South African Airways (Pty) Ltd v Jansen Van Vuuren and Another (CA9/13, C420/2006) [2014] ZALAC 108 (12 June 2014)

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[2014] ZALAC 108
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South African Airways (Pty) Ltd v Jansen Van Vuuren and Another (CA9/13, C420/2006) [2014] ZALAC 108 (12 June 2014)

REPUBLIC
OF SOUTH AFRICA
IN THE LABOUR APPEAL
COURT OF SOUTH AFRICA, CAPE TOWN
Reportable
Case no
:
CA9/13
Case no in the court
a
quo
: C420/2006
In the matter between:
SOUTH
AFRICAN AIRWAYS (PTY) LTD
Appellant
and
GIDEON JACOBUS JANSEN
VAN VUUREN

First Respondent
AIR LINE PILOT’S
ASSOCIATION OF
SOUTH AFRICA
(ALPA-SA)

Second Respondent
Heard:
18 March 2014
Delivered:
12 June 2014
Summary: Unfair
discrimination based on age. Employer retirement policy age to 60.
Employee reaching retirement age- Employee requested
to stay on
standby while negotiation on retirement age finalised. Collective
agreement extending retirement age to 63. Collective
agreement
reducing employees’ salary over the age 60. Employee alleging
unfair discrimination- Labour Court upholding employee’s
claim.
Appeal. Principles restated- two stage-enquiry in considering unfair
discrimination claims: Whether discrimination occurred
and whether it
is unfair. EEA making no provision for justification collective
agreement entered into by parties not justifying
discrimination -
employee unfairly discriminated against on the ground of age. Remedy.
Distinction between compensation and damages
emphasised- Requirement
of fairness in considering compensation. Labour Court award of
compensation excessive and disproportionate.
Quantum of award
reduced.
Unfair labour
practice. Labour Court sitting as arbitrator by agreement between
parties. Employee paid with accumulated leave pay
– Labour
Court decision sitting as arbitrator subject to appeal only- test
that of the correctness of the judgment and not
the reviewability of
the judgment. Accumulated leave pay included in benefit. Employer
committed unfair labour practice in remunerating
employee with his
accumulated leave pay. Appeal dismissed with costs.
CORAM: TLALETSI DJP,
DAVIS JA et COPPIN AJA
JUDGMENT
COPPIN AJA
[1]
This is an appeal against a judgment of the Labour Court (Shaik AJ)
with the necessary leave, in which it was held,
inter
alia,
in
terms of the Employment Equity Act 55 of 1998 (“the EEA”),
that the appellant had discriminated unfairly against
the first
respondent, then employed by it as a senior airline pilot, on the
basis of his age and consequently awarding him damages
and monetary
compensation.
[1]
It was also
held by the court
a
quo
,
sitting as arbitrator, that the appellant had subjected the first
respondent to an unfair labour practice by utilising his accumulated

leave pay to remunerate the first respondent during the period he was
on standby leave pending finalisation of an agreement between
the
appellant and the second respondent in terms of which,
inter
alia
,
the retirement age of pilots was to be increased from age 60 to age
63.
[2]
[2] At the hearing in the
court
a quo,
the first respondent gave oral evidence but the
appellant led no evidence. The following facts were either common
cause, or were
otherwise not seriously disputed. The first respondent
was employed by the appellant as a pilot with the rank of senior
captain.
He was also a member of the second respondent which
represented him in his employment-related issues with the appellant.
[3] On 5 August 2005, the
first respondent turned 60 years of age. Under the terms and
conditions that applied at the time to the
contractual relationship
between the appellant and the pilots employed by it, including the
first respondent, the retirement age
was 60 and a pilot had to retire
at the end of the month in which he or she reached the age of 60. The
first respondent turned
60 on 5 August 2005 and was thus to retire at
the end of August 2005.
[4] Seemingly,
fortuitously, at the time the first respondent turned 60, his union,
the second respondent, was engaged in collective
bargaining with the
appellant to,
inter alia
, increase the retirement age of
pilots to the age of 63. On or about 19 August 2005, the second
respondent and the representatives
of the appellant had reached an
“
in principle
” agreement that the retirement age
of pilots would be 63. However, the collective agreement still had to
be finalised and
formalised. A circular was sent out by the second
respondent informing its members accordingly and that it would take
some three
to four weeks for the details of the collective agreement
to be negotiated.
[5] In response to a
query raised by the first respondent with the general manager of the
second respondent, it was confirmed that
because of the agreement
regarding the extension of the retirement age, the first respondent
would remain in the service of the
appellant despite having reached
the age of 60. This was also verified and confirmed by the Human
Resources Manager of the appellant,
a Mr Schmittdiel, who also
informed the first respondent that he would be remaining in the
service of the appellant until age 63
that is until 31 August 2008
which was his revised retirement date.
[6] Pending the
finalisation and formalisation of the collective agreement, the first
respondent was instructed to remain at home,
but to be on standby.
The first respondent, acting in accordance with the instruction,
remained at home, but was on standby awaiting
flying instructions
from the appellant. He did not complete and hand in any documents
relating to his retirement. At the time when
he was asked to go on
standby he was fit and ready to fly. He had completed a re-testing
which would have permitted him to fly
until January 2006, before
further testing was required. According to the first respondent, he
was ready and willing to render
service at any time when called upon
by his employer to do so. He made several calls to enquire when he
would resume flying because
he was aware that the appellant had a
shortage of captains to fly the type of aircraft which he was flying,
namely a B738. The
first respondent testified that he wanted to
assist instead of remaining at home and was unable to leave home in
case he was called
upon to resume his flying duties with the
appellant.
[7] The collective
agreement (which is titled a ‘memorandum of understanding’
(“
MOU
”)) was only formally concluded and signed by
the parties on or about 11 November 2005. It provided,
inter alia,
that its implementation date would be retrospective as from 1 August
2005 and that it would endure for a period of three years;
that a
pilot may retire at any time between the ages of 50 and 63 at the
pilot’s discretion and that such retirement would
be final;
that pilots who reached the age of 60 would be given the choice to
continue to fly for the appellant on either domestic
or international
routes; that pilots who choose to fly domestically will operate as
captains and those who choose to fly internationally
will operate in
the position of first officer. More significantly, the agreement
provided that pilots who elect to continue to
fly until the age of
60, whether domestically or internationally, will be remunerated on
the salary scale SC20 and that they would,
however, retain their
benefits and would continue to receive general annual increases,
although not notch increases. The agreement
also provided that this
dispensation would endure for a period of three years after which any
pilot in the service of the appellant,
who was over the age of 60,
would revert to his normal rank and salary notch, provided that the
agreed operational limitations
relating to long-range flights to
certain destinations and in terms of which pilots over the age of 60
are not allowed to operate
as the pilot in command of the aircraft,
had been removed.
[8] When the collective
agreement had been signed, the first respondent was called upon to
resume his flying duties with the appellant.
After attending a
refresher course on 9 December 2005 and flight simulator activation
checks on 10 and 11 December 2005, he embarked
on his first flight,
since going on standby, on 12 December 2005.
[9] After he had first
been instructed to be on standby pending the conclusion of the
collective agreement and without having applied
for retirement, or to
be paid out his accumulated leave pay, the appellant paid to the
first respondent his accumulated leave pay
as a lump sum. It came to
an amount of approximately R330 000,00, after taxation. The first
respondent, on becoming aware of the
payment, informed Mr Schmittdiel
that the payment was made in error since it was only due upon his
retirement. The first respondent
returned the payment to the
appellant upon the request of Mr Schmittdiel. It is common cause that
in a written communication addressed
to one, Elize Smit, Mr
Schmittdiel stated that he had been informed that the retirement age
had been extended from age 60 to 63
years and he requested Ms Smit to
“
reinstate
” the first respondent and establish
with the IT Department how the tax directive, pertaining to the
payment of the amount
to the first respondent, could be reversed. Mr
Schmittdiel also instructed Ms Smit as follows: “
Don’t
exit anyone else from the system unless the FDC requests that they be
retired at the age of 60.
”
[10] However, in the same
internal communication, Mr Schmittdiel directed Ms Smit to utilise
the first respondent’s accumulated
leave amount “
for
pay purposes until the final agreement had been signed
”.
This was without the first respondent’s knowledge or consent.
The first respondent only became aware later that instead
of the
appellant paying him a salary while he was on standby, his
accumulated leave was utilised to remunerate him for that period.
He
was on standby leave from 1 September 2005 to 10 November 2005. From
11 November 2005 he was paid a salary but at the SC20 level
as
contemplated in the collective agreement. This was a lower level than
he had been remunerated before. At the time he turned
60 he was
earning at the SC34 level (total cost to employer). Translated into
figures, at the SC34 level his annual earnings (total
cost to
employer) was about R1 476 150 and at the SC20 level his annual
earnings (total cost to employer) were reduced to R1 113
680.
[11] Upon resuming his
duties and becoming aware of the utilisation of the amount due to him
in respect of his accumulated leave
pay, the first respondent took
issue with that and with the fact that, in terms of the collective
agreement, he and other pilots,
who had also reached the age of 60
and did not retire, were to be treated differently from the younger
pilots for the period of
the dispensation under the collective
agreement. In respect of the differentiation the first respondent
appears to have been particularly
dispirited by the fact that he was
to be paid less than what he earned before and less than pilots who
were younger than 60. He
also took issue with the provision in the
agreement (albeit upon the condition of certain operational
limitations that I have mentioned
above having been removed) namely,
that pilots who were 57 or younger at the time the agreement was
concluded were entitled to
work beyond age 60 until age 63 without a
salary reduction or further differentiation on the grounds of age.
The first respondent
took these issues up with the second respondent
and with the Chief Executive Officer of the appellant at the time.
[12] Dissatisfied with
the response of the appellant the first respondent instituted
proceedings in the Labour Court. His main claim,
in essence, was that
the appellant, by virtue of the collective agreement, unfairly
discriminated against him on the basis of his
age, in breach of the
EEA and violated his rights to dignity, equality and his rights to be
free from discrimination as contemplated
in sections 9 and 14 of the
Republic of South Africa Constitution Act 108 of 1996 (‘the
Constitution’). The first respondent
also alleged that the
utilisation by the appellant of the amount due to him in respect of
his accumulated leave pay, constituted
an unfair act or omission and
alleged that the claim had been referred to the Commission for
Conciliation, Mediation and Arbitration
(“
the CCMA
”)
for arbitration. The parties subsequently agreed that the Labour
Court hearing the unfair discrimination claim should also
hear the
claim relating to the unfair labour practice, albeit sitting as
arbitrator in respect of that dispute, which agreement
the court
a
quo
acceded to. The second part of the appeal deals with that
claim.
[13] In respect of the
unfair discrimination claim, the court
a quo
, dismissing,
inter alia
, arguments on behalf of the appellant that the
first respondent consented to or authorised the second respondent to
conclude the
collective agreement that had caused him to suffer the
discrimination and that the discrimination was accordingly fair, held
that
“
the collective agreement is subject to the
Constitution and the EEA and that the parties to the agreement could
not ‘contract
out of the fundamental rights and protections set
out in the bill of rights’
’; that the terms of the
collective agreement “
were discriminatory and manifestly
unfair
” and served no legitimate purpose which caused the
employee, solely on the grounds of his age, to “
suffer
reduction in remuneration and other detriment
”. The court
a
quo
went on to make the order to which I referred in the first
paragraph of this judgment. The court
a quo
did not only award
damages to the first respondent, being the difference between the
amount which the first respondent earned in
terms of the dispensation
under the collective agreement and the amount which he should have
earned if he was not discriminated
against, but also compensation in
an amount which was the equivalent of one year of the first
respondent’s remuneration calculated
at the rate applicable to
his last year of service with the appellant. This is an amount in
excess of R1,4 million.
[14] In respect of the
unfair labour practice claim, the court
a quo
, sitting as
arbitrator, as envisaged in terms of
section 158(2)(b)
of the
Labour
Relations Act 66 of 1995
(“
the LRA
”), gave an
“award” to which I referred in the first paragraph of
this judgment, in terms of which it found that
the claim of the first
respondent was “
in reality
” a claim for
accumulated leave; that it was unfair for the appellant to place the
first respondent on leave in circumstances
where he was not being
paid in the ordinary manner and where his leave account was debited
by the appellant, thus reducing the
number of leave days that stood
to his credit. The court
a quo
also found that the conduct of
the appellant “
in forcing
” the first respondent to
go on leave, constituted an unfair labour practice.
[15] The appellant’s
appeal is in respect of both the judgment in the unfair
discrimination claim and the “award”
(or order) made by
the Labour Court in respect of the first respondent’s unfair
labour practice claim. I shall now proceed
to consider the appeals
against these claims separately.
The unfair discrimination
claim
[16]
The appellant contends that the court
a
quo
was wrong in its findings and conclusions regarding this claim. In
particular, it was contended that the court
a
quo
wrongly relied on a
dictum
from the matter of
Larbi-Odam
and Others v Member of the Executive Council for Education (N-W
Province) and Another.
[3]
It was submitted that the Constitutional Court did not rule out the
possibility of the significance of collective bargaining for
the
purposes of determining whether the discrimination complained of was
justified in terms of the Constitution. From that premise,
it was
further contended on behalf of the appellant that the collective
agreement in this case was significant. The first respondent
and
other pilots over the age of 60 had a choice to either retire finally
or take advantage of the terms of the collective agreement
by which
the retirement age was extended to 63, and, accordingly, to be
governed by the terms of the collective agreement. It was
submitted
that it was made clear to the first respondent at the outset that
although there was an agreement in principle, the extension
of the
retirement age was to be subject to terms and conditions that were
still to be agreed upon between the appellant and the
second
respondent.
[17] On behalf of the
appellant, it was also submitted that the court
a quo
had
erred in equating the collective agreement to subordinate
legislation, because the collective agreement in this case was not

extended by the Minister of Labour to non-parties as contemplated in
section 32 of the LRA, and that it was a collective agreement

concluded by private parties and not under the auspices of a
bargaining council. Furthermore, it was contended that the collective

agreement had a legitimate purpose in that the extension of the
retirement age to 63 was beneficial for pilots. It was also argued

that, in any event, discrimination in terms of section 6(1) of the
EEA was not proved. According to this argument, age was an inherent

requirement of the job of a pilot. Any distinction or preference
against pilots above the age of 60 was based on the inherent
requirements of the job of pilot “and does not constitute
unfair discrimination because of the provisions of section 6(2)(b)
of
the EEA”.
[18] It was also
submitted on behalf of the appellant that the appellant did not
“unilaterally impose discriminatory terms”,
but that the
terms were a product of collective bargaining in which everyone’s
interests were represented and that the members
of the second
respondent were forewarned of conditions to which they still had to
agree. There were other considerations underpinning
the conclusion of
the collective agreement, other than age, namely, the benefits of
extending the retirement age and the costs
attendant upon the
extension thereof. With regard to the latter, it was contended that
the costs were not to impact severely on
the appellant and therefore
mechanisms had to be agreed to limit such financial impact in order
to induce the appellant to agree
to the extension of the retirement
age.
[19] According to the
argument made for the appellant, the first respondent had a choice
either not to accept the benefits of the
collective agreement by
choosing to retire, or to accept the benefits and to only retire at
the age of 63. The first respondent
could not elect both of those
options, or elect the latter option without accepting all the terms
of the collective agreement.
It was contended that the collective
agreement was not an extension or renewal of the first respondent’s
fixed term contract
of employment which, according to this argument,
had lapsed at the end of August 2005 after the first respondent had
turned 60.
It was argued that the collective agreement constituted a
new contract which the first respondent could have either accepted or

rejected.
[20] It was further
submitted on behalf of the appellant that the collective agreement
did not discriminate against the first respondent
but benefitted him.
Public policy was better served by enforcing collective agreements,
which embodied distinctions between employees,
if they, on the whole,
improved the position of those employees. As an alternative argument,
it was submitted on behalf of the
appellant, that the appellant did
not consider the collective agreement binding on it, but nevertheless
honoured its terms in relation
to the first respondent and that if it
were to be accepted that the agreement was not binding on the
appellant from the outset,
then the first respondent’s claim
should fail because he could not have relied on it to found his claim
of discrimination
against the appellant.
[21] It was further
submitted, in the alternative, that even if it was to be found that
there was discrimination, it was justified
for the following reasons:
the extension of the retirement age to 63 benefitted pilots and
particularly the first respondent whose
fixed term contract had
lapsed after he had turned 60; the reduction in the salary of pilots
who elected to continue to work was
intended to limit the cost impact
on the appellant and was also necessitated by other external factors
and restrictions that existed
at the time and that the parties to the
collective agreement accepted these considerations. It was submitted
that the court
a quo
had failed to properly evaluate those
factors and that, if it had done so, it would have found that the
discrimination was justified.
[22] With reference to
section 6 of the EEA, it was submitted on behalf of the first
respondent, that through the collective agreement,
the appellant
discriminated unfairly and unjustifiably against the first
respondent. The appellant’s reliance on section
6(2)(b) of the
EEA, which provides that it is not unfair discrimination to
distinguish, exclude or prefer any person on the basis
of the
inherent requirements of a job, was not sustainable on the basis of
the following. On the facts, shortly before he was supposed
to
retire, the appellant had passed all necessary tests rendering him
fit to fly for a further six months. The fact that age was
an
inherent requirement for the job could not justify paying a pilot
less just because he reached or passed a certain age, particularly,

if that person otherwise met the demands of the job. But,
international case precedent showed that it is not age, but fitness
to fly that is an inherent requirement of the job of a pilot. It was
submitted that at all material times before his final retirement
in
2008 the first respondent was fit to fly.
[23] In response to the
appellant’s argument that the collective agreement was a new
agreement that presented a choice to
the first respondent, it was
submitted that the first respondent’s employment contract did
not lapse in August 2005, because
the first respondent continued to
be employed by the appellant subsequent to that date. In any event,
so it was submitted, he was
officially reinstated on instruction of
the Human Resources Manager after he had pointed out that his
accumulative leave pay had
been wrongly paid out to him. The first
respondent was requested by the appellant to remain on standby
pending the finalisation
of the collective agreement. The first
respondent obliged and continuously tendered his services to the
appellant for the period
during which he was on standby. The first
respondent was not free, nor was he unemployed during that period.
According to this
argument, the fact that the collective agreement
might be said to be a new agreement was of no assistance to the
appellant because
that fact did not make it any less discriminatory,
or justify its discriminatory terms.
[24] It was submitted
that the first respondent’s constitutional right to equality
was protected and that he could not waive
it, or contract out of its
protection. As far as the appellant’s justification argument
was concerned, it was submitted on
behalf of the first respondent,
that no case for justification was made out by the appellant. In
elaboration of this point, it
was submitted with reference to the
appellant’s grounds of justification, that warning an employee
of impending discrimination
cannot justify that discrimination;
arguing that the person had a choice not to be employed and be
discriminated against as a consequence
of being employed, was absurd;
and that arguing, that discrimination was justified because the first
respondent benefited, was
equally absurd. Furthermore, the argument,
that discrimination was justified because it saved the employer
costs, could never be
valid and the mere fact that there were unfair
discriminatory practices elsewhere against pilots did not justify
such practices
being perpetuated, or accommodated, locally against
pilots.
[25]
With regard to the status of the collective agreement, it was
submitted on behalf of the first respondent that it was held
by this
Court in
Platinum
Mine Investments (Pty) Ltd t/a Transition Transport v SATAWU and
Another
[4]
that a national collective agreement was not a contract but
subordinate legislation. In
SACCAWU
and Another v Shakoane and Others,
[5]
it was held that the terms of a collective agreement do not prevail
over the provisions of the LRA, unless the LRA specifically
provides
accordingly. By extension, the terms of a collective agreement will
also not prevail over the EEA which provides in section
63 for its
primacy where there is an apparent conflict between its provisions
and any other law. It was further submitted that
the
dictum
in
Larbi-Odam
was
indeed applicable to the facts of this case.
The applicable law
[26] I now proceed to
consider the relevant law. The first respondent’s case was
based on the provisions of the EEA and sections
9 and 14 of the
Constitution. Section 6(1) of the EEA provides that no person may
unfairly discriminate directly, or indirectly,
against an employee in
an employment policy or practice on one or more grounds including
age. In terms of section 6(2), it is not
unfair discrimination to
take affirmative action measures consistent with the purposes of the
EEA or to distinguish, exclude or
prefer any person on the basis of
an inherent requirement of a job.
[27] Section 11 of the
EEA provides that whenever unfair discrimination is alleged in terms
of the EEA, the employer, against whom
the allegation is made, must
establish that the discrimination is fair.
[28] Two of the main
objects of the EEA are to promote and protect the employee’s
constitutional rights to equality and dignity
and to eliminate unfair
discrimination in employment. In terms of section 5 of the EEA, every
employer is obliged to promote equal
opportunity in the workplace and
to eliminate any unfair discrimination in any employment policy or
practice.
[29] For cases of
discrimination outside the sphere of employment, an infringement of
the equality provision of the Constitution
(section 9) is generally
alleged, calls for an analysis under that section of the
Constitution. The provisions of the EEA, including,
in particular,
section 6, are clearly based on the basic tenets of the equality
provision in the Bill of Rights of the Constitution
as well as,
inter
alia
, the International Labour Organisation’s Convention
No. 111 of 1958 concerning discrimination in respect of employment
and
occupation, which the Republic of South Africa ratified in 1997.
Accordingly, in the case of a claim based on section 6 of the EEA,

material guidance is to be derived from the equality analyses that
were conducted under the Constitution and the Interim Constitution.

Cases that provide a framework for this kind of analysis are an
indispensible guide in considering infringements under section
6 of
the EEA. Similarities between, for example section 8(2) of the
Interim Constitution and section 6(2) of the EEA, as well between

section 9 of the Constitution and section 6 of the EEA, are obvious.
[30] Section 3(d) of the
EEA provides that the EEA must be interpreted in compliance with the
international law obligations of the
Republic of South Africa, in
particular those contained in the International Convention No. 111 of
1958 concerning discrimination
in respect of employment and
occupation. This is an important convention that,
inter alia
,
requires ratifying states to declare and pursue national policy which
are formulated to promote, by means which are appropriate
to the
conditions and practice of those states, equality of opportunity and
treatment in respect of employment with the intention
to eliminate
discrimination.
[31]
In
Harksen
v Lane NO and Others,
[6]
the Constitutional Court undertook an analysis under section 8 of the
Interim Constitution. Section 8(2) of the Interim Constitution

provided as follows:
‘
No
person shall be unfairly discriminated against, directly or
indirectly and without derogating from the generality of this
provision,
on one or more of the following grounds in particular:
race, gender, sex, ethnic or social origin, colour, sexual
orientation,
age, disability, religion, conscience, belief, culture
or language.
’
[32] The Constitutional
Court held in
Harksen
that:
‘
The
determination as to whether differentiation amounts to unfair
discrimination under section 8(2) requires a two-stage analysis.

Firstly the question arises whether the differentiation amounts to
‘discrimination’ and, if it does, whether, secondly,
it
amounts to unfair discrimination.  It is as well to keep these
two stages of the enquiry separate.
’
[7]
Referring
to its decision in
Prinsloo
v Van der Linde and Another,
[8]
the
Constitutional Court went on to explain that section 8(2) of the
Interim Constitution contemplates two categories of discrimination.

The first category consists of the fourteen specified grounds and
grounds that were not specified in that section, but were analogous

to the specified grounds. If the differentiation was on the basis of
the specified grounds there is a presumption in favour of
unfairness,
but there was no such a presumption if the discrimination was not
based on a specified ground. In those circumstances,
the court still
had to determine whether the discrimination was unfair. Where
discrimination results in persons being treated differently
in a
manner which impairs their dignity as human beings it will clearly
constitute a breach of section 8(2), but other forms of

differentiation may also constitute a breach of that section.
Regarding the second stage of the enquiry concerning the unfairness

of the discrimination, the Constitutional Court held that the enquiry
concerns the impact of the impugned measure on the complainant.
[9]
[33]
In
Larbi-Odam
[10]
it was pointed out that if the discrimination was held to be unfair
then the final question to be considered, if the court was
dealing
with the law of general application, was whether unfair
discrimination was nevertheless justified in terms of the
justification
provision of the Interim Constitution.
[11]
[34] In the International
Labour Organization’s Convention 111, “discrimination”
is, in essence, defined as any
distinction, exclusion or preference
which has the effect of nullifying or impairing equality of
opportunity or treatment in employment
or occupation as determined by
the member state concerned.
[35] Turning to the facts
of this case, the first stage would be to determine whether the
conduct or measure of the employer, which
the employee is complaining
about, constitutes ‘discrimination’. The second stage is
to consider whether it is ‘unfair’.
[36] Section 6 of the
EEA, like section 8(2) of the Interim Constitution and section 9(3)
of the Constitution, also contemplates
two categories of
discrimination. The first category is the specified category of
discrimination, namely, race, gender, sex, pregnancy,
marital status,
family responsibility, ethnic or social origin, colour, sexual
orientation, age, disability, religion, HIV status,
conscience,
belief, political opinion, culture, language and birth. The second
category is the unspecified category which is analogous
to the
specified grounds. However, unlike the sections in the Interim
Constitution and the Constitution, there is no express provision
in
the EEA which is to the effect that discrimination on one or more of
the specified grounds is unfair unless it is established
that the
discrimination is fair. But, it is apparent from section 11 of the
EEA that, unless the employer establishes that the
discrimination is
fair, it would be unfair. While the employee arguably has an
onus
to prove discrimination and the basis of the discrimination, he or
she has no
onus
to prove that it is unfair. The effect is thus
the same as in the case of section 9 of the Constitution where there
is an express
deeming provision.
[37] It was argued on
behalf of the appellant that if it were to be found that there was
unfair discrimination such discrimination
was justified. Thus another
matter that requires consideration is whether, in a case involving
the violation of section 6(2) of
the EEA, having found that the
discrimination in question is unfair, the EEA allows for an enquiry
whether the unfair discrimination
is, nevertheless, justified?
[38] In a case which
solely involves the alleged infringement of the equality provision in
the Constitution, the third stage of
the enquiry, namely
justification, is embarked upon only if the law in question is of
general application. Under the Interim Constitution,
the matters
enquired into are set out in section 33(1) and in the Constitution
they are contained in section 36. The EEA does not
have a
justification provision similar or equivalent to that of the
Constitution or the Interim Constitution. It appears on the
face of
it that the EEA does not allow for a justification of unfair
discrimination. In terms of section 11, the employer has the
onus
to prove that the discrimination is fair. The reason(s) for
difference between the Constitution and the EEA is not clear, but is

perhaps due to the fact that the EEA was enacted to regulate unfair
discrimination in the workplace or employment situation, whereas
the
relevant provision(s) in the Interim Constitution and the
Constitution concerns unfair discrimination generally, including
in
the public sphere, where discriminatory provisions in laws are
impugned.
[39]
Although no clear distinction can be drawn between the considerations
involved in determining fairness and those involved when
determining
justification, as is apparent from cases such as
Hugo
[12]
and
City
Council of Pretoria v Walker,
[13]
ideally in determining fairness, moral considerations and the impact
of the measure complained of by the complainant, should be
assessed.
While justification would involve the consideration of the defences
raised by the party who is alleged to be offending,
including
proportionality and other factors identified in the justification
provision in the Constitution.
[40]
In
Hoffman
v South African Airways,
[14]
the
Constitutional Court decided an unfair discrimination case which was
brought as an infringement of the employee’s equality
and
dignity rights in terms of the Constitution. Because the measure
complained about was not contained in a law of general application,

the Constitutional Court did not embark on the third leg of the
enquiry, namely, justification in terms of section 36 of the
Constitution,
but only considered the fairness of the discrimination
complained of.
[15]
However, in
considering the fairness of the discrimination, the Constitutional
Court did not confine itself to a consideration
of the morality and
impact of the discrimination, but also considered a wide range of
issues including economic and other defences
raised by the Airways,
such as the policies of other airlines, perceptions and prejudices
and commercial requirements and applied
a value judgment.
[41]
There have been attempts to formulate a test for the ‘fairness’
envisaged in the EEA. In
Leonard
Dingler Employee Representative Council v Leonard Dingler (Pty)
Ltd,
[16]
the Labour Court dealt with a dispute that concerned an unfair labour
practice within the meaning of item 2(1)(a) of Schedule 7
of the LRA,
in particular involving unfair discrimination. One of the issues that
had to be decided was whether there was discrimination
and, if so,
whether it was fair. Against the background of the Constitution, the
Labour Court formulated a broad test for determining
whether
discriminatory conduct was fair. According to the court
“
discrimination
is unfair if it is reprehensible in terms of the society’s
prevailing norms. Whether society will tolerate
the discrimination
depends on what the object is of the discrimination and the means
used to achieve it. The object must be legitimate
and the means
proportional and rational
”.
[42]
In discussing fairness in relation to dismissals under the Labour
Relations Act No. 28 of 1956, Smalberger JA stated in a dissenting,

minority judgment in
NUMSA
v Vetsak Co-operative Ltd and Others
[17]
:
“
fairness
comprehends that regard must be had not only to the position and
interests of the worker, but also those of the employer,
in order to
make a balanced and equitable assessment. In judging fairness a court
applies a moral or value judgment to established
facts and
circumstances (NUM v Free State Cons at 446I). And in doing so it
must have due and proper regard to the objectives sought
to be
achieved by the Act. In my view it would be unwise and undesirable to
lay down, or to attempt to lay down, any universally
applicable test
for deciding what is fair.”
[43] There is no closed
list of relevant factors that ought to be taken into account when
determining the fairness of the discrimination
and the factors to be
considered depends on the facts of the case under consideration. In
Hoffmann
, Ngcobo J (as he then was) stated:
‘
At
the heart of the prohibition of unfair discrimination is the
recognition that under our Constitution all human beings, regardless

of their position in society, must be accorded equal dignity. That
dignity is impaired when a person is unfairly discriminated
against.
The determining factor regarding the unfairness of the discrimination
is its impact on the person discriminated against.
Relevant
considerations in this regard include the position of the victim of
the discrimination in society, the purpose sought
to be achieved by
the discrimination, the extent to which the rights or interests of
the victim of the discrimination have been
affected and whether the
discrimination has impaired the human dignity of the victim’
[18]
[44] What is clear is
that in considering the issue of fairness under the EEA, the position
and interests of the employee and employer
must be considered and
balanced, and that the objectives of the EEA must be the guiding
light in applying a value judgment to established
facts and
circumstances. The determining factor, however, is the impact of the
discrimination on the victim. This is consistent
with the approach in
Hoffmann
.
[45] Unlike in the case
of an equality analysis under section 9 of the Constitution which
also allows for a further step, namely
a justification analysis in
terms of section 36 where one is dealing with the law of general
application, the EEA does not allow
for justification of unfair
discrimination. Its language is clearly prohibitive. Section 6(2)
does not contain justifications for
unfair discrimination. The Act
provides that it would not be unfair discrimination to take
affirmative measures consistent with
the purposes of the EEA or to
distinguish, exclude or prefer any person on the basis of an inherent
requirement of a job. They
are complete defences to an allegation of
unfair discrimination. In section 11, the EEA recognises that there
may be considerations
other than those specifically referred to in
section 6(2) which may render discrimination fair.
[46]
The employer has an
onus
to establish fairness on a balance of probabilities. An enquiry into
fairness contemplated in the EEA will necessarily involve
more than a
consideration of the moral issues and the impact of the
discriminatory action on the complainant. It will also include
a
consideration and require a balancing of the defences raised by the
employer for the discrimination as well as issues such as

proportionality of the measure, the nature of the complainant’s
right that he alleges has been infringed, the nature and
purpose of
the discriminatory measure, and the relation between the measure and
its purpose.
[19]
[47] Since the
onus
is upon the employer to prove the fairness of the discriminatory
measure, it would be incumbent upon it to ensure that all the

necessary material and evidence is before the court in order to
enable it to make a finding of fairness. As stated earlier, the
onus
is only discharged if fairness is found on a balance of all the
relevant factors and evidence.
Consideration of the
facts in this case
[48] The first respondent
gave evidence,
inter alia
, concerning the impact of the
discrimination he complained of, but the appellant chose to lead no
evidence to contradict the first
respondent and was, seemingly,
satisfied that the cross-examination of the first respondent and the
material he placed before the
court before closing his case, as well
as the submissions it made, were adequate to prove fairness.
[49] The first respondent
testified concerning his long employment history with the appellant.
Having qualified as a pilot at his
own cost, the first respondent
joined the appellant as a junior pilot in 1972 at the age of 26. By
the time he was 60 on 5 August
2005, he had obtained the rank of
senior Captain and was earning at the SC34 notch on the salary scale.
The retirement age for
pilots had previously been extended from 58 to
60. The first respondent related how, before he was due to retire at
the end of
August 2005, he was informed that the retirement age would
be extended to age 63 as there has been an in principle agreement and

that he had been requested to remain at home pending the finalisation
of the “mechanics” of the agreement and that
he would
receive his full salary pending his call-up for duty. He testified
about how he was requested by the employer to repay
the accumulated
leave pay that had been repaid to him in error. This was also borne
out by the internal memorandum of Mr Schmittdiel
to which I have
referred earlier and in which Mr Schmittdiel also instructed that the
first respondent had to be reinstated. The
first respondent testified
about his fitness and readiness to fly and his subsequent resumption
of duties when he was called by
the appellant in December 2009.
[50] The first respondent
testified in which respects the collective agreement discriminated
against him on the basis of his age.
The provision in the collective
agreement that pilots over the age of 60, who flew domestically,
would retain their rank but would
be paid on salary notch SC20, was
discriminatory in that pilots, who, say were younger than 60, who
held the same rank as him and
did the same job as him, would be paid
much more than him. The first respondent at age 58 or 60 held the
rank of senior Captain
and was already earning at SC34 level. In
terms of the collective agreement, and just because of his age, he
was going to be paid
a substantial amount lesser than what he earned
before.
[51] The collective
agreement clearly contains further discriminatory provisions; for
example pilots who were over 60 and who were
senior captains at 60,
would have a reduction in their rank and status if they elected to
fly internationally. They would only
be allowed to operate in the
position of a first officer. Pilots over the age of 57 were not to be
permitted to bid to transfer
to a coastal base and those over 60 were
forbidden to exercise a displacement bid for a category at a coastal
base. Any leave that
was to be paid out to a pilot, irrespective if
he had previously earned on a higher level, would be paid on the
lowest SC20 scale.
The same did not apply to pilots who were under
the age of 60 at the time of the collective agreement.
[52] Correctly it was not
submitted that the provisions of the agreement were not
discriminatory on the basis of age, because blatantly
they are. The
fact that the provisions are part of an agreement that was entered
into between the appellant and the second respondent,
of which the
first respondent was a member, does not detract from the fact that
they discriminated against pilots who were employed
by the appellant
and who were older than 60 at the time of the agreement.
[53] Because the
discrimination was on a specified ground, as I have mentioned
earlier, there is, in effect, a rebuttable presumption
that it was
unfair. Both, the Constitution, in section 9, and the EEA, in section
6, assumes that discrimination on the grounds
specified in the
respective sections would negatively impact on the dignity of a
person discriminated against to an extent that
justified specific
protection. The lowering in rank and salary might well have
stigmatised and marginalised pilots over 60. It
is also conceivable
that discrimination against pilots over 60, including the first
respondent, would have caused the first respondent
to feel humiliated
and unappreciated. The selective nature of the discrimination, since
only those who turned 58, 59 and 60 were
to be affected by the
discriminatory provisions that were to endure for a three year
period, must have intensified those feelings.
[54] The contention on
behalf of the appellant that the age of a pilot was an inherent
requirement of the work of a pilot was not
convincing at all. It is
so that if the appellant had established as a fact that the first
respondent had been discriminated against
on the basis of his age,
because age was an inherent requirement of the job of a pilot it
might well have discharged its
onus,
because in terms of
section 6(2)(b) of the EEA it is not unfair discrimination to
“
distinguish, exclude or prefer any person on the basis of
an inherent requirement of a job
”. However, in this case,
there was no evidence by the appellant that age was an inherent
requirement of the job of a pilot,
but, even more specifically, how
the reduction in rank and the lower payment of a pilot over 60 (i.e.
and under the age of 64),
who continued to do the same work that he
was doing before and at the age of 60 and the same as those who were
not over the age
of 60, rationally connected and related to age being
an inherent requirement of the job of a pilot. The first respondent’s

evidence that he was at all material times fit to fly was not
countenanced or refuted. On the evidence it was established that
it
was indeed not his age, but his fitness to fly that was an inherent
requirement of his job as a pilot.
[55] The appellant
presented no evidence that it ceased to employ the first respondent
after he turned 60, or that his contract
of employment, which was in
place when he turned 60, had lapsed. The evidence presented indicates
the contrary, namely, that the
appellant did not cease to employ the
first respondent after he turned 60, or more specifically, after the
end of the month in
which he turned 60 (i.e. the end of August 2005).
Before the end of that month, he was informed that there was an in
principle
agreement to extend the retirement age of pilots to age 63
and he was requested by the appellant to go on standby pending the
finalisation
of the “mechanics” of the collective
agreement. The appellant accepted that the accumulated leave pay that
had been
paid to the first respondent at or after the end of August
2005, was paid to him in error and requested and accepted its
repayment.
Mr Schmittdiel also instructed that the appellant be
reinstated. On the evidence and the probabilities there was therefore
a continuing
employment relationship between the appellant and the
first respondent. Even after the appellant alleged, sometime in
December
2005, and after the collective agreement had been signed,
that it was not bound by the agreement, it continued its employment
relationship
with the first respondent. So any contention on behalf
of the appellant, suggesting that there was not a continuous
employment
relationship between the appellant and the first
respondent, is without merit.
[56] The contention on
behalf of the appellant that the collective agreement presented the
first respondent with a choice and that
he elected not to retire at
age 60 and therefore could not complain about the consequences of his
choice, is attractive on the
face of it. However, the argument loses
sight of the prohibition against unfair discrimination that is
contained in section 6 of
the EEA and,
inter alia
, section 9
of the Constitution.
[57] The fact that an
individual has a choice to either not be, or to be unfairly
discriminated against and had made the choice
which causes the
discrimination, can never as a factor on its own, render the
discrimination fair. A number of examples could be
thought of,
generally, and more specifically in the employment context, which
would illustrate the regressive and harmful consequences
that would
ensue if such a practice were to be permitted under the law. The very
objects of the Constitution and the EEA, respectively,
to free
society and the workplace of unfair discrimination, would be
seriously undermined to the point of being rendered nugatory.
[58]
The court
a
quo
correctly found
[20]
that the
principle stated in
Larbi-Odam
was applicable. In respect of an argument by the respondent in that
case, that the regulations, under consideration there, were

negotiated in the Education Labour Relations Council where employee
organisations and non-citizen teachers were also represented,
Mokgoro
J stated:
‘
Where
the purpose and effect of an agreement provision is to discriminate
unfairly against a minority, its origin in negotiated
agreement will
not in itself provide grounds for justification
.
Resolution by majority is the basis of all legislation in a
democracy. Yet it too is subject to constitutional challenge where
it
discriminates unfairly against vulnerable groups.’
[21]
(Emphasis
added)
[59] Thus, the fact that
a collective agreement was a product of negotiation between the
appellant’s (alleged) representatives
and the second respondent
does not in itself make it fair, either constitutionally or in terms
of the EEA, its discriminatory contents,
because if it were to do so,
it would undermine both the EEA and the Constitution in a fundamental
respect. The first respondent
continued to be an employee of the
appellant in the knowledge that the age of retirement was to be
extended to age 63 and could
have legitimately anticipated that the
“
mechanics
” of the collective agreement, that were
to be concluded finally, would not undermine his constitutionally
protected rights
(including his rights under the EEA) relating, in
particular, to equality and dignity and his right not to be unfairly
discriminated
against in the workplace.
[60] In my view, the
appellant has not, commensurate with its
onus,
placed anything
of substance before the court
a quo
which could have caused
that court, and on appeal this Court, to come to a conclusion other
than that the discrimination, complained
of by the first respondent,
had no legitimate purpose and was unfair in the sense contemplated in
the EEA.
[61] The appellant
disavowed the collective agreement, contending that it was not bound
by it, because those who represented it
in entering into the
agreement had no authority to do so, but nevertheless applied and
gave effect to its discriminatory provisions
for a period. In a
letter dated 2 August 2007, written by the appellant’s General
Manager of Human Resources to the representatives
of the second
respondent, the latter was informed of the appellant’s decision
to extend the retirement age of its employees
(including pilots) to
age 63 and in that same letter the appellant gave notice that the
collective agreement (referred throughout
the process as a
“
memorandum of understanding”
and dated 11
November 2005) will be of no force and effect as of 3 September 2007.
So for the period 1 August 2005 to 2 September
2007, despite
disavowing it, the appellant, in effect, applied its provisions.
[62] There was no
evidence regarding the proportionality of the discriminatory
provision, in particular, the appellant led no evidence
to indicate
why it was necessary to include the discriminatory provision and what
effect it would have had on the cost of extending
the retirement age
and whether it was in the circumstances necessary.
[63] In my view, the
court
a quo
correctly concluded that the discrimination of
which the first respondent complained, was unfair.
The issue of compensation
[64] I shall now consider
the compensation aspect of this claim in light of the submission made
by counsel for the appellant in
response to questions put by the
court at the hearing, namely that the compensation awarded by the
court
a quo
(over R1,4 million) far exceeds even what the
first respondent claimed, namely R100 000,00. In its application for
leave to appeal,
the appellant raised as a ground,
inter alia
,
that the court
a quo
erred in finding that the first
respondent had quantified his loss and, generally, that the court
a
quo
erred in making an order which included an award of damages
in a specific amount and for compensation. In the application for
leave
to appeal it was
inter alia
also averred that the court
a quo
gave no reasons “
for granting full financial
redress to the first respondent and one year’s remuneration
.
The award was neither just nor equitable
”.
[65] In the judgment
dealing with the issue of leave to appeal, the court
a quo
granted leave to appeal against the whole of its “
judgment,
order and award
”. That would have included the quantum
aspects of both the damages and the compensation awarded. The
distinct impression
given at the hearing before us, in response to
questions posed by the court, was that the only unsatisfactory aspect
about the
quantum was that the compensation awarded was many times
more than what was claimed. The first respondent’s counsel did
not
address us on quantum and adopted the stance that compensation
was never put in issue by the appellant.
[66] Shaik AJ, in the
court
a quo,
dealt very briefly with the issue of damages in
his judgment. The following, apparently with reference to the damages
aspect, is
stated:
‘
[60]
The employee quantified his loss suffered and a quantum of claim was
prepared and submitted to counsel for the respondent.
There was
no objection to the quantum claimed.’
[67] In fact, the first
respondent gave evidence of his financial loss as a consequence of
the collective agreement or “
MOU
”. The first
respondent had done a calculation of his damages. He also explained
how he did the calculation. He testified
what loss he suffered as a
result of the discrimination, which was, essentially, the difference
between the total cost of his employment
on the SC34 salary notch and
the total cost of his employment on the SC20 notch, as well as the
difference in the total cost of
employment on the SC35 salary notch
(to which he, according to his case, ought to have progressed) and
what he was paid on the
SC20 notch. It also included back pay
(calculated on the basis of the difference between the salary notches
referred to earlier);
special leave and a 13
th
cheque
payment difference, as well as the difference in the service bonus
and 13
th
cheque payment. The calculation was in writing
and the first respondent testified in relation to it. The first
respondent’s
evidence regarding his loss, including his
calculation of that loss, was not challenged in cross-examination and
the appellant
produced no evidence to counter his version on those
aspects. The first respondent’s evidence regarding his
patrimonial loss
was reasonable and therefore the court could have
found that his loss, as calculated, had been proved.
[68] The court
a quo,
however, did not deal specifically or expressly with the issue of
‘compensation’ in the body of the judgment, but merely

indicated what factors were taken into account in making the entire
order, which included the order for damages, which I referred
to
above, and for compensation. The compensation order, as I pointed out
earlier in this judgment, is that the appellant pays the
first
respondent the equivalent of one year’s remuneration at the
rate of pay applicable to his last year of service. The
rate of pay
applicable then would have been on the SC34, or SC35 notch, which
translates to an amount of between R1 400 000,00
and R1 800 000,00
per annum (total cost of employment), taking into account the first
respondent’s earning level as reflected
in his written
calculation of his damages, which was admitted in evidence.
[69] The court
a quo
stated the following in the penultimate paragraph of the part of the
judgment dealing with the unfair discrimination claim:
‘
[61]
I have taken note of the fact that SAA is a
state-owned enterprise, that it cancelled the collective agreement

and brought an end to the discrimination and that by resolution of
the board, increased the retirement age.  However, the
applicant
was made to suffer unfair discrimination on a proscribed ground, that
the employer by discriminating thus sought to obtain
an economic
benefit, at the expense of the applicant at the time when he was most
vulnerable on account of the fact that he was
at the end of his
working life he chose not to suffer the discrimination; he raised the
matter with the recognised union and brought
it to the personal
attention of the Chief Executive Officer who, seemingly, ignored his
appeal for relief, which gave rise to this
suit without unreasonable
delay. Equality, having regard to our past, is a most cherished value
and it beholds us all to stand
guard and defend any violation of it.
The fact that the state-owned enterprise, did the violation and
sought to justify it, betrays
carelessness.  This suit, as the
record reveals, was hard fought, that was to cause the delay in the
hearing of the matter
and rise in the burden of cost. I have taken
these factors into account in the order made.
’
[70] Despite what was
said in this paragraph, it does not appear from the judgment or the
record exactly how the court
a quo
arrived at the amount
awarded as compensation. It seems to have been based on an estimate
of what the court
a quo
, subjectively, considered to be fair
taking into account the factors that it mentioned.
[71] As stated earlier,
the court
a quo
awarded the difference in salary (i.e. what
the first respondent earned on the SC20 level and what he ought to
have earned on the
SC34/SC35 level) and the difference in other
payments as damages and a year’s salary, based on the level at
which the first
respondent would have earned in his last year of
employment with the appellant, as compensation. But this does not
tally with the
first respondent’s claim, as set out in his
statement of case, where he claims the loss of salary as
“compensation”
and only R100 000,00 as “damages”
for the discrimination.
[72] In the first
respondent’s statement of claim there was seemingly a
misconception of what constituted “
damages
” and
what constituted “
compensation
”. The court
a
quo
seems to have been aware of that misconception and to have
corrected it in its order by awarding the actual or patrimonial loss

as damages and a
solatium
as compensation for the
discrimination, even though the
solatium
appears to be as much
as, or more than, the damages.
[73] Section 50(1) of the
EEA empowers the Labour Court to make “
any appropriate
”
order, including,
inter alia
, an order awarding “
damages
”
and an order awarding “
compensation
”, in any
circumstances contemplated in the EEA. Section 50(2), which deals
specifically with the situation where the Labour
Court has found that
the employer has unfairly discriminated against the employee,
provides that the Labour Court may make ‘any
appropriate order
that is just and equitable in the circumstances’ including
(
inter alia
) an order that the employer pay the employee
“compensation” (s50(2)(a)) and an order that the employer
pay the employee
“damages” (s50(2)(b)).
[74]
A survey of the cases shows, generally, that there is uncertainty and
confusion concerning the meaning of the terms “compensation”

and “damages” as used in section 50 of the EEA
[22]
.
The terms are ambiguous to say the least. The result is that they are
used interchangeably to refer to the same kind of loss or
injury, and
seemingly impact adversely on the discretion that has to be
exercised. The confusion is particularly pronounced in
cases
involving claims in terms of both, the LRA and the EEA. The confusion
also seems to be compounded, because section 193 of
the LRA refers to
“compensation” as a remedy for an unfair labour practices
and unfair dismissals. Following a series
of cases in the Labour
Court where contradictory meanings where given to this term,
[23]
this Court in
Johnson
& Johnson (Pty) Ltd v CWIU
[24]
held that the term “compensation” in section 193 of the
LRA included and referred to both patrimonial losses and
non-patrimonial
losses, such as a solatium. Since, there has been a
(wrong) tendency to give the term “compensation” in
section 50
of the EEA, the same meaning as the term “compensation”,
as used in section 193 of the LRA even though there are fundamental

differences between the terms. It is merely necessary at this
juncture to emphasise the differences and give meaning to the terms

“damages” and “compensation” in section 50 of
the EEA so as to bring about more certainty. This judgment
is not
intended to be a treatise or an in depth exposition of the intricate
topic of damages and compensation.
[75]
In section 193, the LRA does not distinguish between “damages”
and “compensation” as the EEA does in
section 50
[25]
.
While it is correct that the term in the LRA would include,
patrimonial and non- patrimonial damages, the same is not true of
the
term “compensation” in the EEA. The EEA draws a
distinction between “compensation” and “damages”,

and does not regard them as the same.
[76] The term “damages”
is the more technical of the two. In ordinary parlance, it would be
regarded as the plural form
of the word “damage”.
According to the Shorter Oxford English Dictionary the word “damages”
is used in
a law context and means “a sum of money claimed or
awarded in compensation for loss or injury”. The dictionary
meaning
of the word “compensation” includes “the
action of compensating” and also refers to “a thing that

compensates or is given to compensate, a counter balancing feature or
factor; amends, recompense; Money given to compensate loss
or
injury.” These dictionary meanings are not of much assistance
in giving the terms meaning in their context in the EEA.
It could not
have been intended that the terms should have the same meaning. The
fact that the EEA distinguishes between them is
clearly indicative of
that fact. The intention must have been that they connote different
kinds of award. In my view, the only
rational meaning that can be
given to the terms is that “damages” connotes a monetary
award for patrimonial loss and
“compensation” connotes a
monetary award for non-patrimonial loss (including a ‘solatium’).
[77]
In an Aquilian action, a claimant, to be successful must,
inter
alia,
prove “damage” in order to be compensated by way of
“damages”.
[26]
The
latter is the monetary compensation that the court gives to the
claimant for the damage he has suffered. The objective of the
award
of damages is to make good the damage that was suffered. According to
one point of view, the primary meaning of “damage”

(“
damnum
”),
is patrimonial loss.
[27]
According to another point of view, “damage” includes
both patrimonial and non-patrimonial loss
[28]
although it is not the primary meaning of the term. Purposively
construed and in order to distinguish it from the ordinary or
dictionary meaning of the word “compensation”, the term
“damages”, as used in section 50(1)(2) and, particularly

in section 50(2)(b), was intended to bear the narrow meaning of an
money award to compensate for any patrimonial loss the claimant

(employee) has suffered. Because of its breath, the term
“compensation”, purposefully construed, in circumstances
where it is to be distinguished from “damages”, refers to
the award for non-patrimonial loss (such as injured feelings).
[29]
The
monetary award under this head cannot restore the victim to the
position he or she was in before the discrimination, but is
merely a
solatium.
[78] In the EEA,
“damages” refer to an actual or potential monetary loss
(i.e. patrimonial loss) and “
compensation
” refers
to the award of an amount as a
solatium
(i.e. to non
patrimonial loss). It is conceivable that cases of unfair
discrimination may involve actual (or patrimonial) loss
for the
claimant, as well as injured feelings (or non-patrimonial loss).
[79]
Thus, an award for damages, in respect of the patrimonial loss and a
compensation award, for the injured feelings, may, depending
on the
facts and circumstances of the case, be justified. It is a matter for
the discretion of the Labour Court, which discretion
must be
exercised in light of all the relevant facts and circumstances. Most
importantly, as provided in section 50(1) of the EEA,
the order must
be “
appropriate”
and in terms of section 50(2) must be “appropriate” and
“just and equitable in the circumstances”. Interpreting

section 38 of the Constitution in the
Hoffmann
matter, the Constitutional Court held that the term “
appropriate
relief
”,
as used in that section, must be purposively interpreted in light of
section 172(1)(b) of the Constitution and that it
meant that the
relief must be “
fair
and just in the circumstances of the particular case
”.
[30]
[80]
The purpose of an award of damages for patrimonial loss by means of a
monetary award, is to place the claimant in the financial
position he
or she would have been in had he, or she, not been unfairly
discriminated against. This is the common purpose of an
award of
damages for patrimonial loss in terms of the South African law in
both the fields of delict and contract. In the case
of compensation
for non-patrimonial loss, the purpose is not to place the person in a
position he or she would have otherwise been
in, but for the unfair
discrimination,
[31]
since that
is impossible, but to assuage by means of monetary compensation, as
far as money can do so, the insult, humiliation
and dignity or hurt
that was suffered by the claimant as a result of the unfair
discrimination.
[32]
[81]
In
Hoffmann
it was held that “
fairness
”
in a labour context requires a consideration of the interests of both
the employee and the employer
[33]
as well as the interest of the community which resides in the
recognition of the inherent dignity of all human beings and the
eradication and prevention of all forms of discrimination. Moreover,
the determination of appropriate relief in unfair discrimination

cases calls for the balancing of all the interests that will be
affected by the remedy. The same considerations will apply when
the
court has to decide on an appropriate remedy in an unfair
discrimination matter which is to be determined in terms of the EEA.
[82]
Having decided to award compensation in addition to the damages
awarded, the court
a
quo
was required to carefully consider the quantum of such compensation
so as to ensure that there would be no duplication and that
it would
not be excessive, but would be fair and equitable. Because the
determination of a
solatium
is notoriously difficult, courts use awards in previous, similar,
cases as guidelines and, when necessary, make adjustments in
order to
cater for the specific facts of the case under consideration and
allow for the erosion in the value of money. Courts are
also inclined
to be conservative in fixing the quantum for non-patrimonial
‘losses’.
[34]
[83]
In the determination of such quantum, the effect of the decision on
future awards is another important consideration.
[35]
The court should endeavour to arrive at an amount that society at
large will consider fair in the circumstances and based on how
it
values money.
[84]
In
Christian
v Colliers Properties,
[36]
in emphasising the rational for damages for unfair discrimination,
the court cited with approval from
Alexander
v Home Office
[37]
where
the following was stated, which would also apply in the case under
consideration:
‘
The
objective of an award for unlawful racial discrimination is
restitution. For the injury to feelings, for the humiliation, for
the
insult, it is impossible to say what is restitution and the answer
must depend on the experience and good sense of the judge
and his
assessors. Awards should not be minimal, because this would tend to
trivialise or diminish respect for the public policy
to which the Act
gives effect. On the other hand, just because it is impossible to
assess the monetary value of injured feelings,
award should be
restrained. To award sums which are generally felt to be excessive
does almost as much harm to the policy and the
result which it seeks
as do nominal awards.’
[85]
The compensation awarded by the court
a
quo
is in my view grossly excessive. It not only exceeded by far what the
first respondent claimed but bears no reasonable relationship
to the
injury and humiliation that the first respondent testified he felt
and the other factors the court
a
quo
mentioned. It is also inconsistent and far in excess of the amounts
awarded in (broadly) similar cases. For these reasons, this
Court may
interfere with the compensation award and determine the quantum
thereof afresh. All the facts are before us and no good
purpose will
be served in referring the matter back to the court below for a
re-assessment of the compensation to be awarded. This
is an
exceptional matter where this Court may determine the amount of
afresh in the interest of justice.
[38]
[86] The damages award
was generous. The appellant was ordered to pay the first respondent
the difference in the total cost to company
amount for the period 1
September 2005 to 2 September 2007 and not only the difference in
salary that would have been payable to
him if he was not
discriminated against. On the other hand, the very act of unfair
discrimination is hurtful. It humiliates and
denigrates. The dignity
which every human being is to be accorded under our Constitution, is
impaired. When the first respondent
took issue with the
discriminatory provisions, the appellant, a parastatal, which should
be at the vanguard of protecting employees
against unfair
discrimination, did not relent and simply regularise the situation,
but continued to defend its position in the
appeal before us.
[87] There is a dearth of
cases reported where compensation was awarded for unfair
discrimination based on age. The cases that are
reported are not very
similar but do serve as a rough, but helpful guide as to what would
be fair compensation in this case. A
survey of the cases indicates
that in making awards for compensation the Labour Court, generally,
did not refer to previous, broadly
similar cases, resulting in some
inconsistency in awards. The confusion I referred to before also
seemed to have had an effect
on the assessment of this aspect in some
instances.
[88]
In
Evans
v Japanese School of Johannesburg,
[39]
the applicant was a 63 year old unmarried woman who was employed at
the Japanese school. Her services were terminated on the basis
that
at 63 she had reached what the employer regarded as the normal
retirement age. In her claim, she contended that the normal

retirement age of the school’s employees was 65 and that her
dismissal was therefor automatically unfair and amounted to
unfair
discrimination. Her claim was for compensation under the LRA and for
damages under the EEA. Having found in her favour that
her dismissal
was automatically unfair under the LRA, and amounted to unfair
discrimination under the EEA, the Labour Court went
on to determine
the issue of quantum.  Noting that under the LRA the claimant
was entitled to a maximum of 24 month’
remuneration, the court
awarded her 24 month’s remuneration as compensation under the
LRA which came to an amount of R177
144.00. On the basis that there
was no limitation in terms of the EEA and that there was an overlap
between the two claims, the
court held that she would have earned,
had she remained in employment until age 65, an amount of R359
823.75. The Court regarded
this amount as her loss. Taking into
account the award under the LRA and the fact that she was able to
earn about R2 000.00 from
private teaching, the Court determined that
an amount of R200 000.00 was just and fair compensation in respect of
the unfair discrimination
claim. The Court did not say distinguish
between damages and compensation, but it clearly took into account
the claimant’s
patrimonial loss which would have come to an
amount of about R180 000.00 after her earnings and the LRA award were
deducted. The
solatium
part of the award, presumably, was therefore about R20 000.00.
[89]
In
Bedderson
v Sparrow Schools Education Trust,
[40]
an elderly teacher was dismissed after the employer unilaterally
introduced a retirement age. The claimant brought claims under
the
LRA for automatically unfair dismissal and under the EEA for unfair
discrimination. She claimed compensation for the automatic
unfair
dismissal in terms of the LRA, and compensation and damages in terms
of Section 50 of the EEA. She did not specify an amount
in her claim
and left the amount in the discretion of the Court. The Court was
sympathetic with the employer because of exceptional
circumstances.
It was a non-profit organisation that was involved with children from
deprived backgrounds, and who had learning
problems. Its funding came
from donations. The Court, further taking in account that the
discrimination was not “
mala
fide”
and finding that it was not appropriate to introduce a punitive
element into the compensation, awarded the claimant six (6) month’s

remuneration as compensation which came to an amount of R42 000.00.
No award was made in respect of damages because the claimant
did not
prove such damages, nor was an award made in terms of the LRA for the
dismissal
[90]
In
Hospersa
obo
Venter
v S A Nursing Council,
[41]
which was a case brought under the EEA and involving unfair
discrimination on the grounds of age. The employee was forced to
retire
at age 60 but allowed to work to age 65. Her request for an
extension of her retirement age to age 70 had been rejected. All the

time that she was employed, the retirement age was 70 with the option
to retire at the end of the month in which the age of 65
was reached
or thereafter. The court found that the employer had treated her
differently because of her age and unfairly so. In
considering the
amount to be awarded the court took into account that even though the
employee had lost three years’ salary
because of her forced
retirement, she had earned a pension equal to about half her salary.
The court awarded the complainant what
she claimed, namely
compensation equivalent to two years’ remuneration which came
to an amount of R180 000,00. The court
did not indicate what portion
constituted patrimonial loss and what constituted a
solatium
.Since
it appears that her patrimonial loss was about R135 000,00 (that is a
loss in salary if one deducts the pension she received),
an amount
awarded to her as a
solatium
was therefore about R40 000,00 to R45 000,00.
[91] Taking into account
all the relevant facts in the present case, including the erosion in
the value of money, I am of the view
that a just and equitable amount
for compensation as a
solatium
, in addition to the damages
award made in respect of the first respondent’s patrimonial
loss, which is not interfered with,
is an amount of R50 000,00. The
award made by the court
a quo,
namely, 24 months’
remuneration in respect of the
solatium,
is accordingly to be
set aside and substituted with an award of R50 000,00 (fifty thousand
rands). It is clearly preferable as
well as fair and proper to make
an award in an actual amount. Making an award in the form of payment
of a certain number of month’s
remuneration, which is clearly a
vestige of compensation awards under the LRA, holds the danger that
high earning individuals may
(unwittingly) be awarded more as
compensation than those that earn less, even though the injury
suffered by the latter, as a result
of unfair discrimination, was
greater.
The unfair labour
practice dispute
[92] This claim relates
to the appellant’s appropriation of the first respondent’s
accumulated leave pay and the utilisation
of the same to pay him a
“
salary
” during the period he was on standby
pending the finalisation of the collective agreement (“
or
MOU
”).
[93] As mentioned at the
outset, in respect of this claim, the court
a quo
sat as an
arbitrator, purportedly, as contemplated in section 158(2)(b) of the
LRA. The record indicates it was consequent an agreement
reached
between the parties, that is the appellant and the first respondent,
through their respective legal representatives. We
have not been
called upon to decide whether the Labour Court had the power to sit
as arbitrator in respect of this dispute and
if it appropriately sat
as such in respect of the said dispute. I shall accordingly, confine
myself to the other difficulties raised
that became apparent, but in
respect of which the parties, or their legal representatives, filed
additional written submissions.
[94] It was submitted on
behalf of the first respondent that the court
a quo’s
decision regarding the unfair labour practice issue was an
arbitration award and that it could only be challenged by way of
review.
It was further submitted that there was no such review before
this Court, alternatively, that even if there was effectively a
review
application before this Court, the court
a quo’s
award was not to be reviewed because it was a decision that a
reasonable decision-maker could have made. It was argued further,
in
the alternative, that if the award of the court
a quo
was
appealable (as opposed to “
reviewable
”) the appeal
should be dismissed, because the decision (i.e. referred to as an
“award” in the judgment) was correct.
[95] I will deal in due
course with the the argument that the decision was correct, or one
that a reasonable decision-maker could
have made. At this stage, I
deal with the issue which the first respondent raised namely, that
whether the remedy of a litigant,
where the dispute had been
arbitrated by the Labour Court sitting as arbitrator as contemplated
in section 158(2)(b) of the LRA,
was a review, or an appeal against
the outcome.
[96] Section 158 of the
LRA deals with the powers of the Labour Court and section 158(2)(a)
and (b), in particular, provides:
‘
If
at any stage after a dispute has been referred to the Labour Court,
it becomes apparent that the dispute ought to have been referred
to
arbitration, the court may –
(a)
stay
the proceedings and refer the further dispute to arbitration; or
(b)
with the consent of the parties and if it is expedient to do so,
continue with the proceedings with the court sitting as arbitrator,
in
which case the court may only make any order that a commissioner or
arbitrator would have been entitled to make.’
(Emphasis
added)
[97] Section 158(3)
provides that:
‘
The
reference to ‘arbitration’ in subsection (2) must be
interpreted to include arbitration –
(a)
under
the auspices of the commission;
(b)
under
the auspices of an accredited council;
(c)
under
the auspices of an accredited agency;
(d)
in
accordance with a private dispute resolution procedure; or
(e)
if
the dispute is about the interpretation or application of a
collective agreement.
’
[98] Section 166 of the
LRA deals with appeals against judgments or orders of the Labour
Court and section 166(1), in particular,
provides that “
any
party to any proceedings before the Labour Court may apply to the
Labour Court for leave to appeal to the Labour Appeal Court
against
any final judgment or final order
of the Labour
Court
”. (Emphasis added)
[99] Section 174 of the
LRA deals with the powers of the Labour Appeal Court when hearing
appeals. It provides:
‘
The
Labour Appeal Court has the power –
(a)
on
the hearing of an appeal to receive further evidence, either orally
or by deposition before a person appointed by the Labour
Appeal
Court, or to remit the case to the Labour Court for further hearing,
with such instructions as regards the taking of further
evidence or
otherwise as the Labour Appeal Court considers necessary; and
(b)
to confirm, amend or set aside
the
judgment or order
that is the subject of the appeal and to give any judgment or make
any order that the circumstances may require.
’
(Emphasis
added
)
[100] The problem
confronting this Court has already been identified by the Legislature
and an attempt has been made to address
it by means of an amendment
to section 158(2)(b) of the LRA. The Labour Relations Amendment Bill
of 2012 was adopted by the House
of Assembly in Parliament during
August 2013. At the time of the writing of this judgment, the
amendment had not yet come into
effect. In terms of the amendment,
the phrases in section 158(2)(b), namely, “
with the consent
of the parties
” and “
with the court sitting as an
arbitrator
”, are to be deleted. In terms of an explanatory
memorandum accompanying the Bill, the amendment seeks to empower the
Labour
Court to deal with the matter, not as arbitrator, but as a
court and to provide that any challenge to its decision in such a
matter
would be by way of appeal to this Court and not by way of
review to the Labour Court. The present case was decided in terms of
the LRA before its amendment, and pending the commencement of that
amendment, interpretation is required to ascertain the current

position. We have not been referred to any express provision in the
LRA which readily yields an answer to this rather important
issue
that is being considered. However, in my view the answer lies in a
proper construction of the relevant provisions of the
LRA, in
particular, those that I have quoted above for ease of reference.
[101]
The argument made by the first respondent’s legal
representatives in their supplementary argument, duly truncated, is

that section 158(2)(b) (in its unamended form) must be given its
literal meaning. According to this argument, in terms of this

section, the court sits as an arbitrator and not as a court, but the
remedy available to a party is not by way of review, because
section
145 of the LRA does not apply. It was further argued that this Court
has the power to hear the appeal on a basis similar
to the basis
recognised in the
Sinuko
matter,
[42]
but that this
Court must apply the test propounded in
Sidumo
and Another v Rustenburg Platinum Mines Ltd and Others
[43]
to the decision of the court
a
quo
which sat as an arbitrator. This, it was argued, is necessary in
order to promote consistency and finality. It was furthermore
argued
that it is the nature of the decision which determines which test
ought to be applied, i.e. either the test applicable to
appeals or
that propounded in
Sidumo
,
and not the identity of the person that made the decision.
[102] It is contended
that this Court has the inherent power to reconsider the decision of
the court
a quo
in the same manner it would reconsider the
decision of the Labour Court in a matter involving a review of an
arbitration award.
It was submitted that in this matter the first
respondent was not asking for the matter (relating to the unfair
labour practice),
to be remitted, but was submitting that the
appellant did not make out a proper challenge before this Court. It
approached this
Court arguing grounds of appeal as if its remedy
against the court
a quo’s
determination of the unfair
labour practice issue, was an appeal, whereas it should have
challenged the court
a quo’s
determination on review
grounds. It was also argued that the appeal should accordingly be
dismissed on the grounds that the appellant
brought the appeal
against that determination on the wrong legal basis and further that,
in any event, the court
a quo’s
determination was
reasonable, i.e. not one that a reasonable decision-maker would not
make.
[103]
The principles that apply to the approach to be adopted by a court
when considering the meaning of a legislative provision
are trite.
They have been conveniently restated by the Supreme Court of Appeal
in
Natal
Joint Municipal Pension Fund v Endumeni Municipality.
[44]
In
my view, ultimately the key to the solution of the problem posed,
lies in the meaning of the word “
order
”,
as used in section 158(2)(b), section 166 and the words “
judgment
or order
”,
as used in the first part of section 184(b). There is nothing in the
LRA that provides specifically that the determination
of the Labour
Court in a matter in which it sat as arbitrator, is an “
award
”.
But section 158(2)(b) specifically refers to the determination as an
“
order
”.
It specifically provides that the judge’s powers in making the
order would be the same as that of the commissioner
or arbitrator,
who would otherwise have had to arbitrate the dispute, but does not
thereby mean that the decision of the judge
who sits as an arbitrator
is an “award”. The commissioners and arbitrators,
appointed in terms of the LRA, do not make
“
orders
”
in the strict sense of that term, but make decisions that are
referred to as “
arbitration
awards
”.
The decision of the Labour Court, even if sitting as an arbitrator in
terms of section 158(2)(b) is a “judgment”
or “order”.
Even though section 143 of the LRA provides that arbitration awards
issued by a commissioner are final
and binding and may be enforced as
if they were orders of the Labour Court, the LRA, in section 145,
specifically only provides
for the remedy of review in respect of
arbitration proceedings conducted under the auspices of the CCMA,
unless otherwise agreed
to in a collective agreement.
[104] Section 158(2)(b)
does not purport to regulate the “appealability” of the
judge’s order. Section 145 of
the LRA which deals with the
review of arbitration awards made by commissioners and arbitrators
does not apply to the determination
made by a judge acting in terms
of section 158(2)(b). It is also not envisaged in the LRA that the
judge’s determination
in terms of section 158(2)(b) requires to
be made an order of court as envisaged in section 158(1)(c) read with
section 158(1A)
of the LRA. On the contrary, section 163 of the LRA
provides that “
any decision, judgment or order of the Labour
Court may be served and executed as if it were a decision, judgment
or order of the
High Court
”. Even though there is a similar
provision relating to awards made by a commissioner (under the
auspices of the CCMA or an
arbitrator under the auspices of an
accredited bargaining council), namely, section 143 of the LRA, the
awards of an arbitrator
or commissioner are subject to review (in
case of a council, unless the remedy of review is specifically
excluded in terms of a
collective agreement). An order of the Labour
Court made in terms of section 158(2)(b) is subject to appeal only.
[105] It was never
envisaged in the LRA that a determination of a judge of the Labour
Court sitting as arbitrator would be the subject
of review by another
judge of the Labour Court. This would also be in keeping with the
common principle or practice that applies
to higher courts that a
judge’s order is not subject to review, but may be (and
generally is) subject to appeal. In terms
of the LRA, the Labour
Court has the same status as a High Court.
[106] Section 166 of the
LRA provides that any party to “
any proceedings
”
before the Labour Court may apply for leave to appeal against its
final judgment or order. “
Any proceedings
” would
include the proceedings envisaged under section 158(2)(b). It is
accordingly clear from sections 166 and 174 of the
LRA that a final
judgment or order of the Labour Court in any proceedings before that
court is appealable to this Court and that
this Court has the power
envisaged in section 174 of the LRA in such an appeal.
[107]
The situation that this Court dealt with in
Sinuko
differs in material respects from the present. The difficulty that
was addressed there was whether this Court had the power to
consider
grounds of review that were not dealt with by the Labour Court and
particularly because of the Supreme Court of Appeal’s
criticism
of this Court doing so (i.e. exercising powers of review) in the
Shoprite
Checkers
matter.
[45]
This Court held in
Sinuko
that it had the power to decide in certain exceptional circumstances,
by virtue of the power given to it in terms the auxiliary
provision,
that is, the latter part of section 174(b) of the LRA. In deciding
such grounds, i.e. grounds which the Labour Court
did not decide in
respect of a review of an arbitrator or commissioner’s award,
this Court applies the test propounded in
Sidumo
.
This Court in those circumstances is acting as a court of first
instance and, generally, of last instance (subject to a further

appeal to the Constitutional Court), because there is no decision
(judgment or order) of the Labour Court, in respect of those
points,
that is being appealed against.
[108] In a case where an
order or judgment of the Labour Court is appealed against, that
includes an order made in the proceedings
contemplated in section
158(2)(b) of the LRA, this Court is dealing with an appeal and is not
reviewing the judge of the Labour
Court’s order. The test on
appeal is not reasonableness, but whether the Labour Court’s
order was right or wrong. This
position is also consistent with the
position that will pertain after the coming into operation of the
amendments to section 158(2)(b)
which I referred to earlier.
[109] Appellant’s
submissions are briefly the following: From the pleadings it is clear
that the first respondent’s
unfair labour practice claim is
related to the payment of his accumulated leave pay and not that he
was put on compulsory leave
by the appellant. The first respondent
had no contract of employment with the appellant after his fixed term
contract lapsed at
the end of the month in which he turned 60. In the
absence of an employment contract, the appellant had no duty to pay
the first
respondent and the first respondent had no right to claim a
salary from the appellant. The latter was accordingly entitled to
apply
the first respondent’s accumulated leave to “
remunerate
”
him for the period 1 September to 9 November 2005. If the first
respondent had any claim for remuneration for that period,
which was
not paid from his accumulated leave, the claim could only have arisen
from the collective agreement (i.e. the MOU) and
at the reduced level
but this was not the claim which had been brought before the court
a
quo
. Once the court
a quo
had accepted that “
leave
pay
” was not a benefit within the meaning of section
186(2)(a) of the LRA it should have held that the first respondent’s

claim had to fail. The court
a quo
erred in not finding
accordingly, but “
effectively construed the first
respondent’s claim to be what it was not
”. It found
that his claim was a claim not to be forced to go on leave and not a
claim for accumulated leave pay and that
the finding was incorrect.
It was further argued that, in any event, it could not have been
found that it was an unfair labour
practice to place the first
respondent on leave because the fixed term employment contract had
terminated in August 2005 and the
first respondent had no entitlement
to remain in the appellant’s employment. He only had an
entitlement in terms of the collective
agreement once all its terms
were agreed to on 11 November 2005.
[110]
On behalf of the first respondent it was submitted, in response, that
this Court in
Apollo
Tyres South Africa (Pty) Ltd v CCMA and Others,
[46]
criticised the decision and approach in a case such as
Gaylard
v Telkom
[47]
which
was to consider whether the claim (in that case accumulative leave
pay) was a “
benefit
”
as contemplated in item 2(1)(b) of Schedule 7 of the LRA, the wording
of which was, in all material respects, identical
to the wording of
section 186(2)(a) of the LRA. In
Apollo
Tyres,
it was held that the focus should be on the nature of the dispute.
Where the dispute was about the fairness of the employee’s

conduct relating to the provision of a benefit it could be dealt with
under the unfair labour practice jurisdiction. The first
respondent
challenged the appellant’s conduct in depleting his
accumulative leave entitlement. The Labour Court adjudicated
the
dispute as arbitrator by agreement between the parties on the
supposition that the Labour Court’s order constituted an
award.
It was further submitted that it was not one that a reasonable
arbitrator would not have made. In the alternative, it was
argued
that the court
a
quo’s
decision (or order) was correct.
[111] It was submitted
that the appellant’s conduct, in utilising the first
respondent’s accumulated leave pay to remunerate
him for the
period when he was asked to remain at home on standby, was unfair in
light of the following: The first respondent was
on standby for the
period; he was not informed of and did not consent to the utilisation
of his accumulated leave pay; the appellant
did not reinstate the
accumulated leave when the standby period ended even though the
collective agreement had been concluded with
retrospective effect
(i.e. retrospective to 1 April 2005); the appellant did not pay the
first respondent the accumulated leave
pay he was entitled to when he
finally retired on 31 August 2008 (i.e. at age 63); and the first
respondent had remained in the
appellant’s employment after 31
August 2005 and throughout the period he was on standby.
[112]
The essence of the decision in
Gaylard
[48]
was
that the conduct complained of that there was no unfair labour
practice (i.e. in terms of Item 2 of Schedule 7 of the LRA) if
it
related to the payment of “
accumulated
leave pay
”
because accumulated leave pay was not a “
benefit
”.
According to decisions such as
Gaylard,
the “
benefit
”
contemplated in Item 2(1)(b) of Schedule 7 of the LRA (now section
186(2)(a)) “
may
include a range of rights enjoyed by a beneficiary employee but
excludes such rights as a right to be paid
”.
The rationale, for construing the word “
benefits
”
narrowly and as excluding the right to be paid, was thought to be to
preserve the right to peaceful industrial action (i.e.
in particular
strikes and lockouts).
[49]
According to the reasoning in those cases, if the word “
benefits
”
was given a generous or broad meaning so as to include any advance or
right derived from the employment contract, that would
“
all
but preclude strikes and lockouts
”.
[113]
This Court in
Apollo
Tyres
roundly
rejected the
Gaylard
approach as “
artificial
and unsustainable
”
[50]
and preferred the approach taken in
Protekon
(Pty) Ltd v CCMA and Others,
[51]
in terms of which one does not have to give a narrow meaning to the
word “
benefits
”
but to consider the nature of the benefit dispute in order to
determine whether it is a dispute that must be settled by
way of
industrial action or adjudication (i.e. by way of arbitration). In
terms of the approach endorsed by this Court in
Apollo
,
where the dispute is about existing rights (whether derived from
contract or law) it can and has to be settled by adjudication,
but
where it involves the creation of new rights there is an election to
either resolve it by way of industrial action or by way
of
adjudication (i.e. arbitration).
[114] In light of
Apollo,
the word “
benefits
” in section 186(2)(a) may be
construed broadly. Thus construed, the word would include the payment
of accumulated leave pay.
[115] The court
a quo
was clearly wrong in describing the claim of the first respondent as
something other than a claim for the payment of accumulated
leave
pay, because that was indeed the claim of the first respondent.
However, even though the court
a quo
erred regarding the basis
of entertaining the claim, it was correct in entertaining it. In
terms of
Apollo
it could.
[116] I have already
pointed out in dealing with the issue of unfair discrimination that
uncontested evidence shows that the first
respondent remained in the
employment of the appellant after 31 August 2005. If the fixed term
contract that was in place before
that date had lapsed, which I do
not find, then the first respondent was reinstated in his employment.
It is uncontested that he
was requested by or on behalf of the
appellant to remain on standby pending the finalisation of the detail
of the collective agreement
(or “
MOU
”). The first
respondent’s evidence that he tendered his services to the
appellant throughout the period he was on standby,
was also
uncontested. In those circumstances he was entitled to be paid a
salary by the appellant. The utilisation, by the appellant,
of the
first respondent’s own funds, i.e. his accumulated leave pay,
which was payable to him upon his final retirement,
to “
remunerate
”
him while he was on standby, constituted an unfair labour practice.
An order directing that the appellant pay (or repay)
the first
respondent the money that was wrongly and unfairly utilised, with
interest, was accordingly appropriate and correct.
The appeal insofar
as it relates to the unfair labour practice claim must therefore
fail.
[117] Regarding the costs
on appeal, I am of the view that there is no reason why costs should
not follow the result. Even though
this Court interfered with the
quantum of the award made in respect of compensation for the unfair
discrimination claim, the appellant’s
appeal was not
substantively successful. Law and fairness dictates that the
appellant bear the costs of the appeal.
[118] In the result, the
following order is made:
1.
The
appeal is dismissed save to the extent that the order made in
paragraph 62.3 of the judgment, directing the appellant to pay
the
first respondent compensation in the sum equivalent to one year’s
remuneration calculated at the rate of pay applicable
to his last
year of service, is set aside and is replaced with the following
paragraph:
“
62.3
The respondent is to pay the applicant
R50 000,00 (fifty thousand rands) as compensation for the unfair
discrimination.
”
The appellant is to pay
the costs of the appeal.
P
Coppin
Acting
Judge of Appeal of the
Labour
Appeal Court
I
agree
P
Tlaletsi
Deputy
Judge President of the Labour
and
Labour Appeal Court
I
agree:
D M
Davis
Judge
of the Labour
Appeal
Court
APPEARANCES:
FOR THE APPELLANT:

N H Maenetje SC
With him: T Manchu
Instructed by Norton Rose
South Africa (Inc
As
Deneys Reitz Inc) Cape Town
FOR THE
RESPONDENT:
R G L Stelzner SC
With him: S Harvey
Instructed by De Klerk
and Van Gent Attorneys
Cape
Town
[1]
The
following order was made:
“
62.1
The respondent discriminated unfairly against the applicant on the
basis of his age.
62.2 The respondent
is ordered to pay damages to the applicant the following amounts
being the remuneration he would have earned:
1. Period 1 September
2005 to 30 May 2006 the sum of R225 886,66 together with interest
thereon calculated at the rate of 15,5%
as from 1 September 2005.
2. Period 1 June 2006
to 30 May 2007 the sum of R344 850,00 together with interest thereon
calculated at the rate of 15,5% as
from 1 June 2006.
3. Period 1 June 2007
to 2 September 2007 the sum of R88 810,26 together with interest
thereon calculated at the rate of 15,5%
as from 1 June 2006.
4. Back pay in the
sum of R72 976,34 together with interest thereon calculated at the
rate of 15,5% together with interest thereon
as from 31 October
2006.
5. Special leave and
13
th
cheque payment. Re [31 October 2006] The sum of R30
507,65 being in respect of special leave, bonus and 13
th
cheque difference in pay, together with interest thereon calculated
at the rate of 15,5% as from the 31
st
October 2006.
6. Service bonus 13
th
cheque.  Re [30 April 2006] The sum of R25 167,50 together with
interest calculated at the rate of 15,5% as from 30 April
2006.
7. Service bonus 13
th
cheque. Re [30 April 2007] The sum of R30 371,56 together with
interest thereon calculated at 15,5% as from 30 April 2007.
62.3 The respondent
is ordered to pay the applicant compensation in the sum equivalent
to one (1) year remuneration calculated
on the rate of pay
applicable for his last year of service.
62.4
The aforesaid amounts are to be paid within 14 days of this order.
62.5
Costs of suit including the costs of employing two counsel.
”
[2]
The
order made by the Labour Court in respect of the unfair labour
practice is that:
“
(a)
The respondent is to pay the applicant a sum equivalent to 71 days
calculated on his daily rate of pay which applied on his
last day of
service.
(b)
The aforesaid sum
shall bear interest at the rate of 15,5% calculated from the last
day of service to date of payment.
”
The
judgment of the Labour Court is reported as
Jansen van Vuuren v
South African Airways (Pty) Ltd and Another
[2013] 10 BLLR 1004
(LC).
[3]
[1997]
12 BCLR 1655
(CC) par 28, per Mokgoro J.
[4]
[2010]
10 BLLR 1038
(LAC) at 46.
[5]
[2000]
10 BLLR 1123
(LAC) pars 15 and 16.
[6]
[1997]
11 BCLR 1489 (CC).
[7]
Para
45.
[8]
[1997]
3 SA 1012 (CC); 1997 (6) BCLR 759 (CC).
[9]
See
Larbi-Odam
case
supra
at 1665 par 17 following
President
of the Republic of South Africa and Another v Hugo
1997 (4) SA 1
(CC);
1951 (6) BCLR 708
(CC) par 43.
[10]
See
par 18.
[11]
That
would be section 33(1) of the Interim Constitution which the court
was dealing with in
Larbi-Odam
.
Under the Constitution section 36 is the applicable provision. See
also
Hoffman
v South African Airways
2001 (1) SA 1
(CC) at 16 par 24.
[12]
Supra.
[13]
[1998]
3 BCLR 257
(CC).
[14]
2000
(11) BCLR 1235
[15]
See
at 21 par 41.
[16]
[1997]
11 BLLR (LC).
[17]
[1996]
6 BLLR 697
(AD) at 706 [also reported at
[1996] ZASCA 69
;
1996 (4) SA 577
(A) and
(1996) 17 ILJ 455 (A)].
[18]
At
16 par 27, referring to dicta in
President
of the Republic of South Africa and Another v Hugo
(supra)
at par 41
,
and Harksen v Lane
(supra)
at pars 50 and 51
.
[19]
Compare
Hoffmann
v South African Airways (supra)
at 16 par 27.
[20]
At
1015 par 49 of the reported judgment.
[21]
Para
28.
[22]
The
authors of the subject ‘Damages’, in LAWSA (First
Reissue) Vol. 7 par 9, under the discussion of the confused
nature
of the terminology, quote Lord Hailsham, in
Cassell
& Co Ltd v Broome
[1972] UKHL 3
;
[1972] 1 All ER 801
(HL) 825, who aptly stated that the language of
damages ’is more than usually confused’. Also see P Q R
Boberg “The
Law of Delict; Volume One; Aquilian Liability”
(1984) pp 475-476.
[23]
See
for eg.
Chotia
v Hall Longmore & Co. (Pty) Ltd
[1997]
6 BLLR 739
(LC); (1997) 18 ILJ 1090 (LC) and
NUMSA
v Precious Metal Chains (Pty) Ltd
[1997] 8 BLLR 1068
(LC);(1997)18 ILJ 1346 (LC).
[24]
[1998]
12 BLLR 1209
(LAC).
[25]
Section
158 of the LRA does distinguish between “compensation”
and “damages”.
[26]
See
PQR Boberg ‘The Law of Delict; Volume One; Aquilian Liability’
(1984) p475.
[27]
See
Boberg op cit p475 et seq.
[28]
LAWSA
First Re-Issue Vol. 7 par 10.
[29]
The
intention is consistent with a view expressed in
Warren
and Another v King and Others
[1963] 3 ALL ER 521
at 528. There Harman LJ in relation to a claim
for damages for personal or bodily injuries expressed the view that
‘
the
remedy should not be called damages, for that connotes restitutio in
integrum, a thing patently impossible when a man has
lost a leg or a
girl has her spinal cord severed- but “compensation”.’
[30]
See
Hoffman’s
case para [42].
[31]
Compare
for example
Mutual
& Federal Insurance Co Ltd v Swanepoel
1988 (2) SA 1
(A) at 10-11.
[32]
Very
much like an award under the
actio
injuriarum
.
[33]
See
Hoffmann
(supra)
par 43. See also the
dictum
of Smalberger JA in
NUMSA
v Vetsak Co-operative Ltd & Others
(supra) at 706 B-C.
[34]
See
for example
Bay
Passengers
Transport v Franzen
1975 (1) SA 269 (A).
[35]
See
for example
Signournay
v Gillbanks
1960 (2) SA 552
(A) at 556C.
[36]
(2005)
26 ILJ 234 (LC); also reported at
[2005] 5 BLLR 479
(LC) at 483.
[37]
[1988]
IRLR 190 (CA).
[38]
NUMSA
obo Sinuko v Powertech Transformers (DPM) and Others
[2014]
2 BLLR 133 (LAC).
[39]
[2006]
12 BLLR 1146 (LC).
[40]
[2010]
4 BLLR 363 (LC).
[41]
[2006]
6 BLLR 558
(LC). The judgment in this matter was overturned by the
Labour Appeal Court on the ground that the Labour Court had decided
the
merits of the matter on a different basis than was argued before
it.  (See
SA
Nursing Council v Venter
(JA27/06)
2009 ZALAC 26
(16 July 2009)).
[42]
I.e.
NUMSA
Sinuko v Powertech Transformers (Pty) Ltd (supra)
.
[43]
[2007]
28 ILJ 2405 (CC).
[44]
[2012]
4 SA 593
(SCA) at 604; [2012] 2 ALL SA 262 (SCA).
[45]
See
Shoprite
Checkers (Pty) Ltd v CCMA and Others
2009
(3) SA 493
(SCA) at 501 pars 29 and 30.
[46]
[2013]
34 ILJ 1120 (LAC).
[47]
[1998]
9 BLLR 942 (LC).
[48]
See
also
Schoeman
v Samsung Electronics SA (Pty) Ltd
[1997] 10 BLLR 1364 (LC).
[49]
See
also
Schoeman’s
case
(
supra
).
[50]
See
at page 1128 par 25.
[51]
(2005)
26 ILJ 1105 (LJ).