CASE LAW IN RESPECT OF THE EMPLOYMENT

EQUITY ACT AND ITS IMPACT ON BUSINESS

Presented by Richard PembertonGarlicke & Bousfield Inc

Two aspects

• Unfair discrimination (Chapter II)

and

• Enforcement of Affirmative Action (Chapter V)

Unfair Discrimination (Chapter II)

• Section 6o Prohibits unfair discrimination (some exclusions)

• Section 7o Prohibits medical testing (some exclusions)

• Section 8o Prohibits psychological testing and similar assessments (some exclusions)

• Section 10o Dispute resolution in terms of Chapter II

Dispute Resolution Refer to CCMA within 6 months for conciliation

If unresolved and pursued goes to Labour Court (referral within reasonable time)

alternatively

by agreement to arbitration

Extensive case law more often than not coupled with unfair labour practice disputes and heard as such.

Unfair labour practices (Section 186 of LRA) often contain allegations of discrimination – particularly promotion disputes

Most case law seems to relate to employers unfairly discriminating against employees in respect of promotions

Other forms are Harassment Pay discrimination Medical and psychological testing

Some Cases Department of Correctional Services & Ano vs Popcru &

Others (2012) 2 BLLR 110 (LAC)

Famous dreadlocks case

5 employees dismissed for refusing to cut off their dreadlocks – stated refusal for:

(1) Cultural reasons(2) Religious and belief reasons (Rastafarians)(3) Gender reasons

Labour Court dismissed (1) and (2) as not proved but found discrimination occurred in respect of (3). Women were allowed dreadlocks gender ∴discrimination

Department of Correctional Services & Ano vs Popcru & Others [Contd]

Labour Appeal Court went a step further and found all grounds amounted to discrimination

Department’s submissions = negative stereotyping

(Note: Department allowed handlebar moustaches)

Allpass vs Mooikloof Estates (Pty) Ltd t/a Mooikloof Equestrian Centre

HIV and gay case not actually decided under the EE Act

Actually decided on basis of automatically unfair dismissal ie unfair dismissal for a discriminatory reason – dismissed in reality because of his HIV status.

Employer said he’d lied in his application for employment by stating he was fit and well. In reality HIV positive.

NOTE: Court said not obliged to make a disclosure of HIV status

Allpass vs Mooikloof Estates (Pty) Ltd t/a Mooikloof Equestrian Centre [Contd]

Cross-reference with Hoffmann vs South African Airways (2000) 12 BLLR 1365 (CC)

Hoffmann’s refused employment because HIV positive (pre EEA)

Held = unfair discrimination in terms of the Constitution – SAA ordered to employ Hoffmann. Section 9 - right to equality applied. In terms of EEA = classic case of unfair discrimination

Biggar vs City of Johannesburg Emergency Management Services (2011) 6 BLLR 577 (LC)

This is a discrimination case brought in terms of Section 10 of the Employment Equity Act

Fireman sustained racist abuse by colleagues at a residential complex under the employer’s control

EEA requires employers to take steps to prevent discrimination (section 5)

Failure to do so can result in employer being held liable to pay compensation. Employer did not take reasonable steps

3 months salary ordered as compensation and other relief plus punitive order for costs

NEHAWU & Ano vs Office of the Premier, Province of the Eastern Cape & Another

(2011) 7 BLLR 681 (LC)

Appointment case involving unfair discrimination and implementation of affirmative action

4 applicants – each rated - applicant (an African male) was rated 3rd. 4th applicant (Coloured female) rated 4th.

Court held case involved balancing the Applicant’s right to be treated equally versus the employer’s right to implement affirmative action

Applicant failed to make out a case for unfair discrimination. Based case more on a procedural point. In principle Court held no problem that no discrimination took place if employer had a valid employment equity policy and a need to make a gender appointment.

NOTE:Lungile & Others vs Chester Butcheries

[2012] 8 BLLR 785 (LC)

Applicants must in proving unfair discrimination lay a sound foundation firmly built on facts and thorough preparation. A claim based on unfair discrimination – no matter what form – cannot float in thin air. Applicants alleged unfair discrimination in not getting their bonuses because they had gone on strike.

ENFORCEMENT OF AFFIRMATIVE ACTIONChapter V

o Chapter V currently has a complex process for the enforcement of affirmative action

o The process involves:

• Inspections by inspectors

• Written undertakings by designated employers

• Compliance orders

ENFORCEMENT OF AFFIRMATIVE ACTION[Contd]

• Objections to compliance orders (to DG)

• Appeals from compliance orders (to Labour Court)

• Assessments of compliance

• Referrals by DG to Labour Court for enforcement order

o Also provision for DG to undertake reviews and enforce them in the Labour Court

EMPLOYMENT EQUITY AMENDMENT BILL(approved by Cabinet – going to Parliament)

o Streamlines processes effectively eliminating undertakings, objections, compliance orders and appeals to the DG and allowing DG to go straight to the Labour Court

o Obtaining and issuing compliance orders is discretionary

o Apparently unco-operative designated employers have been dragging out the process and are obstructive

LABOUR COURT’S APPROACH

o Director-General, Department of Labour vs Win-Cool Industrial Enterprise (Pty) Ltd (2007) 9 BLLR 845 (LC)

• Lengthy 34 page judgment by Judge D Pillay.

• Significant judgment in putting the powers of the Labour Court in respect of enforcing affirmative action in terms of Chapter V in perspective

• The matter relates to the enforcement of compliance orders

Background

o Labour inspector issued a compliance order against company requiring it to follow certain provisions of the EE Act

o Company failed to comply

o Department of Labour (DOL) launched an application in the Labour Court for an order declaring that the company had failed to comply and requesting a fine of R500 000,00 (maximum)

o Company said it had complied (belatedly) and that its entire staff was Black

o Company also raised defence that DOL failed to prove it had the necessary mens rea (intention) for liability needed in respect of a criminal offence

o DOL contended it was not required to prove a criminal offence

What did the Court say?o Nature of Contravention• It analysed the true nature of a contravention of the

EEA• Sometimes contraventions of statutes can be

couched in criminal terms• In others in civil terms• Penalties and fines are regulatory tools and

depending on the nature of the tribunal or the procedure in respect of their enforcement they can be civil or criminal in nature

• Distinction is very important in respect of onus of proof

Note:• Brief originally to the Ministerial task team was to

decriminalise labour legislation• Notably the Judge commented that:-

o Non-compliant employers are given the option to comply

o Option of enforcing compliance orders is a final step in the procedure

o Rehabilitation of offenders enjoys a higher priority than retribution

Court found Section 50(1)(g) does not create criminal offences but contraventions for which penalties may be payable

ASSESSMENT OF PENALTY

o Employer policies and practices must be analysed to determine degree of under-representation of designated employees, status of plans and submissions to DOL

o Prohibited conduct consists exclusively of omissions. Mechanical compliance not good enough – employers must systematically transform their workforce. The fact that you employ Black people only does not amount to transformation

ASSESSMENT OF PENALTY [Contd]

o Employer’s submission of a plan long after the expiration of the compliance order was not compliance with the EEA

o Defence of being let down by a consultant held no water – limit to which an employer may “outsource” equity responsibilities

ASSESSMENT OF PENALTY [Contd]

o Factors:• Purpose of EEA• Extent of contravention• Period of contravention• Reason for non-compliance• Employer’s willingness to comply• Loss suffered by workforce• Profit derived by employer• Employer’s compliance with other labour laws• Employer’s investment in its workforce development• Effect of the penalty on employment• Area of industry involved• Deterrent effect of penalty

ASSESSMENT OF PENALTY [Contd]

o Employer found reluctant to transform but DOL still must show good reason for maximum fine and that hardship to workers and communities will not be created

o DOL sought maximum penalty of R500 000,00o Court ruled employer contravened sections 16, 19, 20

and 21 of the EEAo Imposed penalty of R300 000,00 of which R200 000,00

was suspended subject to compliance within a specified period

o Money went to the National Revenue Fund

Director-General, Department of Labour vs Comair Ltd (2009) 11 BLLR 1063 (LC)

o Sections 15, 42 and 50(1)(h) considered

o DOL referred non-compliance by Comair to Labour Court

o Comair counter-applied re failure by DOL to properly assess its compliance before going to the Labour Court

Director-General, Department of Labour vs Comair [Contd]o Heldo Documents of DOL did not indicate a proper application of

his mind to the matter before making his recommendationo DOL must in terms of Section 42 :

Consider number of suitably qualified employees within the designated groups

Take into account the demographic profile of the regional and national economically active population

Make allowance for company’s financial circumstances Have regard to the company’s progress in achieving

targetsDOL did not do so – application dismissed

DISCUSSION AND QUESTIONSRichard Pemberton 7 Torsvale Crescent

La Lucia Ridge Office EstateLa Lucia Ridge

Telephone 031 570 5300 /5321Mobile 083 637 1860