ARB Electrical Wholesalers (Pty) Ltd v Hibbert (DA3/13) [2015] ZALAC 34; [2015] 11 BLLR 1081 (LAC); (2015) 36 ILJ 2989 (LAC) (21 August 2015)
- There is also no bar for an employee to claim "compensation" for an automatically unfair dismissal under the LRA and to claim "compensation" for being unfairly discriminated under the EEA, and to do so in a single action.
- At the same time the employer must not be 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.
The LRA provides that a dismissal on grounds of age is fair if an employee has reached 'the normal or agreed retirement age' (s 187(2)(b)). Most cases have turned on whether a specific age had been agreed between the parties or whether there was proof of a standard practice that had led to that age being regarded as the 'normal' retirement age.
In this case an employee had not agreed to retire when he turned 64. Rather, the employer had unilaterally decided to retire him then. In an attempt to establish the 'normal' retirement age the employer relied the Provident fund rules which specified a normal retirement age of 64 for all employees, with the possibility of early retirement from the age of 55 onwards with the employer's consent and retirement between 60 and 65 at the employer's election. The applicant however was one of the employees who had not joined the firm's Provident Fund.
The LC was not persuaded that the employer had established a 'normal' retirement age that would have applied to the applicant. The court held that as the employer had not succeeded in proving a defence under s 187(2)(b) of the LRA, the applicant's dismissal on grounds of age was automatically unfair in terms of s 187(1)(f) of the LRA.
The significance of this case is not based on the facts but the matter of compensation. Discrimination is dealt with under both the LRA and the EEA. Does that mean that a person unfairly discriminated against can get a 'second bite'? No, said the court. An employee is not entitled to compensation under both the LRA and the EEA simply because the employer's conduct amounts to age discrimination warranting compensation under either Act. Taking into account the 64 year old employee's own expectation that he would retire at age 65, the court awarded him one year's remuneration as compensation.
The LAC rejected the employer's appeal against the LC judgment (and the employee's counter appeal for damages, as the employee had not proved any loss). The LAC confirmed that an employee is entitled to compensation for both the automatically unfair dismissal and unfair discrimination claims and to bring both claims in one action. At the same time the employer must not be 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.
Extract from the judgment:
(Waglay,JP)
[27] There is also no bar for an employee to claim "compensation" for an automatically unfair dismissal based on being discriminated against under the LRA and to claim "compensation" for being unfairly discriminated under the EEA, and to do so in a single action. All evidence led in support of each of the claims will be the same. In the circumstances, not only is it expedient to institute one action but a party who institutes two separate claims could, if it seeks to lead same evidence in two separate actions, face a costs order for not combining the two claims in a single action.
[28] Turning to the entitlement to seek remedies in terms of both Acts: the remedies provided for in terms of the LRA for an automatically unfair dismissal is compensation which the court finds to be "just and equitable" but limited to maximum of what the claimant would have earned while in the employ of the employer for a period of 24 months. The remedy provided for under the EEA is also what the court finds to be "just and equitable" but there is no statutory limit to the amount of compensation that the court may order the employer to pay.
[29] Where a dismissed employee seeks reinstatement or re-employment and is granted that relief, that employee will still be entitled to "compensation" for the claim formulated under the EEA because reinstatement or re-employment is to undo the effects of an unfair dismissal and has nothing to do with the discrimination itself. However, where compensation is the relief sought for the unfair dismissal, then the position is entirely different because, firstly, compensation sought under the two Acts is for a single wrongful conduct by the employer and secondly, the meaning ascribed to compensation under the LRA is, in my view, the same as would apply to the concept of compensation under the EEA. There is in fact no pressing need in the circumstances of the case to differentiate between the meanings attached to compensation in the two Acts. In so far as an employee may have suffered a loss as a result of being discriminated, he is also entitled to claim damages under the EEA as the EEA provides for an employee to claim both compensation and damages.
[30] Where claims are made both in terms of the LRA and the EEA and the court is satisfied that the dismissal was based on unfair discrimination as provided for in the LRA and that the employee was unfairly discriminated in terms of the EEA, the court must ensure that the employer is not penalised twice for the same wrong. In seeking to determine compensation under the LRA and the EEA, the court must not consider awarding separate amounts as compensation but consider what is just and equitable compensation that the employer should be ordered to pay the employee for the humiliation he/she suffered in having his/her dignity impaired. The employee's automatically unfair dismissal is so labelled because it is based on a violation of his constitutional right (in this case not to be discriminated on the basis of his age) and his claim under the EEA is for exactly the same wrong that of being discriminated on the basis of his age.
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[33] 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.