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[2019] ZALCJHB 31
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Sun International Limited v SACCAWU obo Ramerafe and Others (JR1501/17) [2019] ZALCJHB 31; [2019] 7 BLLR 733 (LC); (2019) 40 ILJ 1873 (LC) (26 February 2019)
THE
LABOUR COURT OF SOUTH AFRICA,JOHANNESBURG JUDGMENT
Reportable
CASE
NO: JR1501/17
In the matter between:
SUN
INTERNATIONAL LIMITED
Applicant
and
SACCAWU
obo REBECCA RAMERAFE
First
Respondent
NATIONAL COMMISSIONER
OF
PERCY
PATRICK MAKGOPELA
Second
Respondent
COMMISSIONER FOR
CONCILIATION
MEDIATION
AND ARBITRATION
Third
Respondent
Heard:
12 February 2019
Judgment
delivered: 26 February 2019
JUDGMENT
VAN
NIEKERK J
[1]
On 3 July 2017, the second respondent, to whom I shall refer as ‘the
arbitrator’,
made the following award:
66.
I order the Respondent to compensate the Applicant/Complainant the
difference between R 271 440-00
which is Mr Botha’s
current annual salary and R 143 455-00, which is the
Applicant/Complainant current salary, which
would be R127 985-00
once off payment. The figures in the difference in salaries are
at the the disposal of the Respondent.
67.
The above mention amounts must be paid to the Applicant/Complainant
on or before 05
th
of August 2017. Should the amount of
compensation awarded not being paid at the prescribed date then it
will accrue interests in
terms of Section 143 (2) of the Labour
Relations Act 66 of 1951 as amended, read with the Prescribed Rate of
Interest Act.
68.
I order the Respondent to place the Applicant/Complainant on the same
salary bracket of the position
they (herself and Mr Botha) are
presently occupying (Surveillance Auditor) and/or which they both
occupied.
69.
I order the respondent to eliminate all forms of unfair salary
disparity on its employees starting
with the Applicant/Complainant
dispute.
[2]
The award followed an arbitration hearing at which the arbitrator
recorded that he
was required to decide:
7.1 Whether or not the
Respondent committed unfair discrimination based on Section 6 (1 and
4) of the EEA to the Applicant/Complainant
by paying Mr Botha more
than her, as the complainant is a black female employee and her
comparator Mr Botha is a white male employee.
7.2 Whether or not there
is unfair salary disparity between the Applicant/Complainant and her
Comparator
[3]
The material facts are apparent from the award. The first respondent
(the employee) was
employed by the applicant on 1 January 2008, as a
guest services attendant. In 2014, the employee was engaged in the
position of
surveillance auditor. Her chosen comparator is a Mr
Botha, employed in the same position in June 2016. It is not disputed
that
the employee and Botha have the same job descriptions, or that
they do the same work on a daily basis, are graded at the same level,
and report to the same surveillance shift manager.
[4]
The employee testified that she earned less than Botha, who commenced
employment with
the applicant in June 2016. Her annual remuneration
package is R 143 445; her comparator’s package is R 271 440. In
the employee’s
view, the differential in earnings amounts to
unfair discrimination on the grounds of race and gender;
specifically, that her comparator
was paid a higher salary on account
of the fact that he was white and male.
[5]
The applicant’s HR business partner testified on behalf of the
applicant. She
stated that the employee was appointed to the
surveillance position during the course of a restructuring exercise,
and that she
received a 20% increase to bring her remuneration into
the applicable salary band. (The employee’s remuneration
increase
from R 103 383.33.) Botha was recruited from a security
company. To match his existing remuneration (in the form of nett
earnings),
a total cost-to- company package was calculated at R260
000. At the time of his recruitment, Botha was earning some R200 000
per
annum - the difference of R60 0000 was added to compensate for
the applicant’s requirement of compulsory membership of health
care and retirement funds. Botha was recruited on the basis of his
experience, skills and qualifications. He had been previously
employed at various casinos (including a period of 10 years
employment at Gold Reef City Casino), and thus had more experience
than the employee, and had better qualifications (a PSIRA Grade
A).
[6]
The arbitrator’s reasoning can be gleaned from the following
passages in the
award:
46.
In regard of the case law Mr Botha would meet the principles laid.
The `Applicant/Complainant
accepted that Mr Botha’s CV shows
that he has experience in different fields. She contended that when
Mr. Botha arrived in
the department he did not have experience of
that office. Ashvani testified that when Mr. Botha was employed in
that position he
was already earning more than the
Applicant/Complainant. She testified that for them to keep him they
had to increase the salary
with R60 000-00. My concern would be, when
Mr. Botha agreed to work in the position was he aware of the salary
bands within that
position? The question that I still have is, what
made the management to put Mr. Botha at the R260 000-00 salary
per annum?
Was because they did not want to lose him due to his
experience in security? Was that only because he came already earning
in excess
of R200,000-00 which was already above the
Applicant’s/Complainant’s salary? It was my observation
that Ashvani’s
evidence was tailor-made to speak to the
Respondent’s version. It has been undisputed that Mr. Botha’s
CV shows a foster
of experience but the Applicant’s/Complainant’s
representative argued well that, that experience is not of
surveillance
auditor, which I agree to. The challenge on the
Respondent’s party is that the alleged experiences for other
positions not
for surveillance audit.
[7]
The arbitrator then went on to conclude:
48.
Following the above principle, firstly I find that it is, course that
there was differentiation
in salary between Mr. Botha and the
Applicant/Complainant. Secondly based on the below summarized facts I
find the differentiation
is not justifiable. It is not a dispute that
the Applicant/Complainant worked as the surveillance auditor before
Mr. Botha and
she was appointed at the starting scale of R124 059-99.
Before the Applicant/Complainant was placed in that position she was
earning R103 383-33 as the GSA at Slots. Mr. Botha that was
appointed at the scale of R260,000-00, which seemed to be the
highest
scale in that position. Testified that because Mr. Botha was already
earning in excess of R200,000-00 when they interviewed
him. She
further testified that if they offered in the same salary or release,
he would not have accepted their offer. She testified
that the
increase is R200,000-00 to R60,000-00. The reason for the R60,000-00
was at Mr. Botha should be able to cover medical
aid in provident
fund. I find that not to be fair, rational and justifiable reason to
increase Mr. Botha a salary. The question
would be, why they thought
of employing a person already earning in excess of the starting scale
of that particular position. At
the time the Applicant/Complainant
was earning R137 409-00.The Applicant/Complainant testified that
she wants to enjoy her
work and not working in the same office with
an employee who learns from more than her without any justification.
She testified
that Mr. Botha as an experience in security industry
but not in the surveillance audit position. It is my view on the
assessment
of the Applicant’s/Complainant’s evidence that
she feels that her dignity was somehow impaired as a female person.
And
51
the question would be, why the Applicant/Complainant is not paid the
same like Mr.
Botha? The only possible answer from the evidence it
would be, when Mr. both it was employed he was already earning more
than what
the Applicant/Complainant in. Further on, as he was earning
in excess of R200,000-00 the Respondent want to keep them as Ashvani
testified that if they have said they pay him R200,000-00 or less Mr.
Botha it would not have agreed to work for the Respondent.
The
Respondent’s view that Mr. Botha has more experience is not
correct because the experience they referred to is off the
security
industry general not of a position of surveillance auditor. In the
whole CV of Mr. Botha of these experiences captured
there is no where
it showed he worked in the position of surveillance auditor. Whereas
it is not disputed that, the Applicant worked
for over one year and
four months alone in that office and to doing the work of
surveillance auditor…
54
it should be noted that the Applicant’s/Complainant’s
dispute relied on
the fact that Mr. Botha are is a white male
employee who is paid far more than her. My view is that in addition
to the two grounds
the Respondent wanted to use experience as the
shield of differentiation in salary which you find it to be
capricious in this circumstances…
Taking into consideration of
the evidence presented before me, I am satisfied that the Respondent
failed to establish that the
discrimination was fair and it did not
fill on direct and distant grounds.
56
I find on the balance of probability that, the Respondent’s
conduct complained
of is not rational; such conduct amounts to the
discrimination; and that discrimination is unfair. Often assessing
the whole circumstances
and the evidence presented before me, I find
the Applicant’s/Complainant’s vision to be more probable
than that of
the Respondent in all respect…. I find the
Respondent’s actions of paying Mr. Botha that enormous amount
of money
to be highly unfair only because he was already earning in
excess of R200,000-00 at the time of his interview. The question
would
be, what if Mr. Botha a would have it at the level of the
Applicant/Complainant. My view is that, they have done all to ensure
that they keep them and pay more salary but the problem is he does
same work like the Applicant/Complainant. I could not find the
reason
to differentiate on the payment of the two employees.
58
Considering all what the parties presented before me, I am of the
view that there was
a huge wage disparity that occurred and/or there
was unfair wage discrimination that the Respondent committed, which
needs to be
rectified. I find that there is an unjustifiable,
irrational and unfair salary disparity between the
Applicant/Complainant; I therefore
find that the Respondent failed to
discharge the owners in terms of section 11 [1 of the employment
equity act 47 of 2013, as amended.
[8]
Given that the applicant has chosen to seek a review of the award
(rather than exercise
its right of appeal in terms of s 10(8) of the
EEA) the test to be applied is one that entitles this court to
intervene if and
only if the commissioner’s decision is one
that falls outside of a band of decisions to which a reasonable
decision-maker
could come on the available material. The
locus
classicus
remains
Mofokeng
, where the LAC said the
following
[30]
The failure by an arbitrator to apply his or her mind to issues which
are material to the determination of a case will usually
be an
irregularity. However, the Supreme Court of Appeal (“the SCA”)
in
Herholdt v Nedbank Ltd
and this court in
Goldfields
Mining South Africa (Pty) Ltd (Kloof Gold Mine) v CCMA and others
have held that before such an irregularity will result in the setting
aside of the award, it must in addition reveal a misconception
of the
true enquiry or result in an unreasonable outcome…
[32]
…Mere errors of fact or law may not be enough to vitiate the
award. Something more is required. To repeat: flaws in
the reasoning
of the arbitrator, evidenced in the failure to apply the mind,
reliance on irrelevant considerations or the ignoring
of material
factors etc. must be assessed with the purpose of establishing
whether the arbitrator has undertaken the wrong enquiry,
undertaken
the enquiry in the wrong manner or arrived at an unreasonable result.
Lapses in lawfulness, latent or patent irregularities
and instances
of dialectical unreasonableness should be of such an order
(singularly or cumulatively) as to result in a misconceived
inquiry
or a decision which no reasonable decision-maker could reach on all
the material that was before him or her.
[33]
Irregularities or errors in relation to the facts or issues,
therefore, may or may not produce an unreasonable outcome or provide
a compelling indication that the arbitrator misconceived the inquiry.
In the final analysis, it will depend on the materiality
of the error
or irregularity and its relation to the result. Whether the
irregularity or error is material must be assessed and
determined
with reference to the distorting effect it may or may not have had
upon the arbitrator’s conception of the inquiry,
the
delimitation of the issues to be determined and the ultimate outcome.
If but for an error or irregularity a different outcome
would have
resulted, it will
ex hypothesi
be material to the
determination of the dispute. A material error of this order would
point to at least a
prima facie
unreasonable result. The
reviewing judge must then have regard to the general nature of the
decision in issue; the range of relevant
factors informing the
decision; the nature of the competing interests impacted upon by the
decision; and then ask whether a reasonable
equilibrium has been
struck in accordance with the objects of the LRA. Provided the right
question was asked and answered by the
arbitrator, a wrong answer
will not necessarily be unreasonable. By the same token, an
irregularity or error material to the determination
of the dispute
may constitute a misconception of the nature of the enquiry so as to
lead to no fair trial of the issues, with the
result that the award
may be set aside on that ground alone. The arbitrator however must be
shown to have diverted from the correct
path in the conduct of the
arbitration and as a result failed to address the question raised for
determination.
[9]
In coming to the conclusions that he did, the arbitrator made a
number of errors. His analysis
of the evidence and reference to not
entirely relevant authorities displays a lack of understanding of
some of the basic principles
that underpin the EEA;’s
regulation of the right to equal pay.
[10]
The award lacks coherence, and comprises a series of often random
observations More particularly,
to the extent that the arbitrator
considered that it was for the employee to establish and prove on a
balance of probability that
the applicant’s conduct was not
rational and amounted to unfair discrimination, this overlooks the
provisions of s 11 of
the EEA. That section makes clear that if
unfair discrimination is alleged on a specified ground listed in s 6
(1) (which it was
in the present instance), the employer against whom
the allegation is made must prove, on a balance of probabilities,
that the
discrimination did not take place or that any discrimination
was rational and not unfair, or is otherwise justifiable. The
applicant
was thus obliged to discharge the onus to prove the absence
of any discrimination and to justify any discrimination found to
exist.
Secondly, the arbitrator fails to distinguish between the
various categories of ‘work of equal value’ established
by
Regulation 4 of the Employment Equity Regulations of 2014.
Although the regulation establishes a broad umbrella of ‘work
of equal value’, the regulation recognises three discrete
categories. The first is one in which the employee performs the
same
work of the comparator, i.e. where the work is identical or
interchangeable. The second is where the work is substantially
the
same, or sufficiently similar that the employees concerned can
‘reasonably be considered to be performing the same job’.
The third is an equal value claim proper, where the employee performs
work of the same value as the work of the comparator employee
engaged
‘
in a different job’
(own emphasis), if the
employees’ respective occupations are accorded the same value
in accordance with the methodology prescribed
by the regulation. The
looseness of the language of the regulation is regrettable, but the
three discrete categories that regulation
4 establishes are
conceptually different. Commissioners must respect and apply that
difference.
[11]
The present case concerned a dispute where it was common cause that
the employees were performing
the same work, i.e. the first category
referred to above. There was no need therefore for the arbitrator to
make reference to the
concept of equal pay for work of equal value
(proper), or to refer to the authorities that concern that issue.
[12]
The regulations are clear as to how this enquiry ought to be
undertaken. The arbitrator was required
to determine whether the work
was of equal value (it was admitted to be so, in the form of the same
or similar work), whether there
was a difference in remuneration
(this was admitted) and whether the difference constituted unfair
discrimination, applying s 11
of the Act. The applicant had denied
any act of unfair discrimination and as I have indicated, it
therefore bore the onus to establish,
on a balance of probabilities,
that the difference in remuneration between the employee and Botha
was not the difference of race
and gender, or that it was rational
and not unfair, or otherwise justifiable. The case before him
was one in which the applicant,
in effect, sought to assert a ‘market
related forces’ defence to the claim of discrimination (i.e.
that it had recruited
Botha on the remuneration package it did
because that was what he demanded and what the market justified), and
to raise the ‘justifiability
factors’ of qualifications
and experience in the event that the primary defence failed. There is
no proper evaluation of
the evidence under the rubric established by
s 6 (4) read with s 11. What the arbitrator did to justify the
conclusion he reached
was to reject the evidence of the applicant’s
single witness, in its entirety, on the basis that she ‘tailored’
her evidence to suit the applicant’s case. There is no basis
for this conclusion. The witness’s evidence was an account
of
Botha’s recruitment, an explanation as to how the remuneration
package that was offered to him was calculated, and a justification
for the differences between that package and that paid to the
employee.
[13]
As I have indicated, the justification offered by the applicant for
the differential in pay was
that it was required to match Botha’s
existing nett pay to recruit him, and that Botha’s higher
qualifications and
experience (in comparison to the employee)
attracted a premium. There is no analysis to support the arbitrator’s
rejection
of the first justification - he merely suggests that it was
unfair to pay Botha the package that he was offered. There are
authorities
that address what amounted to a ‘market forces’
defence to the employee’s claim but the arbitrator considered
none of them, nor did he make any reference to the principles that
they establish. (See, for example, the rejection of the ‘I
paid
him more because he asked for more’ and ‘I paid her less
because she was willing to come for less’ defences
in
Clay
Cross (Quarry Services Ltd v Fletcher
[1979] ICR 47.)
Regulation
7 sets out the factors that might serve to justify a differentiation
in income – seniority, length of service
and qualifications are
among them. The arbitrator effectively ignored the factors of
seniority and qualification, and regarded
experience as a criterion
to be limited to the job in which the employee and Botha were
currently engaged. In other words, he disregarded
entirely Botha’s
work history and experience and was prepared only to regard as
relevant his experience in the position of
surveillance auditor. The
evidence disclosed that Botha’s work experience in security
extended over more than 30 years, as
opposed to the employee’s
much more limited work experience in the same sector. Further, as I
have indicated, it would appear
that Botha’s qualifications are
considerably better than those of the employee. There ought to have
been a proper scrutiny
and analysis of this aspect of the applicant’s
defence. In short: the differential in Botha’s and the
employee’s
respective incomes is not insignificant, but this
was not reason in itself to find a lack of rationality, fairness or
other ground
of justifiability. What was required of the arbitrator
was to undertake the analysis required by regulation 7 (2) on the
basis
of all of the evidence, and to determine properly whether the
applicant had made out a case of rationality, fairness or other
justifiability
in respect of the admitted differential in income.
This he failed to do, and thus committed a material error of law.
[14]
Finally, turning to the last paragraph of the arbitrator’s
award (that the applicant ‘
eliminate all forms of salary
disparity on its employees staring with the Applicant/Complainant
dispute’
), there is simply no legal basis for such an
order. The arbitrator merely records (in paragraph 63 of the award)
that he considers
such an award ‘appropriate’.
Commissioners tasked with the determination of unfair discrimination
disputes ought to
appreciate and respect the limits of their powers
of intervention. The arbitrator’s sweeping order potentially
affects all
of the applicant’s employees (and there must be
thousands of them), and is simply incomprehensible. The union’s
representative
in these proceedings conceded as much, and did not
seek to defend that part of the arbitration award.
[15]
For the above reasons, the arbitrator’s award stands to be set
aside on the basis that
in making the order he did, he both failed to
appreciate the nature of the enquiry before him and exceeded his
powers. It is not
necessary for me in these circumstances to
determine whether despite the reviewable irregularities committed by
the arbitrator,
the award is nonetheless capable of being salvaged on
the basis that the result is reasonable. It also follows that the
parties
ought properly to be afforded a rehearing before a different
commissioner. Finally, the interests of the law and fairness dictate
that each party be responsible for its own costs.
I make the following
order:
1.
The award issued by the second respondent
under case number NWRB 413-17 on 3 July 2017, is reviewed and set
aside.
2.
The dispute is remitted to the third
respondent, for a re-rehearing before a commissioner other than the
second respondent.
3.
There is no order as to costs.
André van Niekerk
Judge
REPRESENTATION
For the applicant: Mr S
Jamieson, Cliffe Dekker Hofmeyr
For the first respondent:
Union official