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IN THE LABOUR COURT OF SOUTH AFRICA

(HELD IN DURBAN)

                        Case no: D 1681-17

Reportable/Not Reportable

In the matter between:

ETHEKWENI MUNICIPALITY                                                      Appellant

and

YOGAN NADESAN                                                                 First Respondent

CCMA                                                                                                Second Respondent

BESS PILLIMER N.O.                                                             Third Respondent

Application heard: 5 November 2020 (via Zoom)

Judgment Delivered: 3 February 2021 (electronically)

Summary: Unfair discrimination – affirmative action measures - whether rationality and/or fairness (a standard less deferential to the stand-alone designs of an employment equity policy) is the appropriate test in assessing the individual implementation of affirmative action measures – whether the complainant is required to attack the employment equity plan

JUDGMENT

WHITCHER J

Introduction

[1]     This is an appeal in terms of section 10(8) of the Employment Equity Act (“EEA”) 55 of 1998 against the Third Respondent’s arbitration award that Mr Nadesan was unfairly discriminated against.

[2]     Nadesan’s complaint concerned an affirmative action measure: a decision by the Appellant not to appoint him (the highest scoring candidate) to the post of Senior Storekeeper, Fire and Emergency Services on the basis that Indian males are over-represented in the relevant occupational level. By declining to appoint Nadesan and by re-advertising the post, the Appellant claimed that it was holding out for a suitable candidate from an under-represented racial and gender demographic to later apply.

The evidence

[3]        During June/July 2016, the Appellant advertised the post in question. It had been vacant for more than a year.

[4]        Mr Ravidutt, a senior manager in the Unit and the chairperson of the selection panel testified and explained the nature of the post. The essence of his evidence is that the post is a critical and highly technically skilled post. Firefighters must have the appropriate gear in order to be safe, and it is the responsibility of a Senior Storekeeper to procure for the department and issue appropriate firefighting gear and uniforms to the firefighters. The position also requires in-depth knowledge of specialised firefighting equipment and uniforms, which can only come gradually through experience, working up from the rank of storekeeper. Due to this, there are a limited number of possible candidates. Given the critical nature of the post and it’s vacancy for over a year, the need to fill it had been urgent. He had two Senior Storekeeper vacancies at the time and their vacancy was impacting on the functionality of the Fire Service department. [1]

[5]        There was also reference to a newspaper article written around the time of the arbitration hearing (July 2017) in which the Security and Emergency Services Portfolio Committee lamented the delays in the procurement of protective gear for firefighters.[2]

[6]        The selection panel recommended Nadesan for appointment to the post. He had had had fifteen years of experience in the post and there was upwards of a 40% - 50% difference between his scores and the other shortlisted candidates in the written examination and interview questions.

[7]        The Appellant had an employment equity plan in place at the time. The racial and gender representivity in the Emergency Services Cluster reflected that Indian males were oversubscribed by 505, Indian females by 108 and African males by 1038. White males were undersubscribed by 253, White females by 211 and African females by 1411.

[8]        Presumably conscious of the extreme under-representation of African females in the cluster, the selection panel indicated in their motivation that that there was no suitable African female for the post but there were other occupational level 2 posts in the Cluster that could easily be filled by African females to address under-representation.

[9]        The recommendation of the selection panel was not approved by the Head of the Fire and Emergency Unit, Mr Mchunu, who declared a non-appointment and that the post be re-advertised as a matter of urgency in order to attract “suitable candidates”. The post was re-advertised a few weeks later.

[10]      Mchunu explained his decision to the Commission as follows:

…the post had been vacant for just over a year…and we were only filling it for the first time since then. So we had no urgency to overlook the need for the employment equity on the basis that we were advertising that post for the first time…So I wanted us to get a second opportunity of seeing whether we can attract candidates of a suitable demographic…

[11]      Nadesan’s representative, clearly suggesting Mchunu had in mind African females asked Mchunu if there were African females in training who could fit the bill. Mchunu confirmed that there were none. Notably, he did not dispute the obvious suggestion.

[12]      Regarding whether the post required a person with in-depth knowledge of firefighting equipment, Mchunu said:

“…once a person is appointed to that post it is expected of that person to become familiar with all the processes and that equipment…[3]

[13]      Mchunu further testified that he did not expect the requirements of the job, including 24 months experience, to be relaxed for the next round.

[14]      As counsel for Nadesan noted, Mchunu had no specific reason for believing that there would be a suitably qualified person from an under-represented group in the next round. There was no evidence that anyone from an under-represented group was in training who could fit the bill. There was no evidence that any African female even applied for the job in the first round.

[15]      The demographic representivity within the municipality is divided into various occupational levels and the Plan sets various targets within these occupational levels across the municipality. The targets are not divided into different departments or clusters within the municipality. The post of Senior Storekeeper is a Task Grade 7 post which falls within occupational level 2 within the municipality.

[16]      Mchunu’s evidence did not address the point implicit in Ravidutt’s earlier testimony that any appointment of African females within occupational level 2 anywhere in the municipality would have a positive impact on the equity target within that occupational level and address the under-representation of African females identified by the equity plan.

[17]      On Nadesan’s version, the alleged unfair discrimination was that he more than qualified for the post and essentially participated in a charade:

“I feel its discrimination to go through the entire process of shortlisting, interviewing, verification and then be told that it is a non-appointment.  If they were looking for a certain gender or race, they why put me through all that, why waste my time. Because you know that you are not going to take me at the end of the day, why play with people’s emotions, why play with people’s rights. Make it known”.

Was Nadesan was required to attack the employment equity plan?

[18]      The Appellant alleges that the Commissioner could not find that Nadesan was unfairly discriminated against in the absence of an attack on the employment equity plan. In doing so, it relied on the Constitutional Court decision in Barnard[4]. I agree with counsel for Nadesan that Barnard did not hold that employees may not challenge decisions purportedly implementing an equity plan without challenging the plan itself. Such a conclusion would lead to the bizarre situation that an employee would be denied the right to allege unfair discrimination each time a decision was taken purportedly in terms of a perfectly valid and acceptable employment equity plan.

How the lawfulness of an employment equity measure should be tested

[19]      A survey of the case law that emerged in the case of Barnard as it wound its way through the courts reveals two distinct positions on how the lawfulness of an employment equity measure should be tested.

[20]      On the one side, the view is that as long as an affirmative action measure is rationally connected to addressing identified demographic imbalances, such a measure should not be interfered with on behalf of those negatively affected by the restitutionary measure who cry unfair discrimination.

[21]      If rationality were the sole consideration, Mchunu’s restitutionary measure would relatively easily pass the test. I set out some of the preceding, qualifying issues an adjudicator would have to consider later in the judgment. But once these questions are positively decided, the rationality of the decision is all but established. This is why the rationality standard is said to be deferential to the employer’s equity plan. It is only the plan’s internal logic and validity that the court must consider and not the plan’s effect.

[22]      The other view of the appropriate standard of lawfulness of a restitutionary measure is that, while rationality is always a necessary attribute of any lawful decision, it is not the sole ground. An equity measure that may rationally advance demographic representivity in general may nevertheless be executed in particular ways and circumstances where the decision unfairly infringes upon the dignity, right to equality and other legitimate interests of the non-appointed candidate. Moreover, factors such as the effect of the implementation of the restitutionary measure on service delivery and staff morale may also be taken into account in assessing a decision’s essential fairness. The fairness test thus admits and is sensitive to contextual considerations that may render unlawful a decision which otherwise serves to advance demographic representivity.

[23]      In my view the second approach was finally sanctioned by the Constitutional Court in Barnard.

[24]      Before the CC, Barnard “accepted that the Employment Equity Plan in question was a valid affirmative action measure.  Equally, she did not impugn the validity of the [Commissioner’s] Instruction.  She never contended that either of the two were suspect and should have attracted a presumption of unfairness. For the majority, the effect of this concession was that “the gut of the complaint is that in declining to appoint Barnard, the National Commissioner made an unlawful and unreasonable decision which must be set aside.” In other words, Barnard’s case was an attempt to review the decision of the National Commissioner. That had never been part of her case and the court found that to allow her to pursue it for the first time in the Constitutional Court was unfair and impermissible. In any event, this review-minded dispute had no merit because, in their view, nothing showed the National Commissioner to have unreasonably exercised his discretion to decline Barnard’s appointment. The post was not critical, her non-appointment would not have sacrificed service delivery, the National Commissioner’s decision did not show him to undervalue Barnard’s competence when weighed up against the need for representativity, the National Commissioner did not apply the employment equity measure too rigidly so that it amounted to job reservation when he declined to appoint her, and Barnard was well aware that her application was subject to the application of affirmative action measures that might preclude her for attaining the position even were she to emerge as the most meritorious candidate.

[25]      Regarding the two approaches described earlier on, while the majority proposed rationality as a bare minimum standard for the lawfulness of a restitutionary measure taken in terms of the EEA, they chose not to finally decide the issue.

[26]      The Court held:

“As a bare minimum, the principle of legality would require that the implementation of a legitimate restitution measure must be rationally related to the terms and objects of the measure. It must be applied to advance its legitimate purpose and nothing else. Ordinarily, irrational conduct in implementing a lawful project attracts unlawfulness. Therefore, implementation of corrective measures must be rational. Although these are the minimum requirements, it is not necessary to define the standard finally.”[5]

[27]      The minority judgment on the other hand addressed the issue directly and determined that fairness was also an element of the lawfulness of a restitutionary measure.

[28]      The Court held:

“Assessing the fairness of the individual implementation of affirmative action measures is different to deciding whether those measures amount to unfair discrimination. The latter enquiry is at the general level of determining whether the formulation and content of a restitutionary measure are constitutionally compliant. The former enquiry examines whether a specific implementation of a measure that is constitutionally compliant in its general form is nevertheless in conflict with the provisions of the Act. We must insist that the specific implementation as well as the general formulation of remedial measures be fair.

We must therefore determine whether the National Commissioner's decision not to appoint Ms. Barnard was a fair implementation of the Plan. In doing so, we examine both the objective facts of the case and the reasons the National Commissioner gave for his decision. Here, we also differ from the main judgment, which says that an evaluation of these reasons is not before the Court.”[6]

[29]      As counsel for Nadesan submitted, the majority set out a minimum standard which was elaborated on in the minority judgment.

[30]      The minority judgment considers the question of the lawfulness of a restitutionary measure primarily through the lens of the EEA and not the Constitution[7]. With a statute in place to give effect to the constitutional right to equality, it is the structure and wording of this statute that should be considered in the main when interpreting whether an equity measure is permissible or not. The Constitution is a primary aid in the purposive interpretation of the EEA[8], but the EEA is capable of limiting or qualifying the right to which it gives expression. We also further know from SANDU[9] that “where legislation is enacted to give effect to a constitutional right, a litigant may not bypass that legislation and rely directly on the Constitution without challenging that legislation as falling short of the constitutional standard”. The same principle also obviously applies to judges.

[31]      An employment equity plan is a measure contemplated by the EEA, which in turn is a statute giving expression, perhaps with limitations, to the constitutional right to equality. Restitutionary measures in employment equity plans are not to be directly assessed against constitutional provisions. An adjudicator must consider an equity plans’ compliance with the applicable statute, albeit with the constitution in the background as an ever-present interpretive tool. Should the provisions of the EEA on affirmative action be unequal to the task of enabling equity plans which provide substantive equality to employees, this would constitute a separate challenge for the courts. Judges should, however, observe and be contained by this hierarchy of law and, as it were, chain of command. Viewing restitutionary measures primarily through the lens of the EEA makes a difference because it is easy to mistake employment equity plans as constitutionally mandated tools in a designated employer’s hands to ensure compliance with the injunction to ensure equality, as opposed to statutorily mandated tools to achieve equitable employment practices and representivity in workplaces.

[32]      The EEA operates within workplaces. The world of work is inherently one of balancing interests in on-going relationships and not very often solely about the assertion of free-standing individual rights. The EEA expressly requires a consideration of the impact restitutionary measures may have on all parties, including those negatively affected by them. The CC minority judgment points this out:

Finally, the Act insists on affirmative action measures “based on equal dignity and respect of all people”. In doing so it reiterates dignity’s fundamental constitutional importance, both as a right and underlying value, in compliance with which the Act must be interpreted. Generally speaking, the advancement of those previously disadvantaged marks the equal dignity of all. But affirmative action measures can also undermine the dignity of those negatively affected by them.  The Act requires us to be vigilant against that threat. And, of course, an applicant’s merit cannot be disregarded, especially when it affects the SAPS’s ability to provide a vital public service efficiently. [references excluded]

[33]      The concept of equity in the EEA denotes the quality of fairness or impartiality. At its heart, fairness is a relational concept, favouring in its outcomes, a balancing of interests and not the attainment of rights without reference to others. Attaining balance is what the minority in the CC judgment in Barnard alerted to by saying:

“We must therefore formulate a standard specific to the Act, one that is rigorous enough to ensure that the implementation of a remedial measure is “consistent with the purpose of [the] Act” – namely, to avoid over-rigid implementation, to balance the interests of the various designated groups, and to respect the dignity of rejected applicants.

For these reasons, we consider the appropriate standard to be fairness. Unlike mere rationality, it is sufficiently encompassing to allow courts to assess consistency with the provisions and purposes of the Act, which recognise the importance of “fair treatment in employment”.           

A practical test

[34]      With the above in mind, it is possible to formulate a practical test for the lawfulness of restitutionary measures taken in terms of the EEA.[10] These are measures which take the form of preferential treatment of members of a designated group.

[35]      In the first instance, an adjudicator of an unfair discrimination claim should satisfy themselves that the decision was rational. Next is a consideration of factors that may render a rational decision unfair. It is difficult to draw a precise line between rationality and fairness, which is why a distinction between internal and external factors is conceptually preferable. This distinction coincides largely with the distinction between rationality and fairness and is easier to apply.

[36]      Internal factors deal with the validity and scope of the equity plan, its internal logic, rationality and compliance with the EEA and the factual accuracy of the information the decision-maker relied upon. For instance:

(a)       Where the restitutionary measure has no logical chance of addressing the identified demographic imbalances, it may be irrationally applied.[11]

(b)       If the equity plan was not in force when it was applied, the resultant decision must be irrational.

(c)        If an equity plan imposes quotas it would not be in compliance with the EEA, therefore be invalid, and thus be irrationally applied.

(d)       If the demographic statistics upon which the restitutionary measure was based were substantially wrong, the restitutionary measure is irrationally applied.

(e)       If demographic targets in the occupational category have already been met, then the continued provision of preferential treatment to members of designated groups goes beyond ‘equitable representivity’ and the measure is thus probably irrationally applied.

(f)        If the employee negatively affected by implementation of the equity plan was not in fact Indian but African female or was Indian but was also a member of another equally underrepresented group (female or disabled), the restitutionary measure applied against him may have been irrationally applied.

[37]      Second, an adjudicator should assess whether any countervailing evidence exists that may, notwithstanding the rational application of the equity measure, establish greater external harm to affected parties than the redress the measure would provide to designated groups. This is not a matter of comparing apples with apples. The fact that an employment equity measure is rational is weighty. To extend the metaphor, rationality is a brick against which a number of rather weighty fairness apples must be placed to lift and displace it. Far from the fairness standard lacking deference for the employer’s decision-making or equity plans, once the implementation of a plan is held to be rational, a presumption should apply that this measure was also fairly executed. An adjudicator considering the complaints of the unfair effects of a restitutionary measure should bear closely in mind that an individual’s disappointment cannot lightly outweigh the overarching social necessity for transformation in South African workplaces. In almost all balance of harm tests, the interests of the group tend to trump the interests of the individual. For an individual’s rights to prevail over rationally applied policy, the individual’s harm must be concentrated, sustained, extensively prejudicial to his or her rights and/or should probably also align with the public interest.

[38]      The evaluation of the fairness of an equity measure is done on a case-by-case basis, sensitive to the context and nuances of the proven facts. It should be borne in mind that an employer may also have recourse to fairness arguments to further substantiate a rationally implemented equity measure. Against assertions that an employee’s dignity was negatively affected, an employer may raise the point that attaining demographic targets is essential to attaining BBBEE scores in terms of preferential procurement laws and sectoral codes. In such a case, the external effect of an employer’s failure to apply a restitutionary measure will likely far outweigh the external effect on the employee’s feelings.

[39]      What fairness considerations could rebut the presumption created by rationality mentioned above?

(a)       The realistic prospects of finding a suitable candidate to fill the position from within the ranks of the under-represented group. Where a restitutionary measure has a speculative, distant or delayed chance of addressing representivity it may be unfair to apply it. For example, assuming that (white) females are under-represented as SBV drivers in Ulundi but that they exist elsewhere in the company, evidence of the historically absent application rate from this demographic group may suggest that it is unfair to delay any longer appointing the most meritorious male applicant. It is not irrational for the employer to hold out for a white female applicant, because they do exist. It is rather that, given past experience, such a prospect is so distant that the decision to deny the job to the most meritorious existing candidate in Ulundi by re-advertising is unfair in its effects.

(b)       As with Barnard, the number of times an aggrieved employee has been assessed the most meritorious candidate but been denied the post, is a fairness consideration. This is because the negative effect on an individual’s dignity in being rejected based on an attribute such as race and gender is compounded the more often in their career with the same employer this happens.

(c)        The extent of the under-representivity. If, for example, African men were a mere 1% over-represented when an African man was denied a promotion based on his race, considerations of fairness may well trump a dogmatic and formalistic (albeit rational) application of the equity plan when viewed against the effects of this decision on the candidate’s career-progression.

(d)       The extent of relative differences in performance scoring. A male candidate who scored 99 in an interview where the nearest female contender scored 50 has better grounds for claiming an unfair application of an affirmative action measure when he is overlooked. This is particularly where the position in question is not an entry level job but a senior one where a significant difference in scores reveals the qualitative superiority of a candidate. The claim of unfairness would rest on the fact that the EEA envisages targets and not quotas. As such, an employer has room to deviate from hiring targets, and to justify this to the regulator. Where a candidate is exceptional, such as where a proverbial Einstein applies for a University job, it may be unfair not to appoint him.

(e)       The amount of time the aggrieved party has been expected to act in the vacant position or to substantially fulfill its functions, and is still expected to do so, attendant on his non-appointment. If an employee has acted for two years, applies for the post, is scored the highest but not appointed and then asked to act for another year while an equity candidate is sought, this may be a consideration relevant to the fairness of the implementation of the plan.

(f)        The subjective experience of the aggrieved employee of the non-appointment as an affront to his or her dignity, status, and morale. While individual feelings alone cannot impede the rational application of important social policies, evidence as to the effect of these policies on human beings cannot be ignored either. This is particularly within those employers, such as the public service, who have explicitly accepted the duty to treat employees with respect, dignity and to be transparent and responsive to them in regard to decisions that affect them.

(g)       Unfairness may also be inferred from the external effects on persons other than the complainant.  For example, during COVID, the under-representation of female, coloured pulmonary specialists at a hospital could hardly be held out as a fair reason not to appoint an available Indian doctor to a one-year contract position. In Barnard, the effect of her non-appointment on service delivery and whether the post was critical, were external factors affecting an assessment of the fairness of the decision. Passing her over was not an internal factor affecting the rationality of the decision[12]. It was unfair because she was needed. Barnard essentially argued that because the post was critical, the decision not to appoint anyone demonstrated the unfairness of her treatment.

(h)       As mentioned above, the employer may also advance arguments on why, notwithstanding an employee’s unhappiness, the implementation of an equity measure would, on balancing all the interests at stake, be fair. For instance, the need to advance its BBBEE scores and preserve its business will tend to outweigh individual infringements of dignity.

Application of the fairness test to Nadesan’s case

[40]   On the rationality leg, the accepted evidence was that the Appellant had no pipeline of African female employees at an occupational level from which they could logically be drawn. (I find that this was, in all probability, the profile of employee that the Appellant would have been holding out to appoint if indeed equitable representivity was its goal.) Being aware that no suitable candidates from this under-represented group existed, it would have made no sense to re-advertise the post one more time as a means to achieve their equitable representation. If the Appellant had withdrawn the advertisement altogether, the irrationality of its response would not have arisen. Indeed, a rational response to its conundrum was to focus on creating a layer of appointable employees from under-represented groups for work in the Stores section and only then to run another advertisement. To the extent that Nadesan was denied appointment on the basis of the restitutionary measure of a re-advertisement to occur within a year, this was, on the evidence, irrational.

[41]   It was also irrational considering the importance of the job and the availability of other positions in the occupational level for equity considerations.

[42]   I am also mindful of the questions put to Ravidutt in cross-examination, presumably on the instruction of the Appellant. These questions proposed that African men would have been the “most appointable in terms of the demographics in order to comply with the equity requirements”. If this was the reason the Appellant advanced before the Commissioner for declining to appoint Nadesan, it also marks the decision with irrationality. This is because the Appellant’s own documents demonstrated that African males in the Cluster were also oversubscribed, far more so than the Indian group. As I have found above, reliance on inaccurate statistics is an internal flaw in the implementation of a restitutionary measure.

[43] The irrationality of the implementation of the measure, disposes of the appeal which must be dismissed.

[44]   Were there no internal rationality issues, I doubt fairness would have dictated an interference with the Appellant’s decision. While Nadesan was by far the most meritorious candidate, this would only have been the first time the post was re-advertised. His description of the subjective harm he experienced in the non-appointment was refreshingly honest if rather nonchalant. He mainly resented the waste of his time. While the evidence established the importance of filling the post, there was not enough of it to show that it was truly critical, so as to lift the presumption of fairness that would have flowed from a prior finding that the equity measure was rationally applied. As already stated, though, it is at this prior hurdle that the Appellant’s case faltered.

[45]   In the premises, the appeal is dismissed with costs.

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Benita Whitcher

                                                                        Judge of the Labour Court of South Africa

APPEARANCES:

APPELLANT:                      L Naidoo, instructed by Kathy James Attorneys

FIRST RESPONDENT:      CS Bosch, instructed by Macgregor Erasmus Attorneys

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