Case Law[2024] ZACC 29South Africa
Motor Industry Staff Association and Another v Great South Autobody CC t/a Great South Panelbeaters; Solidarity obo Strydom and Others v State Information Technology Agency SOC Limited (CCT298/22; CCT346/22) [2024] ZACC 29; 2025 (3) BCLR 312 (CC); (2025) 46 ILJ 481 (CC); [2025] 4 BLLR 337 (CC) (20 December 2024)
Constitutional Court of South Africa
20 December 2024
Headnotes
Summary: Automatically unfair dismissal in terms of section 187(1)(f) of the Labour Relations Act 66 of 1995 — dismissal based on age — age discrimination — employees continuing in employment after agreed retirement age of 60 years
Judgment
begin wrapper
begin container
begin header
begin slogan-floater
end slogan-floater
- About SAFLII
About SAFLII
- Databases
Databases
- Search
Search
- Terms of Use
Terms of Use
- RSS Feeds
RSS Feeds
end header
begin main
begin center
# South Africa: Constitutional Court
South Africa: Constitutional Court
You are here:
SAFLII
>>
Databases
>>
South Africa: Constitutional Court
>>
2024
>>
[2024] ZACC 29
|
Noteup
|
LawCite
sino index
## Motor Industry Staff Association and Another v Great South Autobody CC t/a Great South Panelbeaters; Solidarity obo Strydom and Others v State Information Technology Agency SOC Limited (CCT298/22; CCT346/22) [2024] ZACC 29; 2025 (3) BCLR 312 (CC); (2025) 46 ILJ 481 (CC); [2025] 4 BLLR 337 (CC) (20 December 2024)
Motor Industry Staff Association and Another v Great South Autobody CC t/a Great South Panelbeaters; Solidarity obo Strydom and Others v State Information Technology Agency SOC Limited (CCT298/22; CCT346/22) [2024] ZACC 29; 2025 (3) BCLR 312 (CC); (2025) 46 ILJ 481 (CC); [2025] 4 BLLR 337 (CC) (20 December 2024)
Download original files
PDF format
RTF format
Heads of argument BEGIN
Heads of arguments
PDF format
Heads of argument END
make_database: source=/home/saflii//raw/ZACC/Data/2024_29.html
sino date 20 December 2024
FLYNOTES:
LABOUR – Discrimination –
Age
–
Where
employees continued working past agreed retirement age –
Whether employer entitled to dismiss employee at any
time
thereafter on basis that employee has reached normal retirement
age – Alleged automatically unfair dismissal –
Meaning
of “normal” and an “agreed” “retirement
age” – Two matters considered –
Court delivering
three judgments however no majority on the interpretation of
section 187(2)(b) –
Labour Relations Act 66 of 1995
,
ss
187(1)(f)
and
187
(2)(b).
CONSTITUTIONAL
COURT OF SOUTH AFRICA
Case CCT 298/22
In
the matter between:
MOTOR
INDUSTRY STAFF ASSOCIATION
First Applicant
WILLEM
FREDERICK LANDMAN
Second Applicant
and
GREAT
SOUTH AUTOBODY CC t/a GREAT SOUTH
PANELBEATERS
Respondent
Case CCT 346/22
In
the matter between:
SOLIDARITY
obo GERHARDUS VILJOEN
STRYDOM
AND
OTHERS
Applicants
and
STATE
INFORMATION TECHNOLOGY
AGENCY
SOC
LIMITED
Respondent
Neutral citation:
Motor Industry Staff Association and Another v Great South
Autobody CC t/a Great South Panelbeaters; Solidarity obo Strydom and
Others v State Information Technology Agency SOC Limited
[2024]
ZACC 29
Coram:
Zondo CJ,
Chaskalson AJ, Dodson AJ, Kollapen J,
Mathopo J, Rogers J, Schippers AJ, Tshiqi J and
Van Zyl AJ
Judgments:
Zondo CJ: [7] to [135]
Van Zyl AJ:
[136] to [181]
Rogers J: [182] to
[221]
Heard
on:
2 November 2023
Decided
on:
20 December 2024
Summary:
Automatically unfair dismissal in terms of
section 187(1)(f)
of the
Labour Relations Act 66 of 1995
— dismissal based on age
— age discrimination — employees continuing in employment
after agreed retirement age
of 60 years
ORDER
In
the
Landman
case, CCT 298/22:
On
appeal from the Labour Appeal Court of South Africa (hearing an
appeal from the Labour Court):
1.
Leave to appeal is granted.
2.
The appeal is dismissed.
In
the
Solidarity
case, CCT 346/22:
On
appeal from the Labour Court of South Africa:
1.
Leave to appeal is granted.
2.
The appeal is upheld.
3.
The decision of the Labour Court is set aside and, for it, the
following order
is substituted:
“
(a)
The dismissals of Solidarity’s members involved in this case
were automatically unfair.
(b)
The respondent must pay each Solidarity member involved in this case
an amount equal to his or her remuneration
for 24 months calculated
at the rate of remuneration applicable to the employee concerned at
the time of his or her dismissal.
In the case of the dismissal
of the late Ms du Plessis, the respondent shall pay Ms Lötter in
her capacity as the executrix
of the estate of the late Ms du Plessis
an amount equal to 24 months’ remuneration that was applicable
to Ms du Plessis at
the time of her dismissal.”
JUDGMENT
THE
COURT:
[1]
These two cases concern
the interpretation of
section 187(2)(b)
of the
Labour Relations Act
[1
]
(LRA). The delay in
delivering judgment is in part attributable to the fact that the
Court has been unable to reach agreement
on the matter. The
result is that there is no majority on the interpretation of the
section. There are, however, majorities
for the orders to be
made in the two cases.
[2]
On the interpretation of
section 187(2)(b)
, four members of the Court (per Zondo CJ,
with Chaskalson AJ, Mathopo J and Schippers AJ
concurring) (first
judgment) conclude that a dismissal on the basis
of age is fair in terms of that section only if the employee’s
employment
is terminated on the date upon which the employee attains
his or her normal or agreed retirement age, unless the agreement or
collective
agreement provides that, where the employee reaches the
normal or agreed retirement age on a date other than the last day of
the
month, his or her last working day or his or her retirement date
will be the last day of the month. A termination on the basis
of age at a later date is automatically unfair. The first
judgment holds that
Waco
[2]
and the cases that have
followed it were wrongly decided.
[3]
A fifth member of the Court, Van Zyl AJ (second judgment),
holds that upon
the employee reaching his or her normal or agreed
retirement age, the employer has an election whether to terminate the
employee’s
employment on the basis of age. This election
is governed by ordinary contractual principles. Such a
termination, and
notice thereof, may take place on a date later than
the employee’s normal or agreed retirement age. An
employer may,
however, be found to have elected
not
to
terminate the employee’s employment if the employer fails to
exercise the termination election within a reasonable period
of
time. This depends, though, on whether the employer had
knowledge of the correct legal position. The second judgment
thus also disagrees with
Waco
, but for reasons differing from
those contained in the first judgment.
[4]
The remaining four members of the Court (per Rogers J, with
Dodson AJ, Kollapen J
and Tshiqi J concurring) (third
judgment) hold that once an employee has reached his or her normal or
agreed retirement age,
section 187(2)(b)
permits the employer,
then or at any time thereafter, to terminate the employee’s
appointment on the basis of age, upon the
giving of reasonable
notice. The third judgment leaves open the question whether the
employer is required to give the employee
a hearing, since a decision
on that point is unnecessary. It does, however, point to the
desirability of affording such a
hearing. The third judgment
thus accords with the interpretation adopted in
Waco
, albeit
for somewhat different reasons to those stated in that case.
[5]
As to the order to be made in the first case, CCT 298/2022 (
Landman
),
there is unanimity that the case engages the Court’s
jurisdiction and that leave to appeal should be granted. The
first judgment would have upheld the appeal and awarded Mr Landman
compensation equal to 24 months’ remuneration together
with
costs in the Labour Court, the Labour Appeal Court and this
Court. The second and third judgments conclude, however
and
albeit for differing reasons, that the appeal should be dismissed
with no order as to costs. The latter disposition of
the case
thus commands a majority.
[6]
As to the order to be made in the second case, CCT 346/2024
(
Solidarity
), there is again unanimity that the case engages
the Court’s jurisdiction and that leave to appeal should be
granted.
The first judgment concludes – both as a matter
of law based on its interpretation of
section 187(2)(b)
and in any
event on the particular facts of the case – that the appeal
should succeed, that the six employees in question
should be awarded
compensation equal to 24 months’ remuneration and that the
applicants should be granted costs in the Labour
Court, the Labour
Appeal Court and this Court. The second judgment would
have dismissed the appeal with no order as
to costs. Based on
the particular facts of the case, the third judgment agrees with the
disposition proposed in the first
judgment, save that the third
judgment would not grant the applicants costs in any of the Courts
concerned. There is thus
a majority in favour of upholding the
appeal and awarding the employees compensation equal to 24 months’
remuneration, but
no majority in favour of awarding the applicants
costs in any of the Courts concerned.
ZONDO CJ
(Chaskalson AJ, Mathopo J and Schippers AJ
concurring):
Introduction
[7]
Section 187(1)(f)
of the LRA provides:
“
(1)
A dismissal is automatically unfair if the employer, in dismissing
the employee, acts contrary
to
section 5
, or, if the reason for the
dismissal is –
. . .
(f)
that the employer unfairly discriminated against an employee,
directly or indirectly,
on any arbitrary ground, including, but not
limited to race, gender, sex, ethnic or social origin, colour, sexual
orientation,
age, disability, religion, conscience, belief, political
opinion, culture, language, marital status or family responsibility;”
[8]
Section 187(2)(b)
of the LRA makes provision for an exception to
section 187(1)(f).
It reads:
“
(2)
Despite subsection (1)(f) –
. . .
(b)
a dismissal based on age is fair if the employee has reached the
normal or agreed
retirement age for persons employed in that
capacity.”
[9]
Sitting as a Judge of the Labour Court in June 1998 – twenty
six years ago and
within a few months after my appointment as a Judge
– I handed down a judgment on the meaning of
section 187(2)(b)
in a matter where an employee had been dismissed from his employment
on the basis that he had reached an agreed retirement age.
The
dismissal in that case occurred more than a year after the employee
had reached the agreed retirement age. That
employee had
challenged the dismissal and contended that his dismissal on the
ground of his age was automatically unfair as contemplated
in
section 187(1)(f).
Section 187(1)(f)
provided then, as it
still does today, that the dismissal of an employee on the ground of
age constituted an automatically unfair
dismissal. In other
words, it prohibits the dismissal of an employee on the ground of
age. However,
section 187(2)(b)
provided an exception to this
prohibition. It provided then, as it still does today, that the
dismissal of an employee is
fair if he or she “has reached the
normal or agreed retirement age for persons in that capacity”.
That was the
case of
Waco.
[10]
In
Waco
I held that, once an employee had reached an agreed
retirement age, his or her dismissal on the ground that he or she had
reached
an agreed retirement age was fair. I also held that,
where, as in that case, an employee was not dismissed on reaching the
agreed retirement age but was dismissed long after that date on the
ground of age, the dismissal would be fair.
[11]
Waco
has
been followed for the past 26 years and has been held to continue to
be good law. Now, 26 years later, sitting as a member
of this
the apex Court of South Africa and as Chief Justice, I find
myself taking part in the adjudication of a case
which raises
essentially the same question as was raised by
Waco
and,
therefore, raises the question whether or not
Waco
was
correctly decided.
[3]
It
was four years after this country had become a democracy and under
two years since the adoption of the final Constitution
when
Waco
was
decided.
Tempus
fugit
.
[4]
While I dealt with the
Waco
case a
few months into my career as a Judge, I find myself dealing with the
present matter a few months before I retire from the
Bench.
[5]
[12]
There are two applications for leave to appeal before us. They
relate to the
Landman
case and the
Solidarity
case. I
will start with the
Landman
case and will, thereafter, follow
up with the
Solidarity
case.
The
Landman case
The parties
[13]
This case was presented to the Labour Court as a stated case.
The first applicant in the
Landman
case is the Motor Industry
Staff Association which represents certain employees within the motor
industry. The second applicant
is Willem Frederick Landman
(Mr Landman). Mr Landman is a member of the Motor Industry
Association. The respondent
is Great South Autobody CC t/a
Great South Panelbeaters. The respondent is the former employer
of Mr Landman. It is
clear from the respondent’s trading
name that it runs a panel beating business.
The facts
[14]
The agreed facts between the parties were the following:
14.1
Mr Landman commenced his employment with the respondent as a
procurement officer during
November 2007.
14.2
During January 2008, Mr Landman and the respondent concluded a
written contract of employment.
14.3
In terms of the contract of employment the agreed retirement age for
Mr Landman was
60 years of age. Clause 9 of the letter of
appointment signed by both parties and thus constituting the contract
of employment
reads:
“
Your retirement
age will be 60 years of age.”
14.4
Mr Landman reached 60 years of age on 15 March 2018.
14.5
The respondent was aware on 15 March 2018 that Mr Landman was
reaching the retirement age
but did not dismiss him at that stage on
the basis of the agreed retirement age. After he had reached
the retirement age,
Mr Landman continued to work as usual and the
respondent continued to pay him as usual.
14.6
During 2018 the respondent never referred to Mr Landman’s
retirement age or
the retirement clause.
14.7
On or about 14 January 2019 – ten months after Mr Landman
had reached the agreed
retirement age – the respondent gave
Mr Landman a letter informing him that his services would
terminate with effect
from 12 February 2019 as he had reached
the agreed retirement age of 60 years.
14.8
Mr Landman’s last working day was 12 February 2019.
14.9
The respondent dismissed Mr Landman due to his age.
14.10
Mr Landman was a member of the Motor Industry Provident Fund. The
Motor Industry Provident Fund Collective
Agreement provided that the
retirement age of an employee who was a member of that fund was 65
years.
14.11
To the extent that the employer was arguing that Mr Landman’s
agreed retirement age was 60, the
inclusion of this statement in its
statement of defence conflicts with that case or contention.
However, it is accepted that
the parties agreed that the agreed
retirement age for Mr Landman was 60 years. Accordingly,
the matter must be decided
on the basis that the agreed retirement
age applicable to Mr Landman was 60 years despite the provision
of the Motor Industry
Provident Fund Collective Agreement that the
retirement age of employees who were members of that fund, like
Mr Landman, was
65. I mention in passing that, in the
light of the binding nature of a collective agreement as provided for
in section 23
of the LRA, the existence of this provision in the
collective agreement may well arguably be said to effectively vary or
cancel
the retirement age provision in the parties’ contract of
employment. However, in this case it is not necessary to decide
this point.
[15]
The applicant’s case as set out in its pleadings was that by
virtue of the parties’ conduct
as set out above:
15.1 a
new (second) employment contract came into existence which contract
did not contain an agreed retirement
age, or at best for the
respondent, contained a retirement age of 65 years; alternatively,
15.2
the respondent had waived its right to rely on the retirement age as
stipulated in the written employment
contract, alternatively,
Mr Landman and the respondent had waived the retirement clause;
further alternatively,
15.3
the parties tacitly amended the terms of the employment contract to
the effect that the agreed retirement
age of 60 years no longer
applied; and,
15.4 by
dismissing Mr Landman during February 2019 on the basis of his age,
the respondent unfairly discriminated
against him on the basis of his
age and, as such, his dismissal constituted an automatically unfair
dismissal in terms of section
187(1)(f) of the LRA.
[16]
The respondent’s defence was that:
16.1 Mr
Landman’s dismissal was fair pursuant to section 187(2)(b) of
the LRA as he had reached the agreed
retirement age;
16.2
essentially, an employer can retire an employee at any time after the
employee has reached an agreed retirement
age and such retirement
will be protected by section 187(2)(b) of the LRA;
16.3 as
at the date of Mr Landman’s dismissal, his gross monthly
remuneration was R34 800.00;
16.4
the Motor Industry Fund Collective Agreement provides that the
retirement age of “an employee”
who is a member of the
Fund is 65 years of age.
[17]
In terms of the stated case, the Court was required to decide whether
a new employment contract came
into existence between Mr Landman and
the respondent. If the Court concluded that no new contract of
employment came into
existence after Mr Landman had reached the
agreed retirement age of 60 years, the Court would decide whether the
respondent
waived its right to dismiss in terms of the retirement
clause in the written employment contract or whether, “alternatively
[it] waived the rights and obligations that [arose] from the said
clause as alleged in paragraph 12 of the statement of claim or
alternatively [whether] Mr Landman and the respondent amended
the written contract as alleged in paragraph 12 of the statement
of
claim”.
[18]
In terms of the stated case, the Court was also required to decide
whether Mr Landman’s
dismissal by the respondent
constituted an automatically unfair dismissal in terms of section
187(1)(f) of the LRA. The Court
was additionally required to
decide whether, by virtue of section 187(2)(b) of the LRA, the
respondent was permitted in law during
January 2019 to rely on the
retirement age clause as contained in the employment contract to
justify the dismissal.
[19]
By way of relief the applicants sought an order for the payment of
the maximum compensation in the
event that the Court found in favour
of the applicants. The parties agreed on certain facts that
were relevant to the issue
of compensation. These were that:
19.1
as at the time of the hearing of the matter in the Labour Court,
Mr Landman
had not as yet found another job;
19.2
Mr Landman was 62 years and 8 months old as at 27 November 2020
when the stated case was prepared;
19.3
due to Mr Landman’s retirement (dismissal) the Motor
Industry Provident
Fund paid Mr Landman R1 034 430,13
on 26 March 2019 in respect of provident fund benefits;
19.4
if the respondent had not dismissed Mr Landman when it did and
had allowed
him to continue working until he was 65 years of age,
which was the retirement age provided for in the rules of the Motor
Industry
Provident Fund for its members, the latter Fund would have
paid Mr Landman R1 674 127,56;
19.5
as at the date of his dismissal, Mr Landman’s gross salary
was R34 800,00
per month.
Labour
Court
[20]
The stated case was argued before Van Niekerk J who
followed the
Waco
decision and decided that the respondent was
entitled to dismiss Mr Landman on the ground of having reached
the agreed retirement
age when the dismissal took place many months
after Mr Landman had reached the agreed retirement age of 60
years. Accordingly,
the Labour Court concluded that
Mr Landman’s dismissal was fair and dismissed the claim.
However, it did
not award any costs against Mr Landman.
Mr Landman was aggrieved by the decision of the
Labour Court and applied
for leave to appeal to the Labour
Appeal Court against the decision of the Labour Court. The
Labour Court granted
the applicants leave to appeal to the
Labour Appeal Court.
Labour
Appeal Court
[21]
The applicants appealed to the Labour Appeal Court. The
Labour Appeal Court’s
judgment was written by
Kathree-Setiloane AJA and concurred in by Waglay JP and
Coppin JA. The Labour Appeal Court
upheld the
conclusions of the Labour Court and dismissed the appeal. The
Labour Appeal Court also did not make
any order as to
costs.
In
this Court
Jurisdiction
[22]
This Court has
jurisdiction because the matter requires an interpretation of the LRA
which is a constitutional issue.
[6]
The main constitutional issue is whether, upon a proper
construction of section 187(2)(b) of the LRA, an employer may dismiss
an employee who has been allowed to work beyond an agreed retirement
age on the basis that he or she has reached the agreed retirement
age. Put differently, the question is whether an employer who
does not dismiss an employee when the latter reaches an agreed
retirement age but dismisses him or her after the employee has worked
beyond such agreed age may rely on section 187(2)(b) as a
defence to
a claim that the dismissal is automatically unfair. In this
case, Mr Landman was allowed to work for many
months after he
had reached the agreed retirement age before he was dismissed on the
basis that he had reached the agreed retirement
age. Dismissal
on the ground of age also constitutes a limitation of the right not
to be unfairly discriminated against on
the ground of age as
entrenched in section 9 of the Constitution. The constitutional
validity of section 187(2)(b) was not
challenged in these
proceedings.
Application for leave to
appeal
[23]
This Court grants leave to appeal when it is in the interests of
justice to do so. Some of the
factors relevant to whether this
Court should grant leave to appeal are dealt with below:
23.1
Whether the issue or issues that the Court will have to decide in the
appeal,
if it grants leave, will affect only the parties before it or
whether it will affect significant sections of society. If the
judgment of the Court would impact many people, that would be a
factor that favours that leave be granted. In the present
case
there can be no doubt that the question whether an employer who does
not dismiss or retire an employee when he or she reaches
his or her
agreed retirement age but dismisses him or her some time after that
date may invoke section 187(2)(b) as a defence.
23.2
Whether there are reasonable prospects of success for the applicants
if leave
to appeal is granted. The stronger the prospects of
success for the applicants the stronger the case for leave to appeal
to be granted. In the present case I consider that there are
reasonable prospects of success for the applicants despite the
fact
that on the face of it my judgment in
Waco
– which has
stood for 26 years – appears to stand in the applicants’
way. I say this because a reading
of Waco reveals that, in
arriving at the decision in that case, the Labour Court did not
consider the provisions of section
39(2) of the Constitution which
requires that legislation be interpreted to give effect to the
spirit, purport and objects of the
Bill of Rights. It may well
be that, when section 187(2)(b) is interpreted with section 39(2)
in mind, a different meaning
will be given to section 187(2)(b)
than the one that the Labour Court gave in Waco.
23.3
The importance of the matter; there can be no doubt that this matter
is important
and raises important issues.
[24]
I conclude that, given the above factors, it is in the interests of
justice that leave to appeal be
granted.
The
appeal
[25]
It is necessary to set out the constitutional and statutory framework
relevant to the determination
of the issue in this appeal. The
starting point is the Constitution.
Constitutional
and statutory framework
[26]
Section 1 of the Constitution reads as follows in so far as it is
relevant:
“
1.
The Republic of South Africa is one, sovereign, democratic state
founded on the following
values:
(a)
Human dignity, the achievement of equality and the advancement of
human rights and freedoms.
. . .
(c)
Supremacy of the Constitution and rule of law.
. . .”
Section
7(1) of the Constitution – which is under the Bill of Rights –
provides:
“
The Bill of Rights
is the cornerstone of democracy in South Africa. It enshrines
the rights of all the people in our country
and affirms the
democratic values of human dignity, equality and freedom.”
Section
9 of the Constitution deals with equality. It 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.”
[27]
From the above, it will be seen that section 9(1) of the Constitution
provides that “everyone
is equal before the law and has the
right to equal protection and benefit of the law”. Section
9(3) and (4) prohibits,
respectively, the state and any person,
directly or indirectly, from unfairly discriminating against anyone
on the ground of, among
others, age. Section 9(5) is clear.
“Discrimination on one or more of the grounds listed in
subsection (3) is
unfair unless it is established that the
discrimination is fair”. One of the grounds listed in
section 9(3) of the
Constitution is age.
[28]
Section 6(1) and (2) of
the Employment Equity Act
[7]
reads as follows:
“
6
Prohibition of unfair discrimination
(1)
No person may unfairly discriminate, directly or indirectly, against
an employee,
in any employment policy or practice, on one or more
grounds, including race, gender, sex, pregnancy, marital status,
family responsibility,
ethnic or social origin, colour, sexual
orientation,
age
, disability, religion, HIV status,
conscience, belief, political opinion, culture, language, birth or on
any other arbitrary ground.
(2)
It is not unfair discrimination to —
(a)
take affirmative action measures consistent with the purpose of this
Act; or
(b)
distinguish, exclude or prefer any person on the basis of an inherent
requirement
of a job.”
[29]
Section 10 of the Constitution provides:
“
Everyone has
inherent dignity and the right to have their dignity respected and
protected.”
Section
23(1) of the Constitution reads:
“
Everyone has the
right to fair labour practices.”
[30]
The LRA is legislation that was enacted to give effect to, among
others, section 23 of the Constitution.
Section 39(2) of the
Constitution deals with the interpretation of legislation. It
reads:
“
When interpreting
any legislation, and when developing the common law or customary law,
every court, tribunal or forum must promote
the spirit, purport and
objects of the Bill of Rights.”
In
Hyundai
[8]
this
Court explained the spirit, purport and objects of the Bill of Rights
thus:
“
[22]
The purport and objects of the Constitution find expression in
section 1, which lays out the fundamental
values which the
Constitution is designed to achieve. The Constitution requires
that judicial officers read legislation,
where possible, in ways
which give effect to its fundamental values. Consistently with
this, when the constitutionality of
legislation is in issue, they are
under a duty to examine the objects and purport of an Act and to read
the provisions of the legislation,
so far as is possible, in
conformity with the Constitution.”
[31]
The purpose of the LRA, as set out in section 1 thereof is important
when a Court is required to interpret
the LRA. That purpose is
to “advance economic development, social justice, labour peace
and the democratisation of
the workplace by fulfilling the primary
objects” of the LRA. Those primary objects include:
“
(a)
to give effect to and regulate the fundamental rights conferred by
section 23 of the Constitution.”
[32]
Section 185 of the LRA provides for a right not to be unfairly
dismissed and a right not to be subjected
to an unfair labour
practice. Section 185 reads:
“
185
Right not to be unfairly dismissed or subjected to unfair labour
practice:
Every employee has the
right not to be –
(a)
unfairly dismissed; and
(b)
subjected to unfair labour practice.”
Section
186 defines “dismissal”.
[9]
[33]
Section 187(1) of the LRA deals with automatically unfair dismissals.
Section 187(1)(f)
reads:
“
187
Automatically unfair dismissals
(1)
A dismissal is automatically unfair if the employer, in dismissing
the employee, acts
contrary to section 5 or, if the reason for the
dismissal is—
. . .
(f)
that the employer unfairly discriminated against an
employee, directly
or indirectly, on any arbitrary ground, including,
but not limited to race, gender, sex, ethnic or social origin,
colour, sexual
orientation, age, disability, religion, conscience,
belief, political opinion, culture, language, marital status or
family responsibility;
. . .”
Section
187(2)(b) of the LRA reads:
“
(2)
Despite subsection (1)(f)—
. . .
(b)
a dismissal based on age is fair if the employee has reached the
normal or agreed
retirement age for persons employed in that
capacity.”
[34]
Section 188 deals with dismissals other than automatically unfair
dismissals. That is “other
unfair dismissals” as the
heading to section 188 calls them. Section 188 reads:
“
188
Other unfair dismissals
(1)
A dismissal that is not automatically unfair, is unfair if the
employer fails to prove—
(a)
that the reason for dismissal is a fair reason—
(i)
related to the employee's conduct or capacity; or
(ii)
based on the employer's operational requirements; and
(b)
that the dismissal was effected in accordance with a fair procedure.
(2)
Any person considering whether or not the reason for dismissal is a
fair reason or
whether or not the dismissal was effected in
accordance with a fair procedure must take into account any relevant
code of good
practice issued in terms of this Act.”
[35]
Against the above constitutional and statutory background, it is now
necessary to consider the provisions
of sections 187(1)(f) and
187(2)(b) of the LRA to answer the question: is a dismissal of an
employee by the employer on the ground
that the employee has reached
the normal or agreed retirement age automatically unfair when the
dismissal takes place after the
employee has been allowed to work
beyond the day on which he or she reached the retirement age? In
other words, may the employer
rely on section 187(2)(b) as a
defence to justify such a dismissal?
[36]
Section 186 of the LRA defines “dismissal” and reads:
“
186
Meaning of dismissal and unfair labour practice
(1)
‘
Dismissal’
means that—
(a)
an employer has terminated employment with or without
notice;
(b)
an employee employed in terms of a fixed-term contract
of employment
reasonably expected the employer—
(i)
to renew a fixed-term contract of employment on the same or
similar
terms but the employer offered to renew it on less favourable terms,
or did not renew it; or
(ii)
to retain the employee in employment on an indefinite basis but
otherwise
on the same or similar terms as the fixed-term contract,
but the employer offered to retain the employee on less favourable
terms,
or did not offer to retain the employee;
(c)
an employer refused to allow an employee to resume
work after she—
(i)
took maternity leave
in terms of any law, collective agreement or her
contract of employment; or
. . .
(d)
an employer who dismissed a number of employees for the
same or
similar reasons has offered to re-employ one or more of them but has
refused to re-employ another; or
(e)
an employee terminated employment with or without
notice because the
employer made continued employment intolerable for the employee; or
(f)
an employee terminated employment with or without
notice because the
new employer, after a transfer in terms of section 197 or section
197A, provided the employee with conditions
or circumstances at work
that are substantially less favourable to the employee than those
provided by the old employer.”
[37]
This was not the definition of “dismissal” at the time of
the
Waco
judgment. The definition in section 186(1) then
was:
“
186
“dismissal” means that –
(a)
an employer has terminated a contract of employment
with or without
notice;
(b)
an employee reasonably expected the employer to renew
a fixed term
contract of employment on the same or similar terms but the employer
offered to renew it on less favourable terms,
or did not renew it;
(c)
an employer refused to allow an employee to resume
work after she—
(i)
took maternity leave in terms of any law, collective agreement
or her
contract of employment; or
(ii)
was absent from work for up to four weeks before the expected date,
and
up to eight weeks after the actual date, of the birth of her
child;
(d)
an employer who dismissed a number of employees for the
same or
similar reasons has offered to re-employ one or more of them but has
refused to re-employ another; or
(e)
an employee terminated a contract of employment
with or without
notice because the employer made continued employment intolerable for
the employee.”
[38]
In
Waco
[10]
the employee had gone beyond the agreed retirement age by about three
years. The agreed retirement age was 65 and he had
turned 65
years of age in 1994 and, after reaching the agreed retirement age,
the employee had continued to work as usual. He
was 67 years of
age when he was dismissed. I held in
Waco
that
section 187(2)(b) was applicable to that case.
[11]
This meant that, where an employee had gone beyond the agreed
retirement age and the employer dismissed him or her on the
ground of
having reached the agreed retirement age, the employer may rely upon
section 187(2)(b) as a defence to an automatically
unfair
dismissal claim. This meant that the dismissal would be
regarded as fair.
[39]
In
Waco
I had this to say:
“
[16] The
conclusion that section 187(2)(b) applies in this case necessarily
means that the dismissal of the applicant on grounds
of age is not
automatically unfair and, therefore, section 187(1)(f) finds no
application in the matter. That, however, is
not necessarily
the end of the matter as the next question is whether the dismissal
falls into the category of simply unfair dismissals.
If the
dismissal is not an automatically unfair one, it may be that it is
unfair on grounds other than the grounds referred
to in section
187(1). Whether or not the fact that an employee has gone past
the agreed or normal retirement age is a fair
reason to dismiss
depends, in my view, on the meaning of the provisions of section
187(2)(b). I turn to consider those provisions.”
[12]
[40]
I also said in
Waco
:
“
[17]
Initially I thought the provisions of section 187(2)(b) could not
apply to a matter such as this one where
the employee has not only
reached but has gone beyond the agreed or normal retirement age. The
basis for this thought was
that to apply section 187(2)(b) when the
employee has gone past the agreed or normal retirement age would be
extremely unfair and
inequitable because the employer would be
dismissing the employee purely on grounds of age and would be doing
so in circumstances
where there is no complaint that the age of the
applicant is affecting his job performance or competence adversely
nor would it
be in circumstances where there is a complaint that the
operational requirements of the employer are adversely affected by
the
employee’s age.
[18]
It seemed to me that whereas prior to an employee reaching the agreed
or normal retirement age,
a fair reason for dismissal is required to
exist before there can even be talk of a fair dismissal that right of
an employee to
the existence of a fair reason before he can be
dismissed comes to an end upon his reaching the retirement age and
that there is
no such right after the retirement age. I thought
that the legislature could never have intended to enact provisions
with
such far reaching implications without making that
intention clear. Not believing that such a serious inroad into
the
employee’s right to the existence of a fair reason to
dismiss before he can be dismissed could have been intended by the
legislature in enacting section 187(2)(b), it appeared to me
that section 187(2)(b) applied to a situation where the employee
was dismissed on reaching the agreed or normal retirement age and not
where he has gone beyond that age.
[19]
Ultimately I became convinced that section 187(2)(b) could not apply
where a contract of employment
came to an end on the employee
reaching the normal or agreed retirement age because, if one
considers the definition of the word
‘dismissal’ in
section 186 carefully, it cannot be said that, in such a
situation, the employee is being dismissed.
This is so because
in that situation the contract of employment comes to an end by the
effluxion of time on the employee
reaching that age without the
employer having to do anything.”
[13]
[41]
I
wish
to
emphasise
the point that there can be a dismissal of an
employee when he or she reaches the agreed retirement age where the
terms of the contract
of employment are not such as to result in the
contract of employment coming to an end by the effluxion of time when
the employee
reaches the agreed retirement age. That means
that, if the situation is not one where the contract of employment
comes to
an end by the effluxion of time, there may be a dismissal of
the employee when he or she reaches the normal or agreed retirement
age.
[42]
Another issue that arose for determination was whether an employer
who contemplates dismissing an employee
on the ground of age when the
employee has long gone beyond the agreed retirement age is obliged to
comply with a fair procedure
before dismissing the employee. I
held in
Waco
that in such a case there was no obligation on
the employer to comply with a fair procedure other than giving a
contractual notice.
I shall deal with this issue when I deal
with the
Solidarity
matter later in this judgment.
[43]
There are at least three ways in which the employment contract
between an employer and an employee
may come to an end on the basis
of retirement. The first is where the employer and employee are
parties to a fixed term contract
of employment which provides that
the contract will come to an end upon the employee reaching the
normal or agreed retirement age.
In such a case the contract
expires on the day on which the employee reaches the normal or agreed
retirement age with neither
the employer nor employee having to do
anything to bring the contract of employment to an end. In such
a case the contract
of employment between the parties expires by the
effluxion of time upon the employee reaching the agreed retirement
age.
[44]
The second and third ways relate to a situation where the contract of
employment between an employer
and an employee is of an indefinite
nature and contains an agreed retirement age. Sometimes the
agreed retirement age will
be contained in the contract of employment
but sometimes it will be contained in a separate document. Such
separate document
could be the pension fund rules or provident fund
rules applicable to the employer and employee. In such a case,
the contract
of employment between the parties does not come to an
end by the effluxion of time or by the operation of law, somebody has
to
do something to bring about the end of the contract. In such
a case, the employer may take the decision to dismiss the employee
on
the basis of the latter reaching the agreed retirement age. That
is the second way. The employee may also terminate
the contract
of employment on the basis of reaching the agreed retirement age by
resigning or retiring. That is the third
way.
The
meaning of section 187(2)(b)
[45]
In order to determine this appeal, it is important to understand the
meaning of section 187(2)(b).
To understand the meaning of
section 187(2)(b), it is important to understand the phrase “.
. .
if the employee has reached the normal or agreed retirement
age
. . .”. To determine the meaning of this phrase,
an understanding of the verb “reach” the verb “retire”
and the noun “retirement” is important.
[46]
What does reaching a certain age mean? The Cambridge
International Dictionary of English describes
the verb “reach”
as meaning “to arrive at or come to”. Reaching a
certain age means that the person
has reached his or her birthday
that renders him or her to be a certain age.
[47]
What does to “retire” mean? What does “retirement”
mean? The South African
Concise Oxford Dictionary gives as
one of the meanings of the verb “retire” as “leave
one’s job and cease
to work, especially because one has
reached
a particular age.” (Emphasis added.) There are two
very interesting features about the meaning of the verb “retire”
in the context of the present case. Firstly, it is that it
clearly says “retire” means leaving your job and ceasing
to work. Secondly, it uses the language and tense used in
section 187(2)(b) when it says “especially because one has
reached” a particular “age”.
[48]
One of the meanings that the Cambridge International Dictionary of
English gives for the verb “retire”
is “to (cause
to) leave your job or stop working because of old age or ill-health”.
It gives two sentences that
are apposite to the present case.
The one sentence is: “He is due to retire as the Chief
Executive next year”.
The other is: “If an employer
retires an unwanted employee, they dismiss that person”. The
same dictionary
gives the following as the meaning of retirement:
“Retirement is the point at which someone stops working or the
period in
their life when they stop working”.
[49]
When an employer dismisses an employee because the employee has
reached the retirement age, it can
also be said that he or she
retires the employee. When an employee terminates his or her
contract of employment based on
age when he or she has reached the
retirement age, he or she can also be said to retire. We can
say with confidence that,
when one talks about the concept of
reaching an agreed retirement age, one is talking about a point at
which it has been agreed
that an employee will retire or will be
retired or must leave his or her job and cease working.
[50]
Going back to the meaning of the verb “reach”, in the
context of reaching a certain age
the word means arriving at a
certain age or coming to a certain age where the employee will leave
her job and cease to work. Given
the meaning of the two verbs,
“reach” and “retire” in section 187(2)(b) the
phrase “. . .
if the employee has reached the normal or
agreed retirement age
. . .” refers to an employee ceasing
to work or leaving his or her job on grounds of age when he or she
arrives at or comes
to a certain age that has been agreed upon as the
year for the employee to leave work. Agreed retirement age is
the agreed
point at which retirement will happen. It is an
agreement about a common point at which employees will retire or will
be
retired. The term “agreed retirement age” means
that the parties have agreed that a certain age is the age when
employees will retire or will be retired.
[51]
Another important consideration is the purpose of fixing or
prescribing or agreeing upon a retirement
age. What do the
parties intend in fixing or agreeing upon a retirement age? When
an employer and an employee agree
upon a retirement age, for example
65 years of age, the purpose is that, when the employee reaches age
65, he or she will retire.
It would serve no purpose for a
collective agreement or any agreement to fix a retirement age
applicable to a certain employer
or group of employers and their
employees if the employers are free to retire their employees then if
they like or to retire them
at any other time thereafter as they
please. Such agreed retirement age would in due course become
superfluous or redundant.
Imagine an employer who decides
unilaterally that the agreed retirement age does not suit him and,
therefore, never retires
his or her employees when they reach the
agreed retirement age but always retires them two years after the
agreed retirement age.
[52]
If the agreed retirement age is 60 years but the employer is free to
retire his employees who are subject
to that agreed retirement age at
63, then, if he ends up normally retiring his employees at 63, then
age 63 will become the normal
retirement age as contemplated in
section 187(2)(b). What I have just described immediately above
can happen if the third
judgment’s interpretation is to be the
law. The difficulty with the state of affairs that such
interpretation creates
is this: Section 187(2)(b) refers to both a
“normal” and an “agreed” “retirement
age”. The
“or” between the words “normal”
and “agreed” in section 187(2)(b) is disjunctive. The
section contemplates that in an establishment there will either be a
normal retirement age or an agreed retirement age for employees
and
that the same employees cannot be subject to both an agreed
retirement age and a normal retirement age. A normal retirement
age applies where there is no agreed retirement age. To subject
employees to both a normal and an agreed retirement age at
the same
time is the effect of both the judgment (second judgment) by my
Colleague, Van Zyl AJ, and the judgment (third
judgment) by
my Colleague, Rogers J, both of which I have had the pleasure of
reading.
[53]
Once an employee is subject to an agreed retirement age, a normal
retirement age does not apply. Similarly,
if an employee is
subject to a normal retirement age because he or she has not agreed
to any retirement age, there is no agreed
retirement age applicable
to him or her. Therefore, as I have said, an employee cannot be
subjected to both at the same time.
In my view, the
interpretation adopted by the third judgment is not what is
contemplated by the section.
[54]
The second judgment’s interpretation could also result in
employees being subjected to both an
agreed retirement age and a
normal retirement age at the same time. The second judgment is
to the effect that, where there
is an agreed retirement age, an
employer is free to dismiss an employee (for retirement purposes)
when the employee reaches that
age, for example, . on his or her
birthday or to dismiss him or her within a reasonable time after that
date. It is not clear
to me how long the delay would have to be
before the delay can be said to be unreasonable. However, if a
year later were
to fall within the reasonable period, then an
employer whose employees are subject to an agreed retirement age of
60 could also,
of course, be subject to a normal retirement age of 61
if the employer develops a norm to retire his employees at 61 despite
the
existence of an agreed retirement age of 60 in the organisation.
[55]
Furthermore, imagine an industry where there are about 200 employers
all of whom are bound by a collective
agreement which provides that
the retirement age is 65 years. If every one of the 200
employers is free to disregard the
agreed retirement age and choose
an age of their choice as the age at which they will retire their
employees and still be able
to invoke the protection of section
187(2)(b), that would render the agreed retirement age in the
collective agreement redundant.
If trade unions in an industry
or sector concluded a collective agreement with a provision for an
agreed retirement age of,
for example 65 years of age, and employers
simply ignored age 65 for the purposes of the retirement of their
employees and they
retired employees at any ages of their choice
between 65 and, for example, 75, trade unions would be up in arms
against those employers
for ignoring a collective agreement.
[56]
The third judgment’s interpretation of section 187(2)(b)
effectively means that it would be in
order for employers who are
party to agreements on retirement ages to disregard the agreed
retirement age and behave as if they
are in an industry that has no
agreed retirement age. I can see neither sense nor logic in an
employer or group of employers
in an industry having an agreed
retirement age for employees if every employer would be allowed to
ignore the agreed retirement
age and simply retire their employees at
any age beyond the particular agreed retirement age. The
interpretation adopted
by the third judgment has this effect.
[57]
Prior to reaching an agreed retirement age, an employee may not be
dismissed, on the ground of age.
If he or she is dismissed on
such a ground, the dismissal would constitute an automatically unfair
dismissal in terms of
section 187(1)(f) of the LRA. It
would also constitute unfair discrimination on the basis of age and a
violation of
section 6(1) of the Employment Equity Act where the
Employment Equity Act applies. If there is an agreed retirement
age and the employer dismisses the employee
upon the latter
reaching the agreed retirement age
, section 187(2)(b) of the LRA
applies and the dismissal is fair. There is also no obligation
on the employer to afford the
employee procedural fairness in such a
case because the parties agreed that the employee’s contract of
employment would be
terminated upon him or her reaching the agreed
retirement age. The employer’s decision in such a case
does not adversely
affect any of the employee’s rights because
the employee has previously agreed that, when he or she reaches that
age, the
employer may dismiss him or her. Under the
Solidarity
case, which I deal with later in this judgment, I also deal with
the statutory basis for this proposition.
[58]
The approach adopted in
Waco
is
that an employee who reaches the agreed retirement age but continues
to work as usual beyond the agreed retirement age may still
be
dismissed by the employer on the basis that the employee has reached
the agreed retirement age and such dismissal will be fair.
On
that approach, the employer may dismiss the employee a few days or a
few weeks or months or even some years after the employee
reached the
agreed retirement age and rely on section 187(2)(b) to defend the
fairness of the dismissal. In
Waco
the Labour Court
held that in a case where an employer dismissed an employee after he
or she has passed the agreed retirement
age, there was no duty on the
part of the employer to hear the employee.
[14]
This finding in
Waco
meant
that except for the obligation to give a contractual notice of the
termination of the contract of employment, the employer
had no
obligation to follow a fair procedure before dismissing an employee
on such a ground in such circumstances.
[15]
[59]
Let me deal with the
Waco
approach to the substantive fairness
of a dismissal where the employer dismisses an employee beyond the
agreed retirement age on
the ground that the employee has reached the
agreed retirement age. The
Waco
approach is open to
abuse because the employer may dismiss the employee for another
reason but rely on the fact that the employee
“has reached”
the agreed retirement age to justify the dismissal. For
example, there could be a lawful or protected
strike in which workers
who have worked beyond the agreed retirement age participate and the
employer may dismiss those employees
and say it is because they have
reached the agreed retirement age when it is in fact dismissing them
for their role in the strike.
If there were many such employees
and they were dismissed more or less at the same time, it may be that
a Court could be persuaded
that the reason for their dismissal is
their role in the strike and not that they had reached the agreed
retirement age.
However, if they were dismissed some time after
the strike, it may be difficult to show that the reason for the
dismissal is their
role in the strike even though in truth the reason
for their dismissal is their role in the strike.
[60]
Another scenario in which
the
Waco
approach would be open to
abuse by an employer relates to retrenchment. Section 41(2) of
the Basic Conditions of Employment
Act
[16]
places an obligation on an employer who retrenches (i.e. dismisses
for its operational requirements) an employee to pay such employee
severance pay equal to at least one week’s remuneration for
each completed year of continuous service with that employer
unless
the employer has been exempted from this obligation.
[17]
This means that, for example, if an employee has been with the same
employer for, for example, 24 years, the severance pay
will be equal
to remuneration for 24 weeks which is six months’ remuneration.
If the employer has reason to retrench
workers, it would first
dismiss those who have gone beyond the agreed retirement age and say
the reason for the dismissal is that
the employees concerned have
reached the normal or agreed retirement age and they are not being
retrenched. The employer
will know that, if it gives this
reason as the reason for the dismissal and says that the workers are
not being retrenched, it
will not be obliged to pay severance pay to
them. The employer will know that, if it says that those
employees are being
retrenched, it will be obliged to pay severance
pay. Such employees are likely to have served the employer for
many years
and the amounts of severance pay payable to them if they
were retrenched after many years of service could be huge.
[61]
Another way in which an employer may abuse the interpretation of
section 187(2)(b) adopted by
Waco
and by the third
judgment is this. If an employer suspects that an employee who
has reached the normal or agreed retirement
age (as interpreted by
Waco
and the third judgment) of having committed misconduct
but either cannot prove it in a disciplinary hearing or does not want
to
go through the “trouble” of a disciplinary process, it
will be able to just dismiss or retire such employee and say
the
reason is that the employee has reached the normal or agreed
retirement age and not that the employee is dismissed for misconduct.
The employer would know that, if it gave the reason that the
employee has reached the normal or agreed retirement age, it
would be
protected by section 187(2)(b) which would be unlikely to result in a
legal challenge whereas, if it said that the reason
for dismissal was
misconduct, that could be challenged in arbitration.
[62]
What also exacerbates the situation is that the playing fields are
significantly uneven. An example
of this unequal bargaining
power is that the employer may hold on to the employee for as long as
necessary subject to the employee’s
willingness to continue
working. However, for the employee the employment could be
terminated on a week’s or month’s
notice. An
employee in such a situation of vulnerability will not be able to
plan his or her future or finances properly
because, on the approach
of the second and third judgments, it is the prerogative of the
employer to unilaterally decide when the
employee must stop working
after he or she has reached his or her normal or agreed retirement
age birthday. So, while in
this situation, it could be said
that either party may terminate the contract of employment on a
week’s or a month’s
notice, in truth and reality this is
a power that would mostly be exercised by the employer and not the
employee. This means
that an interpretation of section
187(2)(b) that allows the employer to rely on this provision as a
defence when it dismisses an
employee after the employee has reached
the normal or agreed retirement age renders such category of
employees vulnerable to abuse
by the employer.
[63]
The second and third judgments reject this point on the basis that,
if it is suspected that the reason
for dismissal given by the
employer is not the true reason, what the true reason is will be
determined by the court or an arbitrator,
as the case may be, when
the fairness of the dismissal is challenged. My difficulty with
this criticism is this. Let
us imagine that, one or two
employees who have worked beyond their agreed retirement birthday
played a prominent role in organising
a protected (lawful) and very
effective strike against the employer. After the strike has
ended, the employer dismisses them
or retires them on the ground that
they have reached the normal or agreed retirement age. In such
a case, how are employees
going to prove that the reason the employer
gives for the dismissal of the employees concerned is not the true
reason?
[64]
If you accuse the employer of actually dismissing them for their role
in organising a very effective
strike against him, the employer will
say: “But the strike they organised was a protected strike and
I know that I cannot
dismiss them for that. I am telling you
that, in terms of the law, once they have worked beyond their
retirement age birthday,
I may dismiss them on the ground that they
have reached the agreed retirement age at any time. It is up to
me when I do it.”
If the employer says this, it will be
almost impossible for anybody to prove that the true reason for the
dismissal of the
employees is not the one advanced by the employer.
So, the employer will be able to abuse the interpretation
adopted by the
second and third judgments and get away with it.
[65]
The interpretation of section 187(2)(b) that allows the employer to
choose its own time when to dismiss
an employee who has reached the
agreed retirement age should be avoided because it is open to abuse
by employers. In any
event, section 187(2)(b) must be
interpreted restrictively because it is a provision that limits the
right not to be unfairly
discriminated against on the ground of age
as entrenched in section 9(3) and (4) of the Constitution.
Section 9(5) provides
that such discrimination is unfair unless
it is established that it is fair. That means that it
prima
facie
constitutes unfair discrimination. The
Waco
interpretation places employees who work beyond the agreed
retirement age in a vulnerable position. It weakens the
position
of workers more than it is already weakened. It places
the employer in an unduly strong position in relation to workers in
such circumstances.
[66]
The approach adopted in the second judgment does not focus on the
correct interpretation of section
187(2)(b) but rather on whether the
employer can be said to have waived his right to dismiss the employee
when he did not dismiss
him (i.e. the employee) at the time he
reached his normal or agreed retirement age. The approach of
the second judgment appears
to be based, to a large extent, on
principles of common law that favour the employer rather than adopt
an approach that seeks to
take into account the interests of both
employers and employees.
[67]
The second judgment fails
to give effect to the balance which this Court directed in
NEHAWU
[18]
should be struck in interpreting the LRA to give effect to the
concept of fair labour practices. In
NEHAWU
this
Court had this to say which I find important as we consider the
meaning of section 187(2)(b):
“
[T]he focus of
section 23(1) is, broadly speaking, the relationship between the
worker and the employer and the continuation of
that relationship
on
terms that are fair to both
.
In giving content to that right, it is important to bear in
mind the tension between the interests of the workers and the
interests of the employers which is inherent in labour relations.
Care must therefore be taken to accommodate, where possible,
these interests so as to arrive at the balance required by the
concept of fair labour practices. It is in this context that
the LRA must be construed.” [Emphasis added.]
The
third judgment also suffers from the same failure as the second
judgment in this regard.
[68]
Another interpretation of section 187(2)(b) must be sought if
there is one that would not strain
the language of the section. The
Waco
interpretation is based on interpreting the phrase “has
reached the normal or agreed retirement age. . .” in
section 187(2)(b)
to be wide enough to include the dismissal of
an employee long after the employee has gone beyond the agreed
retirement age. In
other words, on that interpretation, even
after a year or two or even three years since the employee reached
the agreed retirement
age, the employer would be entitled to justify
the dismissal with reference to the fact that the employee has
reached the agreed
retirement age and, therefore, may still be
dismissed and in terms of section 187(2)(b) the dismissal would
be fair.
[69]
Another interpretation of the phrase “has reached the normal
retirement or agreed retirement
age” is that this phrase refers
to a situation where an employee reaches or has just reached the
agreed retirement age but
not one who has worked beyond the day when
he or she reached the agreed retirement age. That means that
the employee must
retire on the day on which he or she reaches the
agreed retirement age. In terms of this interpretation the
dismissal which
section 187(2)(b) says is fair is a dismissal based
on age that is effected on the day when the employee reaches the
retirement
age. It is in respect of such a dismissal that an
employer may use section 187(2)(b) as a shield or as protection
against
a claim for an automatically unfair dismissal. That, in
my view, is the correct interpretation of section 187(2)(b) because
it heeds the injunction of section 39(2) of the Constitution.
[70]
The construction of section 187(2)(b) adopted in this judgment gives
effect to the spirit, purport
and objects of the Bill of Rights. It
is consistent with the right to human dignity and promotes the right
to fair labour
practice as enshrined in our Constitution. It
limits the situations in which discrimination on grounds of age is
permitted
– which is
prima facie
unfair discrimination –
to the absolute minimum. The
Waco
interpretation expands
the category of employees on whom this discrimination on grounds of
age is visited. The interpretation
that
Waco
gave to
section 187(2)(b) is not consistent with the fundamental values
of our Constitution and is not to be preferred. It
allows for
the abuse of section 187(2)(b) of the LRA. In this regard I
emphasise that in
Waco
the Labour Court did not heed the
injunction in section 39(2) concerning the interpretation of
legislation. In part this may
well have been because our
Constitution was relatively new at the time. It was less than
two years old.
[71]
The interpretation adopted in this judgment limits the period when an
employer may dismiss an employee
on grounds of age. There is
also no room for the employer to abuse the section 187(2)(b) defence
or protection. It
is only available on the day that the
employee reaches the agreed retirement age and on no other day. This
will not cause
any unfairness to employers because an employer will
be able to keep an eye on when each employee will reach the agreed
retirement
age and prepare for that eventuality in good time. The
employee will also be able to plan his or her life properly knowing
exactly when he or she will retire. The employer has to give
the employee notice of the termination of the contract of employment
or notice pay in lieu of notice when the contract of employment will
not be coming to an end by the effluxion of time or by the
operation
of law.
[72]
Obviously, it is up to the employer and the employee to change the
agreed retirement age or to conclude
a new contract of employment
that will govern the period after the agreed retirement age. The
conclusion reached above renders
it unnecessary to decide the
question whether or not an employer who allows an employee who has
reached an agreed retirement age
to continue working as usual beyond
the agreed retirement age waives the right to rely on section
187(2)(b) of the LRA to dismiss
the employee. The position is
simply that the defence or protection of section 187(2)(b) is
only available to an employer
who dismisses the employee on the
latter reaching the agreed retirement age. That happens if the
dismissal is effected on
the day the employee turns 60 years of age
if the normal or agreed retirement age is 60 years. It is not
available to an
employer who allows the employee to work beyond the
agreed retirement age and dismisses the employee thereafter on the
ground that
the employee has reached the agreed retirement age.
However, if the contract of employment or a collective
agreement that
makes provision for the normal or agreed retirement
age provides that the employee will retire or will be retired on the
last day
of the month in which the employee reached the normal or
agreed retirement age, that will not offend the interpretation of
section
187(2)(b) adopted in this judgment.
[73]
The result of the above is that the section 187(2)(b) protection or
defence upon which the respondent
relied to justify Mr Landman’s
dismissal was no longer available to the respondent when it dismissed
Mr Landman
nine months after he had reached the agreed
retirement age. This, therefore, means that Mr Landman’s
dismissal
is not protected by section 187(2)(b) and there is no other
justification advanced for his dismissal other than age. There
is no complaint that, because of age, Mr Landman could no longer
perform his duties satisfactorily. Accordingly, the
dismissal
constitutes unfair discrimination and is a violation of section 6(1)
of the Employment Equity Act. This also means
that the
dismissal was automatically unfair as contemplated in
section 187(1)(f) of the LRA. Therefore, the appeal
against the decision that the dismissal was fair must succeed.
Remedy
[74]
Mr Landman does not seek reinstatement. He only seeks
maximum compensation applicable to
an employee whose dismissal is
found to have been automatically unfair. That is an amount
equal to the employee’s remuneration
over a period of 24
months. If Mr Landman had sought reinstatement, it is likely
that an order of reinstatement with retrospective
effect would have
been granted. In financial terms that would have cost the
respondent far more than the compensation equal
to 24 months’
remuneration. By not claiming reinstatement in a case where his
performance of work was not adversely
affected by his age, Mr Landman
has ensured that the respondent does not have to pay backpay that in
terms of retrospectivity
of reinstatement would have been more than
24 months’ remuneration.
[75]
If Mr Landman had sought reinstatement, I cannot see what could
have stood in the way of the Court
granting such an order.
Furthermore, it was not the respondent’s case that at the
time of Mr Landman’s dismissal,
he was no longer able to
perform his duties satisfactorily as a result of advanced age.
That being the case, it is fair to
infer that Mr Landman could have
continued working for some years before he could reach the point
where, as a result of advanced
age, he would no longer be able to
perform his duties satisfactorily. By dismissing him at the
time it did, the respondent
deprived Mr Landman of the opportunity of
working for at least a few more years before he could reach that
point.
[76]
Furthermore, it was common cause that the Motor Industry Provident
Fund paid Mr Landman R1 034
430,13 but that, if he had been
allowed to work until he retired when he was 65 years of age, he
would have been paid R1 674 127,56.
This means that Mr Landman
was denied the opportunity to earn an extra R600 000,00.
Therefore, compensation that
is equal to 24 months’
remuneration is not excessive. Mr Landman also did not
claim any interest to be added to
the amounts of this compensation.
That has also benefitted the respondent. Furthermore, it
was common cause that as
at the time of the trial Mr Landman had
not as yet found another job. The trial in the Labour Court
was on 26 November
2020. That was just under two years since
dismissal. He was dismissed on 12 February 2019. In my
view, it accords
with the dictates of fairness and equity that the
maximum amount of compensation be awarded to Mr Landman.
Costs
[77]
With regards to costs the law is that in labour
matters whether or not costs should be awarded to the successful
party depends on
what the requirements of law and fairness dictate.
They
do not
automatically
follow the result. Yet, a party who is
successful must not be placed in a situation where, if he or she is
not granted costs,
the costs of pursuing the matter will be such that
he or she is hardly left with anything. The Court must try and
strike
a fair balance. A dismissal for a reason listed in
section
187(1) of the LRA is a serious
violation of the employee’s rights. Furthermore, in this
case the employer has really
benefitted from the fact that Mr Landman
did not seek reinstatement. In my view, the respondent should
be ordered to
pay the applicants’ costs in all the Courts.
[78]
In the
circumstances
,
the appeal should be upheld and the decisions of the
Labour Appeal Court and the Labour Court should be set
aside.
The order of the Labour Court should be replaced
with one that is consistent with the above conclusions.
The Solidarity Case
[79]
In the
Solidarity
matter, Solidarity, a registered trade
union, makes an application for leave to appeal against a decision of
the Labour Appeal Court
refusing it leave to appeal against
a judgment and order of the Labour Court. Solidarity brings
that application on behalf
of six individuals who were its members
and were dismissed by the State Information Technology Agency SOC Ltd
(SITA), the respondent
in the
Solidarity
matter. I shall
refer to the respondent as either the respondent or the SITA.
[80]
The six individuals on whose behalf Solidarity brings the application
are:
(a)
Mr Christopher Gerhadus Viljoen Strydom;
(b)
Mr Alwyn Enslin;
(c)
Mr Andreas Olivier;
(d)
Ms Wilma Ena Smith;
(e)
“Ms Sonia du Plessis (deceased)”;
and,
(f)
Ms Petra Van den Berg.
Ms
du Plessis had died by the time the trial came to an end in the
Labour Court. In its judgment the Labour Court made an
order of
substitution replacing Ms du Plessis with Ms Theresilda Sieglinda
Lötter from Erasmus, Lötter and Co who had
been appointed
as the executrix of Ms du Plessis’ late estate.
[81]
In the founding affidavit in support of Solidarity’s
application for leave to appeal, the deponent
thereto said that
Solidarity was bringing the application on behalf of the six members
listed above including Ms du Plessis (deceased).
It is not stated
that Solidarity brings that application on behalf of Ms Lötter
in her capacity as the Executrix of the late
estate of Ms du Plessis.
Solidarity cannot act on behalf of someone who has died. Only
an executor or executrix may do so
in the sense that he or she may
represent the estate of such a person. Solidarity could, therefore,
not act on behalf of Ms du
Plessis after she has passed on.
[82]
Directions were issued to the parties directing them to clarify the
status of Ms Lötter in these
proceedings. In other words, the
parties were directed to state whether Ms Lötter, in her
capacity as the executrix of Ms
du Plessis’ estate, is an
applicant in these proceedings and whether Solidarity had a mandate
to act for her. In response
to the directions, Ms Lötter filed
an affidavit. Mr Hendrik van Hoven, who described himself as
the Head of the Labour
Court litigation in Solidarity, filed a
confirmatory affidavit. The SITA did not file anything by the
deadline. It is fair to assume
that it does not dispute what is said
in Ms Lötter’s affidavit and in Mr van Hoven’s
confirmatory affidavit. The
essence of what Ms Lötter says in
her affidavit is that she had authorised Solidarity to represent her
in her capacity as
the executrix of Ms Du Plessis’ estate. Mr
Van Hoven confirms what Ms Lötter says and goes on to say that
Solidarity
has acted under the authority and instruction of Ms Lötter
in her capacity as the executrix of the estate of the late Ms Du
Plessis as stated in her affidavit.
[83]
It seems to me that Ms Lötter authorised Solidarity to act for
her in her representative capacity
and bring an application for leave
to appeal in this Court. However, strictly speaking, Solidarity did
not do so because it never
said it was also acting on her behalf in
bringing this application. Owing to this omission or failure on
the part of Solidarity,
Ms Lötter is, strictly speaking, not an
applicant before us nor did Solidarity purport to act on her behalf
in bringing this
application. It said it acted for, among others, Ms
Du Plessis whom, technically, it could no longer represent because
she had
died. Despite the fact that Solidarity did not,
strictly speaking, purport to act for Ms Lötter and that Ms
Lötter
was not an applicant before us, I am of the view that, in
the circumstances of this case, this is an omission that this Court
may
overlook. I say this because:
(a)
in the Labour Court
Ms Lötter was substituted for the late Ms Du
Plessis.
(b)
Solidarity, in seeking
to include Ms Du Plessis, expressly stated
that she was “deceased”. It is clear that
Solidarity sought to include
Ms Du Plessis in the matter and put her
as one of the persons for whom it was acting;
(c)
Solidarity had been
instructed or authorised by Ms Lötter to act
for her to bring the application for leave to appeal but it did not
carry out
this instruction;
(d)
the dispute between
the late Ms Du Plessis and the respondent is the
same as the disputes between the other individual applicants and the
respondent
which we are dealing with in this judgment;
(e)
the respondent does
not oppose the accommodation of Ms Lötter in
these proceedings.
[84]
In the light of all this, if there is an order to be made in favour
of the other individual applicants,
an appropriate order will also be
made in favour of Ms Lötter in her representative capacity as
the executrix of the estate
of the late Ms Du Plessis.
[85]
I shall refer to the individuals as the individual applicants even
though strictly speaking they were
not individuals. I do this
for convenience. Before going further, it is necessary to set
out the factual background
to the Solidarity dispute with the
respondent. The dispute between the parties was whether or not
the dismissal of the individual
applicants by the respondent on the
basis that they each had reached the agreed retirement age as
contemplated in section 187(2)(b)
of the LRA, even though the
dismissals had happened months or even a year or some years after
each employee had reached the agreed
retirement age, were
automatically unfair. If they were, the next question will be
whether the individual applicants should
be paid compensation and, if
so, how much compensation they would be paid.
Background
[86]
Unlike the
Landman
case, which was adjudicated as a stated
case, the
Solidarity
case was a trial. In respect of
each individual applicant involved in the case, Solidarity filed and
served a statement of
claim. The respondent filed a statement
of defence or a response to each individual applicant’s
statement of claim.
Solidarity filed one or more amended
statements of case. The respondent filed and served its amended
statement of defence.
[87]
In respect of each individual applicant’s case the parties
concluded and signed a pre-trial minute.
Later, Solidarity and
all the individual applicants, on the one hand, and the respondent,
on the other, concluded and signed
a joint pre-trial minute.
[88]
The individual applicants signed contracts of employment with the
respondent.
[89]
The respondent had its conditions of employment which will be
referred to as the SITA Conditions of
Employment which were effective
from 2 December 2011. Such conditions included the
SITA Termination of Employment
Policy which became effective from 19
February 2008.
[90]
Clause 6.3 of the SITA Termination of Employment Policy bore the
heading: “Termination of Services.”
Clause 6.3.1
has two paragraphs. They read thus:
“
6.3.1. Termination
on reaching retirement age
The retirement fund
provides retirement benefits for employees who complete their careers
in SITA’s service. The retirement
age for employees is as
defined in the SITA Conditions of Employment and / or the respective
Pension Retirement Fund rules.
An employee may apply to
continue working beyond normal retirement age. Any decision to
allow an employee to continue working
beyond normal retirement age
shall be taken by the head of department in consultation with the
Human Resources department. Any
decision in this regard should
be based on operational requirements, fitness of the employee (should
be confirmed in writing) and
applicable fund rules.”
[91]
Clause 1 of the SITA Employment Conditions reads as follows in part:
-
“
Rationale
These employment
conditions, with related policies and management directives issued by
the SITA from time to time in its prerogative,
determine the working
conditions within which employees still perform their functions.
When employed by the
SITA, it shall be deemed that the employee has accepted these agreed
upon employment conditions. Unless
otherwise agreed in writing,
these employment conditions shall be regarded as an integral part of
the service contract between
the employee and the SITA.
. . .”
[92]
Clause 9.18 of the SITA Employment Conditions reads:
“
Retirement age
Retirement age
specifications shall be set according to the rules of the relevant
pension or retirement funds.”
[93]
Clause 9.19.1(b)(i) and (ii) of the SITA Employment Conditions, which
relate to Alexander Retirement
Fund, reads as follows:
“
9.19.1 Defined
contribution funds
(a)
Denel Retirement funds
(i)
. . .
(b)
Alexander Forbes Retirement Fund
(i)
The normal retirement age of the fund is the last day of the month
in which a member reaches the age of 60.
A member who
transfers from another company approved pension fund or approved
provident fund shall retain his previous retirement
age of 65 in
terms of the rules of such approved pension fund or approved
provident fund.
(ii)
Subject to the consent of SITA, a member who has reached his
normal retirement date and normal retirement age of 60 or 65,
whichever
is applicable, may remain in service and retire at a date
not later than the last day of the month in which the member attains
the age of 67
. Contributions by and on behalf of the member
shall cease after the normal retirement date and the employee
forfeits the
death, disability and funeral benefits should the
employee pass away or become disabled while in the service of SITA.”
(Emphasis
added).
[94]
In the trial bundle used by the parties there was a document titled:
“
Alexander Forbes
Retirement Fund (Pension Section)
Special Rules Applicable
to State Information Technology Agency (Proprietary) Limited.”
The
following appeared immediately below this title:
“
The General Rules
of the Alexander Forbes Retirement Fund (Pension Section) shall be
read in conjunction with these Special Rules
which shall apply to the
Eligible Employees of the Employer with effect from the Participation
Date.”
The
participation date is 1 April 2005.
[95]
Rule 6 of the Special Rules reads:
“
6 Normal
Retirement Date in terms of General Rule 2:
The last day of the month
in which a member reaches age 60 years; provided that a member who
transfers from another Approved Pension
Fund or Approved Provident
Fund or shall retain his previous retirement age of 65 years in terms
of the rules of such Approved
Pension Fund or Approved Provident
Fund.”
[96]
However, Rule 5.2, which is titled: “Retirement from Service”,
provides as follows in Rule
5.2.1 and 5.2.2:
“
5.2.1
A member who has reached age 55 years may retire from Service on the
last day of any month occurring before he
reaches his Normal
Retirement Date provided that a member who is not a member of the
Alexander Forbes Retirement Fund (Provident
Section) who is at least
50 years of age and is within 10 years of his Normal Retirement Date
may retire on the last day of any
month occurring before he reaches
his Normal Retirement Date.
5.2.2 A
member who has not retired in terms of Rule 5.2.1 must retire from
Service on reaching his Normal Retirement
Date unless his Employer
agrees in writing to his remaining in Service after that date.”
[97]
Clause 2.1.18 of the contract of employment defines “Termination
Date” as meaning “the
retirement age specifications set
according to the rules of the relevant pension or retirement funds or
any other earlier date
as envisaged in terms of this Agreement”.
[98]
In October 2017 Ms Petra Van den Berg received a letter of dismissal
from the respondent dated 11 October
2017. That letter read as
follows:
“
Dear Ms Petra Van
den Berg
Our records indicate that
on the 05
th
of August 2017 you reached another milestone
celebrating your 62nd birthday. According to the SITA conditions of
employment clause
9.18 you were due to retire at the end of August
2015. We would like to take this opportunity to inform you that your
services
with SITA will as a result of your retirement come to an end
on the 31
st
December 2017.
Your valuable input in
making SITA a success is highly appreciated. We take this
opportunity to wish you well in your much
deserved rest.
Sincerely
Moeketsi
Hlabanelo
11/10/2017
Acting HOD: Human
Capital
Date”
All
the individual applicants received similar letters except for the
differences in the names of the addressees and dates for reaching
the
retirement age and when each one was advised he or she would leave
the organisation.
[99]
After each one of the individual applicants had received their
respective letters informing them of
their respective last days in
the organisation, he or she lodged a grievance with the respondent
complaining about the letter.
The respondent considered the
grievances of the individual applicants and concluded that they were
without merit and rejected
them.
Labour
Court
[100]
After the respondent had rejected the individual applicants’
grievances about their dismissals,
Solidarity contended that the
dismissals were automatically unfair as they were in breach of
section 187(1)(f) of the LRA.
The respondent disputed that
contention and contended that its decisions to dismiss the individual
applicants were covered by section
187(2)(b) of the LRA which meant
that the dismissals were fair. These disputes were referred to
conciliation but could not
be resolved. Ultimately, Solidarity
referred these disputes as separate disputes to the Labour Court for
adjudication.
However, as the individual disputes raised more
or less similar legal issues, they were consolidated by an order of
the Labour
Court.
[101]
On the above factual background, Solidarity’s case was that the
respondent had dismissed the
individual applicants on grounds of age
and the dismissals constituted unfair discrimination. They also
contended that their
dismissals constituted automatically unfair
dismissals. They accepted that there was a normal retirement
age of 60 years
applicable to them but made two points in that
regard. Firstly, they contended that, since the respondent did
not dismiss
them when they reached the retirement age of 60 years but
dismissed them either months later or a year or two or even three
years
later, it (i.e. the respondent) had no right to dismiss them at
that stage on the basis that they had reached the normal retirement
age of 60 years unless it had reached agreement with the employees on
a new retirement age which had not happened.
[102]
Secondly, the applicants contended that, in any event, the
respondent’s conditions of employment
applicable to them
provided that, subject to the respondent’s consent, they could
continue working beyond the normal retirement
age of 60 years in
which case they would have a right to retire any day from the normal
retirement age of 60 years up to age 67.
The applicants then
contended that the respondent had consented to them working beyond
the age of 60 years and retiring when
they reached 67 years of age.
In substantiation hereof the applicants pointed out that the
respondent allowed the individual
applicants to work beyond age 60
and gave them work instructions throughout that period and even gave
them salary increases.
[103]
In its statement of defence or response to each applicant’s
statement of case the respondent
denied that it had dismissed the
individual applicants. Its denial was strange, given its letter
to each one of the individual
applicants in which it told them when
they had reached the normal retirement age of 60 and notifying them
of their last working
day. In the end the respondent’s
defence was that, since each individual applicant had worked beyond
their normal retirement
age of 60 years by the time it dismissed
them, the dismissal was fair by reason of section 187(2)(b). In
other words, the
respondent’s contention was that, when an
employer does not dismiss an employee when the latter reaches their
normal retirement
age and allows him or her to work beyond such age,
the employer has a right to dismiss the employee at any time it
chooses thereafter
and such dismissal would be fair in terms of
section 187(2)(b). The respondent contended that this was what
it had done in
this case.
[104]
The respondent submitted that, when it did not dismiss the individual
applicants when they respectively
reached their normal retirement
age, it did not waive its right to dismiss them at any time
thereafter. The respondent, therefore,
invoked
section 187(2)(b) to justify the dismissal of each one of the
individual applicants. Furthermore, the respondent
contended
that it never consented that the individual applicants should work
beyond their normal retirement age and retire when
they reached 67
years of age. The respondent took this position despite the
fact that it was common cause that respondent
had allowed the
individual applicants to work beyond the agreed retirement age and
between that stage and their last day at the
SITA had continued to
give each one of the individual applicants work instructions.
[105]
The Labour Court, through Nkutha-Nkontwana J, concluded that the
dismissals were not automatically
unfair. The reason given was
that, once an employee has worked beyond the date on which he or she
reached the normal retirement
age, the employer is entitled to
dismiss him or her at any time thereafter on the basis that the
employee has reached the normal
retirement age. It said that
the employer is entitled in those circumstances to invoke the section
187(2)(b) shield or protection
against a claim that the dismissal is
automatically unfair. In essence the Labour Court relied on
Waco
to dismiss Solidarity’s claim. Solidarity
then applied to the Labour Court for leave to appeal to the
Labour Appeal
Court against the Labour Court’s judgment and
order. The Labour Court dismissed that application on the
basis
that there were no reasonable prospects of success for the
intended appeal.
Labour
Appeal Court
[106]
Solidarity then petitioned the Labour Appeal Court for leave to
appeal to it against the judgment
and order of the Labour Court.
The Labour Appeal Court, through Waglay JP, Coppin JA
and Setiloane AJA,
dismissed that petition. In its brief
reasons the Labour Appeal Court said that essentially it was, in
general terms,
in agreement with the judgment and order of the
Labour Court and took the view that there were no reasonable
prospects of
success for the intended appeal. It also said that
there was no compelling reason why leave to appeal should be granted.
In
this Court
[107]
Solidarity then applied to this Court for leave to appeal against the
decision of the Labour Appeal
Court and the judgment and order of the
Labour Court.
Jurisdiction
and leave to appeal
[108]
For the reasons given in the
Landman
case above, this Court
has jurisdiction and leave to appeal should be granted.
The
appeal
[109]
For the reasons given in the
Landman
case above in support of
the conclusion that Mr Landman’s dismissal was
automatically unfair I conclude in the
Solidarity
matter, too,
that the dismissals of the individual applicants were automatically
unfair. This is because, as in the
Landman
case, the
dismissals of the individual applicants in the
Solidarity
matter were not effected on the days on which they reached the normal
retirement age but were effected after such dates. I say
this mindful
of the fact that in the
Landman
case there was an agreed
retirement age between the parties whereas in the
Solidarity
matter the agreement between the parties was effectively that the
normal retirement age specified in the Rules of the Alexander Forbes
Retirement Fund was the normal retirement age applicable to the
individual applicants. The reasoning I adopted in the discussion
of
the
Landman
case applies with equal force to a case such as
the
Solidarity
matter where there is a normal retirement age
and not an agreed retirement age. However, in the
Solidarity
matter there is a further ground on the basis of which I also
conclude that the dismissals of the individual applicants were
automatically
unfair. I deal with it below.
[110]
The applicants also contended that, in continuing to work for the
respondent beyond the dates on which
they reached the normal
retirement age, they did so with the consent of the respondent. They
further submitted that, in those
circumstances, they were entitled to
work until age 67. They submitted that, once the respondent had
allowed them to work
beyond the normal retirement age of 60, the
respondent had no right to retire them against their will before they
reached age 67.
In this regard they relied on the conduct of
the respondent as well as clause 9.19.1(b)(i) and (ii) of the SITA
Employment
Conditions. These provisions have been quoted above.
However, because of their importance, I consider it important
to quote them again. Clause 9.19.1(b)(i) and (ii) reads:
“
. . .
[1] (b)
Alexander Forbes Retirement Fund
(i)
The normal retirement age of the fund is the last day of the month in
which a member reaches the age
of 60.
. . .
(ii)
Subject
to the consent of the SITA, a member who has reached his normal
retirement date and normal retirement age of 60 or 65, whichever
is
applicable, may remain in service and retire at a date not later than
the last day of the month in which the member attains
the age of 67
.
. .” (Emphasis added.)
[111]
Clause 9.19.1(b)(i) of the SITA Employment Conditions simply
specifies that the normal retirement
age is 60 years of age but a
member’s last day at work is not necessarily the day on which
the member concerned turns 60.
It provides that the member’s
last day is the last day of the month in which he or she turns 60.
This, therefore,
means that, unless an employee’s 60th
birthday is on the last day of the month, the employee’s last
day at work will
not be his or hers 60
th
birthday.
[112]
Clause 9.19.1(b)(ii) provides for an exception to the general rule in
clause 9.19.1(b)(i) that
a member retires on the last day of the
month in which he or she turns 60 years of age. The exception
for which clause 9.19.1(b)(ii)
provides is that, with the consent of
the respondent, despite a member having reached his or her retirement
age and the last day
of the month in which he or she turns 60 years
of age, he or she may remain in the respondent’s service “and
retire
at a date not later than the last day of the month in which
the member attains the age of 67. . . .”. What
clause 9.19.1(b)(ii)
means is that, provided there is the
employer’s consent, a member may remain in the employer’s
service “and retire
not later than the last day of the month in
which the member attains the age of 67”.
[113]
The right that clause 9.19.1(b)(ii) creates is not an employer’s
right to retire an employee
at any time between the last day of the
month in which the employee reaches 60 years of age and age 67. The
right that the
provision creates is that of the employee. I say
this because the provision says “. . .a member. . .
may
remain
in service and retire at a date not later than. . .”.
The provision does not say: “. . .the SITA may. . .”.
That right only vests in the employee once the respondent has
consented to the employee continuing in the respondent’s
employment beyond the retirement age of 60 years. It is the
employee’s right to retire any time between the last day
of the
month in which he or she turned 60 and age 65. The employee
should obviously have to give notice of his retirement
in the same
way that the employer would have to give the employee notice of
termination of the contract of employment.
[114]
On behalf of the applicants it was contended that each individual
applicant remained in the respondent’s
service beyond the last
day of the month in which they turned 60 and that this was with the
consent of the respondent. The
respondent led the evidence of
only one witness, Mr Moeketsi Hlabanelo. Mr Hlabanelo was the
Acting Head of Department: Human
Capital Management at the time of
the dismissals of the individual applicants. At the time of
giving evidence Mr Hlabanelo
was a Senior Manager: Operations and
Logistics within the Facilities Department.
[115]
That it was with the consent of the respondent that the individual
applicants had continued working
for the respondent beyond the last
day of the months in which they respectively turned 60 years of age
was put to Mr Moeketsi Hlabanelo
under cross examination.
He conceded that it was with the consent of the respondent that the
individual applicants worked
beyond the last day of the months in
which they respectively turned 60 and, thus, reached their agreed
retirement age.
[116]
It is important to refer to the exchange between Mr Hlabanelo and the
applicant’s legal representative
during Mr Hlabanelo’s
cross-examination. In part it reads:
“
APPLICANT
REPRESENTATIVE: Okay. I do not want you to digress. It is a
very simple question. You see, I see where you
and I, where we
have conflict in this discussion, is that you are embedding yourself
in this argument, that it was a mistake to
allow these individuals to
continue to work, am I correct?
MR MOEKETSI HLABANELO:
Absolutely.
APPLICANT REPRESENTATIVE:
Alright. And because you believe it was a mistake, you seem to
have difficulty to agree on a very
simple proposition that, even if
it was a mistake, which I am not conceding, I am saying, even if Her
Ladyship accepts it was a
mistake, that they were there with the
consent of SITA. No-one chased them away.
MR MOEKETSI HLABANELO:
They were there with the consent of SITA, by virtue of the fact
that line managers who were acting on behalf of SITA, allowed them
to
be there.
APPLICANT REPRESENTATIVE:
Yes. But those line managers had a mandate, they were acting on
behalf of SITA.
MR MOEKETSI HLABANELO:
That is what we are. . .[intervened]
APPLICANT REPRESENTATIVE:
Yes, yes, alright. So, basically then, just to summarise, okay.
We have heard your answer
and your qualification, but
basically, you and I seem to be in agreement that in fact yes,
obviously they went and they performed their services after the
age of 60 [sixty],
with the consent of SITA, under those
circumstances. We agree on that.
MR MOEKETSI HLABANELO: We
do.” (Emphasis added.)
[117]
Once one accepts, as one is bound to do after Mr Hlabanelo’s
concession, that it was with the
respondent’s consent that the
individual applicants remained in the respondent’s employment
beyond the last day of
the month in which each individual applicant
turned 60, the next question is whether that had any impact or effect
on whether the
respondent could dismiss any individual applicant on
grounds of age between the last day of the month in which they turned
60 and
the date when they reached age 67. The short answer is
that, once the individual applicants continued to work for the
respondent
beyond the normal retirement age of 60 and did so with the
consent of the respondent, they had a right to work until they turned
67 years of age unless the respondent dismissed them on any ground
recognised in law such as serious misconduct, incapacity or
the
employer’s operational requirements.
[118]
On behalf of the applicants it was also argued that, in order for the
respondent to dismiss the individual
applicants before they reached
age 67, it was necessary that an agreement be reached between the
parties on a new retirement age
and then the respondent could dismiss
them when they reached such retirement age. As there was no
such agreement in this
case, it is not necessary to decide this
point.
[119]
In my view clause 9.19.1(b)(ii) means that, once the SITA or
respondent had given its consent for
the individual applicants to
remain in its employ beyond the retirement age, the individual
applicants had a right to work until
age 67. The respondent had
no right to dismiss them before they reached age 67. For that
reason, too, the dismissals
were automatically unfair because the
dismissals were based on age. Section 187(2)(b) was not
available to the respondent
to use as a shield.
[120]
The applicants also contended that the respondent was obliged to have
observed procedural fairness
in dismissing them but failed to do so.
This raises the question whether the statute places an
obligation on an employer
to observe procedural fairness in cases of
automatically unfair dismissals or where the reason for dismissal is
one prohibited
by section 5 of the LRA or is a reason listed in
section 187(1) of the LRA. I consider this issue next.
[121]
Earlier on I referred to the fact that one of the issues that arose
in
Waco
was whether an employer who contemplates dismissing on
grounds of age an employee who has worked beyond the normal or agreed
retirement
age is obliged to follow a fair procedure. I pointed
out earlier that in
Waco
I held that, in such a case there was
no obligation on the employer to comply with a fair procedure other
than giving a contractual
or statutory notice of termination. I
said this on the basis that an employer could dismiss an employee on
the grounds of
age even long after the employee had reached the
normal or agreed retirement age and still enjoy the section 187(2)(b)
protection.
[122]
On the approach I take in this judgment, as opposed to the one I took
in
Waco
, I am of the view that, if an employer wants to
dismiss on the ground of age an employee who has continued to work
beyond the agreed
retirement age, that dismissal cannot be said to be
fair by reason of section 187(2)(b) but can only be said to be fair
if, by
reason of age, the employee is no longer able to do his or her
work as required. So, the employer would have to prove this.
As far as procedural fairness is concerned, I say it applies in
such a case. This is, of course, not the position I
took in
Waco.
In
Waco
I took the view that an employer
may dismiss an employee on the ground of age any time after the
employee has reached and gone beyond
the agreed retirement age and
the section 187(2)(b) shield or protection would always be
available to the employer. I
also held that procedural fairness
did not apply in such a case. The basis for this was that the
dismissal could not be substantively
unfair because, if it was based
on age as agreed between the employer and employee, there was nothing
to inquire into. That
dismissal would have happened as agreed.
The time from when the dismissal could be effected was also
agreed.
[123]
My view in
Waco
was that, where the reason for an employee’s
dismissal was that he or she had reached the normal or agreed
retirement age,
there was nothing on which the employee needed to be
heard. However, I did not need to look that far to find a
reason for
that view because the statute has the answer. To
make the point I need to make, it is important to quote sections 185,
187
and 188 of the LRA. Section 185 reads:
“
185
Right not to be unfairly dismissed or subjected to unfair labour
practice
Every employee has the
right not to be
(a)
unfairly dismissed; and
(b)
subjected to unfair labour practice.”
[124]
Section 185 creates two rights for an employee. The first is
the right not to be unfairly dismissed.
The second is the right
not to be subjected to unfair labour practice. It is to be
noted that in section 185 there
is no reference to substantive
fairness and procedural fairness. There is simply a right not
to be unfairly dismissed and
a right not to be subjected to an unfair
labour practice.
[125]
The heading to section 187 reads:
“
Automatically
unfair dismissals”
whereas
the heading to section 188 reads:
“
Other unfair
dismissals”.
Here
is how sections 187 and 188 read:
“
187
Automatically unfair dismissals
(1)
A dismissal is automatically unfair if the employer, in dismissing
the employee, acts
contrary to section 5 or, if the reason for the
dismissal is—
(a)
that the employee participated in or supported, or indicated an
intention to participate
in or support, a strike or protest action
that complies with the provisions of Chapter IV;
(b)
that the employee refused, or indicated an intention to refuse, to do
any work normally
done by an employee who at the time was taking part
in a strike that complies with the provisions of Chapter IV or was
locked out,
unless that work is necessary to prevent an actual danger
to life, personal safety or health;
(c)
to compel the employee to accept a demand in respect of any matter of
mutual interest
between the employer and employee;
(d)
that the employee took action, or indicated an intention to take
action, against the
employer by—
(i)
exercising any right conferred by this Act; or
(ii)
participating in any proceedings in terms of this Act;
(e)
the employee's pregnancy, intended pregnancy, or any reason related
to her pregnancy;
(f)
that the employer unfairly discriminated against an employee,
directly or indirectly, on
any arbitrary ground, including, but not
limited to race, gender, sex, ethnic or social origin, colour, sexual
orientation, age,
disability, religion, conscience, belief, political
opinion, culture, language, marital status or family responsibility;
(g)
a transfer, or a reason related to a transfer, contemplated in
section 197 or 197A; or
(h)
a contravention of the
Protected Disclosures Act, 2000
, by the
employer, on account of an employee having made a protected
disclosure defined in that Act.
(2)
Despite subsection (1)(f) —
(a)
a dismissal may be fair if the reason for dismissal is based on an
inherent requirement
of the particular job;
(b)
a dismissal based on age is fair if the employee has reached the
normal or agreed
retirement age for persons employed in that
capacity.
188
Other unfair dismissals
(1)
A dismissal
that is not automatically unfair, is unfair if the
employer fails to prove
—
(a)
that the reason for dismissal is a fair reason-
(i)
related to the employee's conduct or capacity; or
(ii)
based on the employer's operational requirements; and
(b)
that the dismissal was effected in accordance with a fair procedure.
(2)
Any person considering whether or not the reason for dismissal is a
fair reason or
whether or not the dismissal was effected in
accordance with a fair procedure must take into account any relevant
code of good
practice issued in terms of this Act.”
(Emphasis added.)
[126]
These headings tell the reader that
section 187
relates to
automatically unfair dismissals and
section 188
relates to
non-automatically unfairly dismissals – in other words, another
category of dismissals.
[127]
It will be seen from
section 187
that the statute provides reasons
that render a dismissal automatically unfair. It will also be
noted under
section 187
that there is no provision to the effect that
a failure by the employer to afford an employee an opportunity to be
heard renders
a dismissal automatically unfair. Therefore, a
dismissal only becomes automatically unfair on the basis of a
substantive
reason and not on the basis of a failure by the employer
to follow a fair procedure. That, in my view, is because an
employer
is not supposed to dismiss an employee on any of the grounds
listed in
section 187(1)
except within the four corners of
section
187.
[128]
If the employer gets the age of the employee wrong or gets the normal
retirement age wrong or wrongly
thinks that the employee has agreed
to a retirement age, the employee will challenge that dismissal in
the Labour Court. If
the employer fails to show that
section
187(2)(a)
or (b) applies, the dismissal will be automatically unfair.
However, when we proceed to unfair dismissals other than
automatically
unfair dismissals in
section 188
we find that, unlike
in the case of automatically unfair dismissals in
section 187
, the
statute provides two reasons which will render a dismissal unfair.
The first one is substantive. The second one
is
procedural. The effect of
section 188
, read with
section
187
, is that a dismissal cannot be rendered automatically unfair
simply because a fair procedure was not followed by the employer but
a dismissal that is not automatically unfair will be unfair on either
a substantive ground only or on a procedural ground only
or on both
substantive and procedural grounds. As will have been seen
above,
section 188
reads:
“
188
Other unfair dismissals
(1)
A dismissal
that is not automatically
unfair, is unfair if the
employer fails to prove-
(a)
that the reason for dismissal is a fair reason-
(i)
related to the employee's conduct or capacity; or
(ii)
based on the employer's operational requirements; and
(b)
that the dismissal was effected in accordance with a fair procedure.
(2)
Any person considering whether or not the reason for dismissal is a
fair reason or
whether or not the dismissal was effected in
accordance with a fair procedure must take into account any relevant
code of good
practice issued in terms of this Act.” (Emphasis
added.)
[129]
The opening part of
section 188
expressly excludes an automatically
unfair dismissal when the section places upon the employer the burden
to prove that the dismissal
was effected in accordance with a fair
procedure. Therefore, it can be said with confidence that the
unfair dismissal regime
or dispensation that the LRA created does not
require that an employer proves that an automatically unfair
dismissal was effected
in accordance with a fair procedure. That
requirement only applies to the other dismissals dealt with under
section 188.
In my view, that is the law as it presently
stands. The constitutionality of the LRA’s exclusion of
the requirement
of a fair procedure in respect of automatically
unfair dismissals was not challenged in the present case. It
is, therefore,
not necessary to express a view on its
constitutionality. Therefore, it seems to that rightly or
wrongly the LRA does not
impose on an employer the duty to comply
with a fair procedure where a dismissal is for a reason that would
ordinarily render the
dismissal automatically unfair.
Relief
[130]
Initially, Solidarity sought retrospective reinstatement for all the
individual applicants if the
Labour Court concluded that the
dismissals were automatically unfair. It persisted in this position
at the time of launching its
application for leave to appeal in this
Court. However, at the hearing Counsel for Solidarity did not
persist in that position
and sought, instead, an order for the
payment of maximum compensation to the individual applicants. Quite
correctly, the respondent
did not argue that this was a case where,
if the Court concluded that the dismissals were automatically unfair,
the individual
applicants should not be paid any compensation at all.
[131]
In considering whether the individual applicants should be granted
maximum compensation, one of the
important factors is that the
individual applicants’ dismissals were not just without a
reason but were for a prohibited
reason and, therefore, were
automatically unfair.
[132]
It is important to also bear in mind how much time each individual
could have worked before he or
she reached the compulsory retirement
age of 67.
132.1
Mr Strydom reached 60 years of age in May 2015 and his last working
day was 31 December 2017.
He could have worked just
over four years before reaching age 67 but was denied that
opportunity.
132.2
Mr Enslin reached 60 years of age in November 2016. Although
his last working day as a permanent employee
was 31 August 2017,
subsequently he worked for the respondent on a fixed term contract
that ended at the end of February
2018. He could have worked
for another period of over five years but he was denied that
opportunity.
132.3
Mr Olivier turned 60 in November 2016 and his last working day was
30 September 2017. He
could have worked another six
years before he reached 67 years of age but was denied that
opportunity.
132.4
Ms van den Berg turned 60 in August 2015. Her last working day
was 31 January 2018. She
could have worked for
another three and a half years but was denied that opportunity.
132.5
Ms Smith turned 60 in June 2014. Her last working day was
30 September 2017. Since
she could have worked until
June 2021, she was deprived of the opportunity of working for more
than three and a half years.
132.6
Ms du Plessis turned 60 in July 2016 and her last working day was 31
December 2018. She died in January
2021. This means that she could
still have worked just over five years before reaching the retirement
age of 67. However,
since she passed away in January 2021, she
was only denied an opportunity to work for a period of three years
[133]
Furthermore, the individual applicants are not going to be reinstated
which could have had retrospective
effect and thus could have meant
that the respondent would have had to pay the individual applicants
backpay of a number of months
probably more than two years’
backpay. All that is not being done. In these
circumstances I am of the view that
considerations of fairness and
equity dictate that the individual applicants should be awarded
maximum compensation. In the
case of a dismissal that has been
found to be automatically unfair, that would be 24 months’
remuneration.
Costs
[134]
With regard to costs, it needs to be emphasised that a dismissal for
a reason listed in
section 187(1)
of the LRA is a serious
violation of an employee’s right not to be discriminated
against unfairly and the right not to be
dismissed for any of the
reasons listed in
section 187(1)
except where the LRA permits such
dismissal. I am of the view that the requirements of law and
fairness dictate, for the
same reasons I gave in the
Landman
case above, that the respondent should be ordered to pay the
applicants’ costs in all the courts.
[135]
In the circumstances, I would make the following orders:
135.1. In the
Landman
matter:
1.
Leave to appeal is granted.
2.
The appeal is upheld.
3.
The respondent is to pay the applicants’ costs (including those
consequent upon
the employment of two Counsel where two Counsel were
employed).
4.
The order of the Labour Appeal Court is set aside and replaced with
the following:
“
(a)
The appeal is upheld.
(b)
The respondent is ordered to pay the applicants’ costs
(including those consequent upon the employment
of two Counsel where
two Counsel were employed).
(c)
The order of the Labour Court is set aside and replaced with the
following:
‘
(i)
The respondent’s dismissal of Mr Landman was automatically
unfair.
(ii)
The respondent is ordered to pay Mr Landman compensation equal
to 24 months’ remuneration
calculated at the rate of
remuneration applicable to Mr Landman at the time of his dismissal.
(ii)
The respondent is ordered to pay the applicants’ costs
(including
the costs of two Counsel where two Counsel were
employed).’”
135.2. In the
Solidarity
matter:
1.
Leave to appeal is granted.
2.
The appeal is upheld.
3.
The
decision of the Labour Court is set aside and, for it, the following
order is substituted:
(a)
The dismissals of Solidarity’s members
involved in this case
were automatically unfair.
(b)
The respondent must pay each Solidarity member
involved in this case
an amount equal to his or her remuneration for 24 months calculated
at the rate of remuneration applicable
to the employee concerned at
the time of his or her dismissal. In the case of the dismissal
of the late Ms du Plessis, the
respondent shall pay Ms Lötter in
her capacity as the executrix of the estate of the late Ms du Plessis
an amount equal to
24 months’ remuneration that was applicable
to Ms du Plessis at the time of her dismissal.
(c)
The respondent shall pay Solidarity’s
costs including those
consequent upon the employment of two Counsel where two Counsel were
employed.”
4.
The respondent shall pay Solidarity’s costs in this Court,
including
those consequent upon the employment of two Counsel, as
well as Solidarity’s costs in applying for leave to appeal to
the
Labour Appeal Court.
VAN ZYL AJ:
[136]
I have
had
the
advantage of reading the judgments of Zondo CJ (first judgment)
and Rogers J (third judgment). I agree that
the issue
raised in the two matters engages this Court’s jurisdiction and
that the applicants must be granted leave to appeal
the judgment of
the Labour Appeal Court in
Landman
[19]
and
that of the Labour Court in
Solidarity.
[20]
[137]
The
issue raised for determination in both
Landman
and
Solidarity
is the
effect on the
contractual
relationship
between an employer and employee when the employee, who has elected
not to retire upon reaching the normal or agreed
retirement age, is
permitted by the employer to work beyond the determined retirement
age. Put differently, the question
raised on the facts of the
two matters is what, in the absence of the parties having reached
agreement with regard thereto, is
the result of a failure by the
employer to terminate the employee’s employment when the latter
has reached retirement age.
Does the employer without more lose
the protection of
section 187(2)(b)
of the LRA
[21]
as
suggested in the first judgment, or may the employer terminate the
employment relationship at any time thereafter as suggested
in the
third judgment?
[138]
I
agree with the finding in the first judgment that the decision of the
Labour Court in
Waco
[22]
and
that of the Labour Appeal Court in
Landman
is not
correct to the extent that it held without qualification that the
employer may terminate the employment relationship at any
time after
the employee has reached retirement age.
As
I intend showing, the suggestion is inconsistent with accepted
contractual principles. However, I find myself in disagreement
with the first judgment in three respects: firstly, the reasoning
employed in arriving at the aforementioned conclusion; secondly,
and
more fundamentally, I do not agree that there is an obligation on the
employer to terminate the employment relationship when
the employee
has reached the determined or agreed retirement age; and thirdly, I
find on the facts of the two matters before us
that the appeals must
be dismissed. Insofar as the third judgment is concerned, I
disagree with the reasoning as being inconsistent
with the nature of
the right which flows from the manner in which the Legislature has
chosen to deal with the termination by an
employer of the employment
relationship upon the employee having reached the determined
retirement age.
[139]
The
nature
of the relationship between an employer and employee is
contractual.
[23]
As
is the case with any other contractual relationship, the employment
contract may be terminated by agreement.
[24]
This
may be achieved by an express term in the contract, or tacitly by an
unexpressed provision of the contract “which derives
from the
common intention of the parties as inferred by the Court from the
express terms of the contract and the surrounding
circumstances”.
[25]
The
retirement clauses in both
Landman
and
Solidarity
provides
for the termination of the contractual relationship between the
employer and the employee by agreement. In
Landman
the
employee’s contract of employment provided that his “retirement
age will be 60 years of age”. It must
be emphasised that
in
Landman
the
parties asked the Labour Court to determine the issues raised on
the basis of a stated case. To this extent it was
an agreed
fact that the retirement age was 60 years of age, and the fact that
the retirement age was 65 in a collective agreement,
was as a
consequence of no relevance. In
Solidarity
the
employee’s conditions of service read with the rules of the
relevant pension fund in turn provided that their retirement
age is
60 years, but that an employee may continue to render service with
the consent of the employer not extending beyond the
age of 67.
The rules of the relevant pension fund provided that the employer had
to agree in writing to the employee remaining
in service, and that
the employer “shall retire from [S]ervice on such later date as
he agrees with his [e]mployer”.
[140]
The
effect of the retirement clauses in both
Landman
and
Solidarity
is
that the contract of employment terminates by the effluxion of time
upon the employee reaching the
normal
or
agreed retirement age. Not unlike any other form of contract,
if the parties agree upon a definite time for the expiration
of the
employment contract, the contract terminates automatically.
[26]
However, it is important to note that this consensual form of
termination of the contract must be distinguished from the
unilateral
exercise by one party of the right to terminate the agreement.
Such a right may accrue by operation of law, most
commonly on the
ground that the other party to the contract is guilty of material
misrepresentation or that he or she wrongfully
repudiated or breached
a material term of the contract. As emphasised in
Van Streepen
,
[27]
these
are two different forms of terminating a contract that denote two
very different juristic concepts:
“
In
the law of contract ‘cancellation’ is a well-known term
which covers both cancellation by agreement between the parties
(or
consensual cancellation, to use the phrase adopted by counsel in
argument) and cancellation by one party on the ground that
the other
party has wrongfully repudiated or breached a material term of the
contract (see Christie
The
Law of Contract in South Africa
at
431, 520 and the cases there cited; Prof Louise Tager in (1976) 92
SALJ
at
430-1). These two forms of cancellation denote very different
juristic concepts. The first-mentioned form, consensual
cancellation, is a contract whereby another contract is terminated.
The second-mentioned form, cancellation on repudiation
or breach,
involves the unilateral exercise by one party of the right to rescind
the contract, this right having accrued to him
by reason of the other
party’s repudiation or material breach.”
[28]
[141]
It is in the context of the contractual nature of
the relationship between the employer and employee and the principles
applicable
thereto that
section 187(2)(b)
of the LRA
must
be given meaning. The issue raised is
essentially one of interpretation, and its focus is, from an
employer’s perspective,
on the manner in which the employment
relationship terminates when the employee has reached the normal or
agreed retirement age.
For convenience of reference, I quote
the relevant portions of
section 187:
“
(1)
A dismissal is automatically unfair if the employer, in dismissing
the employee, acts contrary
to
section 5
or, if the reason for the
dismissal is
—
. . .
(f)
that the employer unfairly discriminated against an employee,
directly or indirectly,
on any arbitrary ground, including, but not
limited to race, gender, sex, ethnic or social origin, colour, sexual
orientation,
age, disability, religion, conscience, belief, political
opinion, culture, language, marital status or family responsibility.
(2)
Despite subsection (1)(f)
—
. . .
(b)
a dismissal based on age is fair if the employee has reached the
normal or agreed
retirement age for persons employed in that
capacity.”
[142]
The Labour Appeal Court found that
section
187(2)(b)
affords an employer the right to terminate the employment
relationship on the basis of age when the employee has reached
retirement
age, and that the focus of the section is not on
restricting the exercise of
that
right to a
particular point in time, namely when the employer had reached the
normal or agreed retirement age, but rather that the
employee has
reached or passed that age before the right may be exercised.
The Labour Appeal Court reasoned as follows:
“
Section
187(2)(b)
does not prescribe a time frame within which the dismissal
should take place, provided it is after the employer has reached his
or her agreed or normal retirement date. Properly construed,
section 187(2)(b)
affords an employer the right to fairly dismiss an
employee based on age at any time after the employee has reached his
or her
agreed or normal retirement age. This right accrues to
both the employee and the employer immediately after the employee’s
retirement date and can be exercised at any time after this date.
The
focus is not so much on when the employee reached his or her
retirement date, but rather that the employee has already reached
or
passed the normal or agreed retirement age
.”
[29]
(Emphasis
added.)
[143]
With
the qualification, for reasons which I will give shortly, that the
exercise of the right must be within a reasonable time after
the
employee has reached retirement age, and not “at any time
[there]after” as the Labour Appeal Court found, I agree
with
this interpretation. It is consistent with the accepted
approach to statutory interpretation. What the proper
approach
to the interpretation of a statute or any other document is, was
dealt with by the Supreme Court of Appeal in
Endumeni
[30]
and
received the approval of this Court.
[31]
Aptly
described by this Court as a “unitary exercise” in
University of Johannesburg
,
[32]
it is
the process of attributing meaning to the words used in the
legislation by giving consideration to the—
“
nature
of the document, . . . the language used in the light of the ordinary
rules of grammar and syntax; the context in which the
provision
appears, the apparent purpose to which it is directed and the
material known to those responsible for its production.
Where
more than one meaning is possible each possibility must be weighed in
the light of all these factors. The process is
objective, not
subjective. A sensible meaning is to be preferred to one that
leads to insensible or unbusinesslike results
or undermine the
apparent purpose of the document. . . . The inevitable point of
departure is the language of the provision itself,
read in context
and having regard to the purpose of the provision and the background
to the preparation and production of the document.”
[33]
[144]
This
approach accords with the second of the two approaches mentioned by
Schreiner JA
in
Jaga
,
[34]
namely
that from the outset one considers the context and the language
together, and not the one after the other. Of further
importance, particularly in the context of the present matter, is the
point emphasised by Schreiner JA in
Jaga
,
that—
“
the
context as here used is not limited to the language of the rest of
the statute regarded as throwing light of a dictionary kind
on the
part to be interpreted. Often of more importance is the
[subject] matter of the statute, its apparent scope and purpose,
and,
within limits, its background.”
[35]
[145]
The
interpretation
given
to
section 187(2)(b)
by the Labour Appeal Court in
Landman
is consistent with the ordinary grammatical
meaning of the words used therein. The verb “reached”
simply means
that the employee must have attained the required
retirement age. It does not carry the implication of not having
gone beyond
that age. The section simply provides that for the
dismissal to be fair, the employee must have attained (“reached”)
retirement age. It does not confine the fairness of the
dismissal to the date when the employee “reaches”
retirement
age.
[146]
The context in which
section 187(2)(b)
must be
interpreted is provided by two things,
namely
the
fact that
section 187(2)(b)
forms part of Chapter VIII of the LRA
which deals with “Unfair Dismissal and Unfair Labour Practice”,
and that it provides
a defence to what would otherwise have
constituted an automatically unfair dismissal as envisaged in
section
187(1)(f).
Subsection (1)(f) provides that—
“
(1)
A dismissal is automatically unfair if . . . the reason for the
dismissal is
—
. . .
(f)
that the employer unfairly discriminated against an employee,
directly or indirectly,
on any arbitrary ground, including, but not
limited to race, gender, sex, ethnic or social origin, colour, sexual
orientation,
age, disability, religion, conscience, belief, political
opinion, culture, language, marital status or family responsibility.”
[147]
The
subject matter of
section 187(1)(f)
read with subsection (2)(b) is
the right of the individual to equal treatment. Subsection
(1)(f) gives effect to the constitutionally
entrenched right in
section 9
of the Bill of Rights.
[36]
Subsection
(2)(b) on the other hand places a limitation on that right as
envisaged in
section 36
of the Bill of Rights.
[37]
[148]
Neither
the judgment in
Waco
nor
that of the Labour Appeal Court in
Landman
provides
an adequate explanation for finding that the employment contract does
not automatically terminate when the employee has
reached the normal
or agreed retirement age. In
Waco
the
reasoning seems to proceed from the premise that because the
employment contract expires by effluxion of time, and there is
consequently no dismissal when an employee’s contract of
employment terminates by virtue of having attained the normal or
agreed retirement age, a “dismissal” in
section 187(2)(b)
can only have been intended to apply to those instances where the
employee’s services were subsequently terminated after
they
were permitted to work beyond the normal or agreed retirement age.
In
Landman
the
Labour Appeal Court on the other hand found that what the LRA
contemplates is that where the employee continues to work
uninterruptedly
after attaining retirement age, the employment
relationship and the contract continue: “[in] other words, for
purposes of
a dismissal in terms of
section 187(2)(b)
, the employment
contract does not terminate by the effluxion of time when the
employee reaches his or her retirement age but is
deemed to
continue.”
[38]
It is
not clear why the employment contract is said to be “deemed”
to continue.
[149]
On a
reading of
section 187(2)(b)
, the reason why the employment
relationship does not terminate immediately when the employee has
reached retirement age, and that
the employer’s right to
terminate the employment relationship may therefore continue, lies in
the fact that the Legislature
considers the termination of the
employee’s employment by virtue of the employee having attained
the normal or agreed retirement
age to constitute a dismissal.
Section 187(2)(b)
in other words brings about a statutory change to
the legal consequences that would otherwise normally flow from an
employee reaching
retirement age where the agreed retirement age is
seen as an event, the occurrence of which will automatically bring
the contract
to an end.
[39]
Section
187(2)(b)
alters the legal position by providing for a departure from
the automatic termination of the employment relationship when an
employee
reaches the contractually agreed retirement age. It
does that by considering the termination of the employment contract
by
reason of the employee having reached retirement age to be a
dismissal as envisaged in Chapter VIII of the LRA, as opposed
to
it being the automatic consequence of what is otherwise nothing more
than an express term of the contract between the parties
that
determines the maximum duration of the employment relationship.
[150]
Because it is regarded as a dismissal by the
Legislature,
section 187(2)(b)
must be read with
section 186(1)(a)
of
the LRA. A dismissal in terms of the latter section is the
termination of the employee’s contract with or without
notice.
A dismissal is accordingly a positive, unilateral act by the employer
taken with the intention of terminating the
employment relationship
between the parties to a contract of employment. Read in the
context of Chapter VIII as a whole,
the effect of
section 187(2)(b)
is therefore that, notwithstanding what the employer and employee may
mutually have agreed to in their contract of employment,
the
termination of the employment contract by reason of the employee
having reached the normal or agreed retirement age is, from
the
employer’s perspective, a dismissal that requires the employer
to make a decision to terminate the employment relationship
based on
the employee’s age. That being so, it must logically
follow that unless an employer takes a decision to retire
the
employee, the employment contract does not automatically end.
[151]
The legal effect of
section 187(2)(b)
, on the
interpretation given to it in this judgment, is that the employer
acquires the right to fairly terminate the employment
relationship
when the employee has reached the normal or agreed retirement age.
It is a right that accrues to the employer
by operation of law.
Accordingly, at the point in time when the employee reaches
retirement age, the employer is faced with
a choice, namely, to elect
either to terminate the employment contract as envisaged in
section 187(2)(b)
, or to allow the employment relationship to
continue. As in any other contractual relationship where a
state of affairs comes
into existence in which one party to a binding
contract becomes entitled, either under the terms of the contract, or
by the general
application of the law, to exercise a right, and has
to decide whether or not to do so, the principle of election finds
application.
The decision of the party concerned, being a
matter of a choice between two alternatives inconsistent with one
another, in law
constitutes an election.
[152]
As
explained
in
Segal
,
[40]
the principle of election postulates a situation where a contracting
party—
“
has
a choice of two courses. He can either elect to take advantage
of the event or he can elect not to do so. He is
entitled to a
reasonable time in which to make up his mind, but once he has made
his election he is bound by that election and
cannot afterwards
change his mind.”
[41]
[153]
In
Potgieter
,
[42]
Centlivres JA quoted with approval the following passage from
Pollock:
[43]
“
The
contract must be rescinded within a reasonable time, that is, before
the lapse of a time after the true state of things is known,
so long
that under the circumstances of the particular case the other party
may fairly infer that the right of [rescission] is
waived.”
[44]
[154]
What
is important to emphasise from the quoted passages is the fact that
the election must be made within a reasonable time.
The failure
to exercise the right in
section 182(2)(b)
within a reasonable
time is evidence and may be conclusive evidence of an election not to
terminate the employment contract.
[45]
That
the election must be made within a reasonable time is an aspect which
the Labour Appeal Court in
Landman
seems
to have overlooked. The reason for the Court not to have dealt
therewith lies in all likelihood in the fact that it
failed to
consider the legal consequences arising from the nature of the right
that accrues to the employer in terms of
section 187(2)(b)
, with the
result that it dealt with the issue purely as one of a waiver as
opposed to a situation where the employer is entitled
to an election
between two alternative rights which are inconsistent with each
other. Although election involves the waiver
of a right, and
while election and waiver are said to be species of the same general
legal concept that involves the abandonment
of a right and may have
the same requisites and may produce the same results,
[46]
they
are legal acts which arise in different situations. They have
their own nuances, and the distinction is best maintained.
[155]
The
right to terminate the employment contract by reason of age is
conferred on the employer by
section 187(2)(b).
It is therefore
a right conferred by law and it matters not that it is in a statutory
context, and that it impacts on the
contractual relationship between
parties. That being so, the decision to exercise that right by
terminating the employment
relationship rests with the employer.
[47]
It
does not require the agreement of the employee concerned and is
consequently a unilateral act. In this context, the choice
with
which the employer is presented by
section 187(2)(b)
when an
employee reaches the normal or agreed retirement age is best
described as an election as opposed to the waiver of a right
conferred by operation of law.
[48]
Waiver
by election, or simply “election”, applies in the narrow
situation in which there is a choice between two rights
or powers:
“
When
one party to a contract commits a breach of a material term, the
other party is faced with an election. He may cancel
the
contract or he may insist upon due performance by the party in
breach. The remedies available to the innocent party are
inconsistent. The choice of one necessarily excludes the other,
or, as it is said, he cannot both approbate and reprobate.”
[49]
[156]
The
election is made unilaterally and arises where, in a contractual
context such as in the present matters, there is a choice as
to
whether or not the contract “lives or dies”.
[50]
Although
election typically arises when the parties to a contract have to know
where they stand, it is a concept which may find
application in more
than one context. The source of the right or power is therefore
not relevant and the principle of election
is not confined to
remedies arising in a contractual context as the third judgment seems
to suggest.
[51]
[157]
The
result of an election is that once the election has been made, it is
final and binding, and if the party having the election
chose to
terminate the contract, it can only be revived by an agreement that
requires a fresh meeting and concurrence of the minds
of the parties
to restore the
status
quo
ante
(situation
that existed before).
[52]
Further,
and in a contractual context, an election not to terminate the
contract means two things: Firstly, not unlike any
other
contractual relationship where a party has waived a right in law to
terminate the contractual relationship, the employment
contract as it
existed when the right to end that relationship accrued continues to
exist.
[53]
Secondly,
the right to terminate the relationship for the reason that forms the
basis for the existence of the right is lost.
[54]
In
the context of
section 187(2)(b)
, this means that the employment
relationship of the parties continues to be regulated by the same
contract and that the employer
has lost the right to terminate the
contract on the basis of the employee having reached the normal or
agreed retirement age.
[158]
This result does however not mean that the
employer can no longer terminate the employment relationship after
having followed a
fair procedure for reasons relating to the
employee’s capacity, the employee’s conduct, or if
operational requirements
necessitate, the termination of the
contract. An employment contract that does not specify a date
of termination, is otherwise
always terminable on any of the grounds
accepted in law. Nevertheless, it is always open to the
employer and employee to
agree on what the result would be in the
event of the employer failing to terminate the employment contract
when the employee reached
the determined retirement age.
Subject to any legislative prescription, the parties to an employment
contract are, as with
any other contract, free to regulate their
respective rights and duties in the contract. It may
accordingly be open to the
parties to agree on a new retirement age
or to limit the duration of the employee’s employment for a
specified period.
[159]
The implementation of the prohibition against
discrimination on the basis of age required the Legislature to make a
choice between
competing interests. It is a choice between the
need to expand the labour market by increasing the participation of
younger
workers and protecting the rights of older workers who are
possessed of the physical and mental abilities to continue to
satisfactorily
discharge their functions. The interpretation
given to
section 187(2)(b)
in this judgment and the legal
consequences that flow from the nature of the employer’s right
to terminate the employment
relationship are, in my view, consistent
with the Legislature having chosen to find the middle ground between
the automatic termination
of an employee’s employment by reason
of attaining a retirement age on the one hand, and on the other, the
continued employment
of those employees who, despite their age, are
possessed of the necessary skills and knowledge and the physical and
mental ability
to satisfactorily continue to perform their
contractual duties and remain active in the labour market. The
benefit of retaining
the services of the older employees is gained by
section 187(2)(b)
allowing the employment relationship to
continue for a reasonable time period. This affords the
employer the time and opportunity
to give considerations to, and
decide whether or not to continue that relationship, as opposed to
its automatic termination upon
the employee having reached the agreed
or normal retirement age that would otherwise be the position, or by
placing an obligation
on the employer to immediately terminate the
employment relationship as suggested in the first judgment.
[160]
This
interpretation of
section 187(2)(b)
in my view better serves to
promote the extension of the working life of active older employees
without unduly restricting the
entry of younger persons to the labour
market. It provides the employer with an opportunity to
consider retaining the services
of an employee who has reached
retirement age and to reach agreement with the employee with regard
to the terms of their continued
employment. It further prevents
the undue delay of the decision with regard to the tenure of
employment of an employee who
has reached retirement age by requiring
the employer to exercise the accrued right within a reasonable time.
It serves to
promote fairness to both the employer and the employee.
This is consistent with the provisions of the Older Persons Act
[55]
and
its objective of giving effect to and protecting the right of older
persons to equality as entrenched in section 9 of the
Constitution.
[56]
The
preamble to the Older Persons Act proclaims, among others,
the necessity to empower older persons “to continue
to live
meaningfully and constructively in a society that recognises them as
important sources of knowledge, wisdom and expertise”.
The general principles set out in section 5 of the
Older Persons Act, importantly, are said to “guide
the
implementation of all legislation applicable to older
persons”.
[57]
The
general principles referred to include the following—
“
(2)
All proceedings, actions or decisions in a matter concerning an older
person must
—
(a)
respect, protect, promote and fulfil the older person’s rights,
the best interests
of the older person and the rights and principles
set out in this Act, subject to any lawful limitation;
(b)
respect the older person’s inherent dignity;
(c)
treat the older person fairly and equitably; and
(d)
protect the older person from unfair discrimination on any ground,
including on the grounds
of the health status or disability of the
older person.
(3)
In any matter concerning an older person
—
(a)
an approach which is conducive
to
conciliation and
problem-solving should be followed and a confrontational approach
should be avoided; and
(b)
a delay in any action or decision to be taken must be avoided as far
as possible.”
(Emphasis in original).
[161]
The
finding in
Waco
and
Landman
that
it is open to the employer to terminate the employment contract at
any time after the employee has reached retirement age is
inconsistent with the ordinary principles of contract that find
application to the exercise of two alternative and inconsistent
courses of action. The right the employer acquires when the
employee has reached retirement age is the second form of right
referred to in
Van Streepen
.
[58]
It
arises by operation of law, that is, by reason of the fact that
section 187(2)(b) affords the employer the right to terminate
the employment relationship when the employee has reached retirement
age. That right is exercised in the context of the contractual
nature of the relationship between the employer and employee.
The LRA does not serve to alter the contractual nature of the
relationship between the employer and employee or to exclude the
application of contractual principles. What it does is simply
to regulate the relationship between the employer and employee.
To that extent it may intrude on the employment relationship
with
regard to the terms which govern that relationship and its
duration.
[59]
It
may accordingly override what the parties have otherwise consensually
agreed to with the aim of giving effect to the right to
fair labour
practices and other entrenched rights in the Constitution. The
findings
in
Waco
and
Landman
further renders the
position of the employee after reaching retirement age uncertain.
This is inconsistent with the notion
of fairness and the aim in
section 5(3)(b) of the Older Persons Act to avoid a delay in any
action or decision affecting older
persons.
[162]
The interpretation given to section 187(2)(b) in the first and
third judgments is with respect
inconsistent, not only with the fact
that the Legislature has chosen to regard the
termination
of the employment relationship based on age as a dismissal, but also
with the nature of the right that accrues to the employer
when the
employee has reached retirement age and the contractual principles
that find application thereto. That the contractually
agreed
retirement age gives rise to an obligation on the part of the
employer to see to it that the employee is retired upon reaching
the
agreed age, as suggested in the first judgment, is premised on the
contractual nature of the relationship between the employer
and
employee. As stated, the Legislature has chosen to intrude on
that relationship by regarding the termination of the employment
relationship as a dismissal. A dismissal does not contemplate a
consensual termination of employment. Further, the
suggested
interpretation effectively provides for something no different from
what would otherwise have been the ordinary consequence
of a time
clause in an agreement where the employment relationship is
immediately terminated upon the happening of the agreed event.
If that was the intention, the Legislature could have said so.
[163]
Further, instead of serving to protect older, vulnerable employees at
the point of retirement, the
interpretation of section 187(2)(b)
proposed in the first judgment is more likely to
result
in the termination of the services of an employee who has reached
retirement age without any consideration of whether the person’s
skills and knowledge may continue to be utilised, and whether the
employee has the ability to continue to satisfactorily perform
their
contractual duties. At risk of missing the cut off date and a
finding of having discriminated against retiring employees,
employers
will, generally speaking, now be on their guard, and will likely balk
at the suggestion that they must seek to negotiate
a new fixed term
contract or retirement age should they wish to retain the services of
a retiring employee for even a single day
beyond the date of
retirement.
[164]
Further
,
the suggestion in the first judgment that the failure of the employer
to retire the employee on the agreed retirement age, even
by a single
day, must render it an automatically unfair dismissal without any
enquiry into the reasonableness of the delay, is
in my view also
inconsistent with the basic tenets of fairness. As stated by
this Court in
NEHAWU
,
[60]
fairness is not confined to workers only. In support of this
statement this Court quoted with approval the following passage
from
National
Union of Metal Workers of South Africa v Vetsak Co Operative
Ltd
:
[61]
“
Fairness
comprehends that regard must be had not only to the position and
interests of the worker, but also those of the employer,
in order to
make a balanced and equitable assessment.”
[62]
[165]
I also respectfully disagree with the first judgment that an
interpretation of section 187(2)(b)
that leaves room for an
employer to terminate an employee’s employment on a date later
than the day on which the employee
reaches retirement age, is open to
abuse by the employer. As the Labour Appeal Court in
Landman
correctly pointed out, it will be impermissible for an
employer to invoke the provisions of section 187(2)(b) where the
real
reason for the dismissal is based on something other than age.
When placed in dispute, what the real reason for a dismissal
was in
any given case will always be a factual question determinable on the
facts of the matter. It is an issue that may
arise in a variety
of contexts under the LRA and not only in relation to the dismissal
of an employee who has worked beyond his
or her agreed or normal
retirement age.
[166]
The question is then
whether in the present two matters the employers elected not to
exercise the right to terminate the employees’
contracts of
employment when they had reached
retirement
age.
[63]
Common to both waiver and election is that it is a matter of the
intention of the party said to have made the election or
waived the
right in question. “[W]hether it is the waiver of a right
or a remedy, a privilege or power, an interest
or benefit, and
whether in a unilateral or bilateral form, the starting point
invariably is the will of the party said to have
waived.”
[64]
The intention is determined objectively, that is, it is adjudged by
its outward manifestation in the form of words, spoken
or written, or
in the form of conduct or a combination of words and conduct.
[65]
This means that mental reservations that have not been communicated
are of no legal consequence, and the outward manifestations
of the
intention of the party faced with the choice between two alternative
and inconsistent courses of action are adjudged from
the perspective
of a reasonable person in the position of the other party
concerned.
[66]
[167]
Being a matter of
intention, election or waiver can only occur when the party on whose
conduct
reliance is placed had
knowledge of the legal right which they are said to have
elected to waive, or the right of election
which they are said
to have enjoyed, and of the facts under which, or from which, the
right arose.
[67]
In the
case of an election, it means that the person making the election
must similarly have knowledge of both the facts
giving rise to the
election, and of the right of election itself.
[68]
The required knowledge as an ingredient of the required intention
must necessarily also include knowledge of the existence
of a choice
between what are alternative and inconsistent courses of action.
[168]
The burden of proof is on
the party who alleges that an election has been made, or that a right
has been waived. Election
or waiver is not assumed. It
must consequently be pertinently raised, and being a factual matter,
it must be supported by
facts, which must be pleaded. By reason
of the fact that no-one is presumed to waive their rights, clear
proof is required
of an intention to do so.
[69]
In
Laws
v Rutherford
[70]
the position was stated as follows:
“
The
onus is strictly on the appellant. He must show that the
respondent, with full knowledge of her right, decided to abandon
it,
whether expressly or by conduct plainly inconsistent
with
an intention to enforce it.
[71]
Further,
in
Mothupi
,
the Court held that “the conduct from
which
waiver is to be inferred, must be unequivocal, ‘that is to say,
consistent with no other hypotheses.”
[72]
[169]
Making an election accordingly requires an outward
representation or some conduct that unequivocally indicates, when
interpreted
objectively, that the party concerned has made a knowing
and irrevocable election.
[170]
In
Landman
,
the employee pertinently relied on a waiver by the employer of its
right to terminate the employment contract by reason of the
employee
having reached the agreed retirement age. In
Landman
,
and for that matter also in
Solidarity
,
conduct from which an intention to elect to waive the right in
section 187(2)(b) to terminate the employment relationship
is to
be inferred, can on the facts only consist of the failure of the
respective employers to exercise the right within a reasonable
time.
As stated in the passage quoted earlier from the judgment in
Segal
,
[73]
a
party who has acquired the right to terminate a contract and is left
with the choice whether or not to do so, is entitled to a
reasonable
time in which to make that choice. Although each case and the
meaning of the particular conduct relied upon depends
on the
particular facts, in an instance such as the present where the right
entitles the party concerned to either terminate the
employment
relationship or continue with it, certainty requires that the right
must be exercised within a reasonable time.
[171]
In the absence of
anything indicative of a contrary intention, a failure to do so
provides strong
prima
facie
evidence
(evidence based on first sight) which may justify the
inference
that the employer had
elected not to terminate the contract. In
Mahabeer
[74]
the Appellate Division dealt as follows with the correct approach to
a failure of a party to a contract to exercise the right to
cancel
the agreement within a reasonable time:
“
It
is often said (usually on the authority of Voet
Commentarius
Ad Pandectus
18.3.2)
that the right to cancel an agreement must be exercised within a
reasonable time. I have no quarrel with that statement
–
as far as it goes. But it does not follow that failure to
exercise the right within such a time results
ipso
iure
in
its loss. In
Potgieter
’
s
case supra this Court also approved in the present context of a
passage which appears in Pollock at 629 to the effect that “the
contract must be rescinded within a reasonable time, that is, before
the lapse of a time after the true state of things is known,
so long
that under the circumstances of the particular case the other party
may fairly infer that right of rescission is waived.”,
which
puts failure to exercise the right to cancel within a reasonable time
in its true perspective. Depending on the circumstances,
such a
failure may, [for example], justify an inference that the right was
waived or, stated differently, that the party entitled
to cancel has
elected not to do so (
cf
Pienaar v Fortuin
1977
(4) SA 428
(T) at 433G; Becker
v
Sunnypine Park (Pty) Ltd
1982
(1) SA 958
(W) at 964 5;
Smit
v Hoffman en ‘n Ander
1977
(4) SA 610
(O) at 616 G H), or it may open the door to some
other defence. In such cases the lapse of an unreasonably long
time
forms part of the material which is taken into account in order
to decide whether the party entitled to cancel should or should
not
be permitted to assert his right. But per se it cannot bring
about the loss of the right. (
Cf
Alfred McAlpine & Son (Pty) Ltd v Transvaal Provincial
Administration
1977
(4) SA 310
(T) at 325F-G).”
[75]
[172]
The time period which had
elapsed between the employees in both
Landman
and
Solidarity
having reached their
respective retirement ages and the decision of the employers to
terminate their services on the basis of their
age, fluctuated
between a period of six months to three years. In determining
what a reasonable period is it is necessary
to have regard to all
relevant facts and circumstances:
[76]
“‘
Reasonable’
is a relative term and what is reasonable depends upon the
circumstances of each case (cf
Tiopaizi
v Bulawayo Municipality
1923
AD 317
at 326;
Microutsicos
and Another v Swart
1949
(3) SA 715
(A) at 730). In order to determine what is
reasonable within a given factual context one must have regard to the
full spectrum
of relevant facts and circumstances that bear on the
matter in issue. As Corbin (op cit vol 1 at 414 section 96)
states.
‘there is a large element of uncertainty in the
determination of the length of a ‘reasonable time’ in any
particular
case
.
. .
Furthermore,
there is a difference between what may be reasonable in the light of
the circumstances existing at the time the contract
is made and what
[is] reasonable in the light of the circumstances as they occur
during the course of performance.”
[77]
[173]
In the present matters there was no evidence of
what would have constituted a reasonable time period. It is
however not necessary
for purposes of the present enquiry to decide
what a reasonable time period was within which to decide to terminate
the employment
relationship or whether that alone is sufficient to
conclude that the employers elected to waive their right to terminate
the employees’
employment. It will be accepted for
purposes of this judgment that the time periods in question were
unreasonable.
However, the difficulty that presents itself in
the present matters is whether it can be inferred, from the assumed
lapse of a
reasonable period of time, that the employers concerned
had the intention to elect to waive their right to terminate the
employment
contracts. As stated earlier, since election and
waiver are a matter of intention, proof of an intention to waive a
right
can only exist where the party concerned has knowledge of both
the facts and the right in question. It is in other words a
question of intention based on knowledge.
[174]
To emphasise the
requirement that a party must possess a comprehensive
understanding
of both their rights and
the relevant facts before any waiver can be inferred, the Court in
Willis
Faber Enthoven (Pty) Ltd v Receiver of Revenue and Another
[78]
reasoned
that:
“
As
early as 1891 De Villier CJ said in
Watson
v Burchell
9
SC 2
at 5 that ‘no doctrine is better settled in our law than
that a person cannot be held to have renounced his legal rights by
acquiescence unless it is clear that
he
had full knowledge
of
his rights and intended to part with them’.
The
reason is plain for, as De Villiers J remarked in
Tighy
v Putter
1949
(1) SA 1087
(T) at 1095, rights cannot be renounced unless the person
concerned ‘knew what those rights were both in fact and in
law’.
Save for a somewhat discordant note sounded in
Schwarzer
v John Roderick’s Motors (Pty) Ltd
1940
OPD 170
at 185, this has always been and still is our law (
Laws
v Rutherfurd
1924
AD 261
at 263;
Martin
v De Kock
1948
(2) SA 719
(A) at 733;
Feinstein
v Niggli and Another
1981
(2) SA 684
(A) at 698F
G
where an election to rescind or affirm an agreement received similar
treatment.”
[79]
[175]
This
statement of the law is undoubtedly correct. In
Landman
the
employer’s decision to terminate the employee’s contract
of employment only sometime after the employee had already
attained
retirement age is stated to have been made with reliance on
section 187(2)(b). The employer’s reliance
on
section 187(2)(b) is clearly premised on the legal position as
it existed for more than 24 years following the judgment
in
Waco
and
the judgments that have followed thereon.
[80]
[176]
The
Solidarity
matter is no different. In that matter, by
way of example, the employer pleaded in the case of one of the
employees, namely
Mr Strydom, that he had reached the agreed
retirement age; that the termination of his services past that age
did not amount
to an automatically unfair dismissal; and the fact
that he continued to work beyond his retirement age, did not amount
to a waiver
of the employer’s right to terminate his
employment.
[177]
This is consistent with the outcome of the meaning
given to section 187(2)(b) in
Waco
,
namely that the employer is entitled to act in terms of that section
at any time after an employee has reached the normal or agreed
retirement age. Having acted on what the employers considered
to be the correct legal position, it cannot be said that they
had
elected to waive their right to terminate the employees’
employment. It does not justify a drawing of an inference
of
such an election. The further difficulty is that it cannot be
said that any election which may have been made, was made
with
knowledge of the facts and the nature of the right the employer was
put to an election to exercise.
[178]
In
Solidarity
the
employees, with reliance on their conditions of employment read with
the rules of the relevant pension fund, made the argument
in this
Court that by allowing them to work beyond their retirement age of 60
years, the employer incurred what was described as
“an inherent
obligation . . . to engage in consultation and reach accord
concerning a [new] retirement age that transcends
the threshold of
60 years”. This argument is premised on the conduct
of the employer having tacitly created a
pactum
de contrahendo
(agreement
to agree). It is difficult to see how, in the face of the
employees having done nothing to enforce their alleged
right to
negotiate, it is open to them to rely on the employer’s failure
as the basis for their claim that their dismissal
was an
automatically unfair dismissal based on age discrimination.
Further, as the Labour Court in its judgment in
Solidarity
correctly
pointed out, the employees’ contract of employment prescribed a
procedure should the employee seek permission to
work beyond their
retirement age, and that “no extension of time, waiver,
relaxation or suspension of any of the provisions
or terms of [the
employment contract] . . . shall be binding unless recorded in a
written document signed by duly authorised representatives
of the
parties”.
[81]
[179]
These terms of the agreement were not complied
with, and I accordingly find no merit in the submission relied on in
argument.
However, the more obvious reason for there being no
merit in this submission remains the fact that the conduct on which
reliance
is placed for the existence of this “inherent
obligation”, is equally consistent with the employer having
acted in
accordance with the legal position arising from the
interpretation given to section 187(2)(b) in
Waco
and other decisions of the
Labour Court. As a tacit contract cannot be held to exist
unless it can be concluded that
the parties intended to contract with
each other, and as the enquiry is concerned with the proper
inferences to be drawn from the
facts, the conduct of the employer
relied on in
Solidarity
does
not, on a preponderance of probabilities, support the inferences
sought to be drawn therefrom, namely that the unequivocal
conduct of
the parties is “capable of no other reasonable interpretation
that the parties intended to, and did in fact, contract
on the terms
alleged. It must be proved that there was in fact
consensus ad idem
”
(
a meeting of the minds
).
[180]
I am
accordingly of the view that there exists no reason to interfere with
the decisions of the Labour Appeal Court in
Landman
and
that of the Labour Court in
Solidarity
in
dismissing the employees’ claims. Regarding the issue of
the costs of the litigation in this Court, the nature of
the issues
raised, and its importance in providing clarity with regard to the
retirement of employees generally, dictate that it
would be fair not
to depart from the general rule that the losing party in labour
matters should not be ordered to pay the costs
of the successful
party.
[82]
Order
[181]
In the result, and for the foregoing reasons, I
propose the following order in both the
Landman
and
Solidarity
matters
:
1.
Leave to appeal is granted in both matters.
2.
The appeals are dismissed.
3.
There are no orders as to costs.
ROGERS J
(Dodson AJ, Kollapen J and Tshiqi J concurring):
[182]
I
have
had the pleasure of reading the
judgments of my Colleagues Zondo CJ (first
judgment
)
and Van Zyl AJ (second judgment). I agree with the
first and second judgments that our jurisdiction is engaged
and that
leave to appeal should be granted. On the merits, I disagree
fundamentally with both judgments on the interpretation
of
section 187(2)(b) of the LRA. In the result, however, I
agree with the second judgment that the appeal in
Landman
should be dismissed and with the first judgment that the appeal in
Solidarity
should succeed.
Interpretation
of section 187(2)(b)
[183]
The case turns on the
proper interpretation of section 187(2)(b) of the LRA. The
first judgment holds that this provision
only permits an age-related
dismissal if it occurs on the exact date the employee reaches the
normal or agreed retirement age (retirement age
date).
[83]
The second judgment holds that on the retirement-age date the
employer is put to an election and that in most instances the
election will have to be exercised within a reasonable period of
time, failing which the employer might be taken to have elected
to
keep the employment contract in place. In the two cases before
us, the second judgment only avoids the implications of
this
interpretation by invoking the employers’ legal misapprehension
brought about by earlier case law.
[184]
A
dismissal
based on age is fair “if
the employee has reached the normal or agreed retirement age”.
The words I have quoted
from section 187(2)(b) are
straightforward. If somebody asks me today if I have reached my
65th birthday, I would say
yes, even though today is not my 65th
birthday. If a request is made to a group of people, “Will
all
those
who have reached the age of 65
please raise their hands”, nobody would understand the question
to be limited to those whose
65th birthday it is. All those
people who were 65 or older would raise their hands. The state
of having reached a specified
age starts on the person’s
relevant birthday and continues thereafter for as long as the person
lives. A person doesn’t
cease to have reached her 65th
birthday because she is 66 or 67.
[185]
That is the plain meaning of the phrase “has reached the normal
or agreed retirement age”
in section 187(2)(b). Is
there any reason not to give the words their plain meaning?
There is nothing in the immediate
context that points to a different
meaning. On the contrary, the opening words, “a dismissal
based on age is fair”,
favours
the
plain meaning. Dismissal “based on age” is
non-specific as to the age on which the dismissal is based, save that
the employee must satisfy the condition of having reached the normal
or agreed retirement age. If the lawmaker had intended
a fair
age based dismissal to be confined to dismissal on the
retirement-age date, the provision would have read: “a
dismissal is fair if the employee is dismissed on the date on which
he or she reaches the normal or agreed retirement age for persons
employed in that capacity”.
[186]
A statutory provision
usually has a purpose informed by a policy
choice
.
In my view, and having regard to South Africa’s chronic
problem of unemployment, the main policy underlying section 187(2)(b)
is the equitable distribution of employment opportunities by making
jobs available to younger jobseekers and making advancement
available
for
younger
employees. The
thinking must have been that all potential employees should have a
fair crack at gainful employment and advancement
for a fair period of
time. It is thus not unfair that people who may have had
employment for three or four decades should
make way for younger
people.
[84]
[187]
A subsidiary purpose may
be to permit the ending of employees’
careers
with dignity. It
would, of course, be highly offensive to suppose that employees who
have reached their normal or agreed retirement
age have ceased to be
capable of doing their work. A
generalised
assumption like that
would also be untrue. But advancing years can negatively affect
an employee’s abilities.
Permitting employers to dismiss
employees who have reached their normal or agreed retirement ages,
even though they are at that
time still fully productive, spares
employers and employees the distress and humiliation that could
accompany incapacity hearings
as the employees get older.
[85]
[188]
It is unnecessary to consider whether these justifications would
suffice if section 187(2)(b)
were challenged in
terms
of section 9 of the Bill of Rights, since there has been no
challenge to the section in these proceedings. In a
constitutional
challenge, the justifications for age discrimination
might require empirical evidence and are by no means uncontested, as
litigation
in other countries shows. What can be said is that
the main policy I have identified is not offensive in the sense of
imputing
any age based loss of capacity to persons who have
reached their normal or agreed retirement age.
[189]
If the policy underlying section 187(2)(b) is as I have set out
above, it does not support an
interpretation that insists that an
age-based dismissal must occur on the employee’s
retirement
-age
date. The policy of older employees making way for younger
jobseekers
gets stronger, not weaker, as
the older employees advance in age beyond their normal or agreed
retirement ages. Similarly,
the policy of permitting the
dignified termination of employment on account of age rather than
incapacity is not served by confining
the day on which this can
happen to the employees’ retirement age dates, quite the
contrary.
[190]
I cannot think of any other purpose for allowing age-based
dismissals
, but even if another purpose
exists, I cannot conceive of one that would be served by making an
age based
dismissal
fair on the very
date on which the employee reaches the normal or agreed retirement
age but not on a later date. Why should
it be fair to dismiss
an employee on the basis of age because he or she is exactly 65 years
old but unfair to dismiss the employee
on the basis of age because he
or she is 70 or 75? What considerations of policy and
legislative purpose could ever justify
such a distinction?
[191]
The first judgment
appears to regard the purpose of section 187(2)(b) as being to
achieve uniformity and fairness
in
the dates on which
employees must retire.
[86]
However, the desire for uniformity and fairness cannot explain why
the lawmaker chose to allow age to be a basis for dismissal.
At
most it might explain why, once the lawmaker decided to allow age to
be a basis for dismissal, it qualified this right with
reference to a
“normal or agreed” retirement age. However, there
is no need to appeal to uniformity. Apart
from anything else,
employees employed by the same employer or group of employers might
have different contractual retirement ages.
As to fairness, it
would obviously be unfair to allow an employer to dismiss an employee
on account of age if there was no normal
or agreed retirement age
applicable to the employee. Fairness does not, however, compel
the conclusion that the dismissal
must take place exactly on the
employee’s retirement age date.
[192]
The first judgment’s
interpretation does not in any event
achieve
the uniformity it
proclaims. The first judgment holds, paradoxically I
respectfully suggest, that if the employer “misses
the boat”
by failing to dismiss the employee on the employee’s exact
retirement age date, the employer cannot
put this right by
dismissing the employee at a later date. Instead, the employer
has to keep the person on indefinitely unless
and until there are
grounds
for a fair dismissal
based on misconduct, incapacity or operational requirements.
Effectively, the first judgment gives the
employer an election, save
that it has to be exercised only on the retirement-age date. If
the right to dismiss is not exercised
on that exact date, the right
to dismiss the employee on grounds of age is forever lost. What
then becomes of uniformity?
The same rhetorical question can be
posed with reference to the statement in the first judgment
[87]
that an employer and employee are free to conclude a new contract of
employment to govern extended employment beyond the initially
agreed
retirement-age date.
[193]
The first judgment states that if the agreed retirement age is
contained
in a collective
agreement
,
the trade union would be up in arms if an employer failed to comply
with it. The employer can indeed disregard the retirement
age,
except that the employer cannot thereafter dismiss the employee in
question on grounds of age. There is nothing the
union can do
if the employer decides not to dismiss the employee on the latter’s
retirement-age date. The trade union
could not, after the
event, obtain an order compelling the employer to dismiss the
employee on grounds of age, because by that
time dismissal on grounds
of age would be automatically unfair.
[194]
The
first
judgment raises the
spectre of age being used as a cover for dismissals that are really
based on other grounds.
[88]
This objection does not in my view carry any weight. There are
other circumstances, unrelated to age, in which the
true basis of a
dismissal may be in dispute. In such a case, the dispute has to
be resolved with reference to the evidence.
For example, an
employer may purport to dismiss an employee for incapacity or
misconduct
where the true basis is
race or that the employee was a strike leader or a
whistleblower. And even in the case of a person
who is
dismissed on their retirement-age birthday, the true reason for the
dismissal may be something else, and this might be inferred
from the
fact that there were other employees whom the employer did
not
dismiss on their
retirement-age birthdays.
[195]
It is also
legitimate
to consider the
likely effects of the differing interpretations. On the first
judgment’s
interpretation, most
employers are likely from now on to dismiss employees on their
retirement-age dates, since keeping them on
any longer means that
such employees can only be dismissed on conventionally fair grounds
such as misconduct, incapacity or operational
reasons. Indeed,
the first judgment holds that employers are obliged to dismiss
employees on their retirement-age dates,
so the first judgment must
envisage that in future this is what will happen. In the case
of employees who are for any reason
not dismissed on their
retirement-age dates, one will have more instances of employees
eventually being subjected to incapacity
hearings due to advancing
age. This is likely to be distressing for all concerned and
perhaps humiliating for the employee,
a sad ending to what may have
been a happy and productive career.
[196]
So the first judgment’s interpretation is likely to see more
elderly employees dismissed
sooner
and an
increased
number
of unpleasant incapacity
hearings in the case of those elderly employees who are fortunate
enough not to be dismissed on their
relevant retirement-age dates.
It would be a fallacy, therefore, to suppose that, of the competing
interpretations, the first
judgment’s interpretation is the
least invasive of section 9 of the Bill of Rights because it
limits age based
dismissals to a single date. Instead,
age based dismissals will just be accelerated to take place on
that single date.
[197]
The second judgment’s interpretation is likely to have the same
practical
effects as the first
judgment’s
interpretation. On the second judgment’s approach, the
two employers in the present case benefit through a misapprehension
of the legal position brought about by
Waco
and the cases that
followed it. For the future, however, the position would be
that employers will dismiss the employees
on or shortly after their
retirement age dates, since any significant delay might give
rise to a contention that the employer
elected not to invoke its
right to dismiss the employee on the basis of age.
[198]
There is another
objection
to the second
judgment’s interpretation. The proposition that a person
has a reasonable period of time to decide whether
to exercise an
election
caters
for the situation where the
event giving rise to the right to make the election is unexpected.
The obvious example is a breach
or repudiation of a contract.
Once the breach or repudiation occurs, the aggrieved party must in
fairness have a reasonable
chance to assess its options. If,
however, the aggrieved party takes too long, they are at risk of a
finding that they elected
not to cancel the contract.
[199]
This approach to election makes no sense in the context of
section 187(2)(b). If there
is a normal or agreed
retirement age, the employer knows that the employee is reaching
that
age. The reaching of that age is not an unexpected event.
An employer needs no time in order to decide whether to dismiss
the
employee now that he or she has reached the relevant age. The
employer can consider its options in the weeks before the
day
arrives.
[200]
In my view, the correct interpretation of section 187(2)(b) is
that at any time as from the employee’s
retirement age
date the employer may fairly dismiss the employee based on age.
The employer’s choice is not time bound,
provided that the
relevant birthday has been reached. If the normal or agreed
retirement age is 65, the employer may fairly
dismiss the employee
when she is, say, 67 or 68, because the employee continues to be one
who “has reached the normal or
agreed retirement age”.
[201]
To permit this open ended choice does not increase the
vulnerability of elderly employees.
As I have shown, the
interpretations adopted in the first and second judgments will
almost
certainly give rise to more elderly employees being dismissed exactly
on their retirement age dates. My interpretation
allows
for flexibility, since many employers who might otherwise feel forced
to dismiss employees on their retirement age
dates will instead
retain the employees for whatever period suits the employer.
[202]
My interpretation, I must add, does not mean that employees who
have
gone beyond their retirement age dates can be told to go on a
moment’s notice. The employee is still entitled
to
reasonable notice. What that notice is will depend on the
contract of employment and the circumstances of the case.
In my
view, that is so even if the employer decides to dismiss the employee
on his or her retirement age date. If the
employment is to
be terminated on the employee’s retirement age date, that
notice would have to be given reasonably
in advance of the date in
question.
[203]
Of course, if the post-retirement-age employee does not want to live
with the uncertainty of knowing
that the employee
can
terminate his or her services on reasonable notice, the employee can
resign or try to negotiate a fixed term extension.
But I
venture to suggest that most employees would prefer to keep their
jobs subject to termination on reasonable notice rather
than facing
dismissal on their retirement age dates.
[204]
In addition to reasonable notice, is an employee who faces dismissal
in terms of section 187(2)(b)
entitled to a hearing? The
question of procedural fairness was not raised by Mr Landman in
Landman
, but it was pleaded by the employees in
Solidarity
.
However, the
question
received no attention
in written or oral argument. Furthermore, and for reasons that
will appear, the proper disposition
of the
Solidarity
case
does not require the question of procedural fairness to be
determined. In the circumstances, it is undesirable to express
a view on this question.
[205]
Nevertheless, the following observations are not out of place.
There are arguably matters that
could
form
the subject of engagement with an employee facing dismissal in terms
of section 187(2)(b). These might include
whether there is
a normal or agreed retirement age and, if so, what it is; whether (if
the employee places this in issue) the true
reason for dismissal is
age rather than something else; and what would be a reasonable period
of notice, having regard to the employee’s
personal
circumstances. Furthermore, although an employer might not ever
be obliged in fairness to retain an employee whom
it is entitled to
dismiss in terms of section 187(2)(b), there might still be
value in giving the employee a chance to put
up reasons as to why the
employer should refrain from exercising its right of dismissal.
[206]
Even if an employer is not legally obliged to give an employee a
hearing on these or other matters,
considerations of decency, dignity
and compassion point to the desirability of hearing the employee on
them, particularly since
the people affected by dismissal in terms of
section 187(2)(b) are likely to be long serving and loyal
employees.
If an employer voluntarily follows such a course it
may obviate a later challenge to the dismissal on grounds of
procedural unfairness,
a challenge that would then necessitate a
decision on the law point which I prefer to leave open in this case.
Landman
[207]
If Mr
Landman’s
normal or agreed
retirement age was 60, his employer was on my interpretation entitled
to dismiss him on the basis of age, even
though the dismissal took
place nine months after his 60th birthday.
[208]
The first judgment makes reference to the retirement age of 65
contained in the Motor Industry Provident
Fund Collective Agreement
(MIPFCA). However, in his statement of claim Mr Landman
referred to 60 as the “agreed
retirement age”. His
case was that, by
allowing
him to continue
working for some months after he turned 60, his employer had waived
its right to rely on the agreed retirement
age of 60, alternatively
that the employment contract had been tacitly amended by making the
agreed retirement age of 60 no longer
applicable. He also
pleaded estoppel, alleging that the employer had represented to him
that it would no longer rely on the
agreed retirement age of 60.
He pleaded, in the alternative, that, by virtue of the same
circumstances, a new employment
agreement had come into place on
terms entitling him to work indefinitely for the employer,
alternatively until he reached the
age of 65. The age of 65, as
an alternative to indefinite employment, was not pleaded with
reference to the MIPFCA, of which
Mr Landman’s statement
of claim made no mention.
[209]
The stated case accorded with Mr Landman’s statement of
claim. The stated case was
clearly premised on an acceptance
that Mr Landman’s agreed retirement age had been 60.
The
Labour Court was asked to decide
whether his continued employment beyond that date brought a new
employment contract into
existence, as alleged in his statement of
claim; and, if not, whether the employer had waived the agreed
retirement age or whether
the existing contract had been amended by
doing away with the agreed retirement age, again as alleged in the
statement of claim.
The Labour Court was not invited to
decide whether his agreed retirement age was 65 in terms of the
MIPFCA or whether the
MIPFCA trumped the agreed retirement age
contained in Mr Landman’s employment contract.
[210]
No evidence was led. The MIPFCA was not placed before the
Labour Court and is not part
of the record before us. It
may well be, indeed I think it very likely, that the retirement age
of 65 in the MIPFCA is simply
a provision that, for purposes of the
Motor Industry Provident Fund, a member must retire once he or she
reaches the age of 65.
This was
not
said to be either an “agreed” or “normal”
retirement age for employers associated with the Provident Fund.
The fact that a person could not be an in service member of the
Provident Fund beyond the age of 65 would not preclude employers
associated with the Provident Fund from having younger agreed
retirement ages with their employees. The Provident Fund paid
Mr Landman a retirement benefit when his services were
terminated by his employer, even though he was not yet 65.
[211]
Mr Landman did not plead, and the Labour Court was not
asked to find, that his dismissal
was unfair due to non compliance
with a fair procedure. The question as to whether
procedural
fairness applies to a dismissal in terms of section 187(2)(b) is
thus not applicable in his case.
[212]
I would
thus
dismiss the appeal in
Mr Landman’s case, with no order as to costs.
Solidarity
[213]
If the retirement age applicable to the employees in
Solidarity
had been and remained the last day of the month in which they turned
60, SITA would on my interpretation of
section
187(2)(b)
have been entitled to dismiss them when it did, even though they were
all dismissed well past their retirement age
dates.
[214]
However, the contractual arrangements analysed in the first judgment
show that if SITA
consented
to an employee
working beyond the last day of the month in which he or she turned
60, a new retirement age of 67 came into operation.
This is
what happened in the case of the six employees with which
Solidarity
is concerned. This means that SITA
could
not fairly dismiss them in terms of section 187(2)(b) until they
reached the age of 67. They were all dismissed well
before that
age. I thus agree that their dismissals were automatically
unfair in terms of section 187(1)(f).
[215]
This
conclusion
makes it unnecessary to
consider the employees’ pleaded case on procedural unfairness
or to decide the legal question that
I identified earlier, namely
whether an
employee
who is dismissed in
terms of section 187(2)(b) is entitled not only to reasonable
notice but also to a fair hearing.
[216]
Although SITA did not intend to discriminate on grounds of age (in
part SITA was under a misapprehension
that the law was as laid down
in
Waco
and in part it seems to have
misapprehended
the applicable contractual arrangements), I agree for the reasons set
out in the first judgment that it would be just and equitable
to
award the employees the maximum compensation of 24 months’
remuneration.
[217]
I disagree, however, that
we should depart from the usual practice of not awarding costs in
labour matters.
[89]
As I
have said, SITA did not act maliciously; it thought it was dismissing
the employees in accordance with section 187(2)(b).
I do
not think we should mulct SITA in costs because of a fear that
otherwise the compensation awarded to the employees will be
substantially diminished. The litigation was brought on behalf
of
the
six employees by
Solidarity, and we have no reason to believe that Solidarity has not
covered the costs. There is no evidence
that Solidarity has an
arrangement with the employees that it will recover costs from any
compensation awarded to them. Solidarity
as a trade union has
been fighting for a principle with ramifications far beyond the
interests of these six individuals.
[218]
Even if the employees end up bearing their own costs, the costs will
be spread among six of them,
and they were relatively high earners.
Based on the figures contained
in
their
statements of claim and pre trial minutes, 24 months’
remuneration for the six of them will come to R10 586 643.
So this is very far from being a case where the successful employees
are at risk of being “left with nothing” if they
must
bear their own costs.
[219]
If in this matter we depart from the usual approach in labour cases,
we may well end up in a position
where in every successful unfair
dismissal claim the employer will be ordered to pay the employee’s
costs. In the absence
of a costs order in favour of the
employee, the employee’s backpay (in the case of reinstatement)
or compensation (if there
is no reinstatement) will in every case be
diminished by the own costs he or she has to bear. And one
might just as well
ask why an employer that has been vindicated by
successfully
warding off a claim for unfair
dismissal should be positively out of pocket by having to bear its
own expenses. Yet we do
not routinely award costs in favour of
employees or employers in dismissal cases.
[220]
I thus
concur
in the orders proposed in
Solidarity
in the first judgment, save in regard to the costs
in the Labour Court, the Labour Appeal Court and this
Court,
in regard to which I would order the parties to bear their own
costs.
Orders
[221]
I would
thus
make the following orders:
221.1. In the
Landman
case, CCT 298/22:
1.
Leave to appeal is granted.
2.
The appeal is dismissed.
221.2. In the
Solidarity
case, CCT 346/22:
1.
Leave to appeal is granted.
2.
The appeal is upheld.
3.
The decision of the Labour Court is set aside and replaced with the
following:
“
(a)
The dismissals of the six Solidarity members involved in this case
are declared to have been automatically
unfair.
(b)
The respondent is ordered to pay each of those members, or in the
case of late Ms Sonia
du Plessis her deceased estate, compensation
equal to 24 months’ remuneration calculated at the
member’s rate
of remuneration on the date of dismissal.”
Case CCT 298/22
For
the Applicants:
GJ Ebersöhn
Instructed by Gerrie
Ebersöhn Attorneys
Incorporated
For
the Respondents:
RJC Orton
Instructed by Snyman
Attorneys
Case
CCT 346/22
For
the Applicants:
C Goosen
Instructed by Serfontein
Viljoen and Swart
For
the Respondents:
K Tsatsawane SC and N Makhaye
Instructed by Rambevha
Morobane Attorneys
[1]
66 of 1995.
[2]
Schweitzer
v Waco Distributors (A Division of Voltex (Pty) Ltd)
(1998) 19 ILJ 1573 (LC)
(
Waco
).
[3]
In
our law the fact that a matter raises a question of law that a Judge
decided in one way in another case is not a ground for
recusal.
[4]
Latin
for: Time flies.
[5]
Although
this judgment is to be handed down after I had retired, I prepared
its first and second drafts when I was still in office
as
Chief Justice but was about to retire.
[6]
National
Education Health and Allied Workers Union v University of Cape Town
[2002] ZACC 27
;
2003 (2)
BCLR 154
(CC);
2003 (3) SA 1
(CC) (
NEHAWU
).
[7]
55
of 1998.
[8]
Investigating
Directorate: Serious Economic Offences v Hyundai Motor Distributors
(Pty) Limited: In re Hyundai Motor Distributors
(Pty) Limited v Smit
N.O.
[2000]
ZACC 12
;
2000 (10) BCLR 1079
;
2001 (1) SA 545
(CC) (
Hyundai
).
[9]
Section 186 is quoted later in this judgment. See [36] below.
[10]
Waco
above
n 2.
[11]
Id at para 14.
[12]
Id at para 16.
[13]
Id at paras 17-9.
[14]
Waco
above
n 2 at
para
26.
[15]
Waco
above
n 2 at
para
33.
[16]
Act
75 of 1997.
[17]
Section 41(2) of the Basic Conditions of Employment Act reads:
“
An
employer must pay an employee who is dismissed for reasons based on
the employer’s operational requirements severance
pay equal to
at least one week’s remuneration for each completed year of
continuous service with that employer, calculated
in accordance with
section 35.”
[18]
NEHAWU
above n 6
.
[19]
Motor
Industry Staff Association and Another v Great South Autobody CC t/a
Great South Panel Beaters
[2022]
ZALAC 103
;
(2022)
43 ILJ 2326 (LAC)
(
Landman
).
[20]
Solidarity
on behalf of Strydom v State Technology Agency SOC Ltd
[2022]
ZALCJHB 95; (2022) 43 ILJ 1881 (LC) (
Solidarity
).
[21]
Above
n 1.
[22]
Above n 2
.
[23]
Van
Jaarsveld “Labour Law” in
LAWSA
3
ed
(2017) vol 24(1) at para 98 and Grogan
Workplace
Law
12
ed
(Juta & Co Ltd, Cape Town 2017) at 31.
[24]
Van
Streepen & Germs (Pty) Ltd v Transvaal Provincial Administration
1987
(4) SA 569
(A) at 588I-J (
Van Streepen
).
[25]
Alfred
McAlpine & Son (Pty) Ltd v Transvaal Provincial Administration
1974
(3) SA 506
(A) at 531.
[26]
Grogan
above n 23 at 36.
[27]
Van
Streepen
above
n 24 at 588H-J.
[28]
Id.
[29]
Landman
above
n 19 at para 15.
[30]
Natal
Joint Municipal Pension Fund v Endumeni Municipality
[2012]
ZASCA 13
;
2012 (4) SA 593
(SCA) (
Endumeni
)
at para 18.
[31]
Cool
Ideas 1186 CC v Hubbard
[2014]
ZACC 16
;
2014
(4) SA 474
(CC);
2014 (8) BCLR 869
(CC) at para 28. See also
Municipal
Employees Pension Fund v Natal Joint Pension Fund
[2017]
ZACC 43
;
2018 (2) BCLR 157
(2018) 39 ILJ 311 (CC).
[32]
University
of Johannesburg v Auckland Park Theological Seminary
[2021] ZACC 13
;
2021
(6) SA 1
(CC);
2021
(8) BCLR 807
(CC) (
University
of Johannesburg
)
at paras 65–7.
[33]
Endumeni
above
n 30 at para 18.
[34]
Jaga
v Dönges NO; Bhana v Dönges NO
1950
(4) SA 653
(A) (
Jaga
)
at 662G–663A.
[35]
Id
at
662H.
[36]
Section
9 is headed “Equality” and reads:
“
(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.”
[37]
Section
36 is headed “Limitation of rights” and reads as
follows:
“
(1)
The rights in the Bill of Rights may be limited only in terms of law
of general
application to the extent that the limitation is
reasonable and justifiable in an open and democratic society based
on human
dignity, equality and freedom, taking into account all
relevant factors, including—
(a)
the nature of the right;
(b)
the importance of the purpose of the limitation;
(c)
the nature and extent of the limitation;
(d)
the relation between the limitation and its
purpose; and
(e)
less restrictive means to achieve the purpose.
(2)
Except as provided in subsection (1) or in any other provision of
the Constitution, no law may limit any right entrenched in the Bill
of Rights.”
[38]
Landman
above
n 19 at para 17.
[39]
Grogan
above n 23 at 43-5.
[40]
Segal
v Mazzur
1920
CPD 635
(
Segal
).
[41]
Id a
t
644–5. This passage was referred to with approval by the
Appellate Court in
Du
Plessis NNO v Rolfes Ltd
[1996] ZASCA 45
;
1997
(2) SA 354
(A)
at
364G–365A
.
See also
Septoo
v City of Johannesburg
[2017]
ZALAC 85
; (2018) 39 ILJ 580 (LAC) at para 19.
[42]
Potgieter
v Van der Merwe
1949
(1) SA 361
(AD) at 372 (
Potgieter
).
[43]
Pollock
Principles
of Contract:A Treatise on the General Principles Concerning the
Validity of Agreements in the Law of England
8
ed
(
Stevens
and Sons, London 1911)
at
629.
[44]
Id.
[45]
Mahabeer
v Sharma NO
1985
(3) SA 729
(A) (
Mahabeer
)
at 736D-I and
Cook
v Morrison
[2019]
ZASCA 8
;
2019 (5) SA 51
(SCA) at para 30.
[46]
The
principle is sometimes conveniently referred to as the principle of
waiver by election. See
Delta
Petroleum (Caribbean) Ltd v British Virgin Islands Electing
Corporation
[2020]
UKPC 23
at para 18 (
Delta
Petroleum
).
[47]
As
the issue was not raised and therefore not addressed, I leave the
question open whether the employer may have to comply with
the
employee’s right to a procedurally fair dismissal in terms of
section 188(1)(b) of the LRA when making the decision.
[48]
The
bilateral nature of waiver in a purely contractual context is not
without controversy and I express no views with regard thereto.
See Christie and Bradfield
Christie’s
The Law of Contract in South Africa
8
ed
(
LexisNexis,
Durban 2022) at 533
and
Kerr
The
Principles of the Law of Contract
6
ed
(
LexisNexis,
Durban 2002)
at
469-93.
[49]
Bekazaku
Properties (Pty) Ltd v Pam Golding Properties (Pty) Ltd
1996
(2) SA 537
(C) (
Bekazaku
)
at 542E. See also Christie and Bradfield id at 563-4.
[50]
Kosmar
Villa Holidays plc v Trustees of Syndicate 1243
[2008]
EWCA Civ 147
at para 66.
[51]
Delta
Petroleum
above
n 46 at para 19.
[52]
Desai v
Mohamed
1976
(2) SA 209
(N) at 713. See also
United
Bioscope Cafes Ltd v Mosely Buildings Ltd
1924
AD 60
at 67;
Thomas
v Henry
1985
(3) SA 889
(A) at 896E;
Bekazaku
above
n 49 at 542E-J; and
Sewpersadh
v Dookie
[2009]
ZASCA 78
;
2009 (6) SA 611
(SCA) at para 16.
[53]
Christie
and Bradfield
Christie’s
The Law of Contract in South Africa
6
ed (LexisNexis, Durban 2011) at 457.
[54]
Consol
Ltd t/a Consol Glass v Twee Jonge Gezellen (Pty) Ltd
(2)
2005 (6) SA 23
(C) at para 32.
[55]
13
of 2006.
[56]
An
“older person” is defined in section 1 as “a
person who, in the case of a male, is 65 years of age or older
and,
in the case of a female, is 60 years of age or older.”
[57]
Subsection
(1)(a) of section 5.
[58]
Van Streepen
above
n 24 at 588G J.
[59]
National
Automobile & Allied Workers Union v Borg Warner
(1994)
15 ILJ 509 (A) at 515G J.
[60]
NEHAWU
above
n 6 at para 38.
[61]
National
Union of Metal Workers of South Africa v Vetsak Co-operative Ltd
[1996] ZASCA 69
;
1996
(4) SA 577
(A)
.
[62]
Id
at 589C D. See also 593E H.
[63]
The
issue of estoppel did not arise in either the
Landman
or
the
Solidarity
matter.
[64]
Nienaber JA
in
Road
Accident Fund v Mothupi
[2000]
ZASCA 27
;
2000 (4) SA 38
(SCA) (
Mothupi
)
at para 15.
[65]
Id
and
ABSA
Bank Ltd v The Master NNO
1998
(4) SA 15
(N) at 28G J.
[66]
Mothupi
above
n 64 at para 16. See also
Coppermoon
Trading 13 (Pty) Ltd v Government, Eastern Cape Province
2020
(3) SA 391
(ECB) at paras 24 5;
Multilateral
Motor Vehicle Accidents Fund v Meyerowitz
1995
(1) SA 23
(C) at 27D E;
Botha
(now Griessel) v Finanscredit (Pty) Ltd
1989
(3) SA 773
(A) at 792B E;
Palmer
v Poulter
1983
(4) SA 11
(T) at 21A;
Traub
v Barclays National Bank Ltd; Kalk v Barclays National Bank Ltd
1983
(3) SA 619
(A) at 634H 635D; and
Mutual
Life Insurance Co of New York v Ingle
1910
TS 540
at 550.
[67]
Ex
parte Sussens
1941
TPD 15
at 20;
Mothupi
above
n 64 at para 17; and
Borstlap
v Spangenberg
1974
(3) SA 695
(A) at 704G H. As stated by Steyn CJ in
Hepner
v Roodepoort
Maraisburg
Town Council
1962
(4) SA 772
(A) at 778H 9A:
“
In
the ordinary case of waiver, the
facta
probanda
[(material
facts)] would be full knowledge of the rights in question and
express waiver or waiver by plainly inconsistent conduct,
i.e.
knowledge of a particular kind and surrender of the right in a
particular manner.”
[68]
See
Feinstein
v Niggli
1981
(2) SA 684
(A) at 698A - 9B and
Pretorius
v Greyling
1947
(1) SA 171
(W) at 177.
[69]
Ellis
v Laubscher
1956
(4) SA 692
(A) at 702 E.
[70]
Laws
v Rutherford
1924
AD 261
at 263. See also
Montesse
Township & Investments Corporation v Gouws NO
1965
(4) SA 373
(A) at 381B;
Borstlap
v Spangenberg
above
n 48 at 704G H;
Feinstein
above
n 6 at 698H, and
Mothupi
above
n 64 at para 19.
[71]
Laws
v Rutherford
1924
AD 261
at 263.
[72]
Mothupi
above
n 64 at para 19.
[73]
See
Segal
above n 40 at 644-5 and
[152] of this judgment
.
[74]
Mahabeer
above
n 45.
[75]
Id
at
736E I.
[76]
United
Democratic Movement v President of the Republic of South
Africa
(African
Christian Democratic Party and Others Intervening; Institute for
Democracy in South Africa and Another as Amici Curiae)
[2002]
ZACC 21
;
2003 (1) SA 495
(CC);
2002 (11) BCLR 1179
(CC) at para 105
and
Annamma
v Moodley
1943
AD 531
at 538 9.
[77]
Putco
Ltd v TV & Radio Guarantee Co (Pty) Ltd and Other Related Cases
1985 (4) SA 809
(A)
at 830H 831A.
[78]
Willis
Faber Enthoven (Pty) Ltd v Receiver of Revenue
1992
(4) SA 202 (A).
[79]
Id
at 221F
H.
[80]
See
for example
Rubenstein
v Price’s Daelite (Pty) Ltd
[2002]
ZALC 28
; (2002) 23 ILJ 528 (LC) at paras 20 4;
Kutuma
v Limpopo Legislature
[2014]
ZALCJHB 357 at paras 33 8; and
Bos
v Eon Consulting (Pty) Ltd
[2016]
ZALCJHB 305 at paras 46 7.
[81]
Solidarity
above
n 20 at para 23.
[82]
Union
for Police Security and Corrections Organisation v South African
Custodial Management (Pty) Ltd
[2021]
ZACC 41
;
2022
(1) BCLR 118
(CC); (2022) 43 ILJ 341 (CC) and
National
Union of Mineworkers obo Masha v Samancor Limited (Eastern Chrome
Mines)
[2021]
ZACC 41
;
(2021)
42 ILJ 1881 (CC);
2021
(10) BCLR 1191 (CC).
[83]
The
retirement-age date will not necessarily be a birthday. In
Solidarity
,
for example, the retirement age date was the last day of the
month in which the employee turned 60.
[84]
In
Palacios
de la Villa v Cortefiel Servicios SA
[2007]
EUECJ C-411/05
;
[2007] IRLR 989
, a decision of the Grand Chamber of
the Court of Justice of the European Communities, the policy
underlying the Spanish legislation
at issue was said to be “seeking
to promote better access to employment, by means of better
distribution of work between
the generations” (at para 53;
and see also at paras 58, 65 and 72). Similar
justifications have been put
up in other age discrimination
cases: see, for example,
Rosenbladt
(Social policy)
[2010]
EUECJ C 45/09;
[2011] IRLR 51
(
Rosenbladt
)
at para 43;
Georgiev
(Social policy)
[2010]
EUECJ C-250/09
;
[2011] 2 CMLR 7
at para 45;
Fuchs
(Social policy)
[2011]
EUECJ C-159/10
;
[2011] IRLR 1043
(
Fuchs
)
at paras 56-66 and 75; and
Mallon
v Minister for Justice, Ireland, and the Attorney General
[2024] IESC 20
(
Mallon
)
at paras 62(5) and 78.
This
policy is essentially the “fair innings” justification
mentioned in Ter Haar “Is the CJEU Discriminating
in Age
Discrimination Cases?” (2020) 13
Erasmus Law Review
78,
though it perhaps also has elements of the “complete life
view” justification to which the author refers.
For a
criticism of the “fair innings” justification, see
Fredman “The Age of Equality” in Fredman and
Spencer
(eds)
Age as an Equality Issue: Legal and
Policy Perspectives
(Hart Publishing,
Oxford 2003) (Fredman and Spencer) at 47,
a critique
that may be more compelling in a buoyant economy than in one marked
by chronic unemployment.
There
may be other job-specific justifications. See the Canadian
cases dealing with the mandatory retirement of university
academics
(
McKinney v University of Guelph
1990 SCC 60
,
[1990] 3 SCR
229
and
Dickason v Governors of the University of Alberta
1992 SCC 30
;
[1992] 2 SCR 1103)
and of hospital physicians (
Stoffman
v Vancouver General Hospital
1990 SCC 62
;
[1990] 3 SCR 483).
In
Seldon v Clarkson Wright and Jakes (Secretary of State for
Business, Innovation and Skills and another intervening)
[2012]
UKSC 16
;
[2012] 3 All ER 1301
(SC) (
Seldon
), Lady Hale
spoke of “inter generational fairness” which is a
somewhat wider concept than the “fair
innings” idea.
She said this of “inter generational fairness” (at
para 56):
“
It
can mean a variety of things, depending upon the particular
circumstances of the employment concerned: for example, it can
mean
facilitating access to employment by young people; it can mean
enabling older people to remain in the workforce; it can
mean
sharing limited opportunities to work in a particular profession
fairly between the generations; it can mean promoting diversity
and
the interchange of ideas between younger and older workers.”
See
also para 73 per Lord Hope.
[85]
See
Rosenbladt
above n 84 at para 43 and
Fuchs
above n
84 at para 50. In
Mallon
above n 84 at para 74
the Court said that “
the avoidance of
individual capacity assessment – both because of the scope for
disputes such assessment necessarily involves
and because of its
potential impact on the dignity of employees – has been
recognised as a legitimate aim capable of justifying
a general
retirement age”. See also
Seldon
above n 84 at paras 57-8.
In
Rutherford v
Secretary of State for Trade and Industry
[2004] EWCA Civ 1186
;
[2004] IRLR 892
, the British government’s justification
of the retirement ages in section 109 of the Employment Rights
Act 1996
consisted of the following social policies: “enabling
employers to meet the expectations of younger employees for
advancement;
assisting employers to identify their future
recruitment needs; and enabling employers to dismiss an older and
less capable employee
without the need to justify the dismissal”
(at para 45). It is of interest to note that section 109
and
its predecessors (section 28 of the Industrial Relations
Act 1971; para 10 of Schedule 1 to the Trade Union and
Labour Relations Act 1974; and section 64 of the Employment
Protection Act 1978) had the same practical effect as the
interpretation I have given to section 187(2)(b) of the LRA.
Section 109 provided that a dismissal was not unfair
“if
on or before the effective date of termination [the employee] has
attained (a) . . . [the] normal retiring
age, and
(b) in any other case, the age of sixty-five”. Fair
dismissals can thus take place at any time after
the employee has
attained the normal retirement age (if there is one) or has attained
the age of 65. See
Hepple “Age
Discrimination in Employment: Implementing the Framework Directive
2000/78/EC” in Fredman and Spencer
above n 84 at 93.
[86]
First
judgment at [51] to [55].
[87]
First
judgment at [72].
[88]
First
judgment at [59] to [61].
[89]
For
the applicable principles, see
Zungu
v
Premier of the Province of KwaZulu-Natal
[2018]
ZACC 1
;
2018 (6) BCLR 686
(CC); (2018) 39 ILJ 523 (CC) at para 24
and
Long
v South African Breweries (Pty) Ltd
[2019]
ZACC 7
;
2019 (5) BCLR 609
(CC);
[2019] 6 BLLR 515
(CC); (2019) 40
ILJ 965 (CC) at paras 27-30. See also
Member
of the Executive Council
for
Finance: KwaZulu-Natal v Dorkin N.O.
[2007]
ZALAC 34
; (2008) 29 ILJ 1707 (LAC) at para 19.
sino noindex
make_database footer start
Similar Cases
Seebed CC t/a Siyabonga Convenience Centre v Engen Petroleum Limited (CCT 290/20) [2022] ZACC 28; 2023 (12) BCLR 1535 (CC) (20 July 2022)
[2022] ZACC 28Constitutional Court of South Africa95% similar
Motor Industry Staff Association and Another v Great South Autobody CC t/a Great South Panel Beaters (JA68/2021) [2022] ZALAC 103; (2022) 43 ILJ 2326 (LAC) (27 September 2022)
[2022] ZALAC 103Labour Appeal Court of South Africa95% similar
Mfoza Service Station (Pty) Ltd v Engen Petroleum Ltd and Another (CCT 167/21) [2023] ZACC 3; 2023 (4) BCLR 397 (CC); 2023 (6) SA 29 (CC) (1 February 2023)
[2023] ZACC 3Constitutional Court of South Africa95% similar
Transnet SOC Limited v Total South Africa (Pty) Limited and Another (CCT 114/21) [2022] ZACC 21; 2023 (3) BCLR 333 (CC) (21 June 2022)
[2022] ZACC 21Constitutional Court of South Africa95% similar
Tholo Energy Services CC v Commissioner for the South African Revenue Service (CCT 252/24) [2026] ZACC 1 (16 January 2026)
[2026] ZACC 1Constitutional Court of South Africa95% similar