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[2020] ZALAC 22
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BMW (South Africa) (Pty) Ltd v National Union of Metalworkers of South Africa and Another (JA 86/18) [2020] ZALAC 22; (2020) 41 (ILJ) 1877 (LAC) ; [2020] 11 BLLR 1079 (LAC) (18 May 2020)
IN
THE LABOUR APPEAL COURT OF SOUTH AFRICA, JOHANNESBURG
Reportable
Case
no: JA 86/18
In
the matter between:
BMW
(SOUTH AFRICA) (PTY) LTD
Applicant
and
NATIONAL
UNION OF METALWORKERS
OF
SOUTH AFRICA
First Respondent
KARL
DEPPE
Second Respondent
Heard:
12 September 2019
Delivered:
18 May 2020
Summary:
Unfair discrimination in terms of s187(1)(f) of LRA and s 6 of
the EEA---age--- employee’s retirement age changed
from 65 to
60---Whether employee consented to change ---Employee’s conduct
and unchallenged evidence leading to finding that
he did not consent
to the change--- evidence indicating that employee never received the
election form to indicate whether to retire
at age 65 or 60 ---
BMW
(SA) (Pty) Ltd v NUMSA and Another
(2019)
40 ILJ 305 (LAC) distinguished
---
Dismissal automatically unfair- on account of age discrimination.
Relief---employee
claiming compensation under LRA --- Court held employer liable for
payment of compensation to employee for automatically
unfair
dismissal.
Employee
also claiming damages equivalent to five years remuneration under
section 50 of the EEA--- Court held employer liable for
employee’s
proven (patrimonial) damages ---court postponing the
determination of the quantum of compensation and damages
to be
awarded.
Cross-appeal
---employee’s claim for damages in terms of s 77(3) of the BCEA
dismissed for lack of evidence. Appeal partially
upheld.
Coram:
Coppin JA, Murphy and
Kathree-Setiloane
AJJA
JUDGMENT
KATHREE-SETILOANE AJA
[1]
This is an appeal and cross-appeal against the judgment and order of
the Labour Court
(Mahosi J) in which it found
inter
alia
that Mr Karl Deppe’s (“Mr Deppe”) dismissal by BMW
South Africa (Pty) Ltd (“BMW”) constituted an
automatically unfair dismissal in terms of section 187(1)(f) of the
Labour Relations Act (“LRA”)
[1]
as
BMW had discriminated against him on the grounds of age. It also held
that his dismissal constituted unfair discrimination on
the same
grounds in terms of section 6(1) of the Employment Equity Act
(“EEA”).
[2]
In the Labour Court
[2]
Although the issues of merits and quantum were separated and only the
merits of the
dispute were before it, the Labour Court awarded Mr
Deppe compensation equivalent to 24 month’s remuneration in
terms of
section 194(3) of the LRA. In doing so, the Labour Court
reasoned as follows:
‘
In
considering what is just and equitable, where there is a single
action with claims under the LRA and EEA, the Court should not
consider separate compensation under the LRA and the EEA but
what is just and equitable for the indignity the employee has
suffered. Because there is no limit prescribed to the amount of
compensation that can be awarded under the EEA and the amount for
compensation under the LRA for automatically unfair dismissal is
limited to a maximum of 24 months remuneration, I am of the view
that
the employee be awarded the maximum compensation provided by the LRA.
This compensation achieves the result of giving effect
to the
employee’s right to claim under both the EEA and the LRA while
at the same time not penalising the employer twice
for the same wrong
as a single determination is made to what is just and equitable
compensation for the single wrongful act.
[3]
The appeal lies against the Labour Court’s orders that Mr
Deppe’s dismissal
constituted an automatically unfair dismissal
in terms of section 187(1)(f) of the LRA and unfair discrimination in
terms of section
6(1) of the EEA. It also lies against the Labour
Court’s award of compensation. The appeal is with leave of the
Labour Court.
[4]
Mr Deppe also claimed damages arising out of BMW’s breach of
his employment
contract in terms of section 77(3) of the Basic
Conditions of Employment Act 75 of 1997. Under this claim, Mr Deppe
sought damages
equivalent to five years remuneration which he claimed
he was entitled to, and would have earned had his contract of
employment
not been wrongfully repudiated by BMW. The Labour Court
disallowed Mr Deppe’s contractual claim and dismissed his claim
for
damages. In doing so, it observed as follows:
‘
Turning
to the relief of damages, it is trite that a claim for damages is not
there for the asking. Anyone claiming damages for
breach of a
contract should prove the loss that he/she had suffered and that such
loss was consequent to the breach. In this case
the employee claims
five years’ remuneration as damages, which is the remainder of
the period he would have worked for BMW
but for his retirement. There
is no shred of evidence to prove the actual loss.
[5]
The cross-appeal lies against the Labour Court’s dismissal of
the damages claim
with its leave.
Analysis of the
Evidence
[6]
Mr Deppe worked for BMW one month short of 31 years. BMW employed him
on 1 December
1984 as a test technician in the workshop. At the time
of his dismissal, he was employed as a quality technician.
[7]
When Mr Deppe commenced employment with BMW, his retirement age was
65 years. His
contract of employment did not stipulate a retirement
age. It was stipulated in a staff handbook. His contract of
employment provided
in relation to policies of the company that:
‘
You
are expected to familiarise yourself with the policies of the
Company, changes to which have an overriding influence on the
conditions laid down in this letter. The policies are reviewed
regularly and may be amended in terms of changing employment and
market conditions.’
[8]
The contract of employment encloses a “Staff Handbook
containing particulars
of the employees’ benefits and the rules
and regulations of the Company” with which Mr Deppe was “asked
to familiarise
himself”.
[9]
Mr Deppe was a member of the BMW Pension Fund (“the Pension
Fund”). At
the time of joining the Pension Fund, the retirement
age stipulated in its rules was 65 years. On 1 February 1994, the
chairman
of the Pension Fund Trustees, Mr DP Kirby, issued an
internal memorandum to all Pension Fund members stating that:
‘
Taking
into account all the factors at play in our economy, it would appear
prudent to reduce the retirement age from 65 to 60 years
for both
male and female employees.
Because those already
over 50 years of age may have already planned their retirement on a
different basis we would like to give
them the option to retain a
later retirement age.
To enable us to evaluate
opinion on this issue we would appreciate you returning the attached
form with your comments before March
30, 1994.’
[10]
Mr Deppe chose to retire at age 65. According to Mr Deppe, he filled
in the survey form and returned
this document to BMW. Since there
were no emails at BMW in 1994, Mr Deppe returned the hardcopy to BMW.
Mr Deppe’s evidence
on this aspect remains unchallenged. At the
trial, Mr Deppe testified that he chose to retire at age 65 because
at the time of
completing the survey document he was not yet 30 years
old and wished to keep his options open should he decide, in the
future,
to retire earlier. Mr Deppe’s explanation for choosing
to retire at age 65 also remains unchallenged.
[11]
On 28 March 1995, Mr Kirby issued an inter-office memorandum
confirming that:
‘
The
official Company Retirement Age has now been changed to 60 years.
Those of you [regardless of age at the time] who indicated
that you
would like to remain at retirement age 65 will be able to do so.
…
We
will make a list of all who specifically indicated they would like to
keep their retirement age at 65. If you are in doubt
please
contact my secretary to confirm what your choice was.’
[12]
Mr Deppe received this document but believed that because he had
expressed his will in the survey document,
the change referred to in
the inter-office memorandum did not apply to him.
[13]
Mr Kelbrick of BMW testified that, some two months later, a
Managerial Notice (signed by C Wesells
– Personnel Training &
Development), dated 16 May 1995, recording the change in the
retirement age from 65 to 60 was
placed on BMW’s noticeboards.
Employees who had a problem with it were invited to write to the
Personnel Department. According
to Mr Kelbrick, members of staff were
expected to read the Managerial Notice that was placed on the
company’s noticeboards.
Mr Deppe conceded that this kind of
notice is generally placed on the company’s noticeboards.
[14]
It is common cause that in 1995, BMW amended Mr
Deppe’s age of retirement from 65 to 60. The extract from the
BMW Pension
Fund Rules dated February 1995 reflects the amended rule
as follows:
‘
Normal
retirement date” shall mean for each member the last day of the
month in which the member attains 60 years, provided
that each member
who was a member on 31 January 1995 may elect the last day of the
month in which the member attains age 65 years
to be the member’s
normal retirement age.’
[
15]
BMW compiled a list of employees above the age of 50, and a separate
list of employees below 50 who
elected in 1995 to retire at 65 and
forwarded it to Alexander Forbes, the administrator of the Pension
Fund. Mr Deppe’s name
did not appear on this list.
[16]
Mr Deppe’s pension benefit statement dated 31 May 1994 records
his normal retirement age as 65
and his pension benefit statement,
dated 28 February 1995, records his retirement age as 60. He only
learnt of the change to his
retirement age from 65 to 60 when he
received his 1995 pension benefits statement. He, however, assumed it
was a “mistake”
and not that his
age of retirement had actually been changed. BMW did not dispute this
at the trial.
[17]
A day or two later, Mr Deppe raised the change to his retirement age
with Ms Greyling and she undertook
to fix the matter and revert, but
never did. BMW disputes this. Ms Greyling,
a
secretary at the time, testified
that she did not speak with
Mr Deppe as she did not work on pension fund matters and was not
based in Rosslyn (the workshop where
Mr Deppe worked) during this
time. She, however, conceded under cross-examination that she did, in
fact, go to Rosslyn during this
period.
[18]
Mr Deppe’s raising of an objection with Ms Greyling, is the
first of six times Mr Deppe protested
against the change of his
retirement age to 60.
[19]
In 2001, Mr Deppe approached Mr Barnard (Representative of the Salary
Council at the time) and asked
if he could assist in getting his age
of retirement “put back to 65”. Mr Barnard took up Mr
Deppe’s issue with
Ms Greyling, first in person, and then in an
email. The email’s subject line: “Option: Karl Deppe”.
In
the email, Mr Barnard mentions the previous occasion when he had
spoken to Ms Greyling about Mr Deppe’s age of retirement.
[20]
Mr Barnard asked Ms Greyling what he and Mr Deppe should do. The
complaint was expressly about Mr Deppe’s
age of retirement that
had been changed. Ms Greyling’s response dealt with Mr Barnard
and benefits, and not the change to
Mr Deppe’s age of
retirement from 65 to 60. Ms Greyling testified at the trial that she
understood the email to relate to
benefits and not the age of
retirement.
[21]
Ms. Greyling’s response was off-point. It dealt with benefits
in relation to Mr Barnard and not
the change to Mr Deppe’s
retirement age from 65 to 60. She explained, in her evidence, that
she understood the email to relate
to benefits and not the age of
retirement. I consider her explanation to be implausible as there is
simply no reference to benefit
in the email. There are, however, two
references to the “age 60/65 issue”; and an express
reference to “age of
retirement” and “pension
fund”.
[22]
Ms Greyling’s failure to deal with the change to Mr Deppe’s
retirement age prompted Mr
Barnard to write another email to her, in
which he explicitly stated that Mr Deppe did not get the necessary
option form to fill
in. The email from Mr Barnard to Ms Greyling was
Mr Deppe’s third objection to the change of his retirement age
to 60. Ms
Greyling failed to respond.
[23]
Thereafter, in April 2002, Mr Deppe joined an action group that was
formed to address the change in
the age of retirement from 65 to 60.
The action group had 20 members who complained that BMW unilaterally
amended their age of
retirement. The action group’s document
contains a table in which Mr Deppe indicated that he received the
opinion/survey
form and had raised the change to his age of
retirement with Ms Greyling earlier. The document provides in
relation to Mr Deppe:
‘
Chose
to remain on 65 on the option evaluation.
BMW records show 60
Plus/minus four years ago
requested S Greyling to correct mistake, no response
Please query onto Salary
Council Rep’
[24]
This is a contemporaneous document which supports Mr Deppe’s
version entirely. Crucially, BMW
did not challenge its contents. The
action group was Mr Deppe’s fourth protestation against the
change to his age of retirement.
Unfortunately, the action group
collapsed as a result of a lack of funds on the part of employees to
take the matter forward.
[25]
In 2014, Mr Deppe, together with 21 fellow workers, raised an
internal grievance. The grievance is
detailed as “60 v 65 age
of retirement” and the settlement retirement: “to be
compensated or be allowed to retire
at 65”. This was Mr Deppe’s
fifth protestation against BMW changing his age of retirement.
[26]
The first stage internal grievance was unsuccessful and again Mr
Deppe protested
-
for
a sixth time. The matter was referred to stage two of the
internal grievance, but was again unsuccessful.
[27]
Mr Deppe was required to retire on 31 October 2015 at the age of 60.
He followed the necessary legal
processes which culminated in the
proceedings in the Labour Court. At the trial, BMW discovered a
document from 1997. This document
indicates that BMW had provided
some employees with an election by way of an election form dated
1997. This form states that the
age of retirement was changed in 1995
to 65 and that it is now “a condition of employment”. The
form recognises that
not everyone had been given an opportunity to
make an election and therefore, BMW was providing this option to
elect in 1997. The
form was addressed to Provident Fund members only.
[28]
Mr Deppe claims he did not receive an election form of the kind sent
by BMW to Provident Fund members
in 1997. BMW failed to provide
evidence at the trial demonstrating that it provided Pension Fund
members with an election form
akin to the 1997 election form which it
gave to Provident Fund members. The stark absence of this
evidence compels the inference
that Provident Fund members did
receive an option form to make this election whilst, crucially,
Pension Fund members did not. Even
more significant, is that BMW
recognised that not everyone had been given an opportunity to make an
election, yet it did nothing
to rectify the situation in so far as
Pension Fund members were concerned.
[29]
Mr Deppe’s uncontested evidence is that he did not receive an
election form akin to the 1997
form sent to Provident Fund members.
Notably, at no stage during the trial in the Labour Court did BMW
contest Mr Deppe’s
evidence that he did not receive an election
form. Indeed, Mr Kirby said under cross-examination that “
he
cannot testify to whether or not Mr Deppe received such an election
form”.
[30]
Bearing in mind BMW’s failure to contest Mr Deppe’s
evidence that he did not receive an
option to elect in 1997, his
purported failure to see Mr Wessel’s managerial notice (dated
31 May 1995) or to respond to
the 28 March Memorandum takes the issue
no further. Properly construed, these documents were not options to
elect.
[31]
Nowhere in its evidence does BMW point to providing Mr Deppe with an
option to make an election between
retiring at age 65 or 60 prior to
changing his retirement age to 60. Indeed, prior to 1997 Mr Deppe was
provided with no such option.
This much is consistent with the
statement in the 1997 inter-office memorandum which reads: “It
appears that not all members
were aware of the choice. Therefore, a
further opportunity is provided to exercise your option if you were a
member prior to June
1995”.
What is
clear from this is that despite
BMW’s
failure to provide Mr Deppe with an option to elect, it changed his
retirement age in 1995 without his consent.
Markedly,
the survey form which Mr Deppe submitted in 1994 expressly indicated
that he did not wish for his retirement age to be
changed to 60.
Issues for determination
[32]
The central issue for determination is whether Mr Deppe retired at
his normal retirement age of 60
on 31 October 2015 or whether he was
discriminated against by BMW by being dismissed on the grounds of his
age thereby constituting
an automatically unfair dismissal as
envisaged in section 187(1)(f) of the LRA and unfair discrimination
under section 6(1) of
the EEA.
[33]
However, BMW’s principal argument in the appeal is that the
current appeal can be disposed of
on the basis of this Court’s
decision in
BMW(South
Africa) (Pty) Ltd v NUMSA and Another
(“Van
der Bank”)
[3]
which
held that where an employee had not made an election to retire at age
65, then unless the circumstances indicated otherwise,
she had
acquiesced to the change.
[34]
In the cross-appeal, the question for determination is whether Mr
Deppe is entitled to damages flowing
from BMW’s breach of his
employment contract.
Does the application
of Van der Bank dispose of the appeal?
[35]
I deal with this question first because an affirmative finding would
be dispositive of the appeal.
BMW’s first point of contention
in relation to this question is that there is a significant
difference between Mr Deppe’s
pleaded case in his statement of
claim and the evidence that he presented at the trial. The change, it
contends, relates to whether
or not Mr Deppe elected to retire at age
65. It points to Mr Deppe’s statement of case where he alleges
that he elected to
retire at age 65 and contrasts this with his
evidence, in the trial, that he did not exercise an election.
[36]
With regard to the purported inconsistency between Mr Deppe’s
pleaded case and the evidence led
at the trial, BMW argues that the
Labour Court ought to have rejected Mr Deppe’s version. As
indicated, BMW places reliance
on the decision of this Court in
Van
der Bank
[4]
as
support for this contention. In
Van
der Bank
,
BMW changed Mrs Van der Bank’s retirement age from 65 to 60 in
1994. Mrs Van der Bank contended that she had not consented
to the
change of her retirement age to 60.
[37]
This Court concluded that her conduct led to a finding on the
probabilities that she had acquiesced
to the change. In arriving at
this conclusion, it examined Mrs Van der Bank’s conduct from
the time the change took effect
in1994 to the time of the filing of
her statement of case, almost 14 years subsequent to her termination
of employment, and concluded
that her pleaded case differed from her
case as articulated in the original grievance which she raised with
BMW. In rejecting Mrs
Van der Bank’s version that she had
submitted an election form to BMW electing her retirement age as 65
(as opposed to 60),
this Court held that her belated claim that she
had submitted an election form electing to retire at age 65 was not
probable, as
she was repeatedly asked for a copy of the election form
but did not counter this by saying that she had submitted the form.
The Court went onto to hold as follows
:
‘
Were
it otherwise, the grievance reports would necessarily have alluded to
her claim of a submission of such a form and that no
record was in
existence to corroborate the claim.
The
repeated articulation of a demand to show her where she accepted age
60 is inconsistent with her pleaded claim that she made
a positive
election to retain age 65.
…
Ultimately,
the case to be decided is the case put up by the respondent: did she
or did she not submit an election form retaining
age 65, or did she
acquiesce in the changes. This should not be thought to be reversing
the
onus
;
the respondent’s burden was limited to a burden to adduce
evidence of her averment that she submitted a form which her employer
received. Absence a positive finding that the probabilities show that
she did elect as alleged, the appellant’s case that
she
acquiesced is made out, by reason of the length of time that elapsed
since the change was made, initially until 2010, and then
a further
period of acquiescence until 2014.
Her
claim to have made an election cannot be found to be true.’
[5]
[38]
BMW’s reliance on the decision of
Van der Bank
is misplaced as it is distinguishable from the current matter in
three primary respects:
First, in
Van der Bank,
there
was no dispute that Mrs van der Bank was given an opportunity to
elect her age of retirement and that BMW had sought to obtain
her
consent. It is common cause on the facts of the current matter,
that Mr Deppe never received an option to elect his age
of retirement
nor was his consent sought.
[39]
Second, in
Van der Bank
this Court disbelieved Mrs Van der
Bank’s version that she had, in fact, elected to retire at 65.
In this case, Mr
Deppe’s consistent and unchallenged evidence
was that he was not even given that opportunity. Thirdly, Mr Deppe
did not acquiesce
to the change of his retirement age from 65 to 60.
It is clear from the evidence led in the Labour Court that he
complained on
at least six occasions, only one of which is disputed
by BMW. This notwithstanding, BMW contends that after 2002 and the
collapse
of the action group, Mr Deppe accepted his position and
“abandoned his objection to the change in his retirement age”.
[40]
There is no substance to this argument as it is abundantly clear from
the evidence on record that Mr
Deppe did not acquiesce, nor did he
abandon his objection to the change in his retirement age. BMW’s
stance was that it would
change his age of retirement if he provided
it with an election form. Yet, the undisputed evidence is that BMW
did not provide
Mr Deppe with an election form. This being the case,
Mr Deppe could have objected daily but it would have changed nothing.
[41]
This is precisely why, in his words, he felt “defeated”
and “gave-up”. As pointed
out on behalf of Mr Deppe,
“feeling defeated in the face of repeated dejections by a
powerful company is not the same as
formal abandonment” or for
that matter waiver of one’s rights. In fact, Mr Deppe
categorically denied abandoning his
right to retire at 65.
[42]
Mr Deppe’s conduct subsequent to 2002 is not indicative of an
employee who sat back and did nothing
to resolve his issue, but
rather of one who was met with closed doors at every attempt. His
conduct is distinguishable from that
of an employee who, believing
that it is permissible, accepts the change to his age of retirement.
In this case, Mr Deppe objected
but knew that without proof of an
election, he would be unable to persuade his employer. Being defeated
is different from agreeing
to a change. Mr Deppe felt defeated.
[43]
I am, accordingly, of the view that Mr Deppe did not acquiesce to the
change of his retirement age
from 65 to 60.
Van
der Bank
is, therefore, clearly
distinguishable. That being so, BMW’s contention that
the appeal should succeed based on this Court’s decision in
Van
der Bank
is without foundation.
[44]
Returning then to BMW’s contention that Mr Deppe’s
pleaded case is inconsistent with the
case he presented at the trial
in the Labour Court. I see no merit in it as the records make it
clear that Mr Deppe testified to
his pleaded case in the trial.
Significantly, BMW conflates the pleadings in relation to a 1994
memorandum with Mr Deppe’s
evidence in relation to a 1997
memorandum:
Mr Deppe pleaded and
testified consistently that he received the 1994 memorandum and made
an election in the form attached thereto.
He, however, considered
this document to be a survey/opinion document - and stated honestly
that this was not the election referred
to in the 1997 memorandum.
[45]
Mr Deppe testified that he did not receive the 1997 memorandum and
could not make an election in relation
to that document. As I see it,
BMW is conflating Mr Deppe’s testimony in not having made an
election on the 1997 memorandum
with his pleadings dealing with the
1994 memorandum.
Mr Deppe’s evidence was:
“I never at any stage had the opportunity to elect,
select, with the exception of the opinion survey, in which I did
select
65. I never ever had an opportunity after that again”.
[46]
Mr Deppe believed that the survey document did not have legal
consequences and was not the election
document. He received the
survey document but not the election document. However, during
cross-examination, counsel for BMW conflated
the option form with the
evaluation form:
‘
Redding
SC: But you did not keep a copy of the option form, and let me just
identify it, identify the option form document I am
talking about. If
you look at page 64 [237]
Mr Deppe: No I did not.’
[47]
Page 237 of the record is, in fact, the 1994 evaluation form and not
the 1997 election form. Yet counsel
for BMW persisted, during
cross-examination, in referring to the 1994 form as the election
form. As such BMW’s contention
that Mr Deppe’s case has
changed, conflates his pleaded case in relation to the 1994
memorandum with his oral testimony on
the 1997 memorandum. A
traversal of the evidence reveals that Mr Deppe believed the 1997
document to be the formal election document
and the 1994 memorandum
to be a survey. He subjectively believed, despite choosing 65 on the
1994 document that as it was just
a survey, it did not count as the
formal election document of 1997 which referred to the exercise of an
option – not the
expression of an opinion.
[48]
Thus, BMW seeks to use an error made by its own counsel as a basis
for challenging the reliability
of Mr Deppe’s evidence.
Furthermore, BMW did not canvas the purported contradictions between
Mr Deppe’s pleadings and
his oral evidence with him during
cross-examination.
[6]
On
account of the failure to do so, I see no conceivable reason to
reject Mr Deppe’s evidence.
Does the dismissal
constitute an automatically unfair dismissal?
[49]
Mr Deppe contends that his dismissal was automatically unfair in
terms of section 187(1)(f)
[7]
of
the LRA as the reason for the dismissal is that BMW unfairly
discriminated against him on the grounds of his age by forcing him
to
retire at 60 years of age, when his agreed retirement age was 65.
[50]
Mr Deppe’s contract of employment provided for an agreed
retirement age of 65. It, nevertheless,
permitted BMW to amend its
policy on the retirement age from 65 to 60. However, prior to doing
so, BMW chose to provide its employees
with an election to retire at
65 or 60.
[51]
BMW did not provide Mr Deppe with an election/option form which it
gave to Provident Fund members in 1997
to make an election between
retiring at age 65 or 60. The undisputed evidence, however, indicates
that Mr Deppe did, in fact, elect
to resign at age 65 in the
survey/opinion document which he completed in 1994. This
notwithstanding, BMW changed his retirement
age from 65 to 60 without
his consent.
[52]
Consequently, but for reaching the age of 60 BMW would not have
dismissed Mr Deppe. In the circumstances,
Mr Deppe has succeeded in
making out a
prima facie
case that his dismissal is
automatically unfair as envisaged in section 187(1)(f) of the LRA, as
BMW unfairly discriminated against
him on the grounds of age.
[53]
BMW bears the onus to demonstrate that the reason for Mr Deppe’s
dismissal does not constitute
unfair discrimination on the grounds of
age. In an attempt to do so, BMW invokes the provisions of
s187(2)(b)
[8]
of
the LRA arguing that it did not dismiss Mr Deppe because of age, but
rather because he reached the normal retirement age of employees
in
the industry.
[54]
The provisions of section 187(2)(b) of the LRA
relating
to the normal retirement age only apply to the case where there is no
agreed retirement age between the employer and the
employee. In this
case, Mr Deppe was dismissed before reaching his contractually agreed
age of retirement which was 65. Therefore,
the provisions of section
187(2)(b) of the LRA relating to the question of a normal retirement
age have no application.
[9]
[55]
Accordingly, when BMW dismissed Mr Deppe on reaching age 60, his
dismissal was not based on his agreed
age of retirement but rather on
an imposed age of retirement without his consent. As a result, BMW
has failed to discharge the
onus to prove that Mr Deppe’s
dismissal did not constitute an automatically unfair dismissal in
terms of section 187(1)(f)
of the LRA.
Unfair Discrimination
in terms of the EEA
[56]
Mr Deppe contends that on dismissing him when he turned 60, BMW
discriminated against him on a ground
listed in section 6(1) of the
EEA, namely age.
[57]
In terms of section 11 (1) (a) and (b)
[10]
of
the EEA, BMW is required to prove on a balance of probabilities that
it had not unfairly discriminated against Mr Deppe as alleged;
or
that such discrimination is rational and not unfair or is otherwise
justifiable. BMW has, however, failed to do so. Consequently,
Mr Deppe’s dismissal also constitutes unfair discrimination on
the grounds of age in terms of section 6(1) of the EEA.
Remedy
[58]
In
relation to his automatically unfair dismissal claim (Claim A), Mr
Deppe sought compensation in the amount of 24 months’
remuneration in terms of section 194(3) of the LRA. And in relation
to his unfair discrimination claim as envisaged in section
6(1) of
the EEA, he sought compensation and damages in terms of section
50(1)(d) and (e)
[11]
of
the EEA respectively.
[59]
The issue of the quantum of compensation was separated from the
merits of the respective claims by
agreement between the parties. The
parties sought an order to this effect which the Labour Court
granted. Thus having found that
Mr Deppe’s dismissal is an
automatically unfair dismissal, as envisaged in section 187(1)(f) of
the LRA, and constitutes
unfair discrimination on the grounds of age,
as envisaged in section 6(1) of the EEA, the Labour Court had to
determine whether
it would be appropriate to order BMW to pay
compensation and/or damages to Mr Deppe in terms of section
193(3)
[12]
of
the LRA and section 50(1) of the EEA.
[60]
The Labour Court’s discretion to do so was limited to the
question of whether BMW is liable
to pay compensation and/or
proven damages to Mr Deppe in respect of each of these claims, and
did not extend to a determination
of the quantum of compensation
and/or damages it is liable to pay. That determination is reserved
for a subsequent determination
by the Labour Court in terms of
section 194(3)
[13]
of
the LRA and section 50(2)
[14]
of
the EEA.
[61]
This notwithstanding, the Labour Court awarded Mr Deppe compensation
equivalent to 24 months remuneration
in respect of both his LRA and
EEA claims. It premised this award on the following principle which
was articulated in
ARB
Electrical Wholesalers v Hibbert
:
[15]
‘…
where
claims are made both in terms of the LRA and the EEA and the court is
satisfied that the dismissal was based on unfair discrimination
as
provided for in the LRA and the employee was unfairly discriminated
against in terms of the EEA, the court must ensure that
the employer
is not penalised twice for the same wrong. In seeking to determine
compensation under the LRA and the EEA, the court
must not consider
awarding separate amounts as compensation but consider what is just
and equitable compensation that the employer
should be ordered to pay
the employee for the humiliation he/she suffered in having his/her
dignity impaired. The employees automatically
unfair dismissal is so
labelled because it is based on a violation of his constitutional
right (in this case not to be discriminated
against on the basis of
his age) and his claim under the EEA is for exactly the same wrong,
that of being discriminated on the
basis of his age.’
[62]
The Labour Court, in my view, erred in applying the principle
articulated above at the merits stage
of the trial, as that inquiry
is reserved for the court that will determine the quantum of
compensation and/or damages that BMW
would be liable for pursuant to
section 194(3) of the LRA and 50(2) of the EEA respectively. In order
words, it is that court which
would need to apply the just and
equitable principle required by the LRA.
[63]
Moreover,
the Labour Court made the compensation award without giving the
parties an opportunity to present evidence or advance
argument as to
what just and equitable compensation would be under the
circumstances. This is a misdirection that prevented a fair
trial of
the issues. The Labour Court’s compensation award in paragraph
3 of its order, accordingly, falls to be set aside
on appeal.
[64]
In relation to Claim B, Mr Deppe sought both compensation and damages
in respect of his unfair discrimination
claim in terms of section
6(1) of the EEA. In terms of section 50(1) of the EEA, the Labour
Court is empowered to make any appropriate
order including awarding
compensation and/or damages in any circumstances contemplated in the
EEA. The Labour Court, however, failed
to exercise its discretion in
terms of section 50(1)(d) of the EEA in relation to the question of
whether BMW is liable for Mr
Deppe’s proven damages in terms of
section 50(1)(d) of the EEA.
[65]
Notably, Mr Deppe averred in his statement of claim, in relation to
his unfair discrimination claim,
that he has suffered patrimonial
loss by being denied five years’ worth of remuneration. He
according sought an order awarding
him damages under the EEA
equivalent to five years remuneration. He reasserted this in the
evidence he gave at the trial in the
Labour Court.
[66]
What is clear from this is that Mr Deppe’s damages claim is for
patrimonial loss (loss of earnings)
and not non-patrimonial loss for
a violation of his dignity.
There
is, therefore, no duplication between this claim and his compensation
claims under the EEA and LRA, both of which are for
impairment of his
dignity.
[16]
Accordingly,
the Labour Court ought to have found that BMW is liable for Mr
Deppe’s proven damages.
[67]
There is a fundamental difference between “damages” and
“compensation” as contemplated
in s50(2) of the EEA.
Damages in the EEA relates to an actual or potential monetary loss
(patrimonial loss) and compensation relates
to the award of an amount
as a solatium (non-patrimonial loss). This Court has repeatedly held
that a claimant in an unfair discrimination
claim, such as we have in
this case, may suffer actual (patrimonial) loss) as well as injured
feelings or non-patrimonial loss.
A damages award for patrimonial
loss is aimed at placing an employee in the financial position that
the employee would have been,
had he or she not been unfairly
discriminated against. Compensation for non-patrimonial loss, on the
other hand, is “to assuage
by means of monetary compensation
the insult, humiliation and indignity or hurt” that a claimant
has suffered as a result
of the unfair discrimination.
[17]
[68]
All things considered, the Labour Court erred in failing to make an
order to the effect that BMW is
liable for Mr Deppe’s proven
damages for loss of earnings arising from the unfair discrimination
he suffered.
Cross-Appeal
[69]
In Claim B, Mr Deppe sought damages for breach of contract equivalent
to five years remuneration. The
Labour Court found that there was not
a shred of evidence to prove the actual loss. Quite apart from the
fact that the Labour Court
was not allowed to enquire into the
quantum of damages suffered by Mr Deppe, it had on a more elementary
level omitted to determine
whether BMW repudiated Mr Deppe’s
employment contract by changing the retirement age from 65 to 60.
[70]
Although Mr Deppe was entitled in the same action to bring an unfair
discrimination claim for damages
under the EEA as well as a
contractual claim for damages for wrongful termination of his
contract of employment, Mr Deppe was required
to bring these claims
in the alternative, which he did not do. Thus, to the extent that Mr
Deppe has proved his unfair discrimination
claim under the EEA, and
would be entitled to his proven damages arising from that claim, he
is not entitled to claim contractual
damages as well.
[71]
However, even if this Court were inclined to find that Mr Deppe has
succeeded
in
proving that BMW repudiated his employment contract by amending his
retirement age from 60 to 65 without his consent, Mr Deppe
would only
be entitled to contractual damages in the amount of one month’s
notice pay in terms of his contract of employment.
His damages are
limited to the position he would have been in, under the contract,
had the breach not occurred. Mr Deppe’s
contractual claim for
five years pay is, therefore, misplaced as Mr Deppe’s
contractual claim for wrongful termination of
employment is limited
to one month’s notice pay.
Costs
[72]
BMW has only achieved partial success in the appeal. To this end, I
consider it fair and just not to
award it costs in the appeal. On
account of the equivalent result in the Labour Court, I adopt the
same approach to the order of
costs there.
Order
[73]
In the result, it is ordered that:
1.
The appeal is partially upheld with no
order as to costs.
2.
The order of the Labour Court is set aside
and replaced with the following order:
‘
(i)
The Second Applicant’s dismissal is automatically unfair in
terms section 187(1)(f)
of the Labour Relations Act 66 of 1995.
(ii)
The Second Applicant’s dismissal constitutes unfair
discrimination in terms
of section 6(1) of the Employment Equity Act
55 of 1998.
(iii)
The Respondent is liable for payment of compensation to the Second
Applicant for his automatically
unfair dismissal and for
discriminating against him on the grounds of age.
(iv)
The Respondent is liable for the Second Applicant’s proven
damages (patrimonial)
for discriminating against him on the grounds
of age.
(v)
The determination of the quantum of compensation and damages is
postponed
sine die
.
(vi)
There is no order as to costs.’
3.
The Cross-Appeal is dismissed with no
order as to costs.
_________________
F
Kathree-Setiloane
Acting
Judge of Appeal
I
agree
_________________
P
Coppin JA
Judge
of Appeal
I
agree
_________________
J
Murphy AJA
Acting
Judge of Appeal
APPEARANCES:
FOR
THE APPELLANT: Mr GL Van der Westhuizen
Instructed
by Norton Rose Fulbright
FOR
THE RESPONDENT: Ms. H Barnes with Ms. I de Vos
Instructed
by Ruth Edmonds Attorneys
[1]
No.
56 of 1996.
[2]
No.
55 of 1998.
[3]
BMW
(SA) (Pty) Ltd v NUMSA and Another
(2019) 40 ILJ 305 (LAC) (“Van der Bank”).
[4]
Van
der Bank
paras 3-6.
[5]
Van
der Bank
paras 37-42.
[6]
President
of the Republic of South Africa and Others v South African Rugby
Football Union
1999
(2) SA 14 (CC).
[7]
Section
187(1)(f) provides:
‘
A
dismissal is automatically unfair if the employer, in dismissing the
employee, acts contrary to section 5, or if the reason
for the
dismissal is –
(a) …
(f)
that the employer unfairly discriminated against an employee,
directly or indirectly, on any arbitrary ground, including,
but not
limited to race, gender, sex, ethnic or social origin, colour,
sexual orientation, age, disability, religion, conscience,
belief,
political opinion, culture, language, marital status or family
responsibility.” ‘
[8]
Section
187(2)(a) provides:
‘
Despite
subsection 1(f) –
(a)
A dismissal may be fair if the reason for
the dismissal is based on an inherent requirement of the particular
job;
(b)
A dismissal based on age is fair if the
employee has reached the normal or agreed retirement age for persons
employed in that
capacity.’
[9]
Metcash
at
paras 25-26.
[10]
Section
11 of the EEA entitled “Burden of Proof” provides in so
far as is relevant:
‘
(1)
If unfair discrimination is the alleged on a ground listed in
section 6(1), the employer against whom the allegation
is made must prove, on a balance of probabilities, that such
discrimination–
(a)
did not take place as alleged; or
(b)
is rational and not unfair or is otherwise
justifiable.’
[11]
Section
50(1) of the EEA in so far as is relevant provides:
‘
(1)
except where this Act provides otherwise, the Labour Court may make
an appropriate order including–
…
(d) awarding
compensation in any circumstances contemplated in this Act;
(e) awarding damages in
any circumstances contemplated in this Act;
…’
[12]
Section
193(3) of the LRA provides:
‘
If
a dismissal is automatically unfair, or if a dismissal based on the
employer’s operational requirements is found to be
unfair, the
Labour Court in addition may make any other order that it considers
appropriate in the circumstances.’
[13]
Section
194(3) of the LRA provides:
‘
The
compensation awarded to an employee whose dismissal is automatically
unfair must be just and equitable in all the circumstances,
but not
more than the equivalent of 24 months’ remuneration calculated
at the employee’s rate of remuneration on
the date of
dismissal.”
[14]
Section
50(2)(a) of the EEA provides:
(a)
payment of compensation by the employer to
that employee.
[15]
ARB
Electrical Wholesalers (Pty) Ltd v Hibbert
(2015) 36 ILJ 2989 (LAC) para 33.
[16]
ARB
Electrical Wholesalers v Hibbert
(2015)
36 ILJ 2989 (LAC) at para 26.
[17]
SA
Airways (Pty) Ltd v Janse van Vuuren and Another
(2014) 35 ILJ 2774 (LAC) at paras 78-80.