This month, we look at two recent judgments by the Labour Court, each concerned in some way with the right to equality at work. The first case is one in which the Department of Labour applied to the Labour Court to have a fine imposed on an employer that was in breach of its obligations under the Employment Equity Act. The case is important first because it indicates that the Department is willing to take offenders to Court to enforce the Act, and secondly, because the judgment spells out some of the factors that the Court will take into account when imposing fines. The second judgment deals with an employer's obligations when a complaint of harassment is lodged, and the potential liability that can be incurred when adequate steps to address the complainant are not taken.
Enforcing Equity The Employment Equity Act bears its teeth
In Director General of the Department of Labour v Jingua Garments (Pty) Ltd (unreported 5 December 2006), acting Judge Sangoni noted that the EEA was key to implementing affirmative action measures. The company had 280 employees in its employ, and had failed to comply with its statutory obligations as a designated employer. A labour inspector had issued a compliance order after the company breached undertakings to comply with its obligations under the Act. The compliance order was also ignored.
The company admitted that it had not taken reasonable steps to consult with its employees as required, that it had not conduct the required analysis of employment policies, that it had not prepared nor implemented an employment equity plan, within the required period, and that it had failed to submit successive plans.
The court had to consider an apparent contradiction in the Act. Section 37 stipulates the maximum fines that the court could impose for failing to comply with a compliance order. In the schedule to the Act, there is a reference to fines for the contraventions of specific sections of the Act. The issue therefore was whether the Act contemplated that the maximum fine of R500 000 could be imposed in respect of each section that was contravened, or whether the maximum related to the contravention of the compliance order, irrespective of the number of breaches of particular section to which it referred. Fortunately for the company, the Court adopted the latter interpretation.
The Court noted that relevant factors for the purposes of determining an appropriate fine include the nature of the contravention, the period for which the contravention endures, the reason for not complying with the Act, attempts to comply, and the maximum fine prescribed. In this case, the management of the company was Chinese, with a lack of expertise regarding local legal requirements, it had engaged the services of an employer federation that was equally ignorant of the applicable requirements. While the company was no longer trading, it had engaged the services of another consultant to assist it in future to comply with the Act. The company was fined R200 000, half of which was suspended for 3 years on condition that the company as not found guilty of any contravention of the EEA within that period.
Employer liability for acts of sexual harassment.
There have been a number of cases recently, in the Labour Court, the High Court and the Constitutional Court, that deal with an employer's liability for the acts of its employees. A number of these cases have been brought by victims of sexual harassment, where they have sued their employers (rather than the perpetrator of the harassment), claiming that the employers had not done enough either to prevent the harassment or to address its consequences. Section 60 of the Employment Equity Act assists employees to the extent that it provides that in certain circumstances, an employer is deemed to have contravened the Act if it fails to take necessary steps after being informed that an employee, while at work, contravened the Act. The application of this provision was considered in Piliso v Old Mutual Life Assurance and others (unreported, 5 December 2006), the Labour Court considered a claim by an employee of harassment after she had discovered crude notes on a photograph of herself, left at her workstation. She complained that the company did not respond adequately to her raising the matter with management.
In so far as the claim rested on the provisions of section 60, the Labour Court held that the complainant had never alleged that while at work, an employee of the company had contravened the Act. For that reason, section 60 did not apply. However, that was not the end of the case. The complainant had been sufficiently prudent to claim delictual damages, because, she alleged, her employer had failed to provide a safe working environment as it was obliged, at common law, to do.
There was no disagreement that what had occurred was an act of sexual harassment. The issue was whether another employee of the company had committed the act of harassment, because, at common law, an employer is vicariously liable only for the acts of its employees, not other parties. On the facts, the Court found that the complainant had not proved that the perpetrator was an employee, or that the perpetrator was acting within the course and scope of employment. For that reason, the common law claim for damages failed.
The Court then turned to the third claim, one for 'constitutional damages'. Here, it was argued that the Constitution, in the form of a right to fair labour practices, afforded a remedy where the EEA and the common law did not. The focus of the argument was that the company had not done enough to promote equality in the workplace, as it had failed to eliminate unfair discrimination in its workplace. Further, the company was accused of failing to ensure that the working environment was safe, and of failing properly to investigate the incident.
After a review of the evidence, the Court concluded that the company's conduct in failing to do enough to address the complaint of sexual harassment had violated the applicant's constitutional right to fair labour practices. Fair labour practices require an employer to take all reasonable steps, as soon as possible, to eliminate or reduce any possibility of a reoccurrence of an act of harassment. Prompt action and investigation to identify any perpetrator of harassment is necessary. Fair labour practices also require the victim of harassment to be supported and assisted with counselling and consultation. The company's response to the incident was found to have fallen short of this standard. For this reason, the company was ordered to pay the complainant R45 000 as 'constitutional damages'.
Employer Liability for acts of Sexual Harassment
"This statute [the Employment Equity Act] is designed to ensure the
promotion of equal opportunity and fair treatment in employment. It is key
to the implementation of affirmative action measures by maintaining and
enforcing the designated employers to comply with their respective statutory
obligations intended for the implemementation of employment equity." Sangoni AJ in
The Director -General of the Department of Labour v Jinghua Garments (Pty)
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