Employment law update – Racial discrimination in the workplace

November 1st, 2018

Monique Jefferson BA (Wits) LLB (Rhodes) is an attorney at DLA Piper in

In Shoprite Checkers (Pty) Ltd v Samka and Others [2018] 9 BLLR 922 (LC), an employee referred a dispute to the Commission for Conciliation, Mediation and Arbitration (CCMA) in terms of s 60 of the Employment Equity Act 55 of 1998 (EEA) alleging that she was unfairly discriminated against on the basis of race. The basis of her claim was that a customer had made an extremely racist remark to her and the employer did not sufficiently protect her from such conduct. Furthermore, she alleged that the employer’s practices were racist towards black cashiers and that she was being harassed, victimised and bullied by other members of staff, because she had raised grievances about the manner in which black cashiers were treated. The CCMA commissioner found that the employee had been bullied by certain individuals but there was no evidence that the reason for the harassment was her race. The commissioner also found that the employer had conducted an investigation into the grievances raised and there was no evidence that the issues related to racial discrimination. The CCMA commissioner did, however, find that the employer should have properly investigated the employee’s complaint about the racist remark that was made by a customer. The employer was accordingly held liable and ordered to pay the employee compensation of R 75 000. The CCMA commissioner also found that the employer should have considered steps to prevent such conduct from occurring again such as not allowing the customer to have access to the store in the future.

The employer appealed against the award. The employee also cross-appealed the award on the basis that the commissioner should have found that she was discriminated against by being bullied and harassed by other staff members.

The Labour Court agreed that the racist remarks made by the customer constituted one of the worst racist insults. The court nevertheless had to consider whether an employer could be liable under the EEA for conduct by a customer. In this regard, Steenkamp J considered s 60 of the EEA, which provides that an employer may be vicariously liable for the conduct of its employees. Steenkamp J found that this vicarious liability only extended to the conduct of other employees where an employer does not take sufficient steps to eliminate racist conduct by its employees. Thus, the employer could not be liable for the conduct of its customers no matter how unacceptable the conduct was. Steenkamp J was, however, satisfied that the employee could rely on other remedies under the common law and other legislation for relief. For example, the employee could institute a delictual claim for damages or institute an unfair discrimination claim under the Promotion of Equality and Prevention of Unfair Discrimination Act 4 of 2000. The appeal was accordingly upheld.

As regards the cross-appeal, the court found that while harassment is a form of unfair discrimination under the EEA, the employee would need to show that the harassment was on the basis of one of the listed grounds or on an arbitrary ground. The employee failed to satisfy the court that she was harassed because of her race and thus the cross-appeal was dismissed.

Employees’ duty of good faith towards an employer

In Massstores (Pty) Limited trading as Makro v Popela and Others [2018] JOL 40348 (LC), the commissioner in the Commission for Conciliation, Mediation and Arbitration (CCMA) found that the employee’s dismissal was substantively unfair and ordered reinstatement. Massstores instituted review proceedings alleging that the arbitration award was not one that a reasonable decision maker could make. The employee had been employed as a Front Returns Clerk and was responsible for receiving and arranging for the repair of faulty or defective goods from customers. The employee was required to obtain a quotation for the estimated cost of repairs and then to communicate this to the customer. If the quotation was accepted the employee would withdraw the money from her till using a supervisor card in a process known as ‘encashing’. The employee was required to obtain approval from the manager and fill in the necessary documentation before doing so. On return of the item, the employee was required to re-bank any additional cash in Massstore’s bank account and insert details of the items in the control book.

The employee had been provided with a document setting out these roles and responsibilities. There were also annual discussions with her to clarify her role.

In 2014 an investigation was carried out into irregularities at the Front Returns Department at the store where the employee was employed. A number of irregularities were discovered over a six-month period. There were a number of instances of duplicate claims, money not re-banked and missing documentation. These irregularities resulted in a financial loss of approximately R 30 000. There was also information missing in the control book and the employee tried to alter spreadsheets during the investigation to remedy defects.

Massstores instituted disciplinary proceedings and charged the employee with gross negligence, dishonesty and failing to comply with company procedures. The employee was found guilty of all the charges and dismissed. She then referred an unfair dismissal claim to the CCMA. During the arbitration Massstores argued that the employee was the custodian responsible for ensuring that its rules and policies were complied with. On the other hand, the employee argued that she was not the custodian of the Front Returns Department and that her manager was ultimately responsible. She also said that she did not occupy a supervisory position despite her supervisory card and that the entries she had made were on the instructions of her manager. The commissioner found that Massstores was required to show that the employee was the custodian of its rules, policies and procedures and found that she was not guilty of the allegations against her as Massstores had failed to do this. The commissioner accordingly found that the employee was not responsible for the misconduct and thus the dismissal was substantively unfair.

On review, Massstores alleged that the commissioner committed a gross irregularity in finding that the employee was not under any obligation to perform the duties of a custodian. The Labour Court (LC) found that the commissioner had no regard to the role clarity document and thus ignored or misunderstood evidence. Furthermore, the commissioner failed to understand the term ‘custodian’. According to Coetzer AJ, in the context of employment every employee must be a custodian of the employer’s workplace rules and policies as employees have a general duty of good faith towards their employers. He found that this duty of good faith is the cornerstone of an employment relationship and requires the employees to always act in the best interests of their employers. A breach of this duty would affect the trust relationship and may, therefore, justify dismissal in certain circumstances. Furthermore, the duty of good faith places a responsibility on employees to monitor and report non-compliance by other employees to their employer.

The LC held that the employee was required to comply with all Massstores’ policies and procedures notwithstanding that the manager was responsible for the overall management of the Front Returns Department. This was particularly because the employee did not allege that she was not aware of the rules or that the rules were unreasonable or not consistently applied. It was held that the employee was guilty of the allegations against her and that the arbitration award was unreasonable. As regards appropriate sanction, it was held that dismissal was appropriate as the employee had denied responsibility and had not shown any remorse. There had, therefore, been a breakdown in the trust relationship and the employee had exposed Massstores to operational risk.

This article was first published in De Rebus in 2018 (Nov) DR 46.

De Rebus