South African Revenue Service v Commission for Conciliation, Mediation and Arbitration and Others  ZACC 38
The use of the word 'kaffir' is the worst of all racial vitriols a person can ever direct at an African in this country. Where such injurious disregard for human dignity and racial hatred is spewed by an employee against his colleagues in a workplace, that ordinarily renders the relationship between the employee and the employer intolerable.
A white anti-smuggling officer employed by SARS, after an altercation with his black superior, said 'Ek kan nie verstaan hoe kaffirs dink nie' ["I cannot understand how kaffirs think."] (Charge 1); and 'A kaffir must not tell me what to do' (Charge 2).
As required by a collective agreement between SARS and the unions in its workplace, SARS arranged a disciplinary enquiry. The employee pleaded guilty and a sanction was negotiated by the chairperson of the disciplinary enquiry with the representative of SARS in those proceedings. The sanction imposed was: (a) a final written warning valid for six months; (b) suspension without pay for 10 days; (c) an order that the employee undergo counseling.
Upon receipt of the report on the outcome of the disciplinary enquiry, the SARS Commissioner changed the sanction from a final written warning to dismissal. This was however done without affording the employee the opportunity to contest the appropriateness of the more serious dismissal sanction. As a result, the employee challenged the fairness of his dismissal by referring an unfair dismissal dispute to the CCMA for conciliation and later arbitration.
The main issue the arbitrator was called upon to decide was whether the SARS Commissioner was in law entitled to substitute the sanction as he did. The arbitrator concluded that it was legally impermissible for the Commissioner to substitute the sanction imposed by the chairperson of the disciplinary enquiry. The legal basis for the arbitrator's approach was that SARS had, in terms of the collective agreement that binds it, effectively waived its common law powers to reverse the decision of the chairperson of the disciplinary enquiry. The arbitrator ordered the restoration of the position as it was before the Commissioner's intervention. After concluding that the employee's dismissal was unfair, the arbitrator immediately ordered his reinstatement without appearing to take into account section 193(2) of the LRA, which outlines those circumstances under which an unfair dismissal would not automatically require re-instatement or re-employment.
SARS challenged the award in the Labour Court, but the LC dismissed the application on the basis that the collective agreement did not permit SARS to substitute the sanction imposed by the chairperson. Aggrieved by that outcome, SARS again challenged the reversal of the dismissal in the Labour Appeal Court on essentially the same grounds. That challenge was also unsuccessful, which then resulted in the matter being referred to the Constitutional Court.
The main issue in the Constitutional Court concerned SARS's application to have that part of the arbitrator's award that required reinstatement, reviewed and set aside. The SARS Commissioner's unprocedural act that resulted in the unfair dismissal was not challenged. The Constitutional Court ordered that reinstatement be replaced with compensation calculated as 6 months' pay.
Whilst the dismissed employee guilty of racism 'walked away' with 6 months' pay as compensation, the CC took the opportunity to explain fully the devastating impact of racism in the workplace. The Court said that the use of the word 'kaffir' is the worst of all racial vitriols a person can ever direct at an African in this country. Where such injurious disregard for human dignity and racial hatred is spewed by an employee against his colleagues in a workplace, the Court said that ordinarily renders the relationship between the employee and the employer intolerable.
Extract from the judgment:
 The basis for SARS' contention that reinstatement was unreasonable is twofold. One, Mr Kruger was guilty of racism in the workplace which is an extremely serious misconduct. Two, his continued employment would thus be intolerable. In particular, SARS argues that it is, as an organ of State, obliged by section 7 of the Constitution to protect and promote the rights in the Bill of Rights. Those rights include, in this context, its workers' right to equality or human dignity that racism violates.
 Mr Kruger maintains that SARS has failed to discharge the onus that rests on it to establish that the trust relationship has been destroyed and that the circumstances highlighted in aggravation, combined with the obvious gravity of the misconduct, outweighed the factors he relies on in mitigation, thus justifying a sanction of dismissal. He holds the view that SARS should have led evidence to demonstrate that hurling the kaffir insult in the manner he did caused the continued employment relationship between him and SARS to be intolerable. Its failure to do so, he argues, ought to result in his reinstatement. In response, SARS drew attention to the fact that it had placed evidence before the Arbitrator to the effect that the continued employment of Mr Kruger would be intolerable. It is noteworthy that the Arbitrator did not refer to this contention and the supporting evidence in determining whether reinstatement was an appropriate remedy...
SARS thus advanced reasons for its contention that there is a breakdown of the relationship of trust between it and Mr Kruger. Its evidence supports the assertion that his misconduct has rendered a continued employment relationship intolerable.
 Unlike in Crown Chickens where an employee was dismissed for one incident, in this case we have two inextricably-linked incidents of saying of a fellow employee that he is a kaffir. This abusive and derogatory language was directed not only at MrMboweni but all of Mr Kruger's fellow African workers. He impugned their thinking or intellectual capacity and underminingly pronounced on their perceived inherent leadership or managerial incapabilities. None of his African colleagues was in his world-view worthy of effectively exercising authority over him. His was a demonstration of the worst kind of contempt, racism, and insubordination. A proper reflection on these racial statements alone would have been enough to lead the Arbitrator to the inescapable conclusion that reinstatement was the most inappropriate remedy.
 None of this should lead to the mistaken belief that the use of very strong derogatory language like kaffir would always militate against the reinstatement of an offending employee. Crown Chickens does not purport to lay that down or articulate it as an inflexible principle. On the contrary, the Court underlined the particularly crucial role that courts have to play of ensuring that racism or racial abuse is eliminated. And that they must fulfil that duty fairly, fully and firmly. The notion that the use of the word kaffir in the workplace will be visited with a dismissal regardless of the circumstances of a particular case, is irreconcilable with fairness. It is conceivable that exceptional circumstances might well demonstrate that the relationship is tolerable. But, this is certainly not such a case. Even then, a lot more would have to be set out by the offending employee to explain away the obvious intolerability of the continued working relationship. Contrary to Mr Kruger's contention, an employee would have a bigger role to play to undercut the grossly offensive nature and effect of these dignity-suffocating insults. It cannot be primarily the duty of the employer to explain the intolerability that flows effortlessly from the obviously repugnant conduct of the employee.
 After concluding that Mr Kruger's dismissal was unfair, the Arbitrator immediately ordered his reinstatement without taking into account the provisions of section 193(2). She was supposed to consider specifically the provisions of section 193(2) to determine whether this was perhaps a case where reinstatement is precluded. She was also obliged to give reasons for ordering SARS to reinstate Mr Kruger despite its contention and evidence that his continued employment would be intolerable. She was required to say whether she considered Mr Kruger's continued employment to be tolerable and if so, on what basis. This was not done. She does not even seem to have considered whether the seriousness of the misconduct and its potential impact in the workplace, were not such as to render reinstatement inappropriate. And those are the key factors she ought to have considered before she ordered SARS to reinstate Mr Kruger.
 Worse still, this was a case of an employee who, though guilty of racism, did not acknowledge his racist conduct, apologise to all concerned, show remorse or genuinely volunteer to take part in whatever programme could be designed to help him embrace the values of our Constitution, especially equality, non-racialism and human dignity. Having initially pleaded guilty to what in effect amounts to racism in a workplace, he later denied having used the word kaffir. He was disbelieved by the Arbitrator. In other words the Arbitrator was dealing with someone who tried to conceal his racist remarks and lie about them.
 It bears repetition that the use of the word kaffir is the worst of all racial vitriols a white person can ever direct at an African in this country. To suggest that it is necessary for the employer to explain how that extremely abusive language could possibly break the trust relationship and render the employment relationship intolerable, betrays insensitivity or at best for Mr Kruger desperation of the highest order. Where such injurious disregard for human dignity and racial hatred is spewed by an employee against his colleagues in a workplace, that ordinarily renders the relationship between the employee and the employer intolerable.
 SARS is not only an organ of State but it obviously has numerous African and white employees. It is constitutionally and relationally intolerable to have any racist daring enough to refer to fellow employees as kaffirs, within the employ of SARS. His African co-employees know that he called one of them a kaffir and that he regards them as lazy, incapable of leading him and intellectually inferior to him solely because of their race. They would be entitled to feel extremely offended and regard as highly insensitive of SARS, to keep in their midst someone like Mr Kruger. Labour jurisprudence reveals that, where employees have discovered that there is in their workplace an active racist, it has sometimes led to labour unrest. To retain Mr Kruger as an employee, wherever he might be placed, would be similar to recklessly leaving a ticking time-bomb unattended to, knowing that it could self-detonate at any time, with consequences that are too ghastly to contemplate.
 Furthermore, the Arbitrator should have been alive to the enormous problems racism has caused and continues to cause in this country. She should also have factored into her decision the special role that SARS as an organ of State, is required to play in the fight against racism and in efforts aimed at its eradication both in theworkplace and in society. She appears to have ignored or given insufficient weight to these crucial factors.
 By ordering SARS to reinstate Mr Kruger the Arbitrator acted unreasonably. She also does not appear to have been mindful of the fact that in terms of section 193(2) of the LRA, reinstatement would not follow as a matter of course. It would in fact not be an option "if circumstances surrounding the dismissal [were] such that a continued employment relationship would be intolerable". No reasonable arbitrator could have ordered reinstatement. That reinstatement part of her award is thus unreasonable and should be reviewed and set aside.
 To compensate or not to compensate and if compensation is to be awarded for what period, is a function of the judicious exercise of the discretionary power that an arbitrator or the court has in terms of section 194(1) of the LRA. Zondo JP outlined the applicable factors in these terms:
"There are many factors that are relevant to the question whether the court should or should not order the employer to pay compensation. It would be both impractical as well as undesirable to attempt an exhaustive list of such factors. However, some of the relevant factors may be given. They are: Generally speaking, an unfair dismissal ought to earn an employee compensation where reinstatement is not feasible by reason of the intolerability of the continued working relationship. SARS has offered Mr Kruger compensation for his unfair dismissal. This raises very interesting questions. Is it open to or appropriate for this Court to "deny" an employee compensation in circumstances where he was not only dismissed in an admittedly unfair manner but also where the employer who would be burdened with the obligation to pay is not necessarily averse to payment or is willing to pay? The answer is, it depends.
(b) Whether the unfairness of the dismissal is on substantive or procedural grounds or both substantive and procedural grounds; obviously it counts more in favour of awarding compensation as against not awarding compensation at all that the dismissal is both substantively and procedurally unfair than is the case if it is only substantively unfair, or, even lesser, if it is only procedurally unfair.
(c) In so far as the dismissal is procedurally unfair, the nature and extent of the deviation from the procedural requirements; the minor the employer's deviation from what was procedurally required, the greater the chances are that the court or arbitrator may justifiably refuse to award compensation; obviously, the more serious the employer's deviation from what was procedurally required, the stronger the case is for the awarding of compensation.
(d) In so far as the reason for dismissal is misconduct, whether or not the employee was guilty or innocent of the misconduct; if he was guilty, whether such misconduct was in the circumstances of the case not sufficient to constitute a fair reason for the dismissal.
(e) The consequences to the parties if compensation is awarded and the consequences to the parties if compensation is not awarded.
(f) The need for the courts, generally speaking, to provide a remedy where a wrong has been committed against a party to litigation but also the need to acknowledge that there are cases where no remedy should be provided despite a wrong having been committed even though these should not be frequent.
(g) In so far as the employee may have done something wrong which gave rise to his dismissal but which has been found not to have been sufficient to warrant dismissal, the impact of such conduct of the employee upon the employer or its operations or business.
(h) Any conduct by either party that promotes or undermines any of the objects of the Act, for example, effective resolution of disputes."
 In terms of our law compensation is not automatic. It is a discretionary matter. A whole range of factors must be taken in to account to determine whether compensation has to be paid and if so, for how many months. In this regard one of the key factors is the need to ensure that employers are not inadvertently encouraged by the non-payment of compensation to adopt a shotgun approach of dismissing employees without affording them the opportunity to be heard. Employees are ordinarily vulnerable because, unlike employers, they do not often have the resources necessary to vindicate their rights by prosecuting cases all the way up to this Court. Condoning the flouting of laws that govern the fate of people's livelihood is a matter so serious that it always requires greater sensitivity and care. Relevant factors are, of course, the marked deviation from procedure by the SARS Commissioner when he dismissed Mr Kruger. The impact of the gross misconduct that Mr Kruger is guilty of on the employer and its workplace environment is an important factor to help decide on compensation.
 It can never be over-emphasised that being called a kaffir is the worst insult that can ever be visited upon an African person in South Africa, particularly by a white person. It runs against the very essence of our constitutional ethos or quintessence. And the gravity of the misconduct is indeed a factor that ordinarily ought to weigh heavily against an employee in the determination of compensation. Mr Kruger's dishonesty, evident from reneging on his plea of guilty by falsely accusing his union representatives of having forced him to admit guilt, exacerbates the problem. It certainly cannot be neutralised by his assertion that he has African friends and that he is a Pastor.
 The seriousness of the misconduct in this kind of a case was aptly articulated by Zondo JP as follows-
"The attitude of those who refer to, or call, Africans "kaffirs" is an attitude that should have no place in any workplace in this country and should be rejected with absolute contempt by all those in our country - black and white - who are committed to the values of human dignity, equality and freedom that now form the foundation of our society. In this regard the courts must play their proper role and play it with the conviction that must flow from the correctness of the values of human dignity, equality and freedom that they must promote and protect. The courts must deal with such matters in a manner that will 'give expression to the legitimate feelings of outrage' and revulsion that reasonable members of our society - black and white - should have when acts of racism are perpetrated."
 It is thus an unequivocal rejection of the notion of non-racialism, the equal treatment and human dignity of African people to refer to them as kaffirs. Mr Kruger did not merely refer to MrMboweni as a kaffir. He explained the utter contempt he has not just for MrMboweni but apparently all other African employees who are all targeted by the word for denigration. All SARS' African employees without exception are in his view low level intelligence people. So inherently inferior or subhuman they are, that none of them is fit to tell him what to do. It follows that this is so, regardless of their educational qualifications, experience or superior placement over him, purely because of their skin colour. No measure of linguistic tap dancing can lighten this obviously obnoxious and dehumanising connotation.
 The use of this term captures the heartland of racism, its contemptuous disregard and calculated dignity-nullifying effect on others. It bears repetition that,Mr Kruger's utterances constitute a racial minefield in the workplace ever-ready to explode at the slightest provocation. Conduct of this kind needs to be visited with a fair and just but very firm response by this and other courts as custodians of our constitutional democracy, if we ever hope to arrest or eliminate racism. Mollycoddling cannot cut it.
 But a conspectus of all the relevant factors suggests that compensation be paid to Mr Kruger. First, the sanction of dismissal is so livelihood-threatening and serious that a breach of the relevant regulatory framework ought generally to be viewed in a serious light. Importantly, SARS is not dead against the payment of compensation provided it is not for more than six months. It is also a factor to take into account that although comparatively well-resourced, SARS has severally floated from one blunder to another thus causing Mr Kruger or his sponsors to be financially burdened through litigation, when this could have been avoided. This has truly been a tragedy of errors by SARS. Not only did MrMoodley, its representative, effectively strike a deal with Mr Kruger in relation to sanction, but the SARS Commissioner then acted against and in effect reneged on their own deal. Even when he did, presumably with the benefit of legal advice, he reversed the sanction unilaterally. All these factors point strongly to the appropriateness of awarding some compensation to Mr Kruger.
 Section 194(1) of the LRA requires, very much in keeping with the spirit of section 172 of the Constitution, that the remedy for unfair dismissal be just and equitable. Without disregarding the fact that Mr Kruger's utterances amount to one of the worst violations of human dignity that according to our jurisprudence amounts to hate-speech and must be rooted out, all of the above factors point to compensation as the just and equitable remedy that is appropriate in this matter. SARS has reconciled itself with the possibility of payment of up to six months. But for its offer and a series of inexplicable and prejudicial blunders, a lesser period or no compensation would arguably have been more appropriate. Compensation for the period of six months for misconduct as gross as that of Mr Kruger and the lies he told, is by any standard generous.