Director-General of the Department of Labour v Jinghua Garments (Pty) Ltd (2007) 28 ILJ 880 (LC)

Principle:

Fines for violation of the EEA are based on the offence of not complying with the compliance order, rather than on each individual violation of the Act. A fine should not contain a retribution element, only a punitive element and a preventative element.

Facts:

The employer had failed to comply with requirements in terms of the EEA. When it failed to comply with a written undertaking made to a labour inspector, the inspector issued a compliance order. When the company failed to comply with this order, the Department applied to the Labour Court to have the order made an order of court and for the imposition of a fine on the employer. The violations of the EEA were admitted and the only issue before the court was the issue of the fine.

The dispute centred on whether the maximum fine of R500 000 was for contravention of the compliance order of for each individual contravention of a provision of the Act. Imposing a fine on individual contraventions would yield a completely different result to imposing a fine for contravening the compliance order.

The court found that as there were conflicting provisions in the EEA, the interpretation more lenient to the person to be fined had to be preferred. An appropriate fine therefore had to be considered on the basis of the violation of the compliance order, with the contraventions of the particular provisions to be taken into consideration as factors relevant to the determination of the appropriate fine. The court agreed that to ensure compliance with the Act, the fine had to have a punitive element and a preventative element, and not be characterised by an element of retribution.

The court made the compliance order an order of court and ordered the employer to pay a fine of R200 000, half of which was suspended for a period of three years on condition the employer was not found guilty of contravening the same provisions of the Act during that period.

Extract from the judgment:

[At para 20]   [The court listed the following factors as being relevant to the appropriateness of the fine] … the court should consider, inter alia, the following: the purpose of the Act; the extent of the contravention, the period the contravention had endured, the reason for not complying; the attempts made to comply, if any, the maximum fine prescribed, and any relevant considerations relating to the respondent.

[Para 22]   To ensure compliance with the Act the fine should have a punitive and preventative element…It is also agreed by counsel that the fine should not be characterized by an element of retribution.