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Minister of Finance and Other v F J van Heerden (CCT 63/03) [2004] ZACC 3 (29 July 2004)
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CONSTITUTIONAL COURT OF SOUTH AFRICA
Case CCT 63/03
MINISTER OF FINANCE First Applicant
THE POLITICAL OFFICE BEARERS
PENSION FUND Second Applicant
versus
FREDERIK JACOBUS VAN
HEERDEN Respondent
Heard on : 24 February 2004
Decided on : 29
July 2004
JUDGMENT
MOSENEKE J:
Introduction
| [1] | This case raises important
constitutional issues of equality, restitutionary measures and unfair
discrimination. These issues arise
within the context of a challenge to the
constitutionality of certain rules of the Political Office-Bearers Pension Fund
(the Fund)
that provided for differentiated employer contributions in respect of
members of Parliament and other political office-bearers between
1994 and
1999. |
| [2] | The constitutional attack is
mounted on two grounds. The first is that the relevant rules of the Fund offend
the equality provisions
of the Constitution because they are unfairly
discriminatory. The second ground is that, in any event, the Fund as a whole is
a
nullity because it was not validly established under section 190A of the
interim Constitution[1] or section 219
of the Constitution.[2] The equality
challenge is contested on the basis that the differentiation in the rules of the
Fund is not unfairly discriminatory
because it constitutes a “tightly
circumscribed affirmative action measure” permissible under the equality
provisions
of our Constitution. |
| [3] | The claimant is Mr Frederik
Jacobus van Heerden (respondent). He served as a National Party member of the
old Parliament from 1987
to 1994. With the advent of the new democratic
Parliament in 1994, he was returned to office for the same political party as
member
of the National Assembly until April 1999. Like many parliamentarians
whose term straddled the old and new Parliaments, he is a
member of the Fund and
of the Closed Pension Fund (CPF).[3]
He purports to act also on behalf of 145 other similarly placed members of the
Fund. Thring J, sitting in the Cape High Court (High
Court), upheld the claim
and declared the provisions of rule 4.2.1 of the Fund to be unconstitutional and
invalid in Van Heerden v The Speaker of Parliament and Others (the High
Court judgment).[4] The Minister of
Finance, the first applicant, and the Fund, the second applicant, are aggrieved
by this decision and seek leave
of this Court to appeal against
it. |
Factual background
| [4] | From 1983 to 1994, the
pension benefits of members of the tricameral Parliament and of other political
office-bearers were regulated
by
statute.[5] In 1993, at the Kempton
Park constitutional negotiations,[6]
the ruling party of the time raised concern regarding the security of existing
pensions of political office-bearers. There had been
speculation by
parliamentarians and other political office-bearers of the time that the new
political regime may not continue to
pay their pension benefits. The
negotiating parties agreed that a pension fund exclusive to members of the old
Parliament and other
political office-bearers of the time would be established
and fully funded to pay defined benefits to its members, whether they were
re-elected or not as members of the first democratic Parliament of
1994. |
| [5] | Pursuant to this agreement,
legislation established the CPF.[7]
It came into operation on 5 January 1994. As its name intimates, the CPF had
several exclusionary features. Only members of Parliament
and political
office-bearers who held office before 1994 could become its
members.[8] No new members could be
admitted. It follows that persons who were elected to Parliament for the first
time in the 1994 general
elections were excluded. A further significant feature
is that members of the old Parliament who on the 26 April 1994 had not served
for a period of seven and a half years were entitled only to a
gratuity.[9] |
| [6] | Yet another distinguishing
feature of the CPF is its financing provisions. The pension liability of the
CPF to its beneficiaries
was to be fully financed by public funds and not based
on employer or employee
contributions.[10] As a result,
after January 1994, its members were not required to make any contributions to
the CPF irrespective of whether they
were returned to office or not in the 1994
general elections. |
| [7] | Another relevant sequel to
the negotiations at Kempton Park was the establishment of a Special Pension Fund
to provide for people
who had undergone sacrifices in order to bring about the
new democratic
order.[11] |
| [8] | As the new democratic
Parliament of April 1994 convened, it and its members had no pension
arrangements. A new pension fund for the
new Parliament had to be brought into
being. This was in fact a constitutional obligation under section 190A of the
interim Constitution.[12] Clearly,
this constitutional obligation could not be achieved at the outset. The setting
up of a new pension fund was a venture
that would take time. As an interim
measure, all concerned agreed that from 27 April 1994, the National Assembly and
each of its
members would contribute 12,5% and 7,5% of a member’s
pensionable annual income respectively towards the pension fund to be
formed.[13] Pending the creation of
the envisaged pension fund, employer and member contributions were paid to the
Public Investment Commission,
subject to the accrued aggregate capital and
interest thereon being refundable to the pension fund to be
formed. |
| [9] | For reasons not immediately
apparent, four years elapsed before Parliament turned its attention to its own
new pension scheme. In
June 1998, Parliament supported recommendations on the
formation of the new pension fund, with four political parties in Parliament
dissenting.[14] On 3 August 1998 a
parliamentary committee[15] tabled
before the National Assembly a further report on the nature, benefits and
management of the new pension
fund.[16] The report included a
proposal that pension contributions by employers for the period 27 April 1994 to
30 April 1999 should be paid
retrospectively on a differentiated basis to new
and continuing political office-bearers. On 13 August 1998, the report was
debated
and adopted by the National Assembly with only one party
dissenting.[17] Towards the end of
1998, only a few months before the end of the first term of the new Parliament,
the Fund was established but
took effect retrospectively from 27 April 1994.
The rules of the new fund were finalised and registered in terms of section 4(4)
of the Pension Funds Act.[18]
Predictably, the main object of the Fund was to provide for retirement, death
and other benefits for serving and retired
parliamentarians.[19] |
The
rules of the Fund
| [10] | The rules of the Fund
create three categories of members. Rule 2 spells out the
categories: |
“‘Category A Member’ shall mean a Member who has been notified
to the Trustees by the Employer as a Member who
has not reached age 49 years and
who is not a member of the Closed Pension Fund.
‘Category B Member’ shall mean a Member who has been notified to the
Trustees by the Employer as a Member who has reached
age 49 years and who is not
a member of the Closed Pension Fund.
‘Category C Member’ shall mean a Member who is a member of the
Closed Pension Fund.”
The rules require that each
member must make a contribution to the Fund towards retirement benefits at a
monthly and uniform rate
of one-twelfth of 7,5% of his or her annual pensionable
salary. However, the contributions payable by the various
employers[20] within the Fund are
calculated according to a differentiated scale. Rule 4.2.1 prescribes the
variance in this manner:
“The Employer shall make contributions towards the retirement benefit of
each Member in its Service at the rate
of:
| (a) | in the case
of a Category A Member, one twelfth of 17 per cent of his Pensionable
Salary; |
| (b) | in the case of a Category B
Member |
(i) for the period of 27 April 1994 to 30
April 1999, one twelfth of 20 per cent of his Pensionable Salary;
. . . .
| (c) | in the case of a Category C
Member |
(i) for the period of 27 April 1994 to 30
April 1999, one twelfth of 10 per cent of his Pensionable
Salary”.
From 1 May 1999, the differentiation between the three
categories fell away, and the contribution of employers became standardised
for
all members at a rate of one-twelfth of 17 percent of their annual pensionable
salaries.
| [11] | The nub of the
respondent’s unfair discrimination complaint is that over the designated
five years the differentiated employer
contributions scheme improperly
disfavours him and other category C members who are in receipt of pensions from
the CPF, in comparison
with new parliamentarians who are either below or above
49 years of age and do not receive pension benefits from the
CPF. |
The High Court
| [12] | The High Court found that
the challenged provisions are not mere “differentiation” but rather
“discriminatory in
nature” because for five years lower employer
contributions were paid for the less favoured class of members of the Fund to
which they all belonged and contributed equally, with the result that the less
favoured class of members will receive substantially
smaller pensions than will
members of the favoured classes. It also found the differentiation to be
“prima facie unfair”
because first, it is arbitrary as no reason is
advanced for it and secondly, it is based on intersecting grounds of race and
political
affiliation — the latter a matter of conscience and belief
— all being prohibited grounds listed in section 9(3) of the
Constitution.[21] |
| [13] | The High Court reasoned
that a person who relies on section 9(2) to justify discriminatory measures
bears the “onus” of
establishing on a balance of probabilities that
the measures have been taken to promote the achievement of equality and that
“generally
speaking it cannot be an easy onus to discharge”. The
discrimination, it held, has to be “convincingly justified”
to
discharge the presumption of unfairness under section
9(5). |
| [14] | The High Court found that
the Minister and the Fund had failed to discharge the “onus” that
the impugned measures are
justified under section 9(2) because the measures
relied upon do not bear a rational connection to the end they purport to
achieve.
It held that there is no “causal nexus” between means and
ends because it has not been shown that in order to benefit
members of the
favoured categories less must be given to the disfavoured
category. |
| [15] | The High Court took the
view that even if the measures were assumed to be directed at promoting the
achievement of equality they were
unlikely to do so because on “various
calculations . . . the alleged inequality between categories A and B, on the one
hand
and category C, on the other,
subsisted.”[22] It also held
that even accepting that the disfavoured members (category C) are now better off
than the other categories (A and B)
that would not cure the defect in the
ameliorative measures. It concluded that the measures were not only
“haphazard, random
and overhasty” but also “arbitrary”.
The High Court held the differentiated employer contributions to be
unconstitutional
and declared them invalid. However, no order was made
regulating the consequences of the declaration of invalidity on the Fund and
its
members. |
| [16] | The High Court dismissed
the assertion by the Minister and the Fund that certain interested parties to
the proceedings had not been
joined and condoned the delay on the part of the
claimant in instituting the claim. Since the claimant had succeeded on other
grounds,
the High Court found it unnecessary to decide the merits of the claim
that the Fund had been improperly established in breach of
the President’s
constitutional obligations under section 190A of the interim
Constitution. |
Equality submissions
| [17] | Before us, the gravamen of
the applicants’ complaint is that the High Court misconceived the true
nature of the equality protection
recognised by our Constitution, by resorting
to a formal rather than a substantive notion of equality. They argued that the
purpose
of the differentiated scheme of employer benefits was to advance
equality by identifying three separate indicators of need for increased
pension
benefits over a finite period. In that way the scheme rationally pursues a
legitimate governmental purpose of distributing
pensions on an equitable
basis. |
| [18] | The applicants urged us to
have regard to the actual impact of the differentiated employer contribution
scheme. Its effect on the
respondent and members of his class is that they
remain considerably privileged and better off in respect of their pension
benefits
than members of the favoured categories A and B. Moreover, it was
submitted, the scheme is neither unfair nor invasive of the dignity
of anyone.
The complaint of the respondent and his class is not one that says the scheme
invades their dignity but rather one propelled
by financial benefit out of
public funds and a desire to maintain historical
privilege. |
| [19] | In this Court, the argument
advanced by the respondent had three components. He argued that ameliorative
measures under section 9(2)
of the Constitution, if based on any of the
anti-discrimination grounds listed in section 9(3), constitute, in his words,
“positive
discrimination” and must be presumed unfair. The party
implementing the measures must show them to be fair. The differentiation
here,
he argues, is informed by race because the scheme has a disproportionate impact
on 143 white, coloured and Indian members of
Parliament as against two black
members.[23] He urged us to take
the view that the applicants have failed to rebut the resultant presumption of
unfairness of the discriminatory
measures. |
| [20] | A further contention of the
respondent is that the scheme is unfair because the state does not allege that
in order to benefit the
favoured group it was essential that the disfavoured
group should receive lower employee benefits. In his view, limited resources
do
not necessitate the scheme, as the state cannot credibly claim that it cannot
afford to pay pension contributions for all members
at the same level. After
all from 1999 it did. In emphasising the point that the state is not out of
pocket, the respondent draws
attention to an announcement by the Minister on 12
November 2003, a date after the judgment of the High Court, that the national
treasury plans to put aside as a budget item R400 million for additional service
benefits for members of Parliament and of provincial
legislatures. |
| [21] | The respondent concedes the
correctness of the comparative actuarial calculations, presented by the Minister
and the Fund, which indicate
that members of Parliament who are also members of
the CPF are better off than those who are not despite the increased employer
contribution.
It is contended, however, that this is not so in all cases. The
respondent points to 15 category C members who are saddled with
membership of
the CPF without the benefit of generous
pensions.[24] He regards these
cases as jammergevalle.[25]
He argues that in testing the constitutional invalidity of the challenged
scheme, an objective approach would require that the position
of all members
affected by the challenged measure should be considered. As a result, he
submitted, the adverse impact of the scheme
on the jammergevalle is
sufficient to render the employer contributions scheme as a whole unfairly
discriminatory. |
Equality and unfair
discrimination
| [22] | The achievement of equality
goes to the bedrock of our constitutional
architecture.[26] The Constitution
commands us to strive for a society built on the democratic values of human
dignity, the achievement of equality,
the advancement of human rights and
freedom.[27] Thus the achievement
of equality is not only a guaranteed and justiciable right in our Bill of Rights
but also a core and foundational
value; a standard which must inform all law and
against which all law must be tested for constitutional
consonance.[28] |
| [23] | For good reason, the
achievement of equality preoccupies our constitutional thinking. When our
Constitution took root a decade ago
our society was deeply divided, vastly
unequal and uncaring of human worth. Many of these stark social and economic
disparities
will persist for long to come. In effect the commitment of the
Preamble is to restore and protect the equal worth of everyone; to
heal the
divisions of the past and to establish a caring and socially just society. In
explicit terms, the Constitution commits
our society to “improve the
quality of life of all citizens and free the potential of each
person”.[29] |
| [24] | Our supreme law says more
about equality than do comparable constitutions. Like other constitutions, it
confers the right to equal
protection and benefit of the law and the right to
non-discrimination. But it also imposes a positive duty on all organs of state
to protect and promote the achievement of
equality[30] — a duty which
binds the judiciary
too.[31] |
| [25] | Of course, democratic
values and fundamental human rights espoused by our Constitution are
foundational. But just as crucial is the
commitment to strive for a society
based on social justice.[32] In
this way, our Constitution heralds not only equal protection of the law and
non-discrimination but also the start of a credible
and abiding process of
reparation for past exclusion, dispossession, and indignity within the
discipline of our constitutional
framework. |
| [26] | The jurisprudence of this Court
makes plain that the proper reach of the equality right must be determined by
reference to our history
and the underlying values of the
Constitution.[33] As we have seen a
major constitutional object is the creation of a non-racial and non-sexist
egalitarian society underpinned by
human dignity, the rule of law, a democratic
ethos and human rights.[34] From
there emerges a conception of equality that goes beyond mere formal equality and
mere non-discrimination which requires identical
treatment, whatever the
starting point or impact.[35] Of
this Ngcobo J, concurring with a unanimous Court, in Bato Star Fishing
(Pty) Ltd v The Minister of Environmental Affairs and Tourism and
Others[36] observed
that: |
“In this fundamental way, our Constitution differs from other
constitutions which assume that all are equal and in so doing
simply entrench
existing inequalities. Our Constitution recognises that decades of systematic
racial discrimination entrenched by
the apartheid legal order cannot be
eliminated without positive action being taken to achieve that result. We are
required to do
more than that. The effects of discrimination may continue
indefinitely unless there is a commitment to end
it.”[37]
| [27] | This substantive notion of
equality recognises that besides uneven race, class and gender attributes of our
society, there are other
levels and forms of social differentiation and
systematic under-privilege, which still persist. The Constitution enjoins us to
dismantle
them and to prevent the creation of new patterns of
disadvantage.[38] It is therefore
incumbent on courts to scrutinise in each equality claim the situation of the
complainants in society; their history
and vulnerability; the history, nature
and purpose of the discriminatory practice and whether it ameliorates or adds to
group disadvantage
in real life
context,[39] in order to determine
its fairness or otherwise in the light of the values of our Constitution. In
the assessment of fairness or
otherwise a flexible but
“situation-sensitive”[40]
approach is indispensable because of shifting patterns of hurtful discrimination
and stereotypical response in our evolving democratic
society. The unfair
discrimination enquiry requires several stages. These are set out by this Court
in Harksen v Lane NO and
Others.[41] |
Restitutionary
measures
| [28] | A comprehensive
understanding of the Constitution’s conception of equality requires a
harmonious reading of the provisions of
section 9. Section 9(1) proclaims that
everyone is equal before the law and has the right to equal protection and
benefit of the
law. On the other hand, section 9(3) proscribes unfair
discrimination by the state against anyone on any ground including those
specified. Section 9(5) renders discrimination on one or more of the listed
grounds unfair unless its fairness is established.
However, section 9(2)
provides for the achievement of full and equal enjoyment of all rights and
freedoms and authorises legislative
and other measures designed to protect or
advance persons or categories of persons disadvantaged by unfair discrimination.
Restitutionary
measures, sometimes referred to as “affirmative
action”, may be taken to promote the achievement of equality. The
measures
must be “designed” to protect or advance persons
disadvantaged by unfair discrimination in order to advance the achievement
of
equality. |
| [29] | Section 9(1) provides:
“Everyone is equal before the law and has the right to equal protection
and benefit of the law.”
Of course, the phrase “equal protection of
the laws” also appears in the 14th Amendment of the US
Constitution. The American jurisprudence has, generally speaking, rendered a
particularly limited and formal
account of the reach of the equal protection
right.[42] The US
anti-discrimination approach regards affirmative action measures as a suspect
category which must pass strict judicial scrutiny.
The test requires that it be
demonstrated that differentiation on the grounds of race is a necessary means to
the promotion of a
compelling or overriding state interest. A rational
relationship between the differentiation and a state interest would be
inadequate.[43] Our equality
jurisprudence differs substantively from the US approach to equality. Our
respective histories, social context and
constitutional design differ markedly.
Even so, the terminology of “affirmative action” has found its way
into general
use and into a number of our statutes directed at prohibiting
unfair discrimination and promoting equality, such as the Employment
Equity Act
55 of 1998 and the Promotion of Equality and the Prevention of Unfair
Discrimination Act 4 of 2000. But in our context,
this terminology may create
more conceptual and other difficulties than it resolves. We must therefore
exercise great caution not
to import, through this route, inapt foreign equality
jurisprudence which may inflict on our nascent equality jurisprudence American
notions of “suspect categories of state action” and of “strict
scrutiny”. The Afrikaans equivalent “regstellende
aksie” is
perhaps juridically more consonant with the remedial or restitutionary component
of our equality jurisprudence. |
| [30] | Thus, our constitutional
understanding of equality includes what Ackermann J in National Coalition for
Gay and Lesbian Equality and Another v Minister of Justice and
Another[44] calls
“remedial or restitutionary
equality”.[45] Such measures
are not in themselves a deviation from, or invasive of, the right to equality
guaranteed by the Constitution. They
are not “reverse
discrimination” or “positive
discrimination”[46] as argued
by the claimant in this case. They are integral to the reach of our equality
protection. In other words, the provisions
of section 9(1) and section 9(2) are
complementary; both contribute to the constitutional goal of achieving equality
to ensure “full
and equal enjoyment of all
rights”.[47] A disjunctive or
oppositional reading of the two subsections would frustrate the foundational
equality objective of the Constitution
and its broader social justice
imperatives. |
| [31] | Equality before the law
protection in section 9(1) and measures to promote equality in section 9(2) are
both necessary and mutually
reinforcing but may sometimes serve distinguishable
purposes, which I need not discuss now. However, what is clear is that our
Constitution
and in particular section 9 thereof, read as a whole, embraces for
good reason a substantive conception of equality inclusive of
measures to
redress existing inequality. Absent a positive commitment progressively to
eradicate socially constructed barriers to
equality and to root out systematic
or institutionalised under-privilege, the constitutional promise of equality
before the law and
its equal protection and benefit must, in the context of our
country, ring hollow. |
| [32] | The High Court favoured the
approach that in effect, the measures under attack were not mere differentiation
but discriminatory and
that they must be convincingly justified because they are
premised on grounds listed in section 9(3) and therefore attract an onus
“that cannot be easy to discharge”. In Public Servants
Association of South Africa and Others v Minister of Justice and
Others,[48] Swart J, in dealing
with the “affirmative action” claim of the government in that case,
adopted an equivalent route in
the interpretation and application of section
8(3)(a) of the interim Constitution. I am unable to agree with that approach.
Legislative
and other measures that properly fall within the requirements of
section 9(2) are not presumptively unfair. Remedial measures are
not a
derogation from, but a substantive and composite part of, the equality
protection envisaged by the provisions of section 9
and of the Constitution as a
whole. Their primary object is to promote the achievement of equality. To that
end, differentiation
aimed at protecting or advancing persons disadvantaged by
unfair discrimination is warranted provided the measures are shown to conform
to
the internal test set by section 9(2). |
Onus
of proof and section 9(2)
| [33] | It seems to me plain that
if restitutionary measures, even based on any of the grounds of discrimination
listed in section 9(3), pass
muster under section 9(2), they cannot be presumed
to be unfairly discriminatory.[49]
To hold otherwise would mean that the scheme of section 9 is internally
inconsistent or that the provisions of section 9(2) are
a mere interpretative
aid or even surplusage.[50] I
cannot accept that our Constitution at once authorises measures aimed at redress
of past inequality and disadvantage but also
labels them as presumptively
unfair. Such an approach, at the outset, tags section 9(2) measures as a
suspect category that may
be permissible only if shown not to discriminate
unfairly. Secondly, such presumptive unfairness would unduly require the
judiciary
to second guess the legislature and the executive concerning the
appropriate measures to overcome the effect of unfair
discrimination. |
| [34] | Following the reasoning in
Public Servants
Association,[51] the High Court
made much of the presumption of unfairness against the differentiated pension
scheme and the burdensome onus it attracts.
I have concluded that legislative
and other measures, which properly fall within the provision of section 9(2), do
not attract any
such burden. |
| [35] | It follows that the High
Court is clearly mistaken in approaching this matter on the limited basis that
it need not decide whether
and the extent to which members of Parliament who
were members of the CPF were better off than those who were
not,[52] since the applicants had
omitted to make certain averments, which the court regarded as essential to
discharge the section 9(5) onus. |
Requirements
of section 9(2)
| [36] | The pivotal enquiry in this
matter is not whether the Minister and the Fund discharged the presumption of
unfairness under section
9(5), but whether the measure in issue passes muster
under section 9(2). If a measure properly falls within the ambit of section
9(2) it does not constitute unfair discrimination. However, if the measure does
not fall within section 9(2), and it constitutes
discrimination on a prohibited
ground, it will be necessary to resort to the Harksen test in order to
ascertain whether the measures offend the anti-discrimination prohibition in
section 9(3). |
| [37] | When a measure is
challenged as violating the equality provision, its defender may meet the claim
by showing that the measure is contemplated
by section 9(2) in that it promotes
the achievement of equality and is designed to protect and advance persons
disadvantaged by unfair
discrimination. It seems to me that to determine
whether a measure falls within section 9(2) the enquiry is threefold. The first
yardstick relates to whether the measure targets persons or categories of
persons who have been disadvantaged by unfair discrimination;
the second is
whether the measure is designed to protect or advance such persons or categories
of persons; and the third requirement
is whether the measure promotes the
achievement of equality. |
| [38] | The first question is
whether the programme of redress is designed to protect and advance a
disadvantaged class. The measures of
redress chosen must favour a group or
category designated in section 9(2). The beneficiaries must be shown to be
disadvantaged by
unfair discrimination. In the present matter, the Minister and
the Fund submitted that the differentiated contribution scheme was
set up to
promote the attainment of equality between members of the CPF and new members
who were in the past excluded on account
of race and or political affiliation.
This objective they would advance by identifying three separate indicators of
need for increased
pensions for new parliamentarians. On the facts, however, it
is clear that not all new parliamentarians of 1994 belong to the class
of
persons prejudiced by past disadvantage and unfair exclusion. An overwhelming
majority of the new members of Parliament were
excluded from parliamentary
participation by past apartheid laws on account of race, political affiliation
or belief.
[53] |
| [39] | The starting point of
equality analysis is almost always a comparison between affected classes.
However, often it is difficult, impractical
or undesirable to devise a
legislative scheme with “pure” differentiation demarcating precisely
the affected classes.
Within each class, favoured or otherwise, there may
indeed be exceptional or “hard cases” or windfall beneficiaries.
That however is not sufficient to undermine the legal efficacy of the scheme.
The distinction must be measured against the majority
and not the exceptional
and difficult minority of people to which it applies. In this regard I am in
respectful agreement, with
the following observation of Gonthier J, in
Thibaudeau v Canada:
[54] |
“The fact that it may create a disadvantage in certain exceptional cases
while benefiting a legitimate group as a whole does
not justify the conclusion
that it is
prejudicial.”[55]
| [40] | In the context of a section
9(2) measure, the legal efficacy of the remedial scheme should be judged by
whether an overwhelming majority
of members of the favoured class are persons
designated as disadvantaged by unfair exclusion. It is clear that the existence
of
exceptional cases or of the tiny minority of members of Parliament who were
not unfairly discriminated against under the apartheid
regime, but who benefited
from the differential pension contribution scheme, does not affect the validity
of the remedial measures
concerned. |
| [41] | The second question is
whether the measure is “designed to protect or advance” those
disadvantaged by unfair discrimination.
In essence, the remedial measures are
directed at an envisaged future outcome. The future is hard to predict.
However, they must
be reasonably capable of attaining the desired outcome. If
the remedial measures are arbitrary, capricious or display naked preference
they
could hardly be said to be designed to achieve the constitutionally authorised
end.[56] Moreover, if it is clear
that they are not reasonably likely to achieve the end of advancing or
benefiting the interests of those
who have been disadvantaged by unfair
discrimination, they would not constitute measures contemplated by section
9(2). |
| [42] | In Public Servants
Association,[57] Swart J, in
interpreting section 8(3)(a) of the interim Constitution, held
that: |
“The measures must be designed to achieve something. This denotes
. . . a causal connection between the designed measures and the
objectives.”[58]
In
the present matter Thring J followed this approach and held that no such causal
nexus is present because the sponsor of the differentiated
employer contribution
scheme does not say that less had to be paid for the disfavoured category in
order to give more to the favoured
group. I cannot support this approach.
Section 9(2) of the Constitution does not postulate a standard of necessity
between the
legislative choice and the governmental objective. The text
requires only that the means should be designed to protect or advance.
It is
sufficient if the measure carries a reasonable likelihood of meeting the end.
To require a sponsor of a remedial measure
to establish a precise prediction of
a future outcome is to set a standard not required by section 9(2). Such a test
would render
the remedial measure stillborn, and defeat the objective of section
9(2).
| [43] | It is untenable to require,
as Thring J did, that a sponsor of remedial measures must show a necessity to
disfavour one class in order
to uplift another. The provisions of section 9(2)
do not prescribe such a necessity test because remedial measures must be
constructed
to protect or advance a disadvantaged group. They are not
predicated on a necessity or purpose to prejudice or penalise others,
and so
require supporters of the measure to establish that there is no less onerous way
in which the remedial objective may be achieved.
The prejudice that may arise
is incidental to but certainly not the target of remedial legislative choice.
On the facts of this
case, the members of the disfavoured class, barring a
few, are beneficiaries of a generous publicly funded pension scheme which
pre-dates the differential measure. The favoured categories
are, in the main,
not. The disfavoured category was and, as the High Court observed, remains
better situated than its new parliamentary
counterparts as far as state-funded
pension benefits go. |
| [44] | The third and last
requirement is that the measure “promotes the achievement of
equality”. Determining whether a measure
will in the long run promote the
achievement of equality requires an appreciation of the effect of the measure in
the context of
our broader society. It must be accepted that the achievement of
this goal may often come at a price for those who were previously
advantaged.
Action needs to be taken to advance the position of those who have suffered
unfair discrimination in the past. As Ngcobo
J observed in Bato
Star: |
“The measures that bring about transformation will inevitably affect some
members of the society adversely, particularly those
coming from the previously
advantaged
communities.”[59]
However, it is also clear that the long-term goal of our society
is a non-racial, non-sexist society in which each person will be
recognised and
treated as a human being of equal worth and dignity. Central to this vision is
the recognition that ours is a diverse
society, comprised of people of different
races, different language groups, different religions and both sexes. This
diversity,
and our equality as citizens within it, is something our Constitution
celebrates and protects. In assessing therefore whether a
measure will in the
long-term promote equality, we must bear in mind this constitutional vision. In
particular, a measure should
not constitute an abuse of power or impose such
substantial and undue harm on those excluded from its benefits that our
long-term
constitutional goal would be threatened.
Discussion
| [45] | At the threshold, the
challenged pension contribution scheme differentiates among its members. The
differentiation is based on several
indicators. However, the discontent of the
respondent is confined to the distinction made between state pension
contributions in
respect of pre- and post-1994 parliamentarians. In my view, we
are obliged to look at the scheme as a whole. We must bear in mind
its history
of transition from the old to the new 1994 Parliament; the duration, nature and
purpose of the scheme; the position of
the complainant and the impact of the
disfavour on the respondent and his class. |
| [46] | The scheme has a finite
lifespan of five years. It is a transitional, limited and temporary tool to
allocate public resources. Its
effect is retrospective. Nothing significant
turns on that. The scheme was set up late in the life of the first democratic
Parliament.
Properly so, the pension benefits of all concerned were best
protected by a retrospective date of commencement. Otherwise all members
would
have found themselves without pension benefits, although they had served
Parliament for nearly four and a half years since
April
1994. |
| [47] | The scheme creates several
classes of members in regard to employer pension contributions. The first class
(category A) focuses on
parliamentarians younger than 49 years of age, who are
not members of the CPF. They receive employer contributions of 17% of their
annual pensionable salary. Their colleagues older than 49 years (category B)
who are not members of the CPF get a higher contribution
of 20%. The third
class (category C) receives pension benefits from the CPF and is allocated
employer contributions of 10%. Lastly,
the class of those over 49 years
(category B) who left office in 1999 continue to receive a 5% employer
contribution for five years
after they left office. Those of the same class who
remained in office receive no comparable
benefit. |
| [48] | It is clear to me that the
differentiated scale of employer contributions was one decided and applied to
ameliorate past disadvantage
related to the pension benefits need of new
political office-bearers, premised on three indicators. First, members who did
not have
access to the generous benefits of the CPF, as a class, had a greater
need for pension benefits than the class of members who were
already in receipt
of these benefits. The inequality of pensions between the overwhelming majority
of new parliamentarians and the
vast majority old parliamentarians arises from
past unjustified legislative and other exclusions of the former. That, in a
large
measure, explains the line drawn between new and old parliamentarians.
Although the class of the new parliamentarians of 1994 is
drawn predominantly
from disadvantaged backgrounds, it is racially and gender diverse and drawn from
different political parties. |
| [49] | Within the class of new
parliamentarians a sharper indicator of need is utilised. Members over the age
of 49 years (category B) being,
as a class, closer to retirement, had a greater
need for increased pension benefits than members under that age (category A).
The
older class was accordingly given 20% employer contributions while the
younger class received 17% contributions. |
| [50] | Thirdly, within the class
of category B, members who left office in 1999, as a class, had a greater need
for increased pension benefits
than those who remained in office because the
latter would continue to accumulate benefits under the Fund. The class that
left office
in 1999 accordingly continued to receive a 5% employer contribution
for five years after they left office. The class that remained
in office
received no comparable benefit because the latter would continue to accumulate
benefits under the Fund. |
| [51] | Within each class of
members of the Fund, individual variations are to be expected. Conceivably some
new members of Parliament who
do not receive pensions from the CPF may have
accumulated pension benefits before joining Parliament. Conversely, some old
parliamentarians
may not receive pensions as generous as most members of the
CPF. Comparable individual variations may be found amongst younger members
who
leave office early or older members who are elected to office several times. In
my view, none of these possible exceptions to
the three membership categories
diminishes the efficacy of the indicators as general guides to the payment of
the relative increased
pension benefits. |
| [52] | I am satisfied that the
evidence demonstrates a clear connection between the membership differentiation
the scheme makes and the relative
need of each class for increased pension
benefits. The scheme was designed to distribute pension benefits on an
equitable basis
with the purpose of diminishing the inequality between
privileged and disadvantaged parliamentarians. In that sense the scheme
promotes
the achievement of equality. It reflects a clear and rational
consideration of the need of the members of the Fund and serves the
purpose of
advancing persons disadvantaged by unfair
discrimination. |
| [53] | The high watermark of the
respondent’s complaint is that the impact of this differentiation on him
and others in his position
is that he will earn from the Fund less pension than
otherwise. That is so.[60] The
argument the respondent did not advance is that, as a class, new
parliamentarians who are members of the Fund earn an average
annual pension
higher than that earned by him and his class of parliamentarians who are also
members of the CPF. He cannot credibly
advance that assertion. The actuarial
evidence tendered by the Minister and the
Fund[61] demonstrates that the
applicant and his class remain a privileged class of public pension
beneficiaries notwithstanding the challenged
remedial measures. Their pensions
are indeed generous and several times more generous than they would, on their
pensionable annual
salaries, have been entitled to under comparable public
sector pension funds. Moreover, they are considerably more generous than
pensions payable out of the Special Pension Fund to people who had undergone
sacrifices in order to bring about the new democratic
order.[62] |
| [54] | The respondent does not
claim that he and his class of parliamentarians are in any sense vulnerable or
marginalized or that in the
past they were unfairly excluded or discriminated
against. Nor do I think that he and his class were. He does not complain that
the scheme is invasive of his dignity or of any of the members of the CPF.
There is no evidence to suggest any indignity. His claim
appears to be
propelled by a desire to earn more in circumstances where his pensions benefit
is well ahead of that of his newer colleagues
in parliament, despite the
remedial measures
challenged. |
Jammergevalle
| [55] | Jammergevalle is an
appellation that both counsel used to describe the class of some 15
members[63] of the Fund who were
also members of the CPF, but did not receive the generous payments that accrued
to the overwhelming majority
of parliamentarians who are members of the CPF.
Their terminal benefits were calculated in accordance with a formula under
section
11 of the Members of Parliament and Political Office-Bearers Pension
Scheme Act.[64] Ordinary members of
the old Parliament who had rendered less than seven and a half years service at
April 1994 were entitled to
no more than a gratuity. Other office-bearers with
less than five years of service at April 1994 also fall into the category. It
is thus clear that within category C not all members receive generous benefits
from the CPF. Their relatively limited terms of office
before the advent of the
new Parliament earned them only a lump gratuity payment in the CPF.
Nonetheless, under the differentiated
scheme of the Fund, they fall within the
disfavoured category C membership. |
| [56] | The question is whether the
adverse impact of the employer contribution scheme on jammergevalle is
such as to render it unfairly discriminatory. One must, however, keep in
mind that they are a notional sub-class comprising approximately 10% of
the total class of 146 category C members of the Fund, even on their
argument.
In many respects they do not, in terms of state funded pension benefits, share
the financial attributes of 90% of the
respondent and class he seeks to
represent. Put differently, jammergevalle are unrepresentative of the
class complaining of unfair discrimination and are therefore not an appropriate
comparator. The comparison
to be made must be with the overwhelming majority of
the class asserting the equality claim. I am satisfied that the circumstances
of this sub-class of category C members do not invalidate the legal efficacy of
the scheme of the Fund. |
Conclusion
| [57] | I have come to the
conclusion that it is in the interests of justice to grant this application for
leave to appeal from the decision
of the High Court. The order of the High
Court declaring rule 4.2.1 of the Fund unconstitutional and invalid cannot be
supported.
The appeal has merit and must be
upheld. |
Section 190A of the interim
Constitution
| [58] | In his fourth set of
affidavits before the High Court, the respondent raised a new cause of action
that the Fund as a whole is invalid
as it was not properly established under
section 190A or its employer contributions are not set at a rate determined by
the President. |
| [59] | The High Court declined to
decide this cause of action because it had disposed of the matter on the basis
of unfair discrimination.
In its further judgment on the application for leave
to appeal and for a certificate in terms of the old Rule 18 of this
Court,[65] the High Court took the
view that the section 190A contention did not form part of its reasons for
judgment and thus cannot be the
subject of any appeal. I respectfully agree
that “an argument in support of an appeal on this ground would be
virtually impossible
to formulate in logic.” However, in this Court the
respondent persisted in this argument. |
| [60] | The crux of the
respondent’s contention is that the Fund has no legal effect because it
was not established in terms of section
190A or, if it was, the levels of
employer contributions to the Fund were set by cabinet resolution and not by the
President as required
by section 190A(5). In response, the Minister and the
Fund disavowed any reliance on section 190A for the establishment of the Fund.
They argue that mere reference to section 190A in the affidavit of one of their
deponents[66] does not convey that
the Fund was created under that constitutional
provision. |
| [61] | It appears to me plain that
the Fund could not be established under the provisions of section 190A. The
Fund came into force on 23
September
1998.[67] Section 190A was repealed
on 4 February 1997, the day the final Constitution took
effect.[68] Accordingly, the
question whether the level of employer contributions of the impugned rules of
the Fund was set by the cabinet rather
than the President in accordance with the
requirements of section 190A(5) does not arise. The legal power to set up a
pension fund
could not possibly arise from a repealed and therefore lifeless
constitutional provision, irrespective of the mistaken views or preferences
of
those concerned. The impugned pension scheme could not be set up pursuant to
the repealed provisions of section 190A of the interim
Constitution. |
Section 219 of the Constitution
and section 8 of the Remuneration Act
| [62] | Before us the respondent
advanced a new reason why the Fund as a whole should be invalidated. He argues
that levels of challenged
employer contributions were determined by the cabinet
and not in compliance with section
219[69] of the Constitution and
section 8[70] of the Remuneration of
Public Office-Bearers Act (the Remuneration
Act).[71] |
| [63] | It
is so that the Constitution does not contain a direct equivalent of section
190A. Unlike section 190A of the interim Constitution,
section 219 of the
Constitution enjoins Parliament to create a legislative framework for
determining salaries, allowances and benefits
of members of the National
Assembly and other persons holding public office. Such legislation is the
Remuneration Act. Section
8(2) of the Remuneration Act requires the Minister of
Finance to determine the amount of the contributions to be made to the pension
fund by the national government, after taking into consideration the
recommendations of the Independent Commission for the Remuneration
of Public
Office-Bearers (Remuneration Commission), established in terms of the
Independent Commission for the Remuneration of Public
Office-Bearers Act
(Commission Act),[72] which
legislation came into operation on 29 June
1998. |
| [64] | The respondent raised the
contention on section 219 for the first time before us on appeal. None of the
facts relevant to the issue
are traversed in the affidavits lodged in the High
Court. Neither the Minister nor the Fund had a proper opportunity to deal with
the matter in written argument or during the hearing before us. The matter is
not an issue in the appeal. There is no application
for direct access. The
matter is not properly before us and must be dismissed without deciding its
merits. |
Unreasonable delay and
non-joinder
| [65] | The applicants urged us to
uphold the appeal on the ground that the High Court ought to have disallowed the
respondent’s claim
because there was unreasonable delay in bringing it
before court. They also raised issues of non-joinder, contending that
provincial
legislatures and the President should have been joined as parties.
In the light of the decision I have come to on the merits of
the case, it is
unnecessary to decide these
issues. |
Costs
| [66] | The applicants sought an
order for costs against the respondent. The respondent has raised issues of
broad public concern and constitutional
importance. In circumstances such as
these, this Court seldom makes a cost
order.[73] I am, therefore, not
minded to grant an adverse cost order against the
respondent. |
Order
The following order
is made:
| (a) | The application for leave to
appeal against the judgment and order of the High Court made on 12 June 2003 is
granted. |
| (b) | The appeal is
upheld. |
| (c) | The order of the High Court of 12
June 2003 declaring the provisions of rule 4.2.1 of the Political Office-Bearers
Pension Fund to
be unconstitutional and invalid including its order as to costs
is set aside. |
| (d) | No order as to costs of the
present application is made. |
Chaskalson CJ,
Langa DCJ, Madala J, O’Regan J, Sachs J, Van der Westhuizen J and Yacoob J
concur in the judgment of Moseneke
J.
MOKGORO
J:
Introduction
| [67] | I have read the judgment
prepared by my colleague Moseneke J. I agree with the order that he proposes as
well as his findings in
relation to section 190A of the interim Constitution and
section 219 of the Constitution. I also agree with his conclusion that
the
impugned measure does not violate section 9 of the
Constitution,[73]
|
but am unable to agree with the route taken to
arrive at this conclusion. Whereas Moseneke J concludes that section 9(2) of
the Constitution
applies to this case, I am of the view that the facts of this
case are to be decided in terms of section 9(3) of the Constitution.
| [68] | The facts of this case have
been clearly set out in the main
judgment.[2] The High Court upheld
the claim of Mr Van Heerden (the respondent) that the differentiation between
the amounts of contributions
of members of the Political Office-Bearers Fund
(POBF) amounted to unfair discrimination on the basis of race and political
affiliation.
As the main judgment makes clear, the High Court held that the
state bears an onus to show that the impugned measures fall under
section 9(2)
of the Constitution. The High Court held that the applicant (the Minister) had
failed to discharge this onus. One
of the main reasons for this finding was
that the Minister had failed to show that it was necessary to require that the
various employers
identified under the Fund’s rules contribute less to the
pensions of category C members in order for category A and B members
to receive
greater contributions. In other words, the High Court held that there was no
causal connection between the benefit to
the new members of Parliament and the
disadvantage to the old members. Moseneke J has dealt sufficiently with the
issue that the
High Court’s approach to section 9(2) and the nature of the
burden to be discharged were incorrect. I agree with the analysis
and
conclusions of Moseneke J in this
regard. |
Arguments in this Court
| [69] | The Minister argues that
the High Court adopted an approach to the interpretation of section 9 which is
based on the notion of formal
equality. In contradistinction to the notion of
formal equality it was argued that the Constitution embraces substantive
equality
which permits remedial measures to be enacted to address past unfair
discrimination. According to the Minister, the differentiation
that occurs
under the rules of the POBF constitutes a positive measure to create equity
amongst parliamentarians in respect of the
pensions that they will ultimately
draw. This measure, it was argued, is of the type envisaged by section 9(2) of
the Constitution
because it aims to advance persons previously disadvantaged by
unfair discrimination and in so doing promotes the achievement of
equality. |
| [70] | Before this Court, the
respondent persists with his argument that the measure unfairly discriminates on
the basis of race and political
affiliation. The respondent argues that any
measure, which is restitutionary in nature but discriminates against persons on
one
of the listed grounds, attracts the presumption of unfairness in terms of
section 9(5). The state must show the measures to be fair
in order successfully
to resist his equality challenge. The respondent further argues that the state
has failed to show that it
cannot afford to pay all parliamentarians equally
and, as such, has failed to show the necessity of discriminating in the way that
the POBF does. As a consequence, so the argument goes, the measure is unfair
and unconstitutional. |
Equality and unfair
discrimination
| [71] | The role of the right to
equality in our new dispensation cannot be overstated. Apartheid was not merely
a system that entrenched
political power and socio-economic privilege in the
hands of a minority nor did it only deprive the majority of the right to self
actualisation and to control their own destinies. It targeted them for
oppression and suppression. Not only did apartheid degrade
its victims, it also
systematically dehumanised them, striking at the core of their human dignity.
The disparate impact of the system
is today still deeply
entrenched. |
| [72] | It was with this in mind
that the interim Constitution recognised in its preamble the need to create a
society “in which there
is equality between men and women and people of
all races so that all citizens shall be able to enjoy and exercise their
fundamental
rights and freedoms”. The Constitution now makes clear the
fundamental importance of equality in our constitutional framework
by
establishing that one of the fundamental values upon which our society is
founded is the “achievement of
equality”.[3] As this Court
held in Prinsloo v Van der Linde and Another:
|
“Our country has diverse communities with different historical experiences
and living conditions. Until recently, very many
areas of public and private
life were invaded by systematic legal separateness coupled with legally enforced
advantage and disadvantage.
The impact of structured and vast inequality is
still with us despite the arrival of the new constitutional order. It is the
majority,
and not the minority, which has suffered from this legal separateness
and
disadvantage.”[4]
| [73] | It is no mistake that our
Constitution uses the phrase “achievement of equality”. The
tremendous indignity and political
oppression that characterised the years of
apartheid was coupled with the systemic entrenchment of economic disadvantage
for millions
of South Africans. The vast majority of this country’s
wealth remained then and remains still, as a consequence of the entrenched
disadvantage, in the hands of a minority. Sprawling and over-crowded informal
townships inhabited by poor and jobless people without
property to call their
own and without many of the basic amenities necessary for a dignified human
existence sit beside most affluent
neighbourhoods with people who have access to
the best schools, the best jobs and the best opportunities. The use of the
phrase
“achievement of equality” therefore recognises that the
creation of democracy and equal treatment before the law are
not enough to
foster substantive equality. Unless the disparity that currently exists is
consciously and systematically obliterated,
it can easily be overlooked and will
as a result continue to define our society for a long time to
come. |
| [74] | In Brink v Kitshoff
NO[5] this Court remarked
that |
“[a]s in other national constitutions, section 8 is the product of our own
particular history. Perhaps more than any of the
other provisions in chap 3,
its interpretation must be based on the specific language of section 8, as well
as our own constitutional
context. Our history is of particular relevance to
the concept of equality. The policy of apartheid, in law and in fact,
systematically
discriminated against black people in all aspects of social life.
Black people were prevented from becoming owners of property or
even residing in
areas classified as ‘white’, which constituted nearly 90% of the
landmass of South Africa; senior jobs
and access to established schools and
universities were denied to them; civic amenities, including transport systems,
public parks,
libraries and many shops were also closed to black people.
Instead, separate and inferior facilities were provided. The deep scars
of this
appalling programme are still visible in our society. It is in the light of
that history and the enduring legacy that it
bequeathed that the equality clause
needs to be
interpreted.”[6]
Although
these remarks refer to section 8 of the interim Constitution they are equally
apposite today.
Restitutionary measures
| [75] | Moseneke J is indeed
correct when he points out that the provisions of section 9 must be understood
against the backdrop of the circumstances
highlighted above and the need to
foster substantive equality. Section 9(2) in particular was enacted with the
idea that true equality
can never be said to exist until the patterns of
disparity which were created in the past have been eradicated. The measures it
envisages therefore form an integral part of our overall conception of equality.
When in 1994 democracy was established in South
Africa the right to equality for
all South Africans was constitutionally protected. However, section 9(2)
acknowledges that our
notion of substantive equality requires measures to be
enacted to make up for that part of the past which cannot simply be corrected
by
removing the legal bars to equality of
treatment. |
| [76] | For this reason, I join
Moseneke J in his criticism of the High Court’s approach to section 9(2).
To require the state to demonstrate
that it is necessary to give less to one
group in order to advance another would be to undermine the scheme of section
9(2). The
reason for the enactment of section 9(2) is to authorise
restitutionary measures for the advancement of those previously disadvantaged
by
unfair discrimination. Whenever a group is given certain advantages it must
follow that it receives more than others in the context
of the particular
measure which is being enacted. But the measure will not necessarily be enacted
with the aim of taking from one
group to give to another. The logical
consequence of the respondent’s submissions is that practically no measure
may be enacted
of a restitutionary nature because each time the state attempts
to do so it will, more often than not, fail to prove the necessity
of giving
more to one person or group than another. The approach of the High Court
presupposes that it will only be permissible
to favour a particular group if
there are insufficient resources to give equally to everyone. The Minister is
correct when he argues
that the approach of the High Court is premised on a
notion of formal equality which is at odds with the vision of substantive
equality
in our Constitution. It would be contrary to the spirit of section
9(2) and inimical to its purpose to require the state to show
that it has
insufficient resources to give advantages equally, every time that it attempts
to enact a restitutionary measure which
advances those previously
disadvantaged. |
| [77] | I further agree with the
judgment of Moseneke J in its approach to the interaction between section 9(2)
and section 9(3). The whole
structure of our equality clause and the important
aim of substantive equality would be undermined by an approach which requires
the state to show that measures which aim at advancing the substantive notion of
equality and fostering a society which no longer
resembles that of the South
Africa of old are fair. It is an invariable consequence of enacting measures
that advance certain groups
that other groups will be disadvantaged in that
regard, albeit that this would not be the intention of such measures. More
often
than not, such disadvantage will be on the basis of one of the listed
grounds in section 9(3). The logical consequence of the approach
advanced by
the respondent is that practically all restitutionary measures would attract a
presumption of unfairness. This cannot
be what section 9(2) envisages. An
interpretation of the Constitution which renders certain provisions redundant
should be avoided. |
| [78] | I wish to make one further
observation about the difference between section 9(2) and section 9(3). Section
9(2) is forward looking
and measures enacted in terms of it ought to be assessed
from the perspective of the goal intended to be advanced. The measures
must
promote the achievement of equality by advancing those previously disadvantaged
in the manner envisaged. This is not to say
that the interests of those not
advanced by the measure must necessarily be disregarded. However, the main
focus in section 9(2)
is on the group advanced and the mechanism used to advance
it. |
| [79] | Our equality jurisprudence
in terms of section 9(3) is, however, different. When assessing a measure under
section 9(3), the focus
is on the group or person discriminated against. Here,
the impact on the complainant and his or her position in society is of utmost
importance. The aim of the challenged measure and whether it advances a
legitimate government purpose will of course be important.
However, the main
focus is on the complainant and the impact of the measure on him or
her. |
| [80] | This distinction is in my
view important. It would frustrate the goal of section 9(2) if measures enacted
in terms of it paid undue
attention to those disadvantaged by the measure when
that disadvantage is merely an invariable result and not the aim of the measure.
The goal of transformation would be impeded if individual complainants who are
aggrieved by restitutionary measures could argue that
the measures unfairly
discriminated against them because of their undue impact on them. As Ngcobo J
said in Bato Star Fishing (Pty) Ltd v Minister of Environmental Affairs and
Others:[7] |
“There are profound difficulties that will be confronted in giving effect
to the constitutional commitment of achieving equality.
We must not
underestimate them. The measures that bring about transformation will
inevitably affect some members of the society
adversely, particularly those
coming from the previously advantaged communities. It may well be that other
considerations may have
to yield in favour of achieving the goal we fashioned
for ourselves in the
Constitution.”[8]
It is for this reason that the equality jurisprudence developed
by this Court in the context of section 9(3) is unsuited to analysis
under
section 9(2). The test as established by cases such as Harksen v Lane NO and
Others[9] and President of
the Republic of South Africa and Another v
Hugo[10] would focus unduly on
the position of the complainant to be appropriate to a section 9(2)
analysis.
| [81] | Because of this distinction
it is important that a measure purportedly enacted under section 9(2) fits
properly within it. If measures
are incorrectly defended under it, insufficient
weight will be given to the position of the complainant. Conversely, if the
equality
jurisprudence under section 9(3) is built into the test for section
9(2), the process of transformation, as envisaged by the Constitution,
will be
unduly hampered. |
The correct approach to
section 9(2)
| [82] | Given my view that section
9(2) measures ought not to be tested against section 9(3), it is clearly
necessary to ascertain what requirements
a section 9(2) measure must meet. I
endorse the three aspects of the review standard identified by Moseneke J in the
main judgment,
namely that “[t]he first yardstick relates to whether the
measure targets persons or categories of persons who have been disadvantaged
by
unfair discrimination; the second is whether the measure is designed to protect
or advance such persons or categories of persons;
and the third requirement is
whether the measure promotes the achievement of
equality.”[11] |
| [83] | I further support the
approach of the main judgment to the question of the purpose of the
measure[12] and also the connection
between the means employed and the end sought to be
achieved.[13] I cannot, however,
support the approach taken by Moseneke J to what he describes as the
“first yardstick” – that
the measure must be aimed at
advancing persons or categories of persons previously disadvantaged by unfair
discrimination. |
| [84] | In a case such as the
present, an applicant will approach the courts and claim that a particular
measure unfairly discriminates against
him or her. If, as a defence, the state
successfully demonstrates that a measure falls within the ambit of section 9(2),
the state
in my view is relieved of the burden to show that the measure is fair,
which it might otherwise have borne. Because a restitutionary
measure which
discriminates at all will almost certainly discriminate on the basis of one of
the listed grounds, if it were not for
section 9(2), a restitutionary measure
would invariably attract a presumption of unfairness. Section 9(2) therefore
relieves the
state of having to show that the discrimination in question is
fair. It is important that this should be so, for the reasons regarding
transformation mentioned above. It would be inimical to the pursuit of
substantive equality if the state was required to show that
each restitutionary
measure that it enacted was fair, as would be required by section
9(3). |
| [85] | Another aspect of section
9(2) is that it allows a person or categories of people to be advanced. This is
important because of the
nature of the unfair discrimination that was
perpetrated by apartheid. The approach of apartheid was to categorise people
and attach
consequences to those categories. No relevance was attached to the
circumstances of individuals. Advantages or disadvantages were
metered out
according to one’s membership of a group. Recognising this, section 9(2)
allows for measures to be enacted which
target whole categories of persons.
Therefore a person or groups of persons are advanced on the basis of membership
of a group.
The importance of this is that it is unnecessary for the state to
show that each individual member of a group that was targeted
by past unfair
discrimination was in fact individually unfairly discriminated against when
enacting a measure under section 9(2).
It is sufficient for a person to be a
member of a group previously targeted by the apartheid state for unfair
discrimination in
order to benefit from a provision enacted in terms of section
9(2). |
| [86] | On this understanding of
section 9(2), it is clear that various consequences attach to the state when
invoking it. The state need
not show that any discrimination caused by the
measure is fair, or that each individual member of the advanced group actually
suffered
past disadvantages as long as an individual was part of a group
targeted. Because section 9(2) relieves the state of these burdens,
it is my
view that care should be taken to ensure that measures enacted under it actually
do fall within the ambit intended by the
section. If the aim of the section is
to advance persons or groups previously disadvantaged by unfair discrimination,
the section
should be used for that purpose alone. To do otherwise would be to
allow the section to be used to enact measures which should not
be tested under
section 9(2) because they benefit persons who do not belong to groups previously
disadvantaged by unfair discrimination. |
| [87] | Section 9(2) is a unique
constitutional provision which has been enacted to respond decisively to the
particular history of inequality
and the impact of that history on our society.
It makes clear that restitutionary measures are part of the scheme for the
realisation
of substantive equality. A measure which is part of the framework
for the advancement of equality cannot ever be said to discriminate
unfairly.
That being the case, once a measure can properly be said to satisfy the internal
test in section 9(2) and fall within
the ambit of the section, the scrutiny that
other measures are subjected to in terms of section 9(3) does not apply. Once
the state
successfully demonstrates that a measure falls within section 9(2),
that measure is constitutionally compliant without any further
justification.
That being the case, section 9(2) must be used only in appropriate cases and
with great circumspection. The vision
of substantive equality and the need for
transformation cannot be underestimated. For that reason section 9(2), as an
instrument
for transformation and the creation of a truly equal society, is
powerful and unapologetic. It would therefore be improper and unfortunate
for
section 9(2) to be used in circumstances for which it was not intended. If used
in circumstances where a measure does not in
fact advance those previously
targeted for disadvantage, the effect will be to render constitutionally
compliant a measure which
has the potential to discriminate unfairly. This
cannot be what section 9(2) envisages. |
| [88] | The
main judgment is compelling in its argument that a measure will fall under
section 9(2) if the “overwhelming majority of
members of the favoured
class are persons designated as disadvantaged by unfair
exclusion”.[14] By this
reasoning, a measure will still fall under section 9(2) even if some of those
who benefit from it were not members of groups
targeted for unfair
discrimination in the past. Moseneke J might be correct when he says that
“the existence of exceptional
cases or of the tiny minority of members of
Parliament who were not unfairly discriminated against under the apartheid
regime, but
who benefited from the differential pension contribution scheme,
does not affect the validity of the remedial measures
concerned.”[15] However, it
is not necessary for me to decide the correctness of this test for determining a
category or group of persons under
section 9(2) because it is my view that this
case does not concern exceptional cases or tiny
minorities. |
| [89] | As already indicated, it is
not necessarily the case, and I leave this question open, that every person in
whose favour a restitutionary
measure has been enacted must be shown to be a
member of a group which has previously been disadvantaged by unfair
discrimination.
However, in the light of my remarks about the importance of
section 9(2) and the burden that it removes from the state, it is my
view that a
measure must be more carefully crafted in relation to the group targeted for
advancement than the present one, to fall
under section
9(2). |
| [90] | In this case, there are two
possible grounds of previous disadvantage which this measure might have been
enacted to redress: race
and political affiliation. The notion of
discrimination on the basis of political affiliation is complex. It might seem
on the
surface as if the majority of Members of Parliament (MPs) who joined for
the first time in 1994 were previously unable to be members,
on the basis of
their political affiliation or belief. However, it is my view that this is not
a conclusion which is supported by
the evidence. Nor, in my view, is it capable
of being supported by such evidence. The majority of parliamentarians who
joined the
legislatures in 1994 were black. Black people were prohibited by law
on account of their race from standing for national election
in South Africa and
were only permitted to do so in the so-called independent homelands. They
therefore did not have any choice
whatsoever about standing for national
elections. |
| [91] | Unlike some of the white
MPs who stood for election for the first time in 1994, who might claim that even
though as whites they were
entitled to vote under the old dispensation their
disgust with the system prevented them from participating, black persons, even
if they had no objection to running for Parliament, by law had no choice. It is
artificial to say, therefore, that such black persons
were previously
disadvantaged on the basis of political affiliation. If black people had not
been prohibited from voting or standing
for national office prior to 1994, it
might be that some of those MPs elected for the first time in 1994 might have
run for office
previously, as some did in the homelands. Even if this is
unlikely it is impossible to speculate about decisions people might have
taken
when in reality they had no choice. The prohibition on standing for office
based on race was so integral to the system of
apartheid that it is hard to
speculate what might have been, had black people been allowed to vote at
national level. |
| [92] | The political affiliation
argument is based on the premise that a person was excluded on the basis of his
or her belief. It was introduced
in this case to explain why white people could
justifiably benefit from the restitutionary measure in the POBF. The idea is
that
the white beneficiaries, who ran for office for former liberation movements
in 1994, could not participate in Parliament prior to
1994 not because of a
legal bar but because of an ideological distaste for the system. Unlike their
black counterparts, they were
not discriminated against under the law. Their
non-participation in the parliamentary process arose from a choice that they
made
– a choice which must be acknowledged for its significance in the
fight for democracy and the very equality envisaged by section
9(2). The
significance of this choice should not be underemphasised. Be that as it may,
since it has not been ascertained or shown
whether this is the case for the vast
majority of MPs elected for the first time in 1994, it is my view that the POBF
cannot be seen
as a restitutionary measure aimed at redressing previous
discrimination on the basis of political
affiliation. |
| [93] | I turn to the question of
race as a basis for advancement. On the evidence before this Court, it seems
that there were 251 members
elected to the National Legislature for the first
time in 1994. There were therefore 251 people who benefited from the higher
pension
rate provided for in the POBF. Of these, 53 were white. This means
that 79 per cent of the beneficiaries of the higher rate were
black. However,
within this group were also black people who were not excluded from membership
of Parliament during apartheid.
Because of the system’s approach to race
classification, they were permitted to be part of the tri-cameral Parliament.
Therefore,
although it seems that 79 per cent of the new members were previously
excluded on the basis of their race, the figure may be significantly
less. In
my view, and I limit my remarks to the facts of this case, the evidence does not
show that the advanced group are in the
overwhelming majority designated in
terms of race. It has also not been shown that this is the case in terms of
political affiliation.
In my view, unless a measure is shown to stand the
internal test in section 9(2), it does not qualify as a section 9(2)
measure. |
The scheme of the equality
clause
| [94] | In the present matter, the
respondent approached the High Court claiming that the differentiation in terms
of the POBF unfairly discriminated
against him on the basis of race and
political affiliation. In response, the Minister did not contend that the
measure constitutes
fair discrimination or mere differentiation. Rather, the
Minister raised section 9(2) as a defence and argued that the measure was
restitutionary in nature. This raises the question whether the Minister must
stand or fall by his submissions. It also raises the
question whether the fact
that the Minister relied on section 9(2) precludes a court from finding that the
measure, although not
restitutionary in the terms of section 9(2), is
nevertheless fair having subjected it to equality analysis in terms of section
9(3). |
| [95] | The main judgment has made
it clear that section 9(2) is part of a unified view of the right to equality in
section 9. I support
that view. A measure enacted in terms of section 9(2) is
not an exception to our notion of equality; it is an integral part of it.
From
this must follow that section 9 must be viewed as a whole and any matter which
engages the issue of equality engages the whole
section. This is not to say
that all five subsections will always be relevant to every enquiry. Certain
forms of discrimination
might be so irrational that they do not even survive
challenge in any of the terms of section 9. Other forms might attract a
presumption
of unfairness which can be rebutted. A measure might fall squarely
under section 9(2) in which case it will not attract a presumption
of unfairness
and will not need to be tested in terms of section 9(3). What is important is
to avoid a notion of equality which
divides section 9 into artificial
parts. |
| [96] | In the present matter, the
Minister has relied on facts in support of his contention that the measure falls
under section 9(2). These
facts in my view also support a finding that the
discrimination in this case is fair. As I have found above, the measure does
not
meet the requirements of section 9(2). However, as I make clear below, it
is my view that the measure does not constitute unfair
discrimination. Many of
the factors that Moseneke J advances in his judgment in support of his
contention that the differentiation
in the POBF is an acceptable restitutionary
measure are, in my view, relevant to the fairness of the
measure.[16] Given that section 9
must be viewed as a whole and given that the Minister relies on facts which
demonstrate that the measure is
fair, it would not be logical to hold that the
appeal on the basis of section 9(2) must either be upheld or dismissed
altogether. |
Section 9(3)
| [97] | Nothing in section 9(2)
limits the circumstances in which the state can enact measures to advance a
purpose other than to remedy disadvantage
caused by past unfair discrimination.
Such measures will then need to be tested in terms of section 9(3). It is
important to observe
that a measure might resemble a restitutionary measure
because it is aimed at creating equity between groups of persons but falls
short
of protection in terms of section 9(2). This would be the case when any of the
three requirements identified by Moseneke J
are not fulfilled. In view of the
approach I take of the group targeted for disadvantage in the past, the
inclusion of those not
so targeted affects the group in a way that disqualifies
it for advancement under a section 9(2) remedial measure. Such a measure
may,
generally on the basis of justification in terms of section 9(3) and
particularly in view of the objective of the measure, pass
muster. The evidence
for advancement of the group or for justification may be the same or it may be
different, depending on the
circumstances of each case. It would be untenable
to strike the measure down only because it does not fall under section 9(2) when
it could be decided under section 9(3). Doing so would frustrate any programme
designed for the achievement of equity. |
| [98] | The measure created by rule
4.2.1 is most certainly aimed at the achievement of equity. However it falls
short of all the requirements
of section 9(2) in that it fails to target a group
previously disadvantaged by unfair discrimination. In my view it must thus be
tested against section 9(3) of the
Constitution. |
| [99] | In Harksen v Lane
NO[17] the Court considered the
following to be relevant to whether discrimination is
unfair: |
“(a) [T]he position of the complainants in society and whether they have
suffered in the past from patterns of disadvantage,
whether the discrimination
in the case under consideration is on a specified ground or not;
(b) the nature of the provision or power and the purpose sought to be achieved
by it. If its purpose is manifestly not directed,
in the first instance, at
impairing the complainants in the manner indicated above, but is aimed at
achieving a worthy and important
societal goal, such as, for example, the
furthering of equality for all, this purpose may, depending on the facts of the
particular
case, have a significant bearing on the question whether complainants
have in fact suffered the impairment in question. In Hugo, for example,
the purpose of the Presidential Act was to benefit three groups of prisoners,
namely, disabled prisoners, young people
and mothers of young children, as an
act of mercy. The fact that all these groups were regarded as being
particularly vulnerable
in our society, and that in the case of the disabled and
the young mothers, they belonged to groups who had been victims of
discrimination
in the past, weighed with the Court in concluding that the
discrimination was not unfair;
(c) with due regard to (a) and (b) above, and any other relevant factors, the
extent to which the discrimination has affected the
rights or interests of
complainants and whether it has led to an impairment of their fundamental human
dignity or constitutes an
impairment of a comparably serious
nature.”
Various factors are therefore relevant to an
analysis of unfair discrimination. Of importance is the position of the
complainants
in society and whether they have suffered in the past from patterns
of disadvantage. So too, whether the discrimination in the case
under
consideration is on a specified ground. The nature of the provision or power
and the purpose sought to be achieved by it is
also important. The question to
be asked is whether the provision is aimed at an important societal goal.
Unlike under section
9(2), other factors to emphasise include the extent to
which the discrimination has affected the rights or interests of the
complainants
and whether the discrimination is of a serious nature and impairs
the fundamental dignity of the complainants.
| [100] | It is my view that there
is clearly discrimination on the facts of this case, but that such
discrimination is not on a listed ground.
The discrimination is between those
members who served in Parliament prior to 1994 and those who did not. However,
it is possible
to assume in favour of the respondent that the discrimination in
question is based on one of the listed grounds, either race or political
affiliation. |
| [101] | Assuming in favour of the
respondent that the discrimination is based on race or political affiliation
attracts the presumption that
the measure unfairly discriminates. Even so, I am
of the view that the measure is fair. The main judgment points out that the
actuarial
evidence before this Court shows that the respondent and the majority
of his group “remain a privileged class of public pension
beneficiaries
notwithstanding the challenged remedial
measures.”[18] This suggests
that the consequences of the measure do not impact unduly on the interests of
the respondent. In fact, the respondent
concedes that the majority of members
of Parliament who are members of the Closed Pension Fund (CPF) are better off
than those who
benefit from the increased contributions in terms of the POBF.
He argues, however, that there are sufficient exceptions –
referring to
the so-called
‘jammergevalle’[19]
– to conclude that the measure is unfair. I return to the case of the
‘jammergevalle’ below. In so far as the
respondent has correctly
conceded that the majority of members of the CPF are in fact better off than
their colleagues who joined
Parliament for the first time in 1994 as a result of
their membership of the CPF, it cannot be said that they are victims of unfair
discrimination. It cannot be said that a measure which creates no disadvantages
unfairly discriminates unless it attracts one of
the other characteristics which
this Court has held in previous equality cases to constitute a violation of
section 9, such as a
negative impact on the complainant’s dignity.
Moseneke J correctly points out that the measures do not impact negatively on
the dignity of the complainants.[20]
The scheme does not have an impact on their dignity, because it does not
negatively impact on the complainants’ sense of self
worth. Furthermore,
the respondent conceded in argument that the only loss suffered was pecuniary in
nature. His motivation for
contesting the measure was indeed to earn
more. |
| [102] | Another factor of
importance is whether the measure advances an important societal goal or whether
it is aimed at impairing the complainant.
It is clear that the current measure
advances an important societal goal. It is aimed at creating equity between new
MPs and those
members of the current Parliament who, because of the fact that
they were also members of the tri-cameral Parliament, are members
of the CPF.
It cannot be contested that a person who was not unfairly excluded in the past
could have chosen to run for a right-wing
party for the first time in 1994 and
still benefit from the POBF. The scheme was instituted to benefit all
newcomers, rather than
those excluded on the basis of their race or political
affiliation, because it was seen as a government concern that new MPs did
not
have a substantial pension to fall back on in their retirement. That is a
legitimate objective in terms of section 9(3). The
scheme in no way targets the
complainants, nor does it seek to impair
them. |
Jammergevalle
| [103] | While acknowledging that
the majority of parliamentarians who receive lower contributions in terms of the
POBF are actually still
better off because of their membership of the CPF, the
respondent argues that the existence of the ‘jammergevalle’ –
those members of the POBF who are worse off even though they are members of the
CPF because of when they joined Parliament –
is sufficient to render the
scheme unfair. |
| [104] | There is a dispute between
the parties as to the number of ‘jammergevalle’. According to the
respondent, 15 people fall
into this category. According to the Minister,
however, only 13 people are in fact worse off – a difference which is
rather
insignificant. Regardless of whether 15 or 13 people are affected, I am
of the view that the measure is fair. As the main judgment
holds, in any
legislative scheme which differentiates between classes, there will be hard
cases. These hard cases should not |
prevent a court
from concluding that a measure is not unfair and is therefore constitutionally
compliant.
| [105] | I have cautioned that, in
the context of section 9(2), great care must be taken to define the group
because of the nature of the subsection
and the advantage of not having to
justify the measure on the part of the author of the remedial measure in
invoking it. It is my
view that the facts of this case are such that the
measure is not one envisaged by section 9(2). The basis for this conclusion is
that a significant number of the beneficiaries are not members of a category
previously disadvantaged by unfair discrimination.
There is a significant
difference between a finding that a measure must be tightly crafted to fall
under section 9(2) because of
its specific requirements and the consequences
which attach to that section and a finding that the existence of exceptional
circumstances
does not render an otherwise fair measure unfair. My conclusion
in this regard is not at odds with my conclusion that the
‘jammergevalle’
do not constitute an obstacle to finding the present
measure to be fair. The conclusion in respect of section 9(2) is based on the
narrow purpose for which it was designed and its special place in our equality
jurisprudence in view of the history of inequality
in our society. The
conclusion in respect of the ‘jammergevalle’ is based on an
acknowledgment that, under our section
9(3) jurisprudence, to allow hard cases
to undermine otherwise constitutionally compliant schemes would place a burden
on government
that would unduly impede its ability to transform our
society. |
Conclusion
| [106] | A consideration of the
factors mentioned above leads me to the conclusion that the measure in this case
does not unfairly discriminate
against the respondent. I would therefore agree
with the order proposed by Moseneke J and also uphold the
appeal. |
Sachs J and Skweyiya J concur in
the judgment of Mokgoro J.
NGCOBO J:
Introduction
| [107] | At the centre of this
application for leave to appeal are the provisions of rule 4.2.1 read with the
relevant definitions of the rules
of the Political Office-Bearers Pension Fund
(the Fund). The impugned rules provide for differentiated employer
contributions in
respect of members of Parliament. They treat members of
Parliament who came to Parliament for the first time in 1994 (new members)
more
favourably than those who were members of Parliament prior to 1994 (old
members). The respondent attacked these rules on the
grounds that they
discriminate unfairly against old members. The applicant resisted this attack
on the grounds that the rules constituted
a “limited affirmative action
measure” in favour of new members of Parliament under section 9(2) of the
Constitution.
The High Court found that the impugned rules did not fall under
section 9(2) and concluded that the impugned rules violate the equality
clause
of the Constitution. The main judgment finds that the rules fall under section
9(2) and are therefore within the constitutional
bounds. |
| [108] | The main judgment holds
that for a measure to come under section 9(2) it must meet three requirements,
namely, it must: (a) target
persons or categories of persons who have been
disadvantaged by unfair discrimination; (b) be designed to protect or advance
such
persons; and (c) promote the achievement of equality. With this, I agree.
I doubt whether section 9(2) applies to the facts of
this case. In particular,
I doubt whether on the facts of this case the requirement that the measure must
target persons or categories
of persons who have been disadvantaged by
discrimination has been met. The beneficiaries of the measure included persons
who were
not disadvantaged by past discrimination. This issue was not fully
argued in this Court. However, in the view I take of the central
question
whether the impugned rules discriminate unfairly against the respondent, I
consider it unnecessary to reach any firm conclusion
in this
regard. |
| [109] | The fact that a remedial
measure under constitutional challenge does not come under section 9(2) of the
Constitution does not necessarily
mean that it violates the equality clause. In
National Coalition for Gay and Lesbian Equality and Another v Minister of
Justice[74] this Court held that
the principles underlying remedial equality do not operate only in the context
of section 9(2). It follows
therefore that the constitutional validity of the
impugned rules must still be determined in light of the equality guarantee. The
respondent contended that the impugned rules unfairly discriminate against him
and those similarly situated and are therefore irrational.
This contention must
be considered in the light of the equality
guarantee. |
Equality Analysis
| [110] | The relevant provision of
the Constitution in section 9 provides: |
“(1) Everyone is equal before the law and has the right to equal
protection and benefit of the law.
(2) Equality includes the full and equal enjoyment of all rights and freedoms.
To promote the achievement of equality, legislative
and other measures designed
to protect or advance persons or categories of persons, disadvantaged by unfair
discrimination may be
taken.
(3) The state may not unfairly discriminate directly or indirectly against
anyone on one or more grounds, including race, gender,
sex, pregnancy, marital
status, ethnic or social origin, colour, sexual orientation, age, disability,
religion, conscience, belief,
culture, language and birth.
(4) No person may unfairly discriminate directly or indirectly against anyone on
one or more grounds in terms of subsection (3).
National legislation must be
enacted to prevent or prohibit unfair discrimination.
(5) Discrimination on one or more of the grounds listed in subsection (3) is
unfair unless it is established that the discrimination
is fair.”
| [111] | The proper
approach to the question whether the impugned rules violate the equality clause
involves three basic enquiries: first,
whether the impugned rules make a
differentiation that bears a rational connection to a legitimate government
purpose; and if so,
second, whether the differentiation amounts to unfair
discrimination; and if so, third, whether the impugned rules can be justified
under the limitations provision. If the differentiation bears no such rational
connection, there is a violation of section 9(1)
and the second enquiry does not
arise. Similarly, if the differentiation does not amount to unfair
discrimination, the third enquiry
does not
arise.[75] It is to the first
enquiry that I now turn. |
Rationality of
Differentiation
| [112] | It is common cause that
the impugned rules differentiate between old and new members of Parliament in
relation to parliamentary pension
benefits. The need for differentiation arose
because old members of Parliament were members of the Closed Pension Fund (CPF)
and
thus entitled to pension benefits from that fund. New members of Parliament
were excluded from the CPF and thus were not entitled
to any benefits under that
fund. When the new fund was created after April 1994, old members of Parliament
became entitled to benefits
under the new fund. This resulted in the old
members of Parliament being entitled to parliamentary benefits from two pension
funds.
The differentiation in contributions to be made in respect of different
categories of members was designed to bring about equity
in the spread of
parliamentary pension benefits amongst old and new political
office-bearers. |
| [113] | The legitimacy of this
purpose cannot be gainsaid. There was inequality in the entitlement to pension
benefits in that old members
of Parliament were entitled to benefits from a
parliamentary pension fund from which new members were excluded. Nor can there
be
any doubt as to the existence of a rational connection between the
differentiation created by the impugned rules and the legitimate
governmental
purpose. It follows therefore that the contention by the respondent that the
differentiation was irrational must fail.
The question which falls to be
determined is whether this differentiation amounted to unfair
discrimination. |
Discrimination
| [114] | It was contended on behalf
of the respondent that race was an important factor in the differentiation.
There can be no question that
the differentiation had a disproportionate impact
on persons who were previously classified as white, coloured and Indian. These
racial groups were the only racial groups that were eligible to be members of
the tri-cameral parliament. It is also clear from
the papers that one of the
primary considerations in adopting the impugned rules was the fact that an
overwhelming majority of those
who were excluded from the CPF were excluded from
the tri-cameral parliament because of race and political
affiliation. |
| [115] | In all the circumstances
we are concerned here with a differentiation on a listed ground. But the rules
are facially neutral as far
as race and political affiliation is concerned.
This finding raises a rebuttable presumption that the impugned rules indirectly
discriminate unfairly against the respondent. The ultimate question, however,
is whether in fact the impugned rules indirectly discriminate
unfairly as
contended by the respondent. |
Do the impugned
rules discriminate unfairly?
| [116] | At the heart of our
equality guarantee is the prohibition of unfair discrimination and remedying the
effects of past unfair discrimination.
Human dignity is harmed by unfair
treatment that is premised upon personal traits or circumstances that do not
relate to the needs,
capacities and merits of different individuals. Often such
discrimination is premised on the assumption that the disfavoured group
is not
worthy of dignity. At times, as our history amply demonstrates, such
discrimination proceeds on the assumption that the disfavoured
group is inferior
to other groups.[76] And this is an
assault on the human dignity of the disfavoured group. Equality as enshrined in
our Constitution does not tolerate
distinctions that treat other people as
“second class citizens, that demean them, that treat them as less capable
for no good
reason or that otherwise offend fundamental human
dignity”.[77] |
| [117] | In President of the
Republic of South Africa and Another v Hugo, this Court outlined the purpose
of the equality clause, in particular, the prohibition of unfair discrimination
and said: |
“The prohibition on unfair discrimination in the interim Constitution
seeks not only to avoid discrimination against people
who are members of
disadvantaged groups. It seeks more than that. At the heart of unfair
discrimination lies recognition that the
purpose of our new constitutional and
democratic order is the establishment of a society in which all human beings
will be accorded
equal dignity and respect regardless of their membership of
particular groups. The achievement of such a society in the context
of our
deeply inegalitarian past will not be easy, but that that is the goal of the
Constitution should not be forgotten or
overlooked.”[78]
| [118] | However, it is not every
distinction or differentiation in treatment which falls foul of the equality
guarantee. Legislatures, to
govern effectively, may treat different individuals
and groups in different ways. In Prinsloo v Van der Linde and
Another,[79] this Court accepted
that in order to govern a modern country efficiently and to harmonise the
interests of all its people for common
good, it may be necessary for government
to make distinctions. Such distinctions will “very rarely”
constitute unfair
discrimination to such regulation, without the addition of a
further
element.[80] |
| [119] | Our concept of equality
therefore recognises that at times it may be necessary to treat people
differently for example when it is
necessary to recognise the different social
or economic situations in which individuals are situated. This is a recognition
of the
fact that treating unequals as if they are equals may produce inequality.
Our concept of unfair discrimination therefore recognises
that: |
...“[A]lthough a society which affords each human being equal treatment on
the basis of equal worth and freedom is our goal,
we cannot achieve that goal by
insisting upon identical treatment in all circumstances before that goal is
achieved. Each case,
therefore, will require a careful and a thorough
understanding of the impact of discriminatory action upon the particular people
concerned to determine whether its overall impact is one which furthers the
constitutional goal of equality or not. A classification
which is unfair in one
context may not necessarily be unfair in a different
context.”[81]
| [120] | As noted
previously,[82] it is also
important to note that the principles of remedial equality do not only operate
in the context of section 9(2) of the Constitution.
This Court has recognised
that they are relevant in deciding whether the discriminatory provisions have
impacted unfairly on
complainants.[83] Thus in
Harksen when dealing with the purpose of the provision or power as
a factor to be considered in deciding whether discrimination has impacted
unfairly on the complainant, this Court held
that: |
“If its purpose is manifestly not directed, at the first instance, at
impairing the complainants in the manner indicated above,
but is aimed at
achieving a worthy and important societal goal, such as, for example, the
furthering of equality for all, this purpose
may, depending on the facts of the
particular case, have a significant bearing on the question whether complainants
have in fact
suffered the impairment in
question.”[84]
| [121] | The question
which falls to be determined therefore is the impact of discrimination on the
respondent and those similarly situated.
And in determining this question
relevant considerations include the position of the respondent and those
similarly situated in
society, the purpose sought to be achieved by the
discrimination, the extent to which the rights or the interests of the
respondent
have been affected and whether the discrimination has impaired the
human dignity of the
respondent.[85] It is to that
enquiry that I now turn. |
The position of the
members of the affected group in society
| [122] | The majority of the group
affected is not one which has suffered discrimination in the
past.[86] Members of this group
are all politicians, and have some political power. This group cannot, in my
view, be said to be a vulnerable
group. That in itself does not render
the discrimination fair. |
The nature and
the purpose of the power exercised by Parliament
| [123] | In adopting the impugned
rules, Parliament was fulfilling its constitutional obligation to create a
pension fund for political office-bearers.
Under the interim Constitution this
obligation was imposed by section
190A.[87] Under the Constitution
that obligation is imposed by section
219.[88] The purpose of the
impugned rules is, broadly speaking, to give effect to this constitutional
obligation. |
| [124] | The purpose behind the
impugned rules is given as follows by Mr Maritz, the Chief Director in the
Directorate of Pensions Administration
of the Department of Finance and
Deputy-Chairperson of the Political Office-Bearers Pension Fund, the Third
Respondent herein: |
“15. The pension arrangements which applied in respect of political
office bearers after the commencement of the 1983 tri-cameral
Parliament were
contained in the Members of Parliament and Political Office Bearers Pension
Scheme Act 112 of 1984 (“the 1984
Act”). The pension scheme
established in terms of the 1984 Act was a so called “pay as you go”
scheme. This meant
that no special fund was established for the payment of
contributions. Rather, in terms of the 1984 Act, ordinary members of Parliament
were required to pay 7% (seven percent) of their pensionable salary to the State
Revenue Fund. When a member of Parliament retired,
he or she became entitled to
pension benefits in terms of the Act, and these benefits were paid out of the
State Revenue Fund. No
specific pension fund was established for purposes of
payment of pensions in terms of the 1984
Act.
16. During the negotiations held in Kempton Park in the early 1990’s, for
the establishment of a democratic government in
South Africa and the
determination of a democratic constitution, the question of the pensions of
members of the previous Parliament
was raised. It was agreed that a closed
pension fund would be established, and the actuarial interest of every member
and existing
pensioner of the pension scheme established under the 1984 Act
would be determined and paid into that fund by the State. Consequent
upon this
agreement, the Closed Pension Fund Act 197 of 1993 was passed, (“the
Closed Pension Fund Act”) in terms of
which the Closed Pension Fund was
established. The total actuarial liability of that fund was about R773 700 000,
00 (SEVEN HUNDRED
AND SEVENTY MILLION RAND) as at 1 February 1994. This
liability which was funded to an amount of some R440 000 000, 00 (FOUR HUNDRED
AND FORTY MILLION RAND) by the issuing of government stock, and the remaining
obligation of some R333 700 000, 00 (THREE HUNDRED
AND THIRTY THREE MILLION
SEVEN HUNDRED THOUSAND RAND) by way of monies voted by Parliament under the
budget vote of the Department
of Finance. The latter amount was payed over
several years together with interest of some R220 000 000, 00 (TWO HUNDRED AND
TWENTY
MILLION RANDS).
17. The Closed Pension Fund Act came into operation on 5 January 1994. As its
name suggested, the membership of the Closed Pension
Fund was closed from the
inception of the Fund – it was limited to persons who, in their capacity
as political office bearers
of the South African state prior to the interim
Constitution, received pensions, or were entitled to pension benefits in that
capacity.
Persons who were not already members of the Closed Pension Fund, and
who were elected to Parliament or the provincial legislatures
in the first
democratic elections in April 1994, did not thereby become members of the Closed
Pension Fund.
18. In addition to being a closed fund, the Closed Pension Fund was an
extremely generous fund. I attach marked “PM1” an affidavit
of ERICH POTGIETER, the actuary of the Third Respondent. In annexure
PM1 POTGIETER analyses the benefits provided by the Closed Pension Fund
and shows that they were more than 2.5 times as generous as those provided
by
the Third Respondent to Category B members (the most privileged class of members
of the Third Respondent), and just under 4 times
as generous as the benefits
provided by the typical defined benefit pension funds operating in the private
sector.
19. Because the Closed Pension Fund was closed, after the first democratic
elections in April 1994, it became necessary for a new
pension dispensation to
be established for members of Parliament and other political office bearers.
The creation of a new pension
fund for political office bearers (“the new
fund”) was, in fact, a constitutional obligation imposed by section 190A
of the interim Constitution.”
| [125] | And the rationale for the
differentiation is given as follows by Mr
Maritz: |
“27 The rationale for the differentiation is the
following:
27.1 With more pressing calls on the public purse and the expansion of
Parliament and the creation of the provincial legislatures
after the 1994
elections it was not affordable to create a pension scheme providing political
office bearers with benefits as generous
as those provided under the 1984 Act
and the Closed Pension
Fund.
27.2 The limited resources available for the pensions of political office
bearers had to be spread in an equitable
fashion.
27.3 Members of the Closed Pension Fund were already in receipt of generous
pension benefits which were far in excess of those available
to new political
office bearers.
27.4 The overwhelming majority of new political office bearers had been
excluded from access to political office under the tri-cameral
regime (and
thereby from access to the generous benefits of the Closed Pension Fund) by
virtue of either their race or their political
affiliation or both their race
and their political
affiliation.
27.5 In this context, the differentiated scheme of employer contributions under
the Rules of the Third Respondent was designed to
benefit new political office
bearers whose exclusion from the benefits of the Closed Pension Fund by virtue
of historical circumstances
left them with a need for more generous pension
benefits than their colleagues who had access to Closed Pension Fund
benefits.
27.6 Within the class of new political office bearers, the differentiated
scheme also conferred additional benefits on office bearers
who were over the
age of 50 and whose advanced age accordingly increased their immediate need for
more generous pension
benefits.
27.7 Consistent with its origins in a particular transitional historical
context, the differentiation effected by the scheme was
a limited affirmative
action measure which operated only for the first five years of the democratic
era. From 1 May 1999 there was
to be a uniform employer contribution of 17% in
respect of all members of the Third
Respondent.”
| [126] | From what Mr Maritz says,
it is clear that as at April 1994 members of Parliament and other political
office-bearers who held office
prior to 1994 enjoyed extremely generous pension
benefits under the CPF. The CPF was fully funded by public funds. This fund
was
especially reserved for the benefit of this group. Persons elected to
Parliament for the first time in 1994 were excluded from this
fund. It was, as
its name suggests, a closed fund. But for that exclusion, new members would
have been entitled to join the same
fund and benefit from its generous
provisions. After the first democratic elections it became necessary to
establish a new pension
scheme for members of Parliament and other political
office-bearers. Parliament was under a constitutional duty to do
so. |
| [127] | But the reality was that
old members of Parliament already had a generous, publicly funded pension
scheme. This had to be kept in
mind when creating a new pension scheme. Old
members of Parliament could not be excluded from the new pension f |
