on their cause of action as follows:
“The individual Applicants are seeking an order that the Respondent must remunerate them and provide to them the same terms and conditions of employment as the two newly appointed Section Managers retrospective to January 2014, as well as an order that all Section Managers must be remunerated on the same basis. Alternatively the individual Applicants are seeking an order that they be paid the difference in remuneration for the same period that the two newly appointed Section Managers were paid such a higher remuneration package. In the alternative, the individual Applicants are seeking compensation in an amount to be determined by the Court for having been discriminated against. The individual Applicants also seek an order that the Respondent must pay the individual applicant’s legal costs.” [2]
[10] During oral argument the applicants limited the relief they seek to payment of a lump sum as compensation to each of them. They pursued with their claim for a cost order in their favour.
[11] The respondent admitted that it appointed the two section managers at a higher salary scale. The respondent denied that the facts and circumstances pleaded by the applicants, amount to unfair discrimination as contemplated by the Employment Equity Act.[3]
[12] The respondent’s defence became evident in the pre-trial conference. The pre-trial conference minute records that the applicants were advised that a mistake had been made in the salary scale at which the two section managers were appointed. The pre-trial minute contains no reference to the correction.
[13] According to the applicants they were advised of the correction only during January 2017. They submit that this should be taken into account for purposes of a cost order. Having been advised of the correction only shortly before the hearing, they resolved to pursue relief only in the form of compensation, coupled with a cost order.
[14] Having regard to the pleadings and the agreed facts, it is common cause between the parties that the two section managers were appointed by mistake on the higher scale and that approximately 20 months later with effect from 1 September 2015 the error had been corrected and the remuneration paid to them adjusted downwards.
[15] The factual position that is common cause between the parties, thus is that two section managers were appointed, in error, on a higher scale than that enjoyed by the applicants; the error was corrected with effect from 1 September 2015 and the additional remuneration that the two received while on the higher scale was not refunded to the respondent by them because of an earlier precedent that the respondent felt to be binding on it.
The EEA and the history of colonialism: Darcy du Toit’s Editorial in IR Network published by LexisNexis [subscription required]
Excerpts
“But, despite having reached this finding by its fifth page, the judgment continues for a further 31 pages to consider issues adding no greater clarity to the legal principle on which it is based nor to the understanding of prohibited discrimination in conformity with Convention 111.
The source of the digression was the applicants’ claim that their discrimination was based on an “arbitrary ground” and their evidently misguided submission that, this being so, they did not need to specify the ground in question. In doing so they relied on a passage from a textbook arguing that the insertion of “arbitrary grounds” in the prohibition of “unfair discrimination” in section 6(1) of the EEA should be interpreted as extending the prohibition from the existing range of listed and unlisted grounds to include grounds that are irrational.3
It is impossible in the space of a short commentary to follow the court’s painstaking reasoning in rejecting this conclusion. Suffice it to note that the interpretation ultimately arrived at by the court is that the addition of “arbitrary grounds”, in fact, served no purpose but merely restated the existing law. Or, as Coetzee AJ put it,
“[t]he purpose of the legislator by inserting “or any other arbitrary ground” serves no other purpose than being synonymous with “one or more ground” or being synonymous with “unlisted grounds”” (para 102).
Also noteworthy is the court’s acceptance that the term “arbitrary” was added to section 6(1) to bring it in line with the prohibition of discriminatory dismissals in section 187(1)(f) of the LRA, where “unfair discrimination” is categorised as “arbitrary”. This is what the Explanatory Memorandum introducing the 2014 amendment states. But explanatory memorandums are not authoritative, and can be interrogated if there are reasons for doing so.
One such reason in the present case is that section 187(1)(f) predates the EEA. At the time when section 187 was enacted, unfair discrimination was prohibited by item 2(1)(a) of Schedule 7 to the LRA where it was also defined as “arbitrary”. But the purpose of the LRA was primarily to give effect to section 23 of the Constitution (the ‘labour clause’). Three years later, the EEA was intended expressly to prohibit unfair discrimination and give effect to Convention 111. In the process it abolished item 2(1)(a).
The reformulation of the prohibition of unfair discrimination in section 6(1) of the EEA, therefore, should be taken as the authoritative definition, and reviving item 2(1)(a) by the indirect route of bringing section 6(1) in line with section 187(1)(f) does not seem the most logical step. But, sooner than concluding that “arbitrary ground” should be taken to mean what it says, that seems to be where this judgment would leave us.
The underlying problem may well be the decision of the Constitutional Assembly in the early 1990s, at the height of the drive for national reconciliation, to adopt the apartheid regime’s tautologous notion of “unfair discrimination” (i.e., discrimination not sanctioned by apartheid laws) on prohibited grounds and reject the internationally accepted prohibition of “discrimination” pure and simple on such grounds.
This has been interpreted as allowing courts the discretion of declaring discrimination on prohibited grounds to be “fair”, in head-on conflict with Convention 111. And it seems to have survived the 2013 amendments to the EEA. True, courts have thus far drawn the line at allowing instances of blatant discrimination to be justified by this open-ended means. But the invitation to do so remains.
For the record, Convention 111 defines “discrimination” as
Inherent requirements of the job, affirmative action measures and state security are the only possible exclusions. Courts cannot justify discrimination by declaring it “fair”.
It would also make it unnecessary to decide whether “arbitrary grounds” must involve an attack on human dignity to equate them with “unlisted grounds”, as Ndudula v Metrorail would have it. The test would simply be whether a distinction on that ground nullifies or impairs equality of opportunity or treatment.
This is consistent with the Constitution because it offers more, not less, protection than that required by the equality clause. And, in terms of section 3(d) of the EEA, it is the definition which South African courts should be applying. It is unlikely to disturb relations in the workplace, but could end a great deal of legal confusion.