IN THE LABOUR COURT OF SOUTH AFRICA
HELD AT CAPE TOWN
Case Number: C 122/98
In the matter between
BEVERLEY WHITEHEAD Applicant
and
WOOLWORTHS (PTY) LTD Respondent
JUDGMENT
WAGLAY A J
1 This is an application in terms of which the Applicant claims compensation on
the grounds that she was dismissed and that such dismissal constituted an
automatic unfair dismissal as contemplated by s 187(1)(e) of the Labour
Relations Act (hereinafter the “Act”) or alternatively on the grounds of an
unfair labour practice under item 2(1)(a) of Schedule 7 to the Act.
2 The Applicant alleges, in the first instance that she was offered a permanent
position as a “Human Resources Generalist” with the Respondent which offer
she accepted and subsequent to the conclusion of the agreement Respondent
repudiated the contract of employment thereby effecting a dismissal which
dismissal was unfair. In the alternative Applicant alleges that she was unfairly
discriminated against as an applicant for employment on grounds of her
pregnancy and that in the circumstances she has been a victim of an unfair
labour practise.
UNFAIR DISMISSAL
3 s187 (1)(e) upon which the Applicant relies for her principal claim provides
that:
“ (1) A dismissal is automatically unfair if the employer, in dismissing the
employee acts contrary to section 5 or, if the reason for the dismissal is
(a) ...
(b) ...
(c) ...
(d) ...
(e) the employee’s pregnancy, intended pregnancy, or any reason related to
her pregnancy;
(f) ... ”
4 In terms of this section a dismissal of an employee for any “reason related to
her pregnancy” constitutes an automatically unfair dismissal. The Applicant
therefore needs to satisfy this court that she was an employee as contemplated
by the Act and that she was dismissed.
5 In order to qualify as an employee it is not sufficient for the Applicant to
satisfy this court that a contract of employment was in fact concluded. The
coming into being of a contract between the parties may give rise to a
contractual claim but does not confer the status of an employee or employer
upon the parties as provided for in the Act.
6 s 213, the Definition section of the Act defines “employee” for purpose of s
187 to mean:
“(a) any person, excluding an independent contractor, who works for another
person or for the state and who receives, or is entitled to receive, any
remuneration; and
(b) any other person who in any manner assists in carrying on or conducting
the business of an employer,
and “employed” and “employment” have meanings corresponding to that of
“employee”;
7 In terms of the definition a person is only an employee when such person
actually works for another person. The employee must therefore have
rendered a service to another which services are not that of an independent
contractor. In addition to working for another the employee must also
“receive” or be “entitled to receive” remuneration. The remuneration referred
to must correspondingly mean remuneration for work done or tendered to be
done. In the circumstances where an offer of employment is made to another
and the offer is accepted a contract of employment may come into existence
but the parties to that contract do not enjoy the protection of the Act until such
time as the offeree actually commences her performance or at least tenders
performance in terms of the contract.
8 In the present matter if I have to accept the evidence of the Applicant as
unchallenged, the evidence establishes that on 17 December 1997 and after
Applicant was interviewed by Inskip, the head of the IT Service department of
the Respondent she was satisfied that all that was required to obtain the
permanent position of H. R. Generalist was for Inskip to make a final decision.
The message left for the Applicant by Inskip on her telephone on 19 December
1997 stating that he “wanted to finalise the paper work” according to her
confirmed that a contract of employment had in fact been concluded.
9 During a telephonic conversation between the Applicant and Inskip on 23
December 1997 Inskip according to the Applicant withdrew the permanent
position offer and offered Applicant a fixed term contract for 5 months. The
reason for withdrawing the offer as communicated to her by Inskip was
because of her pregnancy. The withdrawal of the offer by Inskip on behalf of
the Respondent according to the Applicant constituted a breach of contract
which breach Applicant argues constitutes an unfair dismissal as contemplated
by s 186(a) read with s 187(1)(e) of the Act.
10
11 For purposes of this judgment I do not need to decide upon whether or not a
contract of employment had in fact been concluded because even if I find that a
proper contract had been concluded between the parties, Applicant’s argument
that a breach of such contract amounted to a dismissal cannot be tenable. This is
so because the Applicant did not work for, nor was she entitled to receive any
remuneration from, the Respondent prior to 23 December 1997 being the date of
the alleged breach.
12 Had the Applicant prior to being informed that the offer is withdrawn (here I
am relying purely on the testimony of the Applicant despite such testimony
being challenged by the Respondent) tendered her services to the Respondent
and the Respondent refused to accept such tender then perhaps the Applicant
may have had a claim for a dismissal because the word “work” in the
definition section of the Act, is broad enough, I believe, to encompass a
tender. The tender must however be made before a contract is repudiated for
an Applicant to succeed in her claim of being dismissed.
13 In this matter Applicant made no tender prior to the repudiation of the
contract, in fact she could not do so as her employment was only required to
commence on 12 January 1998. In the circumstances Applicant cannot claim
to be dismissed as she failed to qualify as an employee as provided for in s
187(1)(e) of the Act.
14
15 I must add that I find that the definition of an employee in the Act totally
unsatisfactory. The definition should have included conferring the status of an
employee and employer on the parties on the finalisation of a contract of
employment even if such contract of employment was only to take effect at
some future date. I say this because if one of the parties repudiates the
contract for reason not valid in law why should the innocent party only have
recourse to the ordinary Court on the basis of a breach of contract and not be
given the protection provided for in the Act. This is particularly important as
the amount of compensation the innocent party would receive, depending upon
the forum it is obliged to approach, is substantially different.
16 Notwithstanding my unhappiness, based on the clear wording of the Act and
for reasons stated earlier Applicants claim for unfair dismissal must fail.
UNFAIR DISCRIMINATION
17 Turning then to Applicant’s alternative claim that she was a victim of an unfair
labour practice as contemplated by item 2 (1)(a) of schedule 7 to the Act in
that she was discriminated against because of her pregnancy, item 2(1)(a) read
together with item 2(2)(a) of Schedule 7 to the Act provides:
“2 RESIDUAL UNFAIR LABOUR PRACTICES
(1) For the purposes of this item, an unfair labour practice means any unfair act
or omission that arises between an employer and an employee, involving –
(a) the unfair discrimination, either directly or indirectly, against an employee on
any arbitrary ground, including, but not limited to race, gender, sex, ethnic or
social origin, colour, sexual orientation, age, disability, religion, conscience,
belief, political opinion, culture, language, marital status or family responsibility;
(b) ...
(c) ...
(d) ...
(2) For the purposes of sub item (1)(a)
(a) ‘employee’ includes an applicant for employment;
(b) ...
(c) ...
18 It is not disputed that the Applicant was an “applicant for employment” and
thus an employee for purposes of item 2(1)(a). In terms of this item for
discrimination to constitute an unfair labour practise it must be unfair and
based on an arbitrary ground. Although the Act lists grounds which are to be
regarded as arbitrary this list is not intended to be exhaustive as the wording of
the item states “ ... including, but not limited to ... ”. This item therefore
foresees that they may well be other grounds which could constitute unfair
discrimination on an arbitrary ground.
19 In matters relating to discrimination the party claiming to be discriminated
against is simply required to establish that he/she was discriminated against.
The Respondent then has the evidentiary burden to satisfy that the
discrimination was not unfair on any arbitrary ground. See Leonard Dinger
Employee Representative Council v Leonard Dinger (Pty) Ltd & others (1998)
19 ILJ 285 (LC) and Kadiaka v Amalgamated Beverage Industries (1999) 20
ILJ 373 (LC)
20 Respondent does not dispute that there was discrimination but denies that it
unfairly discriminated against the Applicant on an arbitrary ground.
21 Respondent’s argument is as follows:
(i) There was no differential in treatment accorded specifically and only
against the Applicant or someone in position similar to her as the reason for the
discrimination was the requirement of uninterrupted job continuity which
requirement applied equally to any applicant for the position advertised; and
(ii) That uninterrupted job continuity was rationally and commercially
supportable.
22 In support of its first submission Respondent led evidence to the effect that the
position of H. R. Generalist carried with it a distinct need for uninterrupted
continuity of employment that is that the incumbent was required to remain
uninterruptedly in that post for at least 12 months. The reason for such
continuity was the merger between the Respondent’s IT division and an
external company. The merger resulted in the need for the post for which
Applicant was solicited. This position was a key one because with the merger
approximately 100 people had to be integrated into the existing IT division of
the Respondent. There were staff related policies that required to be updated
and brought into line with Respondent’s policies. Coupled with that there was
an extremely high staff loss in that division and a number of issues relating to
retention of staff as well as developing a new range of strategies and
operational policies and procedures was needed to be addressed as a matter of
urgency and more importantly for the Respondent to be in a position to
address these issues effectively it required the incumbent to remain in the post
for a period of at least 12 months to give credibility to the process and to
ensure its success.
23 None of the evidence recorded in paragraph [20] above was challenged by the
Applicant. Respondent relies on this evidence to justify the requirement of
uninterrupted job continuity as not being a requirement based on any arbitrary
ground upon which it sought to discriminate. According to the Respondent
that while it was correct that pregnant women would be excluded from being
appointed to the position in question any other applicant who could not fulfill
the requirement of uninterrupted job continuity for a period of at least 12
months would likewise be excluded.
24 The problem with the above argument is that it presupposes that if there are
facts upon which an employer relies upon to arrive at a decision to
discriminate against an applicant for a job, this Court is bound to accept such a
decision. While the facts remain unchallenged and therefore for the Court to
accept, a decision based on the facts remain open for the Court to determine.
This is so because the Labour Court is not simply a Court of Law but a Court
of Law and Equity and as such is entitled not only to look at the justification
for the actions of the parties before it but also the reasonableness thereof.
25 The first issue that this court needs to determine is whether the condition of
uninterrupted job continuity which obviously discriminates against pregnant
women was based on an arbitrary ground. The test that the Court must apply
in making a determination is not what was the subjective opinion of the
Respondent based on the factual position with which it is confronted but
taking into account the factual position can the condition placed by the
Respondent be objectively justifiable.
26 On the evidence presented I find no objectively justifiable reason why the
requirement of uninterrupted job continuity for a period of 12 months was a
necessary requirement for the position. While I do not propose to determine
the number of enquiries the Court may need to make in determining whether
or not the discrimination complained of is based on an arbitrary ground a good
yardstick to measure whether or not discrimination is based on an arbitrary
ground is to determine whether the discrimination is such that it can be
sustained irrespective of the happening or non happening of any unforseen
event.
27 In the matter before me to be satisfied that the requirement of uninterrupted
job continuity to be valid and not to be based on an arbitrary ground I need to
be satisfied that the incumbent would, no matter what fate befalls him or her
continue with his/her employment uninterrupted for at least 12 months. No
employer can receive any guarantee that an incumbent will remain in its
employ for a uninterrupted period of anytime. In the absence of such
guarantee I am satisfied that to place such a requirement can be no more than a
decision arrived at on an arbitrary ground.
28 Not only is the requirement of uninterrupted job continuity for a period of at
least 12 months not objectively justifiable I cannot find such a condition to be
reasonable. Imagine for a moment that the incumbent who has satisfied the
Respondent that he is able to remain in its employ for the uninterrupted period
of 12 months, renders exceptional services for a period of 6 months, and is
then involved in an accident or is taken unexpectedly ill and is unable to
perform his duties for a period of 2 months. What happens in that case? Does
the Respondent dismiss him? Does the Respondent continue to employ the
incumbent after he has recuperated? Do either of these options not make
nonsense of the requirement of uninterrupted job continuity? To simply
suggest that at the time the offer of employment is made there must be no
encumbrance upon the incumbent to satisfy the condition, defeats the very
object of that condition. Furthermore Respondent has not led any evidence to
show that once offered employment the incumbent will not be allowed to
resign from his position without any contractual penalty being imposed upon
him or some other punitive condition. This would mean that there is no
hindrance on the incumbent to leave the Respondent’s employ if he so desires,
before the expiry of the 12 month period. If the need for uninterrupted job
continuity was of such grave importance I have no doubt that some
impediment would have been placed upon the incumbent from being free to
sell his labour wherever he pleases. That there was no impediment gives
credence to the belief that the discrimination based on the condition of
uninterrupted job continuity was nothing other than discrimination which was
unfair and based on an arbitrary ground.
29 Respondents argument however goes further it states that not only must the
discrimination be seen against the background of the facts presented but also
whether or not the Respondent’s need for uninterrupted job continuity can be
justified on a commercial rationale.
30 According to Respondent its decision was commercially justifiable as an
employer’s entitlement to discriminate if there is an economic rationale falls
within the purview of the not all exhaustive definition of item 2(1)(a) of
schedule 7 to the Act as long as it is not, as held by Seady A J in the Dingler
matter “reprehensible in terms of society’s prevailing norms”. This argument
can be easily dispensed with. If profitability is to dictate whether or not
discrimination is unfair it would negate the very essence for the need of a Bill
of Rights.
31 We live in a Constitutional State with an entrenched Bill of Rights and as
such there is a duty upon this Court to give effect to the rights enshrined in the
Bill of Rights and as Seady A J correctly pointed out in Dingler that item 2 (1)
(a) must be evaluated against the background of the South African
Constitution.
32 Seen against this background the fairness or unfairness of the discrimination
cannot be measured against the profitability or for that matter efficiency of a
business enterprise.
33 Respondent further argued that the requirement of uninterrupted job continuity
was not an arbitrary ground on which the Respondent unfairly discriminated
against the Applicant because it was the inherent requirement for the position
to which Applicant applied.
34 This argument of Respondent was based on item 2(2)(c) of Schedule 7 to the
Act which provides
“(2) For the purposes of sub item (1)(a)
(a) ...
(b) ...
(c) any discrimination based on an inherent requirement of the particular job
does not constitute an unfair discrimination. ”
35 This sub item qualifies item 2(1)(a) in that discrimination which can be
justified on the basis that it is an indispensable requirement for a particular job
then such discrimination cannot be held to be unfair.
36 This provision of the Act only excuses discrimination based on “an inherent
requirement of the particular job”. This implies that the job itself must have
some indispensable attribute. This indispensable attribute however must relate
in an inescapable way to the performing of the job required. Getting a job
done within a prescribed period could well be an inherent job requirement, but
to succeed on this ground a party relying thereon must satisfy the Court that
time was of the essence. In this matter no evidence to this effect was led.
While the Respondent did satisfy me that it needed to address its various
problems as a matter of urgency this is not sufficient. Period of time can only
be an inherent requirement of the job if there is some contract that needed to
be performed within a prescribed period. The fact that time was not of the
essence in this matter is further evidenced by the fact that Respondent was
quite prepared to continue its search for a H. R. Generalist had it not found the
present incumbent suitable for the post during the period when Applicant
amongst others were being interviewed.
37 What is more crucial when one speaks of the inherent job requirement is that
the requirement must be so inherent that if not met an applicant would simply
not qualify for the post. That this was not so in this case was clearly
established. Mr Inskip, the only witness for the Respondent conceded that had
the Respondent not secured any other applicant for the post, he would have
employed the Applicant. This he later qualified to mean that he would not
have employed the Applicant permanently to the post but that he would have
considered other ways to secure her services. In fact the Respondent did offer
the Applicant employment not on a permanent basis but on a fixed term
contract until such time as the Applicant would have, had she obtained
permanent employment with Respondent, gone on maternity leave.
38 What is interesting was that Applicant was offered the fixed term contract
before the Respondent had finally decided upon employing Mr Young in the
post for which Applicant was solicited by the Respondent.
39 In any event the concept of inherent job requirement implies that the
indispensable attribute must be job related. To suggest that the requirement as
in this case, of uninterrupted job continuity is an inherent job requirement is to
distort the very concept. If the job can be performed without the requirement,
as it can in this case, than it cannot be said that the requirement is inherent and
therefore protected under item 2(2)(c) of Schedule 7 to the Act.
40 In the circumstances and for the reasons stated above I am satisfied that the
Applicant was unfairly discriminated against by the Respondent as provided
by item 2(1)(a) of Schedule 7 to the Act.
COMPENSATION
41 Inskip for the Respondent conceded that had Applicant been appointed to the
post she would have earned about R 300 000.00 per annum. Applicant in fact
seeks compensation in that amount. Respondent argued that item 4 of
Schedule 7 empowers this court to grant compensation but that the
compensation that the Court may grant is not in any way related to the
compensation the Court is obliged to grant under s 194 of the Act which relate
to unfair dismissal. For guidance as to what amount of compensation this
Court should order the Respondent to pay I must, so Respondent argues, rely
on judgments which dealt with s 46(9) of the old Labour Relations Act as the
wording of item 4 of the present Act follow closely the wording of the said s
46(9).
42 The Labour Appeal Court sitting in terms of the old Act in the matter of
Ferodo (Pty) Ltd v De ruter (1993) ILJ held, in computing the amount of
compensation that must be ordered in favour of an employee who was a victim
of unfair labour practice, that:
“(a) there must be evidence before the Court of actual financial loss suffered by
the person claiming compensation;
(b) there must be proof that the loss was caused by the unfair labour practice;
(c) the loss must be foreseeable, ie not too remote or speculative;
(d) the award must endeavour to place the applicant in monetary terms in the
position which he would have been had the unfair labour practice not been
committed;
(e) in making the award the court must be guided by what is reasonable and
fair in the circumstances. It should not be calculated to punish the party;
(f) there is a duty on the employee (if he is seeking compensation) to mitigate
his damages by taking all reasonable steps to acquire alternative employment;
(g) any benefit which the applicant receives eg by way of a severance package
must be taken into account.”
43 Allied to the above decision in the matter Robecor v Dwandt (1995) 16 ILJ
1519, the Labour Appeal Court also sitting in terms of the old Labour
Relations Act added that regard should also be had to the period within which
an applicant for compensation secured alternative employment.
44 The fact that item 4 may mirror s 46(9) of the old Act does not mean that I am
bound to the principles as laid down by the Labour Appeal Court sitting in
terms of the old Act. The present Labour Act ushered in a new labour
dispensation and when interpreting this Act although reliance can be placed on
the judgment of the Labour Appeal Court as well as the decisions of the
Industrial Court I am not bound by or obliged to follow those decisions . I am
even less inclined to follow any principles laid down by the Labour Appeal
Court with regard to compensation awards decided on the basis of the old Act
particularly in matters such as the present where in terms of the old Act the
Applicant would not have had any remedy whatsoever.
45 Item 4 of Schedule 7 to the Act empowers this court to order compensation in
disputes about unfair labour practices. There is no limit prescribed to the
amount of compensation I may order nor is there any basis set out in the Act
upon which I may calculate an appropriate compensation. It is therefore left to
this Court to decide what principles it would apply in determining the
compensation. The only condition being is that the Court must be satisfied
that the compensation ordered is fair and reasonable.
46
47 With regard to the principle applicable I see no reason why I should not follow
the ratio of Johnson and Johnson (Pty) Ltd v Chemical Workers Industrial
Union (1999) 20 ILJ 89 (LAC). Although this matter dealt with s 194 of the
Act which dealt with unfair dismissal the principle that compensation should
not be based on patrimonial or actual loss is I believe also applicable in
matters relating to unfair labour practice as provided for in Schedule 7 to the
Act.
48 I have considered Respondent’s argument that the decision in Johnson and
Johnson related specifically to the wording of s 194 of the Act and since a
similar section does not exist as an item in Schedule 7 it should not be relied
upon. Although this argument is not without merit I am not satisfied that I am
obliged to consider patrimonial or actual loss in determining the amount of
compensation I may order. Notwithstanding that Schedule 7 does not have
provisions similar to s 194 of the Act I see no reason why an employee who is
a victim of an unfair labour practice must have her compensation calculated on
actual loss suffered whilst a victim of an unfair dismissal not. The difference
that would apply to an unfair dismissal as opposed to an unfair labour practice
is the amount of compensation. In matters of unfair dismissal once the Court
or the arbitration has decided that compensation should be granted it is obliged
to grant at least the full amount as provided for by s 194(1) whereas in an
unfair labour practice the Court or the arbitrator must grant such amount as it
considers to be fair and reasonable.
49
50 In determining what is a fair and reasonable amount of compensation, this
court must take into account whether if at all the employee secured alternative
employment or whether or not the employee was offered an alternative
employment as well as whether or not the employee has secured any other
income from the time that the unfair labour practice was perpetrated upon her
to the time that the matter was finally heard in Court. This must not be taken
into account for purposes of calculating any financial loss but to determine
what amount would be reasonable to order in the employee’s favour.
Consideration should also be given to the actions of the employer as well as
the nature of the unfair labour practice.
51 In the present matter I am satisfied that the Applicant did secure income in the
amount of little over R 60 000.00 since the date on which she was advised that
she was not successful for the position to which she was invited to apply. I
have also taken into account that there has been no desire on the part of the
Applicant to seek employment in earnest also the fact that the Applicant was
offered a fixed term contract by the Respondent.
52 Furthermore for purposes of calculating compensation I am entitled to have
regard to the evidence of the Respondent. Respondent’s evidence that it
honestly held the belief that uninterrupted job continuity was a pre requisite
for the position to which Applicant had been solicited to apply I find
unsatisfactory. Had it been a pre requisite I believe the Respondent would
have so stated in its advertisements which were handed in as exhibits. In
addition and as stated earlier, the fact that Respondent did not seek to include
some penalty upon an incumbent for failing to fulfill the requirement of
uninterrupted job continuity for a period of at least 12 months reinforces my
view that Respondent did not honestly believe that uninterrupted job
continuity was a pre requisite for the position in question.
53 More importantly Inskip for the Respondent, in his evidence admitted that he
did not inform the Applicant, when being advised on 17 December 1997 that
she was pregnant and would require to go on maternity leave within 5 months
of commencing her employment, that pregnancy was a bar against being
successful to the position. His evidence that he did not think this was
necessary because they were also discussing other possibilities I find
unacceptable because even if they were discussing other possibilities he should
have, had the requirement of uninterrupted job continuity been a pre
requisite, informed the Applicant that she did not qualify for the permanent
post. His evidence in this respect is even more suspect when one considers
that the interview with the Applicant on that day ended with Inskip informing
the Applicant that he still had other candidates to interview. Why, if Applicant
was not a contender to the permanent position and possibilities other than a
permanent position for the Applicant were being considered was there a need
to inform the Applicant that they still have other candidates to be considered
for the permanent post.
54 For reasons stated above I believe that a fair and reasonable amount of
compensation would be for Respondent to pay to the Applicant an amount
equal to two thirds of what the Applicant would have earned over a 12 month
period had she not been discriminated against and offered the position to
which she was invited to apply.
55 In the result I find that the Respondent committed an unfair labour practice as
contemplated by item 2(1)(a) of Schedule 7 to the Act and is accordingly
ordered to pay the Applicant compensation in the amount of R 200 000.00
(two hundred thousand rands) plus the costs of this application.
B WAGLAY
Acting Judge of the Labour Court.
SIGNED AND DATED THIS 28th DAY OF May 1999.
DATE OF HEARING: 27 April 1999.
DATE OF JUDGMENT: 28 May 1999.
For the Applicant: H. C. Nieuwoudt of Jan S. De Villiers and son.
For the Respondent: Adv. A. E. Franklin instructed by Perrott, Van
Niekerk and Woodhouse Inc.