Simmadari v Absa Bank Limited (C124/17, C728/16) [2018] ZALCCT 7 (6 March 2018)

Principle:

  1. Disputes about automatically unfair dismissals must in terms of s10(1) of the EEA be adjudicated under the LRA.

  2. There is no bar to an applicant pursuing an automatically unfair dismissal claim under the LRA and an unfair discrimination claim under the EEA in the same case.

  3. In deciding on what relief to grant, courts will not assess compensation claims separately under the 2 Acts - rather they will consider overall, what is a just and equitable amount that the employer should be ordered to pay as compensation for the indignity the employee has suffered, and will prevent 'double dipping'.

  4. An employee's statement of claim must make out a valid cause of action.

Facts:

The employee was dismissed by the bank on charges of gross misconduct relating to the harassment and bullying of her subordinates. She allegedly referred to individuals as "monkeys"; handing out inappropriate gifts such as oversized playing cards (as a reflection of the employee's age) and gifts of a sexual nature; threatening employees' jobs; and making racist, ageist and other inappropriate comments. She referred to management as "old white men who do not know what they're doing" and "oxygen thieves"; and made comments about "boere".

The employee claimed she was treated differently and dismissed on account of her race, because she pursued transformation. Based on these allegations, she lodged a claim for automatically unfair dismissal under the LRA and unfair discrimination under the EEA. These claims were then consolidated into one case to be heard by the Labour Court. Before proceedings commenced, it was argued on behalf of the employer that both claims were fatally defective even before any evidence was led.

The LC found there was nothing wrong with an applicant, out of the same set of facts and in the same case, bringing a claim for unfair dismissal under the LRA and a claim for unfair discrimination under the EEA. But whether compensation should be awarded as a remedy under both Acts, is a different question. The LC referred to the LAC judgment in ARB Electrical Wholesalers v Hibbert, in which the LAC expressed a strong view against "double dipping". Where there has been both an automatically unfair dismissal and unfair discrimination, the LAC in that case said the court should not consider separate compensation under the LRA and the EEA, but what is just and equitable for the indignity the employee has suffered. The employer is not penalised twice for the same wrong, as a single determination is made as to what is just and equitable compensation for the single wrongful conduct.

But that was not the end of the matter - the LC then considered whether the employee's statement of claim on both issues disclosed a valid cause of action, and found that it did not.

Dealing with the employee's unfair discrimination claim, the LC drew the following principles from various judgments:
  1. The mere allegation of discrimination is not enough - the applicant must substantiate that this discrimination is as legally defined;

  2. The applicant must show that the differentiation is linked to the listed discriminatory ground - causation is a necessary element;

  3. The coexistence of a listed ground - eg race - and differentiation, does not on its own establish discrimination;

  4. Discrimination is unfair only to the extent that it is caused by a prohibited ground;

  5. The discrimination must be relative to another person.

The LC found that the employee's statement of claim had not made out case in terms of the above factors. The employee had not made out a case that her alleged victimisation was because of her race, and she had not identified a comparator - ie another person in comparison with whom she had been discriminated against.

Dealing with the employee's automatically unfair dismissal claim, the LC found that the employee's statement of claim did not establish that she was dismissed on the grounds of her race rather than for misconduct; and she had not shown that she was treated differently to any other comparable person because of her race, gender or conscience.

For these reasons the LC disposed of this case even before any evidence was led.

Extract from the judgment:

(Steenkamp,J)

[12]   The effect of s10(1) is, therefore, to consign disputes about automatically unfair dismissal to be dealt with under Chapter VIII of the LRA.

[13]   Given its peremptory language, disputes about automatically unfair dismissal "must" be adjudicated under the aegis of the LRA. They cannot be determined under the EEA.

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[18.5]   But this does not, in my view, preclude an employee from pursuing both claims. Conceivably, in a trial involving the same facts, an employee could be unsuccessful in proving that her dismissal was based on race and therefore automatically unfair in terms of s 187(1)(f) of the LRA; but she could succeed in showing that, while employed, she was subject to harassment and discrimination based on race, and thus succeed in an EEA claim.

[18.6]   I can see no reason why those two claims cannot be consolidated, as in this case...................

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[27]   In this case, the applicant did not claim damages. But that does not bar her claim for compensation under both the EEA and the LRA. This Court retains jurisdiction to hear both; whether it will award compensation on both claims, should both succeed, is a different question. In Hibbert the LAC expressed a strong view against "double dipping":

"Where there is a single action with claims under the LRA and the EEA based on the employee being discriminated against and the court is satisfied that there has been an automatically unfair dismissal and that the employer's action also constitutes a violation of the EEA, it must determine what is a just and equitable amount that the employer should be ordered to pay as compensation. In arriving at this determination, the court should not consider separate compensation under the LRA and the EEA but what is just and equitable for the indignity the employee has suffered. In doing this, it may take various factors into account inter alia, as set out in Tshishonga, additionally, including but not limited to the position held by the employee within the employer's establishment, the remuneration he earned, how reprehensible and offensive was the employer's conduct, how if at all did it affect the employee and what motivated the wrongful conduct by the employer to act as it did etc. If the claim is under the LRA only, the court must, if the amount determined by the court to be just and equitable exceeds the threshold set in s194(3) of the LRA, reduce the amount of compensation to bring it within the limitation provided in s194(3). The amount will not have to be reduced though if, like in this matter, the claim is brought under both the LRA and the EEA because there is no limit prescribed to the amount of compensation that can be awarded under the EEA. The importance of this is that the employee's right to claim under both the EEA and the LRA is recognised and given effect to while at the same time the employer is not being penalised twice for the same wrong as a single determination is made as to what is just and equitable compensation for the single wrongful conduct."

[37]   The unfair discrimination enquiry involves three stages. The Constitutional Court described it as follows in Mbana:

[37.1]   The first step is to establish whether there is differentiation.
[37.2]   The second step is to establish whether that differentiation amounts to discrimination.
[37.3]   Finally, the Court must establish whether that discrimination is unfair.

[38]   When differentiation is based on a listed ground, it is presumed to be unfair unless the employer proves (i) that it did not take place; or (ii) it is rational, not unfair and justifiable.

[39]   The employer's onus is only triggered when the employee brings herself within the provisions of s6(1) of the EEA. That is, she must allege and prove that she is a victim of discrimination.

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[41]   The following principles stem from this passage, and other authorities.

[41.1]   The mere allegation of discrimination is not enough. The employee must substantiate that this discrimination is as legally defined.

[41.2]   It is not enough to merely allege that this discrimination is based upon race. The applicants must allege and prove that the disparate treatment exists because of race. Causation is a necessary element to uphold discrimination. The applicant must link the differentiation to a listed ground.

[41.3]   The coexistence of race and differentiation does not, on its own, establish discrimination.

[41.4]   The correct approach to causation is that the discrimination is unfair only to the extent that it is caused by a prohibited ground.

[41.5]   The discrimination alleged must be relative to another person...........
[45.4]   The applicant's claim under the EEA does not disclose a valid cause of action. The exception in this regard must be upheld.

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[50]   With regard to the LRA claim also, the applicant has not set out her cause of action. She has not established that she was dismissed on the grounds of her race rather than for misconduct; and she has not shown that she was treated differently to Spangenberg because of her race, gender or conscience.