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[2014] ZALCJHB 82
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Mokhwele and Others v Courier Freight Group (JS220/2011) [2014] ZALCJHB 82 (20 March 2014)
REPUBLIC
OF SOUTH AFRICA
THE LABOUR COURT OF
SOUTH ARICA, JOHANNESBURG
JUDGMENT
Not Reportable
Case no: JS 220/2011
In
the matter between:
LEBOGANG
MOKWELE AND 2
OTHERS
Applicants
and
THE
COURIER FREIGHT
GROUP
Respondent
Heard:
23 July 2013
Delivered:
20 March 2014
Summary:
The Applicants seek an order that the Respondent pays them a profit
share bonus for the 2008/2009 financial
year. The claim is based on
the grounds that the South African Post Office (SAPO) paid the Speed
Services employees such a bonus
and that they were unfairly
discriminated against by not treating them similarly. The Applicants
are employed by the Respondent,
a wholly owned subsidiary of SAPO,
and were paid, in addition to their basic salaries, on a commission
basis. The Speed Services
employees were entitled to bonuses because
Speed Services is a division of SAPO, not a subsidiary. The payment
of an
ex gratia
amount to Speed Services staff
was discretionary and it did not entitle the Respondent’s staff
(the Applicants) to the same.
The Speed Services staff were employees
of SAPO whereas the Applicants were employees of a subsidiary. The
discrimination in paying
the
ex gratia
amount to
Speed Services staff only was not an unfair discrimination against
the Applicants. Objective reasons existed why they
were discriminated
upon and these were not listed grounds of discrimination in terms of
the Employment Equity Act or some attribute
or characteristics
attaching to the Applicants which renders the differentiation
pejorative or in such a way which impairs their
fundamental dignity.
JUDGMENT
MALINDI, AJ
Introduction
[1]
The
Applicants claim payment from the Respondent, the Courier and Freight
Group, of profit share bonus for the year 2007/2008 (the
bonus). The
claim is based on the allegation that the South African Post Office,
which is the holding company and is a 100% shareholder
in the
Respondent as its subsidiary, paid the bonus to all other employees
in the category of sales personnel except the Applicants
and that the
actions of the Respondent amount to unfair discrimination against the
Applicants.
[2]
The
Respondent denies that the payment of the bonus to other employees,
to the exclusion of the Applicants, amounted to discrimination.
[3]
The
court has to determine whether there was any unfair discrimination by
the Respondent in excluding the Applicants from payment
of the bonus
as aforesaid.
Background facts
[4]
It
is common cause that the Applicants were employees of the Respondent
and formed part of the sales staff of the Respondent. The
Respondent
is a wholly owned subsidiary of the South African Post Office Limited
(“SAPO”).
[5]
In
terms of the Respondent’s standard contract of employment for
sales staff and employees’ remuneration is an all-inclusive
total cost to company (TCT) remuneration package that is inclusive
“of all company contributions such as provident fund,
medical
aid, motor vehicle allowance, car insurance, fuel and maintenance
allowance, cellphone allowance and annual bonus.”
In respect of
the annual bonus it is provided as follows:
‘
Your
bonus forms part of your total cost to company remuneration package
and will be paid out to you on a monthly basis. However
employees can
select to structure their package in such a way that the 13
th
cheque, which is equivalent to 6,5% of their total cost to company,
is paid out in December.’
[6]
The
First Applicant’s contract of employment dated July 2009 is
identical to the standard contract of employment.
[7]
The
Respondent has adopted guidelines for the payment of commission for
sales staff in the form of a commission structure and commission
policy. The commission policy states as follows:-
‘
The
commission policy, as proposed in the framework, is designed to
remunerate and reward staff for above budget revenue performance
a
goal that is in line with the strategic intent of the SAPO group to
become a “performance driven organisation”. To
ensure
that CFG generates profitable revenue, the policy will encourage
staff to grow the revenue based at acceptable, profitable
and agreed
margin.’
[8]
It
states further that:
‘
Commission,
by virtue of rewarding individual performance based on profit margin
sharing, precludes sales staff from annual company
bonus incentives
or payments of any kind.’
[9]
At
the arbitration hearing, the Applicants submitted that they had
received profit sharing bonuses previously but that the Respondent
had failed to pay them their bonuses for the 2008/2009 financial
year. The Respondent contended that the Applicants had already
received commission and as a result were not entitled to the payment
of the bonuses. It had submitted further that an
ex-gratia
payment to all staff of the Respondent had been made for the
2006/2007 financial year and again in 2007/2008 financial year but
excluding sales representatives of the Respondent. One of the reasons
why the sales staff of the Respondent were excluded was the
fact that
the Respondent experienced heavy losses for the period of 2004 to
2008 and that, as opposed to the rest of the Respondent’s
employees, the sales staff enjoyed higher salaries and the added
benefit of earning commission.
The
evidence
[10]
The
Applicants led the evidence of Werner Pienaar, whose evidence was
essentially that although the Applicants’ contracts
of
employment did not provide for profit sharing bonuses, the SAPO’s
conduct in paying an
ex-gratia
payment to all of the Group’s employees except the Respondent’s
employees was unjustified and constituted unfair discrimination.
He
testified that the unfair discrimination arose out of the SAPO’s
decision to extend the
ex-gratia
payment to staff of Speed Services, a division of the SAPO, who
performed the same service as the Respondent’s sales
representatives.
[11]
Pienaar
testified further that although he cannot recall, the profit sharing
bonuses had been paid in previous financial years.
They had
definitely been paid for the 2007/2008 financial year. In the
2009/2010 financial year, the Respondent’s employees
had been
informed that they would receive the bonus, which was deposited into
their accounts but was immediately withdrawn.
[12]
The
Respondent led the evidence of Nhlanhla Clement Dube, the
Respondent’s General Manager: Sales and Marketing. His evidence
was to the effect that although the Respondent is a subsidiary of the
SAPO, it is a separate legal entity with its own board of
directors
and subcommittees. He testified that Speed Services is a division of
the SAPO and was therefore subject to the controls
and management by
the SAPO. It is part of SAPO and is not a separate legal entity. Its
employees are employed by the SAPO.
[13]
He
testified that the terms and conditions of employment for the
Respondent’s employees are different from those of Speed
Services.
[14]
Employment
contracts for the SAPO and its divisions provide for a basic salary
and other general terms and conditions of employment
as contained in
the SAPO’s Human Resources Policy Manual. Their contracts do
not provide for payment of a commission, except,
as testified by
Pienaar and Dube, when a Speed Services person or employee sells
CFG’s products and services.
Analysis
[15]
It
is not necessary to analyse the evidence extensively or to repeat it
herein in view of the simple premise upon which this claim
has been
brought. Mr Louw, for the Applicants, submitted that it is not the
Applicants’ case that they were entitled as of
a right to be
paid profit share bonuses but that their case is based simply on the
grounds that the SAPO has no justification to
pay all other employees
the bonus in the form of an
ex-gratia
payment to the exclusion of the Applicants who are sales
representatives of the Respondent. He submitted that the fact that
SAPO
paid the
ex-gratia
payment on the basis that it had made a profit, the payment ought to
have been extended to the Respondent’s employees even
though
the Respondent as a subsidiary had shown profit losses for the period
2004 to 2008.
[16]
On
the other hand, Mr Boda, for the Respondent submits that the
exclusion of the Applicants from the
ex-gratia
payment was based on objective grounds which do not amount to an
unfair discrimination as defined. These are,
inter
alia
, that the Respondent had suffered
profit losses between 2004 and 2008, in particular the substantial
loss in 2009; the Respondent’s
staff earn commissions which put
them in a substantially better economic position whereas Speed
Services staff do not earn commission
on deliveries; and that no
bonus was paid and that the payment was
ex-gratia
as a concession because the Respondent
was showing signs of improvement in its operating profit performance.
[17]
The
Respondent submitted further that if allegations of unfair
discriminations are made against SAPO, from whom the
ex-gratia
payments were made, the Applicants
ought to have joined the SAPO.
Evaluation
[18]
In
view of the Applicants’ submission that they do not contend
that they are entitled to the profit sharing bonus as a right
but on
the basis only that the Respondent’s conduct constitutes unfair
discrimination against them because the bonus was
paid to other SAPO
employees except the Respondent’s employees, I do not have to
go into greater analysis an evaluation of
the oral and documentary
evidence referred to.
[19]
The
Applicants do not state, neither in their statement of case, the
pre-trial conference minute nor in oral argument the basis
of the
allegation of unfair discrimination except that the Respondent’s
employees were excluded from a payment that was extended
to other
employees.
[20]
On
the other hand, the Respondent contends that the Applicants have
failed to establish a ground for discrimination under the Employment
Equity Act because the discrimination they contend for is not a
listed or analogous ground of discrimination. Reference is made
to
the well-known decision of the Constitutional Court in
Harksen
vs Lane N.O. and Others
[1]
which
requires that even where a differentiation which amounts to
discrimination has been established, it has to be established,
as a
second requirement, that the discrimination amounts to unfair
discrimination.
[21]
Where
a litigant does not rely on a listed ground such as racism or sexual
orientation, the analogous ground must be on the basis
of some
attribute or characteristics attaching to the litigant which renders
the differentiation pejorative or that they were treated
differently
in such a way which impairs their fundamental dignity.
[2]
[22]
The
Respondent has submitted and tendered evidence to the effect that the
Applicants were discriminated against on grounds that
do not amount
to unfair discrimination. As stated above, those grounds are,
inter
alia
, that the comparison between the
Respondent’s employees and those of Speed Services, a division
of SAPO, is inappropriate.
The two groups of employees are employed
by different employers, one of whom, the SAPO, is not joined to these
proceedings and
are employed on different terms and conditions.
Critically, the Respondent’s employees were excluded from the
profit share
bonus because the Respondent had made a substantial loss
during the relevant periods. The Respondent and SAPO had deemed it
appropriate
to exclude the Applicants because of this and that the
Applicants stood in a better economic position compared to other
employees
because they earned a commission which on average was
incomparable to the amounts distributed as
ex-gratia
payments.
[23]
These
grounds for excluding the Applicants are objective and cannot be
characterised as unfair discrimination unless the Applicants
succeed
in establishing discrimination within the accepted legal definition
of the concept.
[3]
[24]
Accordingly,
I find that the applicants have failed to establish a cause of action
based on unfair discrimination in this case.
Costs
[25]
The
Respondent has sought a cost order. The Applicants did not address
the Court on the issue of costs. However, as some or most
of the
Applicants still work for the Respondent, I am inclined not to issue
a cost order in this matter.
Conclusion
[26]
Accordingly,
I make the following order.
1.
The claim is dismissed.
2.
There is no order as to costs.
______________________
Malindi, AJ
Acting Judge of the
Labour Court
Appearances:
For
the Applicants: Mr Louw (Attorney)
Instructed
by:
Goldberg Attorneys
For
Respondent: Advocate F.A. Boda
Instructed
by:
Routlege Modise (practising as Eversheds)
[1]
[
1997]
11 BCLR 1489 (CC).
[2]
Mothoa
v Minister of Safety and Security
(2007)
9 BLLR 879
(LC at para 17:
Ntai
and Others v SA Breweries Ltd
(2001)
22
ILJ
214
(LC) at para 73
[3]
Ntai
and Others
at
para 73.