McGregor v Public Health and Social Development Sectoral Bargaining Council and Others (CC) (unreported case no CCT270/20, 17-6-2021) (Mogoeng CJ, Jafta J, Khampepe J, Madlanga J, Majiedt J, Mhlantla J, Pillay AJ, Theron J, Tlaletsi AJ and Tshiqi J)In this case the Constitutional Court (CC) was called on to make a determination of whether an award of six months’ compensation awarded to Dr McGregor, a senior medical practitioner, dismissed on the basis of sexual harassment in the workplace was appropriate and if not, what compensation, if any, should have been awarded under the circumstances.
Dr McGregor was employed as Head of Anaesthesiology and was dismissed after the disciplinary hearing in which he was found guilty of four charges of misconduct that amounted to sexual harassment. Not satisfied with the outcome Dr McGregor referred the dispute to the Public Health and Social Development Sectoral Bargaining Council challenging both the substantive and procedural fairness of the dismissal. The arbitrator found him guilty of three of the four charges of misconduct and found that dismissal was procedurally unfair and subsequently ordered compensation in the sum of R 924 679,92 equivalent to six months’ remuneration.
Dr McGregor was not happy with the outcome and referred the matter to the LC to have the arbitration award reviewed on the basis that his conduct did not constitute sexual harassment and did not warrant dismissal. The Department also brought a counter-review challenging the award on the basis that –
The LC found that the arbitrator’s finding in respect of the three charges were reasonable and, therefore, not reviewable. It found that notwithstanding the unfairness of the procedure followed the dismissal was substantively fair. The LC dismissed the Department’s cross-
review and did not interfere with the compensation awarded.
Dr McGregor filed a petition with the LAC, requesting that his dismissal be declared substantively unfair and that he be reinstated. The Department filed a new cross-appeal, claiming that the LC erred in not reconsidering the compensation after determining that the dismissal was substantively fair. Like the LC, the LAC found that dismissal was procedurally unfair and substantively fair. Similar to the LC, the LAC, albeit erroneously as it seems, did not revisit the compensation award.
Dr McGregor approached the CC to overturn the LAC’s judgment. The CC refused to grant leave to appeal against the dismissal as this only constituted a factual dispute. The CC thereafter discussed the cross-appeal brought by the department and addressed the question of compensation. The CC revisited s 193(1)(c) of the Labour Relations Act 66 of 1995 (LRA), which authorises the arbitrator or the LC to award compensation of unfair dismissal, however, this section must be read with s 194(1) of the LRA, which sets the limit of compensation that may not be exceeded. Although every employee has the right under s 185(a) of the LRA not to be unfairly dismissed the infringement of this right does not automatically confer a right to a remedy. The operative term ‘may’ in s 193(1)(c) of the LRA implies that the award of compensation is never guaranteed. Compensation is determined by the conclusions of the quality and character of a dismissal, and in the end, a wide range of variables must be considered to determine if compensation must be given and, if so, for how many months.
The CC referred to the judgment in Dr D.C Kemp t/a Centralmed v Rawlins [2009] 11 BLLR 1027 (LAC) and drew a distinction between the discretion exercised in terms of ss 193(1)(c) and 194(1). It held that a compensation award in terms of s 193(1)(c) is reviewable, and the test is whether a reasonable decision maker would have arrived at that conclusion. On the other hand, a compensation award in terms of s 194(1) constitute a narrow exercise of discretion and the court can only interfere if the grounds for interference exists. The CC found that both the LC and LAC erred in that they failed to consider whether the grounds for a review of the amount of compensation, as laid down in Dr D.C Kemp, had been met. As a result, no court had adequately applied itself to the appropriateness of the compensation amount because the dismissal was substantively fair. The CC confirmed the principle in HM Liebowitz (Pty) Ltd t/a Auto Industrial Centre Group of Companies v Fernandes (LAC) (unreported case no DA3/01, 1-2-2002) (Zondo JP) that there is a distinction between compensation payable to an employee who deserved to be dismissed (substantive unfairness) and an employee who did not, but was subjected to unfair procedure, and the compensation award must reflect this distinction. The CC stated that although compensation for unfair dismissal serves a vital purpose, its appropriateness must be considered in the context of the dismissal. This means that if sexual harassment was the reason for the dismissal, it must be considered. This is because the Constitution guarantees not only the right to fair labour practices, but also that our constitutional democracy is built on the explicit values of human dignity, integrity, and the achievement of equality in a non-racial and non-sexist society under the rule of law. Sexual harassment, on the other hand, undermines a person’s dignity and is the opposite of genuine workplace equality. Consequently, the CC reduced the compensation to an equivalent of two months’ remuneration.
Noteworthy from this decision is the reviewability of the exercise of discretion by a decision maker when they decide whether to award compensation at all, and if so, by how much?
The decision also reaffirms the weight of substantive unfairness over procedural fairness on the question of how much compensation to award as enunciated in Dr D.C Kemp.
Lastly, the decision notes the CC’s intolerance to sexual harassment in the workplace on one hand and cushions an employee’s right to fair procedure on the other hand.
Sifiso Ngcobo LLB (Hons) (University of Zululand) is a legal practitioner at Zuma & Co Inc in Verulam and Ntombifikile Zulu LLB LLM (Business Law) (UKZN) is a legal practitioner in Durban. Ms Zulu writes in her personal capacity.
This article was first published in De Rebus in 2021 (Sept) DR 31.
