Minister of Finance v van Heerden 2004 (11) BCLR 1125 (CC)

Principle:

  1. Remedial measures are not a derogation from, but a substantive and composite part of, the equality protection envisaged by the provisions of section 9 and of the Constitution as a whole.

  2. If restitutionary measures, even based on any of the grounds of discrimination listed in section 9(3), pass muster under section 9(2), they cannot be presumed to be unfairly discriminatory.

  3. To determine whether a measure falls within section 9(2) the enquiry is threefold. The first yardstick relates to whether the measure targets persons or categories of persons who have been disadvantaged by unfair discrimination; the second is whether the measure is designed to protect or advance such persons or categories of persons; and the third requirement is whether the measure promotes the achievement of equality.

Facts:

The respondents contended that a rule of the Political Office Bearers Pension Fund treated new members of parliament more favourably that old members. The respondents were of the view that the rules discriminated unfairly against old members. The applicants however claimed that the rule constituted a limited affirmative action measure in favour of new members of Parliament under section 9(2). The court unanimously found in favour of the applicants.

In the Constitutional Court the provisions of section 9 of the Constitution were analysed. The court held that s 9(2) provides for the achievement of full and equal enjoyment of all rights and freedoms and authorizes legislative and other measures designed to protect or advance persons or categories of persons disadvantaged by unfair discrimination. Restitutionary measures, sometimes referred to as ‘affirmative action’, may be taken to promote the achievement of equality. The measures must be ‘designed’ to protect or advance persons disadvantaged by unfair discrimination in order to advance the achievement of equality”.

Extract from the judgment:

[22]   The achievement of equality goes to the bedrock of our constitutional architecture.  The Constitution commands us to strive for a society built on the democratic values of human dignity, the achievement of equality, the advancement of human rights and freedom. Thus the achievement of equality is not only a guaranteed and justiciable right in our Bill of Rights but also a core and foundational value; a standard which must inform all law and against which all law must be tested for constitutional consonance.

[23]   For good reason, the achievement of equality preoccupies our constitutional thinking. When our Constitution took root a decade ago our society was deeply divided, vastly unequal and uncaring of human worth. Many of these stark social and economic disparities will persist for long to come. In effect the commitment of the Preamble is to restore and protect the equal worth of everyone; to heal the divisions of the past and to establish a caring and socially just society. In explicit terms, the Constitution commits our society to “improve the quality of life of all citizens and free the potential of each person”.

[24]   Our supreme law says more about equality than do comparable constitutions. Like other constitutions, it confers the right to equal protection and benefit of the law and the right to non-discrimination. But it also imposes a positive duty on all organs of State to protect and promote the achievement of equality  – a duty which binds the judiciary too.

[25]   Of course, democratic values and fundamental human rights espoused by our Constitution are foundational. But just as crucial is the commitment to strive for a society based on social justice.  In this way, our Constitution heralds not only equal protection of the law and non-discrimination but also the start of a credible and abiding process of reparation for past exclusion, dispossession, and indignity within the discipline of our constitutional framework.

[26]   The jurisprudence of this Court makes plain that the proper reach of the equality right must be determined by reference to our history and the underlying values of the Constitution.  As we have seen a major constitutional object is the creation of a non-racial and non-sexist egalitarian society underpinned by human dignity, the rule of law, a democratic ethos and human rights.  From there emerges a conception of equality that goes beyond mere formal equality and mere non-discrimination which requires identical treatment, whatever the starting point or impact.  Of this Ngcobo J, concurring with a unanimous court, in Bato Star Fishing (Pty) Ltd v The Minister of Environmental Affairs and Tourism and others observed that:

“In this fundamental way, our Constitution differs from other constitutions which assume that all are equal and in so doing simply entrench existing inequalities. Our Constitution recognises that decades of systematic racial discrimination entrenched by the apartheid legal order cannot be eliminated without positive action being taken to achieve that result. We are required to do more than that. The effects of discrimination may continue indefinitely unless there is a commitment to end it.”

[27]   This substantive notion of equality recognises that besides uneven race, class and gender attributes of our society, there are other levels and forms of social differentiation and systematic under-privilege, which still persist. The Constitution enjoins us to dismantle them and to prevent the creation of new patterns of disadvantage.  It is therefore incumbent on courts to scrutinise in each equality claim the situation of the complainants in society; their history and vulnerability; the history, nature and purpose of the discriminatory practice and whether it ameliorates or adds to group disadvantage in real life context,  in order to determine its fairness or otherwise in the light of the values of our Constitution. In the assessment of fairness or otherwise a flexible but “situation-sensitive”  approach is indispensable because of shifting patterns of hurtful discrimination and stereotypical response in our evolving democratic society. The unfair discrimination enquiry requires several stages. These are set out by this Court in Harksen v Lane NO and Others.

Restitutionary measures

[28]   A comprehensive understanding of the Constitution’s conception of equality requires a harmonious reading of the provisions of section 9. Section 9(1) proclaims that everyone is equal before the law and has the right to equal protection and benefit of the law. On the other hand, section 9(3) proscribes unfair discrimination by the State against anyone on any ground including those specified. Section 9(5) renders discrimination on one or more of the listed grounds unfair unless its fairness is established. However, section 9(2) provides for the achievement of full and equal enjoyment of all rights and freedoms and authorises legislative and other measures designed to protect or advance persons or categories of persons disadvantaged by unfair discrimination. Restitutionary measures, sometimes referred to as “affirmative action”, may be taken to promote the achievement of equality. The measures must be “designed” to protect or advance persons disadvantaged by unfair discrimination in order to advance the achievement of equality.

[29]   Section 9(1) provides: “Everyone is equal before the law and has the right to equal protection and benefit of the law.” Of course, the phrase “equal protection of the laws” also appears in the 14th Amendment of the US Constitution. The American jurisprudence has, generally speaking, rendered a particularly limited and formal account of the reach of the equal protection right.  The US anti-discrimination approach regards affirmative action measures as a suspect category which must pass strict judicial scrutiny. The test requires that it be demonstrated that differentiation on the grounds of race is a necessary means to the promotion of a compelling or overriding State interest. A rational relationship between the differentiation and a State interest would be inadequate.  Our equality jurisprudence differs substantively from the US approach to equality. Our respective histories, social context and constitutional design differ markedly. Even so, the terminology of “affirmative action” has found its way into general use and into a number of our statutes directed at prohibiting unfair discrimination and promoting equality, such as the Employment Equity Act 55 of 1998 and the Promotion of Equality and the Prevention of Unfair Discrimination Act 4 of 2000. But in our context, this terminology may create more conceptual and other difficulties than it resolves. We must therefore exercise great caution not to import, through this route, inapt foreign equality jurisprudence which may inflict on our nascent equality jurisprudence American notions of “suspect categories of State action” and of “strict scrutiny”. The Afrikaans equivalent “regstellende aksie” is perhaps juridically more consonant with the remedial or restitutionary component of our equality jurisprudence.

[30]   Thus, our constitutional understanding of equality includes what Ackermann J in National Coalition for Gay and Lesbian Equality and Another v Minister of Justice and Another calls “remedial or restitutionary equality”.  Such measures are not in themselves a deviation from, or invasive of, the right to equality guaranteed by the Constitution. They are not “reverse discrimination” or “positive discrimination” as argued by the claimant in this case. They are integral to the reach of our equality protection. In other words, the provisions of section 9(1) and section 9(2) are complementary; both contribute to the constitutional goal of achieving equality to ensure “full and equal enjoyment of all rights”.  A disjunctive or oppositional reading of the two subsections would frustrate the foundational equality objective of the Constitution and its broader social justice imperatives.

[31]   Equality before the law protection in section 9(1) and measures to promote equality in section 9(2) are both necessary and mutually reinforcing but may sometimes serve distinguishable purposes, which I need not discuss now. However, what is clear is that our Constitution and in particular section 9 thereof, read as a whole, embraces for good reason a substantive conception of equality inclusive of measures to redress existing inequality. Absent a positive commitment progressively to eradicate socially constructed barriers to equality and to root out systematic or institutionalised under-privilege, the constitutional promise of equality before the law and its equal protection and benefit must, in the context of our country, ring hollow.

[32]   The High Court favoured the approach that in effect, the measures under attack were not mere differentiation but discriminatory and that they must be convincingly justified because they are premised on grounds listed in section 9(3) and therefore attract an onus “that cannot be easy to discharge”. In Public Servants Association of South Africa and Others v Minister of Justice and Others,  Swart J, in dealing with the “affirmative action” claim of the government in that case, adopted an equivalent route in the interpretation and application of section 8(3)(a) of the interim Constitution. I am unable to agree with that approach. Legislative and other measures that properly fall within the requirements of section 9(2) are not presumptively unfair. Remedial measures are not a derogation from, but a substantive and composite part of, the equality protection envisaged by the provisions of section 9 and of the Constitution as a whole. Their primary object is to promote the achievement of equality. To that end, differentiation aimed at protecting or advancing persons disadvantaged by unfair discrimination is warranted provided the measures are shown to conform to the internal test set by section 9(2).

Onus of proof and section 9(2)

[33]   It seems to me plain that if restitutionary measures, even based on any of the grounds of discrimination listed in section 9(3), pass muster under section 9(2), they cannot be presumed to be unfairly discriminatory. To hold otherwise would mean that the scheme of section 9 is internally inconsistent or that the provisions of section 9(2) are a mere interpretative aid or even surplusage.  I cannot accept that our Constitution at once authorises measures aimed at redress of past inequality and disadvantage but also labels them as presumptively unfair. Such an approach, at the outset, tags section 9(2) measures as a suspect category that may be permissible only if shown not to discriminate unfairly. Secondly, such presumptive unfairness would unduly require the judiciary to second guess the Legislature and the executive concerning the appropriate measures to overcome the effect of unfair discrimination.

[34]   Following the reasoning in Public Servants Association, the High Court made much of the presumption of unfairness against the differentiated pension scheme and the burdensome onus it attracts. I have concluded that legislative and other measures, which properly fall within the provision of section 9(2), do not attract any such burden.

[35]   It follows that the High Court is clearly mistaken in approaching this matter on the limited basis that it need not decide whether and the extent to which members of Parliament who were members of the CPF were better off than those who were not, since the applicants had omitted to make certain averments, which the court regarded as essential to discharge the section 9(5) onus.

Requirements of section 9(2)

[36]   The pivotal enquiry in this matter is not whether the Minister and the Fund discharged the presumption of unfairness under section 9(5), but whether the measure in issue passes muster under section 9(2). If a measure properly falls within the ambit of section 9(2) it does not constitute unfair discrimination. However, if the measure does not fall within section 9(2), and it constitutes discrimination on a prohibited ground, it will be necessary to resort to the Harksen (supra) test in order to ascertain whether the measures offend the anti-discrimination prohibition in section 9(3).

[37]   When a measure is challenged as violating the equality provision, its defender may meet the claim by showing that the measure is contemplated by section 9(2) in that it promotes the achievement of equality and is designed to protect and advance persons disadvantaged by unfair discrimination. It seems to me that to determine whether a measure falls within section 9(2) the enquiry is threefold. The first yardstick relates to whether the measure targets persons or categories of persons who have been disadvantaged by unfair discrimination; the second is whether the measure is designed to protect or advance such persons or categories of persons; and the third requirement is whether the measure promotes the achievement of equality.

[38]   The first question is whether the programme of redress is designed to protect and advance a disadvantaged class. The measures of redress chosen must favour a group or category designated in section 9(2). The beneficiaries must be shown to be disadvantaged by unfair discrimination. In the present matter, the Minister and the Fund submitted that the differentiated contribution scheme was set up to promote the attainment of equality between members of the CPF and new members who were in the past excluded on account of race and or political affiliation. This objective they would advance by identifying three separate indicators of need for increased pensions for new parliamentarians. On the facts, however, it is clear that not all new parliamentarians of 1994 belong to the class of persons prejudiced by past disadvantage and unfair exclusion. An overwhelming majority of the new members of Parliament were excluded from parliamentary participation by past apartheid laws on account of race, political affiliation or belief.

[39]   The starting point of equality analysis is almost always a comparison between affected classes. However, often it is difficult, impractical or undesirable to devise a legislative scheme with “pure” differentiation demarcating precisely the affected classes. Within each class, favoured or otherwise, there may indeed be exceptional or “hard cases” or windfall beneficiaries. That however is not sufficient to undermine the legal efficacy of the scheme. The distinction must be measured against the majority and not the exceptional and difficult minority of people to which it applies. In this regard I am in respectful agreement, with the following observation of Gonthier J, in Thibaudeau v Canada:

“The fact that it may create a disadvantage in certain exceptional cases while benefiting a legitimate group as a whole does not justify the conclusion that it is prejudicial.”

[40]   In the context of a section 9(2) measure, the legal efficacy of the remedial scheme should be judged by whether an overwhelming majority of members of the favoured class are persons designated as disadvantaged by unfair exclusion. It is clear that the existence of exceptional cases or of the tiny minority of members of Parliament who were not unfairly discriminated against under the apartheid regime, but who benefited from the differential pension contribution scheme, does not affect the validity of the remedial measures concerned.

[41]   The second question is whether the measure is “designed to protect or advance” those disadvantaged by unfair discrimination. In essence, the remedial measures are directed at an envisaged future outcome. The future is hard to predict. However, they must be reasonably capable of attaining the desired outcome. If the remedial measures are arbitrary, capricious or display naked preference they could hardly be said to be designed to achieve the constitutionally authorised end.  Moreover, if it is clear that they are not reasonably likely to achieve the end of advancing or benefiting the interests of those who have been disadvantaged by unfair discrimination, they would not constitute measures contemplated by section 9(2).

[42]   In Public Servants Association,  Swart J, in interpreting section 8(3)(a) of the interim Constitution, held that:

“The measures must be designed to achieve something. This denotes . . . a causal connection between the designed measures and the objectives.”

In the present matter Thring J followed this approach and held that no such causal nexus is present because the sponsor of the differentiated employer contribution scheme does not say that less had to be paid for the disfavoured category in order to give more to the favoured group. I cannot support this approach. Section 9(2) of the Constitution does not postulate a standard of necessity between the legislative choice and the governmental objective. The text requires only that the means should be designed to protect or advance. It is sufficient if the measure carries a reasonable likelihood of meeting the end. To require a sponsor of a remedial measure to establish a precise prediction of a future outcome is to set a standard not required by section 9(2). Such a test would render the remedial measure stillborn, and defeat the objective of section 9(2).

[43]   It is untenable to require, as Thring J did, that a sponsor of remedial measures must show a necessity to disfavour one class in order to uplift another. The provisions of section 9(2) do not prescribe such a necessity test because remedial measures must be constructed to protect or advance a disadvantaged group. They are not predicated on a necessity or purpose to prejudice or penalise others, and so require supporters of the measure to establish that there is no less onerous way in which the remedial objective may be achieved. The prejudice that may arise is incidental to but certainly not the target of remedial legislative choice. On the facts of this case, the members of the disfavoured class, barring a few, are beneficiaries of a generous publicly funded pension scheme which pre-dates the differential measure. The favoured categories are, in the main, not. The disfavoured category was and, as the High Court observed, remains better situated than its new parliamentary counterparts as far as state-funded pension benefits go.

[44]   The third and last requirement is that the measure “promotes the achievement of equality”. Determining whether a measure will in the long run promote the achievement of equality requires an appreciation of the effect of the measure in the context of our broader society. It must be accepted that the achievement of this goal may often come at a price for those who were previously advantaged. Action needs to be taken to advance the position of those who have suffered unfair discrimination in the past. As Ngcobo J observed in Bato Star:

“The measures that bring about transformation will inevitably affect some members of the society adversely, particularly those coming from the previously advantaged communities.”

However, it is also clear that the long-term goal of our society is a non-racial, non-sexist society in which each person will be recognised and treated as a human being of equal worth and dignity. Central to this vision is the recognition that ours is a diverse society, comprised of people of different races, different language groups, different religions and both sexes. This diversity, and our equality as citizens within it, is something our Constitution celebrates and protects. In assessing therefore whether a measure will in the long-term promote equality, we must bear in mind this constitutional vision. In particular, a measure should not constitute an abuse of power or impose such substantial and undue harm on those excluded from its benefits that our long-term constitutional goal would be threatened.