Employment law update

July 1st, 2016
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Talita Laubscher BIur LLB (UFS) LLM (Emory University USA) is an attorney at Bowman Gilfillan in Johannesburg.

Talita Laubscher BIur LLB (UFS) LLM (Emory University USA) is an attorney at Bowman Gilfillan in Johannesburg.

Monique Jefferson BA (Wits) LLB (Rhodes) is an attorney at Bowman Gilfillan in Johannesburg.

Monique Jefferson BA (Wits) LLB (Rhodes) is an attorney at Bowman Gilfillan in Johannesburg.

 

 

 

 

 

 

 

 

 

Equal pay for equal work

Pioneer Foods (Pty) Ltd v Workers Against Regression and Others (unreported case no C687/15, 19-4-2016) (Steenkamp J) is one of the first appeals decided in terms of s 10(8) of the Employment Equity Act 55 of 1998 (EEA), which came into effect on 1 August 2014.

In accordance with a collective agreement between Pioneer Foods and the Food and Allied Workers’ Union (FAWU), Pioneer pays all newly appointed employees for the first two years of their employment at 80% of the rate paid to longer serving employees. This agreement came about because FAWU had persuaded Pioneer to reduce the extent to which it was using the services of various forms of ‘precarious’ employees, including employees supplied by labour brokers. At the same time, FAWU proposed the creation of a pay scale that showed differentiation between new hires and employees who had been in the company for many years. The 80% scale was accordingly adopted and was consistently applied to all new hires for the first two years of their employment with Pioneer.

Seven employees, who were all employed as drivers on 1 November 2014, took issue with this practice and contended in the Commission for Conciliation, Mediation and Arbitration (CCMA) that this constituted unfair discrimination. The commissioner agreed and found in his award that paying new entrants at 80% was ‘in conflict with the requirement of equal pay for equal work’. His reason for this conclusion was that some of the employees had performed services as drivers to Pioneer through a labour broker before they were employed directly by Pioneer. The commissioner accordingly held that these employees were not ‘new entrants’ in the true sense of the word, and the differentiation in pay was unfair because the employees’ previous indirect employment via the temporary employment service was ignored. In the circumstances, the commissioner found that the employees were entitled to damages and ordered Pioneer to pay them the equivalent of the difference in remuneration between them and the longer serving drivers for the period 1 November 2014 to 1 August 2015. He also ordered Pioneer to correct their remuneration to the 100% ratio of the applicable grade with effect from 1 August 2015.

Pioneer appealed to the Labour Court (LC) in terms of s 10(8) of the EEA. The LC, per Steenkamp J, upheld the appeal.

The court noted that the employees did not rely on any of the 12 listed grounds in s 6(1). Rather, their complaint was that they were unfairly discriminated against because of some other ground, namely, length of service. Regarding the burden of proof, s 11(1) of the EEA was accordingly not applicable, and s 11(2) had to be followed. In terms of this section, the complainant must prove, on a balance of probabilities, that –

  • the conduct complained of is not rational;
  • the conduct complained of amounts to discrimination; and
  • the discrimination is unfair.

In order to prove that the conduct complained of ‘amounts to discrimination’, the complainant must identify the listed or unlisted arbitrary ground of discrimination. As was held in Ntai and Others v South Africa Breweries Ltd [2001] 2 BLLR 186 (LC), ‘the mere “arbitrary” actions of an employer do not, as such, amount to “discrimination” within the accepted legal definition of the concept’. The ground complained about must furthermore be the reason for the disparate treatment – there must be a causal link between the ground and the difference in treatment.

In this case, the ground of alleged unfair discrimination was that the applicant employees were ‘newer employees’. First, the court considered whether ‘being newer employees’ is an unlisted arbitrary ground of discrimination, namely, is it irrational? The court held that it is not. In fact, it is a classic example of a ground of differentiation which is rational, legitimate and exceedingly common. The court stated: ‘There is quite manifestly a rational connection between using length of service as a factor determining pay, and the objective of recognising long service and loyalty of existing employees.’ The court noted further that the legislature shares the view that length of service is a rational and legitimate ground for differentiation in, inter alia:

‘Regulation 7(1)(a) of the Employment Equity Regulations 2014, which includes “length of service” as one of the “factors justifying differentiation in terms and conditions of employment”;

Section 198 D (2)(a) of the [Labour Relations Act 66 of 1995], which includes “length of service” as a “justifiable reason” for differential treatment;

Clause 7.3.1 of the Code of Good Practice on Equal Pay/Remuneration for Work of Equal Value’.

Clause 7.3.1 states that it is not unfair discrimination if the difference is fair and rational and is based on, inter alia, the individuals’ respective seniority or length of service.

Second, differentiating on the basis of length of service does not amount to ‘discrimination’. In order to amount to ‘discrimination’ the ground must be based on attributes and characteristics which have the potential to impair the fundamental human dignity of persons as human beings or to affect them in a comparably serious manner. Treating people differently in the workplace in accordance with their length of service with the employer does not have this effect and thus does not impair their fundamental human dignity. It accordingly does not amount to ‘discrimination’.

Third, it is not ‘unfair’.  In this regard, the court held that it was not unfair for Pioneer to agree with FAWU that new employees should earn less than those who had loyally remained in its service, and to implement this agreement. Absence this agreement, it was questionable whether these jobs would have existed at all.

The court noted that some of the employees were engaged by a labour broker before they were employed by Pioneer directly. The arbitrator was of the view that it had to consider the provisions of s 198A of the Labour Relations Act 66 of 1995 (LRA), which provides inter alia that, in certain circumstances, labour broker employees are deemed to be the employees of the client.  Steenkamp J held, however, that s 198A had no application to the dispute –

  • the claim was brought in terms of the EEA, not s 198A of the LRA, and had to be determined with reference to the provisions of the EEA;
  • the differential treatment arose out of the FAWU collective agreement which was concluded some 18 months before s 198A took effect. Section 198A does not have retrospective application; and
  • by the time s 198A came into force, the applicant-employees had already become employees of Pioneer and they were no longer labour broker-employees.

In the circumstances, appeal was upheld and the commissioner’s award was reversed and substituted by an order dismissing the claim.

 

Moksha Naidoo BA (Wits) LLB (UKZN) is an advocate at the Johannesburg Bar.

Moksha Naidoo BA (Wits) LLB (UKZN) is an advocate at the Johannesburg Bar.

 

Question:

Please advise if I stand a chance.

I have recently resigned from my previous employ due to malicious charges that were brought against me.

I had a fallout with a certain executive (and I have concrete proof of that fallout) and he reported false allegations against me. He alleged that I gave confidential information to one of the shop stewards. As a board secretariat that could have ended my career. Disciplinary proceedings then ensued in June 2015. They dragged up until January 2016. On 20 January the main witness in the case (the executive) did not attend proceedings. I then took a decision to resign. I resigned due to the fact that my reputation and dignity were destroyed. My performance, as well as my health were deteriorating.
The person I am alleged to have provided confidential information to is my witness that I did no such thing.

Answer:

I shall respond to your query on the understanding that you would like to know whether you can claim a constructive dismissal under the circumstances you have described above.

It would be apposite to firstly set out the test for constructive dismissal. The first point to mention is that it is an employee who bears the initial onus to establish a dismissal and if successful the onus shifts to the employer to prove the fairness thereof.

In Solid Doors (Pty) Ltd v Commissioner Theron and Others (2004) 25 ILJ 2337 (LAC) the Labour Appeal Court (LAC) said the following in respect of an employee’s onus in a claim for constructive dismissal:

‘[T]here are three requirements for constructive dismissal to be established. The first is that the employee must have terminated the contract of employment. The second is that the reason for termination of the contract must be that continued employment has become intolerable for the employee. The third is that it must have been the employee’s employer who had made continued employment intolerable. All these three requirements must be present for it to be said that a constructive dismissal has been established.’

By resigning you have met the first requirement to a claim for constructive dismissal. On your version you make mention that it was an executive of the entity you worked for who ‘engineered’ the charges against you – for purposes of this article I shall therefore accept that you would be able to establish that it was your employer who allegedly made continued employment intolerable thus satisfying the third requirement set out in the Solid Doors matter.

Your prospects of success in a potential claim for constructive dismissal therefore turns on whether you can objectively prove, on a balance of probability, that your employer made continued employment intolerable.

In attempting to establish intolerable working conditions, there was a view that an employee should show that they had no other option but to resign due to the intolerable working conditions created by the employer (see Jordaan v CCMA and Others [2010] 12 BLLR 1235 (LAC)). However the Constitutional Court in Strategic Liquor Services v Mvumbi NO and Others [2009] 9 BLLR 847 (CC), when presented with an argument that the employee’s claim for constructive dismissal should fail as he was given a choice to resign or face a poor performance investigation, held:

‘The second is that it misconceives the test for constructive dismissal, which does not require that the employee have no choice but to resign, but only that the employer should have made continued employment intolerable.’

Thus the fact that you resigned as opposed to concluding your disciplinary enquiry should not pose as a bar to a claim for constructive dismissal.

Having made this point it would be prudent to inform you that the general view is that an employee who resigns in the face of disciplinary action would have a ‘hard case to meet’ in a claim for constructive dismissal (see Asara Wine Estate & Hotel (Pty) Ltd v Van Rooyen and Others (2012) 33 ILJ 363 (LC)). However, it is nevertheless open for an employee, when attempting to establish intolerable working conditions, to argue that the pending or incomplete disciplinary action was a sham intended to frustrate and harass the employee by subjecting him or her to frivolous and vexatious charges. In SALSTAFF on behalf of Bezuidenhout v Metrorail (2) (2001) 22 ILJ 2531 (BCA), Grogan A, sitting as arbitrator in a matter where the employee claimed a constructive dismissal held:

‘I would add, with respect, that once an employee reasonably forms the suspicion that disciplinary action taken against him is a form of harassment, he or she cannot be criticized for resigning to avoid the stigma that would result from being dismissed for “misconduct”.’

From the information you have provided I am unable to provide you with an instructive view on whether you can establish intolerable working conditions, I am, however, able to share with you that on the strength of the above authorities your decision to resign before the disciplinary process was concluded is not fatal to a claim for constructive dismissal. In addition if you can establish that the disciplinary inquiry you were subjected to was a sham intended to frustrate and harass you and brought about in response to a fall out with an executive, then this would go far in supporting your potential claim. What could further strengthen your argument is the fact that your ex-employer did not conclude your disciplinary inquiry within seven months (ie, from June 2015 to the date you resigned in January). If you did not have a hand in bringing about this delay, then you may well argue that in a further attempt to frustrate and harass you, your ex-employer unduly dragging out the disciplinary process, which in turn contributed to the intolerable working conditions.

As stated in the response to the question (above), my approach was whether the person writing the question could refer a constructive dismissal dispute to the CCMA. It is trite in labour law that an employee cannot claim damages at any CCMA dispute, put differently the CCMA does not have jurisdiction to award damages – it can only award reinstatement, reemployment or compensation. In short, a person cannot claim damages at the CCMA. Compensation vastly differs from damages in the employment law context.

 

These articles were first published in De Rebus in 2016 (July) DR 60.