Discrimination: The unfortunate tale of an ‘affirmative action’ candidate

July 1st, 2018

Chowan v Associated Motor Holdings (Pty) Ltd and Others [2018] 2 All SA 720 (GJ)

By Henry Ngcobo and Nicole Deokiram

Despite 24 years of democracy and progressive South African legislation, racial and gender discrimination remain a reality in many South African workplaces. The media regularly reports on incidents where black and female employees have endured humiliating and degrading experiences of racism or sexism, or even both.

Recently Ms Adila Chowan, an Indian South African woman who is also a chartered accountant with extensive experience in the corporate world, both locally and overseas, made headlines when she sued a major corporation in the High Court after being repeatedly overlooked for a position for which she was eminently qualified. The recent judgment, Chowan v Associated Motor Holdings (Pty) Ltd and Others [2018] 2 All SA 720 (GJ) highlights the real challenges of eradicating systemic discrimination and inequalities in South African workplaces.

Chowan successfully sued her employer, Associated Motor Holdings (AMH), AMH’s CEO, Mr Mark Lamberti, and Imperial Holdings Limited (Imperial) for damages.

Assurances made at the outset

In 2012, Chowan was head-hunted by AMH for the group financial manager position. She accepted the group financial manager position, subject to the assurance that there will be opportunities for growth and career progression and, ultimately, the opportunity, in the future, to become chief financial officer. The chief financial officer at the time, a Mr Hibbit,
was to groom Chowan for the chief financial officer position.

After Hibbit had resigned from AMH, Chowan fulfilled her own duties as group financial manager and those of the chief financial officer. Hibbit recommended Chowan for the chief financial officer position and required her to undergo a psychometric test to determine any gaps for development. She underwent the psychometric test, but was never informed about any such gaps.

AMH advertised the chief financial officer position, and Chowan, who was the only black candidate, applied and was interviewed. She was further interviewed by Lamberti who, at the end of the interview, apparently, informed Chowan that she would not be appointed chief financial officer. Lamberti promised Chowan that if she gave her full support to the new chief financial officer whom he appointed, ‘he promises [her] a career path within one year’ and that she would be ‘properly compensated’. Mr Ockert Janse van Rensburg was appointed chief financial officer in early January 2015.

Chowan, feeling aggrieved and disappointed, tendered her resignation, but withdrew it after Lamberti reassured her that she had career progression within the Imperial Group and would be appointed chief financial officer.

From bad to worse

Things did not improve for Chowan. Her relationship with Janse van Rensburg became tense. At one stage, Chowan was given a brown-colour company car. When she complained to Janse van Rensburg about the car’s colour, he replied that the brown colour suited the colour of her skin. Chowan felt degraded by those remarks.

Later on, Lamberti and Janse van Rensburg had a meeting where they discussed Chowan’s suitability to become chief financial officer. Janse van Rensburg told Chowan afterwards that Lamberti’s view was that Chowan ‘would never be a CFO in the Imperial Group’, as Lamberti did not believe she had what it takes to be one, ‘and that she should be moved to another part of the AMH group.’ Lamberti had also referred to Chowan as the ‘affirmative action candidate’.

Chowan was upset by these remarks and met with Lamberti. He told Chowan ‘that she is a female, employment equity, technically competent, they would like to keep her but if she wants to go she must go – others have left his management and done better outside the company – and that she required three to four years to develop her leadership skills.’ Chowan felt she was discriminated against based on race and gender, and demanded that Lamberti apologise and honour the promises he had made to her.

Chowan later lodged a grievance against Lamberti with Thulani Gcabashe, the chairman of Imperial. Prior to doing so, Chowan had discussed the matter with another employee, a Mr Koornhof, who apparently warned Chowan that it would be a ‘career limiting move for her if [she] raised a grievance against a powerful man like Mr Mark Lamberti’. Nonetheless, Chowan was undeterred.

After an investigation to determine if Chowan’s grievance had merits, Gcabashe concluded that it had none, and that her assertions against Lamberti were unfounded. She was suspended from employment, subjected to a disciplinary inquiry, where she was subsequently found guilty, and summarily dismissed. She was marched out of AMH’s offices and her laptop and office keys were taken from her in the presence of other employees. Chowan felt she was being victimised and that the real reason for her dismissal was that she had blown the whistle to Gcabashe, exposing workplace discrimination.

Chowan then sued AMH, Lamberti and Imperial for damages. She asserted that her rights to equality and non-discriminatory treatment was violated, and that she was subjected to disciplinary action and dismissed contrary to whistle-blowing legislations. She claimed AMH and Lamberti had a legal duty to protect her from being exposed to racial and gender discrimination in the workplace and breached their legal duty not to subject her to occupational detriment (namely, disciplinary action and dismissal).

Systemic discrimination must be eradicated

In a highly critical judgment, the High Court judge concluded there was great public interest in ensuring eradication of systemic discrimination and inequalities. AMH, as Chowan’s employer, had a duty to ensure that Chowan was not subjected to occupational detriment on account of a protected disclosure she made to Gcabashe. The court found that the disclosure was made in good faith, that Lamberti’s racist and sexist comments infringed on Chowan’s right to human dignity, and that all she wanted was for Lamberti to apologise and keep the promise he made to her. AMH was liable to Chowan for damages as AMH had failed in its duty.

In relation to the second component of the claim, that Chowan’s reputation had been impaired, Meyer J concluded that Chowan had felt insulted as she was a qualified, professional chartered accountant with extensive experience and achievements whom has held various top positions at influential companies. The remarks about her made her feel as if she was only appointed to the position at AMH because she was a ‘female empowerment equity candidate’. Accordingly, she succeeded in her claim that her dignity had been impaired. The court has yet to determine the amount of damages, but Chowan is reportedly claiming some R 28 million for loss of earnings and impairment to her dignity.

Lessons for employers

While the judgment highlights real challenges in eradicating systemic discrimination and inequality in South African workplaces, it also provides important lessons for employers and it serves as a textbook example of what employers should not do.

Chowan’s legal claim was based on contract law and the common law of delictual liability and, surprisingly, not on statute such as the Employment Equity Act 55 of 1998 (EEA). Sections 5 and 6(1) of the EEA expressly require employers to take steps to promote equal opportunity by eliminating unfair discrimination in any employment policies or practices. An employer that fails to do so may be held liable for non-compliance and be ordered to pay damages.

Officials and other employees of a company should refrain from making degrading discriminatory remarks against other employees. Companies will be jointly and severally liable with their employees for any of their employees’ conduct that amounts to unfair discrimination. For example, s 60 of the EEA makes express provision for the liability of an employer for breach of the provisions of the EEA unless the employer proves that it did all that was reasonably practicable to ensure that its employees do not contravene the EEA provisions. In the context of this judgment, what was significant was that Chowan was only subjected to disciplinary action, suspended from her employment and eventually dismissed. Lamberti and Janse van Rensburg were not subjected to suspension or disciplinary action.

The evidence presented at court strongly suggests that Chowan was repeatedly overlooked for the position of chief financial officer, primarily on impermissible grounds such as race and gender. This was supported by various inappropriate, humiliating and degrading utterances and unfulfilled promises and assurances attributable to Lamberti.

Henry Ngcobo Bproc (UJ) LLB (UKZN) HDip Company Law (Wits) is an attorney and Nicole Deokiram LLB LLM (Labour Law) (UJ) is a candidate attorney at Bowmans in Johannesburg.

This article was first published in De Rebus in 2018 (July) DR 44.