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FLYNOTES: LABOUR – Discrimination – Race and gender – Shortlisting practice – Not excluded from recruitment process – Shortlisted, interviewed, and recommended – Employment equity measures designed to promote designated groups without imposing rigid quotas – Pipeline concept was a known and rational career pathing initiative – Legitimate restitution measures targeting historically disadvantaged groups and promoting substantive equality – Recruitment process did not violate rights – Appeal upheld.

 

THE LABOUR APPEAL COURT OF SOUTH AFRICA, CAPE TOWN

 

Not Reportable

Case no: CA 13/2024

 

In the matter between:

 

ESKOM HOLDINGS SOC LTD                                                 Appellant

(PEAKING POWER STATION)                                                 (Respondent in Court a quo)

 

and

 

SOLIDARITY OBO AP ERASMUS                                           Respondent

(Applicant in Court a quo)

 

Heard:          13 May 2025

Delivered:    05 November 2025

Coram:         Savage JA, Waglay AJA et Musi AJA

Summary:    Unfair discrimination claim – in addition to its EE plan, appellant maintained a practice of pipelining to promote unrepresented groups into senior management positions – Court a quo found that the practice of shortlisting candidates from under-represented groups amounted to an absolute barrier to non-designated groups from appointment to positions within the organisation – EE targets and practice of pipelining rational for the purposes of promoting and advancing under-represented persons within the organisation who have been suspectable to unfair discrimination at senior management level – Court a quo erred in finding practice to be discriminatory – Appeal upheld.

JUDGMENT

MUSI, AJA

Introduction

[1]  This is an appeal against a judgment and order of the Labour Court, in which it found that the appellant, Eskom Holdings SOC Ltd (Peaking Power Station), unfairly discriminated against the respondent employee, Mr Erasmus. The appeal is with the leave of the Labour Court.

Background

[2]  It is common cause that Mr Erasmus has been employed by Eskom since August 1988. He was a Senior Advisor Outage Coordinator. He responded to an internal advertisement and applied for the post of Senior Manager: Outage Execution at Peaking Power Station. This post resorts under the Group Technology Division of Eskom. In terms of Eskom’s recruitment policy, a Staff Requisition form (GA 13) must therefore be completed in the recruitment process. The GA 13 must be approved by the middle and senior managers of a division and the Employment Equity assigned manager.

[3]  On 3 April 2017, a GA 13 was completed by Mr Pasquallie, a Middle Manager: Site Outage. The GA 13 was authorised and supported by the Senior Manager, Mr Van Staden, who was authorised to sign an appointment letter in the case of a successful candidate.

[4]  In terms of the GA 13, a white male was to be appointed to the position. It also stated that ‘internal pipeline’ was considered and that there was budget available to fill the post. The Employment Equity Assigned Manager, Dr Khumalo, wrote in manuscript that preferably an African Male or Female of all races should be considered.

[5]  During July 2017, the post was advertised internally. Many persons applied for the position. On his application form, Mr Erasmus indicated that he is an African. He and other candidates who met the minimum requirements were shortlisted. Mr Van Staden had earmarked Mr Erasmus for the position and wanted him appointed to the post. Mr Pasquallie, Mr Van Staden and Ms Leuw from Eskom’s Human Resources Department interviewed the candidates. Mr Erasmus was ultimately recommended but was not appointed.

[6]  Mr Erasmus was dissatisfied and sent an email to Mr Van Staden in which he raised several issues in connection with his not being appointed. He thereafter lodges a formal grievance. The Presiding Officer found that the initial indication on the GA 13 that only white males should be interviewed for the position was contrary to Eskom’s policy and practice. The Presiding Officer further found that although Mr Erasmus’ appointment would not have caused a decline in the Employment Equity (EE), the reality was that white males were overrepresented by 16% in the Group Technology Division (GTD) and there would have been a missed opportunity to promote a candidate from the designated groups to improve the EE at the GTD. It was also stated that if a critical position, such as the one for which Mr Erasmus applied, is not filled during the first round, a manager can motivate for a second round of interviews and if a white male who meets all the requirements and is the preferred candidate, such a person may be appointed.

At the Labour Court

[7]  Ms Dibela, from Eskom’s Human Resources Division, testified that Mr Erasmus would not have been shortlisted if he had indicated that he was white instead of African. She testified that although the GA 13 indicated that the internal recruitment would not have an effect on employment equity (EE), Dr Khumalo had indicated that the position should preferably be filled by an African male or a female of all races. She testified that she understood Dr Khumalo to be saying that they cannot appoint a white male based on Eskom’s pipelining on the senior management profile of the position.

[8]  She explained that “pipelining” meant that, in order to get the desired race and gender balance at the top, they have to start building up from Middle Management. She stated:

‘So the pipelining would be to promote [the] African males in this instance or to promote females of all races, so that they get the score and reached the compact, the shareholders compact in terms of what is required.’

[9]  Mr Dumisani Mdladla, HR Operations Manager, testified that the person doing the preliminary shortlisting was supposed to concentrate on African males and females of all races. He explained that if the process ran without a white male and no appointment was made, the manager had two options. First, the manager could request a relook at the shortlisted candidates and add other race groups. Second, it would be to initiate a second round of recruitment and relax the EE requirements. He confirmed that the GTD had a target of 25,2% for African male senior managers, but was sitting at 16,96% and that it was in line with the targets in senior management to appoint African males so that they could be part of the pipeline for senior management.

[10]  Mr Erasmus testified that he was aggrieved because he was not appointed on the basis of his skin colour and that his grievance lodged had been unsuccessful.

[11]  He accepted that there was an over-representation of white males at the senior management level in the GTD. He did not accept the notion of a pipeline. He never had sight of Eskom’s EE plan.

[12]  Mr Van Staden confirmed that he was the Senior Manager: Outage and Project Execution at Eskom. He confirmed that he wanted to retain Mr Erasmus and the only way to do so had been by way of a proper recruitment process. Although he was part of the interview panel, he did not notice that Mr Erasmus indicated that he was an African. He confirmed that he wrote that appointing a white male would not have any effect on EE because the person to be appointed would be on the same band level for EE purposes.

[13]  He testified that he understood Dr Khumalo’s manuscript insertion to mean that if a white male and a black male were both found to be suitable for appointment, then the African male should be preferred. He was referred to an email written by Ms Nkensani Leeuw in which she stated that ‘the aim is to create a pipeline for senior management. We are currently not meeting the targets in terms of race and gender as per our shareholder’s contract [sic], therefore we cannot appoint a white male’. His response was that this objection was not the initial objection to the appointment.

[14]  He testified that he was not aware of any policy to motivate for an exception and that he motivated for the filling of the post. He also indicated to the General Manager that he wanted to include a white male in the recruitment process. He confirmed that there is no fixed or firm policy against the promotion of white males, as he is an example of a white male who was appointed to his position. He disagreed with Ms Dibela that white males should have been ignored during the shortlisting stage. He confirmed that Ms Dibela suggested that he should approach Dr Khumalo to request her permission to appoint Mr Erasmus. He conceded that he did not approach Dr Khumalo. He agreed that the GTD had the worst EE figures in the organisation.

[15]  He also confirmed that he wrote a motivation for the appointment of Mr Erasmus to the Acting General Manager, Mr Nemadodsi, who had responded as follows:

‘You are spot on this appointment will not impact EE any further than they are. In trying to query with few stakeholders on this matter, I learned that Technology has the worst EE numbers in the organization. With that background, opportunities like this cannot be missed. While we may not change the picture overnight, we should feel we are doing enough from our different sections to improve them.

In that, I cannot support this appointment. Please go out to again and I have cleared this with HR, they will allow another round which will be trying [to] address this unfavourable EE position.’

[16]  The Labour Court found that there was no dispute that a white male, in terms of the appellant’s practice of implementing its affirmative action measures, had no possibility of being shortlisted for the post in question. The Labour Court said that it appears that the inflexible and blunt instrument practiced at the shortlisting stage must be recognised as an absolute barrier to the ability of members of non-designated groups to compete with the EE candidates from the inception of a recruitment process. It found that the recruitment and selection policy did not mention the shortlisting barrier, and there was no mention of the pipeline in the EE plan.

[17]  The Labour Court found that the evidence placed before it went to the question of whether Mr Erasmus was unfairly discriminated against and whether an ‘absolute barrier’ was created by the practice of only shortlisting a category of under-represented candidates. It concluded that the evidence established that Eskom’s employment practice amounted to an absolute barrier to non-designated groups and cannot be regarded as an affirmative action measure in terms of the Employment Equity Act[1] (EEA).

Analysis

[18]  Eskom’s EE plan was not challenged. Its validity and applicability were also not challenged. It was not disputed that, in terms of Eskom’s targets, white males were over-represented in the GTD. In South African Police Services v Solidarity obo Barnard[2], it was stated:

‘[36]  The test whether a restitution measure falls within the ambit of s 9(2) is threefold. The measure must ―

(a)  Target a particular class of people who have been susceptible to unfair discrimination;

(b)  Be designed to protect or advance those classes of persons; and

(c)  Promote the achievement of equality.

[37]  Once the measure in question passes the test, it is neither unfair nor presumed to be unfair. This is so because the Constitution says so… This however, does not oust the court’s power to interrogate whether the measure is a legitimate restitution measure within the scope of the empowering s 9(2).

…

[42]  A designated employer is required to implement several measures in pursuit of affirmative action. They must identify and eliminate employment barriers, further diversify the workforce “based on equal dignity and respect of all people” and “retain and develop people” as well as “implement appropriate training measures”. Section 15(3) contains a vital proviso that the measures directed at affirmative action may include preferential treatment and numerical goals but must exclude “quotas”. Curiously, the statute does not furnish a definition of “quotas”. This not being an appropriate case, it would be unwise to give meaning to the term. Let it suffice to observe that s 15(4) sets the tone for the flexibility and inclusiveness required to advance employment equity. It makes it quite clear that a designated employer may not adopt an Employment Equity Policy or practice that would establish an absolute barrier to the future or continued employment or promotion of people who are not from designated groups.’

[19]  It is common cause that Mr Van Staden informed the erstwhile General Manager (GM) that he wanted to promote Mr Erasmus to the post. He motivated his intentions to the GM by stating:

‘When we negotiated with Altus [Erasmus] to be transferred to Outage management one of the commitments was that we will recruit for the Manager Site Outage vacant position on my proposed structure. I need permission for the following to make this happen [or] else I [am] really running the risk [of] losing him, putting not only the upcoming outages at Palmiet at risk but also the outage planning process for Gariep and Van der Kloof, which he is busy with as well.

a.  Approval of my changed structure.

b.  Approval to interview selected people for the manager site outage position in that structure with the aim to promote.’

[20]  To that extent, Mr Van Staden and Mr Pasquallie indicated on the GA 13 that a white male should be appointed to the post. Dr Khumalo should have been aware of the contents of the GA 13, specifically the intention to appoint a white male; otherwise, she would not have recommended that an African male or a female of all races should be given preference. The GM and Mr Van Staden knew that Mr Erasmus was a white male. There is no evidence that Mr Pasquallie did not know that Erasmus was a white male. They did not object to him being shortlisted; likewise, the HR representative at the interviews did not raise any objection. It seems to me that Mr Erasmus was shortlisted and interviewed while Eskom knew that he was a white male. Ms Dibela’s testimony that they would not have shortlisted him had they known he was a white male is opportunistic. The issue that he indicated that he was an African was never raised during or after the interviews.

[21]  Mr Erasmus accepted that if Dr Khumalo did not write what she wrote, white males would have been shortlisted. He also conceded that there was a practice to allow for motivation to include people from over-represented groups, including white males. He categorically stated that his grievance was that he was not appointed because of his skin colour. That is so because he was shortlisted despite Eskom knowing that he is white.

[22]  Mr Van Staden also stated that there is no absolute barrier against white males being shortlisted or appointed. He testified as follows:

‘Yes, as per the emails that you’ve probably seen, I did motivate right from the beginning to say that, first of all, I need to fill the position and then secondly, there is a possible candidate that I would like to include in the recruitment process, hence my specific note in the GA 13 of a possible white male.’

[23]  He further testified that the interview was not conducted contrary to the GA 13 because it specifically mentioned a white male. With regard to a policy against promoting white males, he stated:

‘My lady in my experience it is not a fixed and firm policy that no white will be promoted. Yeah, and certainly I was an example of that.’

[24]  Although the pipeline is not mentioned in the EE plan, it is clearly a requirement on the GA 13. Mr Van Staden and  Mr Pasquallie indicated that the internal pipeline was considered when the GA 13 was completed. Consideration of the internal pipeline was therefore always a consideration.  

[25]  On the pipeline, the Labour Court correctly concluded that the pipeline appears to be a rational career pathing initiative to develop persons from designated groups towards taking up positions at senior management level. Mr Erasmus’ case that the pipeline concept was not part of Eskom’s recruitment and selection process is of scant assistance because it was a known practice and part of the GA 13.

[26]  In my view, the evidence establishes that Mr Erasmus was not appointed because of the EE targets and the pipeline that Eskom implemented to change the demographics at the senior management level. This was a rational way to target a particular class of persons who have been susceptible to unfair discrimination at that level; it was conceived to protect and advance them, and it promotes equality.

[27]  I therefore make the following order:

Order

1.  The appeal is upheld with no order as to costs.

2.  The order of the Labour Court is set aside and replaced with the following:

          ‘The application is dismissed.’

 

CJ Musi AJA

Savage AJ and Waglay AJA concur.

 

APPEARANCES:

FOR THE APPELLANT:           Adv Anton Myburgh SC

                                                 With Zinhle Ngwenya         

                                                 Instructed by Edward Nathan Sonnenberghs Inc

FOR THE RESPONDENT:       Adv DJ Groenewald

                                                 Instructed by Serfontein, Viljoen & Swart Attorneys

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