Employment law update – Unfair discrimination on the basis of age

December 1st, 2013

By Talita Laubscher and Monique Jefferson

In Jansen van Vuuren v South African Airways (Pty) Ltd and Another [2013] 10 BLLR 1004 (LC) the Labour Court was required to consider whether South African Airways (SAA) had unfairly discriminated against the applicant employee on the basis of age when it introduced certain new terms and conditions of employment in accordance with a collective agreement. In addition, Shaik AJ was required to consider whether SAA committed an unfair labour practice by unilaterally deducting annual leave from the employee’s annual leave entitlement without the employee’s knowledge.

The employee was an airline pilot who had reached the then official SAA retirement age of 60. At the time that he reached this age, SAA had in principle agreed with the Air Line Pilots Association of South Africa that the retirement age would be increased but this still needed to be formalised in writing. The employee made inquiries as to whether, given the negotiations around an increased retirement age, he would remain in service after he reached the age of 60.

He was advised telephonically that he would remain in service until he reached the age of 63 but that he was to remain at home for the period during which the terms and conditions of the collective agreement were being negotiated. The employee continued to receive his normal salary during this period, but it later transpired that SAA treated this period as annual leave and unilaterally deducted his absence from his annual leave entitlement without him having any knowledge of this.

In terms of the collective agreement SAA extended its retirement age to 63, subject to certain terms and conditions. The employee was recalled to flying duty but was subject to the new terms and conditions of the collective agreement, including a reduction in his salary for doing the same work as before. He alleged that SAA had unfairly discriminated against him by introducing new terms and conditions that prejudiced him because of his age. The effect of the terms of the collective agreement was that pilots over the age of 60 earned a lower salary and were denied certain privileges compared to their younger counterparts. Pilots over the age of 60 were in effect treated as subordinates to those whom they had previously supervised and this differentiation was based solely on age.

Shaik AJ considered this in light of the Constitution and the Employment Equity Act 55 of 1998 (the EEA), which prohibits unfair discrimination. SAA argued that the employee did not have a claim as the employee’s employment had automatically terminated when he reached the age of 60 and thus the new collective agreement that came into effect after his retirement novated his previous terms and conditions.

However, Shaik AJ held that the employment contract had not been terminated – the applicant had simply been told to stay at home while SAA was re-negotiating the retirement age. Furthermore, the employee never received a new contract of employment with new terms and conditions and he was not entitled to be paid accrued annual leave pay until he retired at the age of 63.

There was undisputed evidence that SAA differentiated between employees on the basis of age. SAA, however, argued that the employee had failed to show that there was an employment policy or practice that unfairly discriminated on the grounds of age and there was no comparator. It was also alleged by SAA that it was unlawful for the employee to ‘cherry pick’ certain terms of the collective agreement, that is, the extension of the retirement age, and to request the court to ignore other terms, such as the reduced remuneration.

Furthermore, SAA alleged that the remuneration and conditions were as a result of collective bargaining and the court should therefore not nullify the outcome of collective bargaining. Shaik AJ considered the fact that, in terms of s 11 of the EEA where an employee shows that discrimination exists, there is a rebuttable presumption that such discrimination is unfair unless the employer can justify it.

Shaik AJ held that a collective agreement is subject to the Constitution and the EEA and cannot be used to justify unfair discrimination. Furthermore, public policy had to be determined with reference to the Constitution and terms that violated the Constitution were therefore contrary to public policy and accordingly unenforceable.

SAA later unilaterally terminated the collective agreement in 2007. Shaik AJ found that reliance on the collective agreement to justify discrimination was misplaced as SAA did not appear to regard itself as bound by it and unilaterally terminated it. It was concluded that the collective agreement was discriminatory and unfair and served no legitimate purpose. It was also held that there was no need for a comparator as it was not a claim for equal pay for equal work.

Shaik AJ considered mitigating factors that the collective agreement was subsequently cancelled and thus discrimination was brought to an end. However, this did not detract from the fact that the emplo­yee had suffered discrimination and SAA derived a benefit at the employee’s expense. Thus, SAA was ordered to pay compensation equal to one year’s remuneration and damages equal to the difference between the salary the employee received and the salary and benefits he should have received had his terms and conditions not been unilaterally changed by the collective agreement.

As regards the alleged unfair labour practice, at the time that the employee reached the age of 60 he had accrued annual leave to the value of R 330 000. Had his employment terminated, he would have been paid out this amount as accrued annual leave pay. In fact, he did receive payment of R 330 000 in respect of his accrued annual leave but was then told that this amount was paid in error as he was entitled to be paid such amount only on retirement and he was thus required to repay this amount.

The employee was under the impression that he had received his normal salary during this time. However, it subsequently transpired that SAA treated this period as annual leave and deducted this absence from his annual leave entitlement. The amount that the employee received each month was actually his accrued annual leave pay and not a normal salary. The employee was not consulted with on this and this arrangement was unilaterally implemented.

SAA conceded that this was unfair but alleged that it was not an unfair labour practice as leave is not a benefit. Shaik AJ held that while there may be case law to the effect that leave pay is not a benefit, this does not mean that leave itself is not a benefit. It was held that forcing the employee to go on leave constitutes an unfair labour practice and SAA was ordered to pay the employee a sum equivalent to the number of days’ annual leave that had been deducted from his annual leave entitlement.

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.

This article was first published in De Rebus in 2013 (Dec) DR 45.