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REVISED AND REPORTABLE CASE NO. J4333/99
IN THE LABOUR COURT OF SOUTH AFRICA
(HELD AT BRAAMFONTEIN )
20000829
In the matter between:
J MIDDLETON AND 16 OTHERS Applicants
and
INDUSTRIAL CHEMICAL CARRIERS (PTY) LTD Respondent
J U D G M E N T
PILLAY AJ :
1.This is a referral in terms of section 2(1)(a) of Schedule 7 of the Labour
Relations Act 66 of 1995 (“the Labour Relations Act”). The applicants
seek an order, declaring the failure by AECI, the first respondent, to
pay the applicants the same retrenchment packages and gratuities that
were paid to the socalled payroll employees to be unfair discrimination
and directing that the applicants be paid the same retrenchment packages
and gratuities as the payroll employees.
2.The facts were as follows: The applicants were formally employed by
Industrial Chemical Carriers, ICC, the second respondent, a subsidiary
of AECI. AECI and ICC entered into a Sale of Asset Agreement with
Tanker Services (Pty) Ltd, in terms of which all the assets of ICC were
sold to
Tanker Services. The effective date of the sale was 31 December 1998.
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3.The terms of the Sale of Assets Agreement material to this dispute were the
following and can be found at paragraph 9 of the agreement:
"9.1 Tanker Services undertakes to AECI that it will, within seven days of
the signature date, make offers of employment to the people named in
Annexure “D” hereto on the same or better terms and conditions on which
they were employed by AECI on the signature date.
9.2 Tanker Services undertakes to AECI that it will within seven days of the
signature date make offers of employment to the people listed in
Annexure “E” hereto on terms and conditions determined by Tanker
Services in its sole and absolute discretion.
9.3 AECI undertakes to find alternative employment or retrench at AECI's
cost any person listed in Annexure “E” who rejects Tanker Services'
offer or any other person for whom no position exists at Tanker
Services."
Annexure “D” to the Sale of Assets Agreement represented the list
of the employees who had substantively equivalent conditions of service,
and who were mainly the socalled salaried staff, and Annexure “E”
represented those who had substantively different conditions of service
at Tanker Services. The latter were mainly the payroll employees.
4.Pursuant to the agreement the applicants, amongst other salaried staff,
were employed by Tanker Services from 1 January 1999. The payroll
employees were retrenched and paid the retrenchment packages in
accordance with AECI's retrenchment guide lines. Some of the payroll
employees approached the South African Chemical Workers' Union, SACWU,
and the Mine Workers' Union, MWU, for assistance in challenging the
fairness of their retrenchment. After negotiations these disputes were
fairness of their retrenchment. After negotiations these disputes were
resolved on the basis that AECI would pay the union members who were
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payroll employees, a gratuity being the equivalent of two extra months'
salary.
5.In May 1999, five months after being employed by Tanker Services, the
applicants referred this dispute for conciliation. The applicants
contended that they were discriminated against on arbitrary grounds by
not being retrenched and paid a package and gratuity.
6.It was further contended on their behalf that because the terms and
conditions were not the same or better at Tanker Services than at AECI,
they were disadvantaged, more so as there was no consultation with them
prior to their employment at Tanker Services.
7.It is common cause that AECI and ICC had differentiated between the payroll
employees and the salaried staff. The issue to be decided is whether
the differentiation was unfair discrimination. This approach has been
followed in previous decisions of this court and the Constitutional
Court. (Leonard Dingler Employees' Representative Council v Leonard
Dingler (Pty) Ltd 1998 19 ILJ 285 (LC); Brink v Kitshoff 1996 (4) SA 197
(CC); Prinsloo v Van der Linde 1997 (3) SA 1012 (CC); President of the
Republic of South Africa v Hugo 1997 (4) SA 1 (CC); Harksen v Lane N.O.
and Others 1998 (1) SA 300 (CC); LarbiOrdam and others v Members of the
Executive Council for Education and Another (North West Province) 1998
(1) SA 745 (CC); City Council of Pretoria v Walker 1998 (2) SA 363 (CC);
National Coalition for Gay and Lesbian Equility v Minister of Justice
1999 (1) SA 6 (CC) and Jooste v Score Supermarket Trading (Pty) Ltd 1999
(2) SA 1 (CC)).
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8.Discrimination may be on a ground specified or unspecified in Item 2(1)(a)
of Schedule 7. If it is on a specified ground then the unfairness is
automatically presumed. If the differentiation is on an unspecified
ground then the complainant must prove that the differentiation amounts
to discrimination, which is unfair (Harksen v Lane NO and Others .)
9.Not every differentiation would amount to discrimination. The law
anticipates that individuals and groups may be regulated differently
without it being unfair (Prinsloo v Van der Linde and Another) The kind
of discrimination on an unspecified ground that is prohibited is one
that has
"the potential to impair the fundamental dignity of persons as human
beings, or to affect them in a comparably serious manner" (Harksen v
Lane NO.)
This is clearly not a case where the impairment of the fundamental
dignity of the applicants was in issue. Whether the differentiation
affected the applicants in a comparably serious manner will now be
considered.
10.Prior to determination of their employment becoming an issue, payroll
employees were treated differently from the salaried staff. Their terms
and conditions of employment which were determined through collective
bargaining were different from those of the salaried staff. For
instance, they qualified for overtime pay whereas the salaried staff did
not. The nature of their duties and the level of responsibility also
differed. In all the circumstances there was a preexisting valid basis
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for the differentiation between the payroll employees and the salaried
staff.
11.The Sale of Assets Agreement entitled Tanker Services to approach the
payroll employees direct with offers of employment. There is no
evidence that AECI knew which of the payroll employees were offered
employment and whether any of them had refused the offer. All the
payroll employees were paid the retrenchment benefit irrespective of
whether they were employed at Tanker Services.
12.It was contended on behalf of the applicants that the payment of the
retrenchment benefit to those payroll employees who had refused
employment with Tanker Services and not to offer a similar option to the
applicants was discriminatory.
13.The decision to treat the payroll employees differently from the salaried
staff on termination of employment was therefore neither arbitrary nor
unfair (South African Society of Bank Officials v Standard Bank of South
Africa Limited 1998 2 SA 1 SCA; Mans v Mondicraf Ltd 2000 21 ILJ 213
(LC)).
14.As it transpired, treatment of the applicants on termination of their
employment was qualitatively superior than the treatment of the payroll
employees. Despite their complaint of being discriminated against, the
applicants did not seek to be treated the same as the payroll employees
in every respect. They were selective about the way in which they
wanted their treatment to be equal to that of the payroll employees.
This is not surprising, considering that the payroll employees' terms
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and conditions of employment at Tanker Services were overall inferior to
those of the applicants. The payroll employees suffered an average of
between 50% and 60% reduction in their rates of remuneration. Their
leave entitlement fell from 20 to 15 days per annum. There was no
guarantee of employment and their security of tenure was not carried
forward to Tanker Services.
15.Implicit in the notion of unfair discrimination is the requirement of
disadvantage and prejudice ( Prinsloo v Van der Linde and Another 1997 3
SA 1012; see also Chaskalson et al The Constitutional Law of South
Africa at pages 1413 and 1440). Whether an individual or group has
been disadvantaged or prejudiced will depend on, amongst other things,
the effect of the discrimination on the interests of those concerned
(President of the Republic of South Africa v Hugo above; LarbiOrdam and
others v Members of the Executive Council for Education and Another
above).
16.In this case the payroll employees were in a weaker and less advantaged
position than the salaried staff who were more privileged. The salaried
staff were therefore not a “vulnerable group” and were not disadvantaged
or prejudiced in relation to the payroll employees ( LarbiOrdam and
Others v Members of the Executive Council for Education and Another
above).
17. Based on the Aristotelian adage that likes must be treated alike
(Catherine Albertyn and Janet Kentridge Introducing the right to
Equality in the Interim Constitution SAJHR 149), a complaint of unfair
discrimination on any of the unspecified grounds should establish why
the treatment should be the same. The applicants accepted the practice
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of distinguishing between payroll and salaried employees. It is
therefore inappropriate to compare terms and conditions of employment of
payroll and salaried employees without establishing a rationale as to
why they should have been treated the same.
18.The conduct of the respondent has been entirely consistent with the tenor
of section 189 of the Labour Relations Act, namely to preserve and
promote job security and employment over dismissal and unemployment.
Furthermore, the respondent complied with section 41 of the Basic
Conditions of Employment Act No. 75 Of 1997 (“Basic Conditions of
Employment Act”) by providing similar alternative employment for the
applicants. Consequently, if the applicants had refused the employment
with Tanker Services, such refusal would have been unreasonable. This
was confirmed in the arbitration Patricia Tenant v ICC .
19.The respondent did not force the applicants to accept employment with
Tanker Services, but merely reminded them of the possible consequences
of their failure to do so.
20.With regard to the payroll employees who had no guarantee of employment
with Tanker Services, AECI was obliged to pay severance pay in terms of
section 41 of the Basic Conditions of Employment Act. Therefore the
payment of severance pay to the payroll employees and not to the
salaried staff was in compliance with the statutory obligation. It was
therefore not unfair.
21.It is also convenient for the applicants to now demand payment of the
retrenchment package and gratuity when there is no risk to their
employment at Tanker Services. If they had the courage of their
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convictions to enforce their claim at that stage for the retrenchment
package and the gratuity, they ran the risk of losing both the package
and the alternative employment, as was established in the arbitration
between Patricia Tenant v ICC .
22.Finally, it was contended for the applicants that as the transaction with
Tanker Services was the sale of assets and not the transfer of a
business as a going concern in terms of section 197 of the Labour
Relations Act, there was no need to consult with any of the employees.
By consulting with the payroll employees and not the salaried staff the
respondents had discriminated unfairly against the latter, so it was
submitted.
23.Apart from not being specifically pleaded the argument is quite
misconstrued and counterproductive to the applicants' cause. The need
to consult, apart from it being good industrial relations practice,
stems from section 189. The sale of the assets brought about the need
to dismiss for operational reasons. Section 197 does not apply to this
arbitration. Furthermore, AECI and ICC denied that there was no
consultation with the applicants.
24.The applicants' case is not based on one of the specified grounds of
discrimination. The onus therefore rests on the applicants to prove, not
only discrimination but also that it was unfair. The applicants allege
that the discrimination was arbitrary. They have failed to prove that
the treatment was indeed arbitrary or unfair.
As a result the applicants have not discharged the onus.
The matter is accordingly dismissed with costs.
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___________
Pillay J
APPEARANCES IN CASE J4333/99
Trial : 2930 August 2000
Judgment : 1 September 2000
Before her Honourable Judge : Pillay AJ
For the Applicants : Mr D Short
For the Respondents : Adv WattPringle
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