Chowan v Associated Motor Holdings (Pty) Ltd and Others (22142/16) [2018] ZAGPJHC 40 (23 March 2018)

Principle:

  1. The filing if a grievance, depending on its contents, may constitute a 'protected disclosure' under the Protected Disclosures Act, and disciplinary action taken against an employee for filing such a grievance may constitute an 'occupational detriment' in terms of that Act.
  2. S157 of the LRA should not be interpreted to always exclude delictual claims for damages through the ordinary courts.
  3. The Protected Disclosures Act provides that an employee who has been subjected to an occupational detriment may approach any court having jurisdiction, including the Labour Court, for appropriate relief.

Facts:

In a highly publicised recent case, Ms Adila Chowan, an employee of Associated Motor Holdings (AMH), sued AMH, together with Imperial Holdings and Mr Mark Lamberti, for damages. Ms Chowan claimed damages based on economic losses she said she suffered from their wrongful actions, and due to injuries to her reputation and sense of self-worth. AMH is a subsidiary of Imperial Holdings, and Mr Lamberti was at material times CEO of Imperial. Worklaw subscribers will be aware that the fallout from this case has been significant - Mr Lamberti has since resigned as Imperial CEO and from the Eskom Board.

Ms Chowan was employed by AMH as group financial manager from 16 March 2012 until she was dismissed with immediate effect in September 2015. She was also effectively acting chief financial officer for 3 months during 2014. At the time she was head hunted to be group financial manager at AMH in 2012, she had extensive experience in the corporate world and as a chartered accountant, having qualified in 2000. At the time of her appointment at AMH, she was assured there were ample career opportunities for advancement within AMH and the broader Imperial Group, and she was advised at one stage that she was being groomed for the position of chief financial officer (CFO).

When the incumbent CFO resigned in 2014, he recommended Ms Chowan for his position and asked her to undergo a psychometric test to establish if there were any 'gaps where she would need development'. Having undergone this test, she was not advised of any shortcomings. He discussed with her a successor to her as group financial manager, should she be appointed as CFO.

She subsequently became aware that the CFO position had been advertised and that Mr Lamberti, Imperial CEO, had appointed a recruitment firm to find 'a top flight CFO'. She was interviewed by the recruitment firm and by Mr Lamberti. At the conclusion of her interview with Mr Lamberti, he informed her she would not be appointed as CFO, but that if she gave her full support to the CFO he appoints, he promised her a career path within one year and that she would be properly compensated. Mr Lamberti followed up on his interview, by sending her an e-mail the next day, in which he attempted to persuade her of the value of remaining within the Group and he gave her a personal commitment to help grow her leadership skills.

Three white males were subsequently identified and shortlisted for the CFO position, from which one was appointed. Ms Chowan felt 'let down' by these developments, believing she had been overlooked, and resigned in June 2014. A week later, the AMH CEO and Mr Lamberti met with her and persuaded her to withdraw her resignation, assuring her of advancement opportunities within the broader Imperial Group and that she would be appointed into a CFO position within the Group within a year.

A strained working relationship developed between Ms Chowan and the person appointed as AMH CFO, with her feeling he was not the 'top flight' CFO she had been told would be appointed. Ms Chowan also claimed that in one meeting between them, when she complained about the brown coloured company vehicle that had been given to her, that the CFO said "well, the colour of the car suits your skin". The CFO gave evidence, disputing this version of events, but the Court found that Ms Chowan's version of events was more probable.

Ms Chowan also testified that the AMH CFO returned from a meeting with Mr Lamberti during March 2015, and advised her that Mr Lamberti had asked him to convey to her that he did not believe she had what it takes to be a CFO within the Imperial Group and would never be appointed as such. She felt Mr Lamberti had reneged on his earlier promises to her and should have conveyed that message himself. Whilst the employer witnesses disputed these events, it is common cause that these engagements led to a further meeting in April 2015 attended by Ms Chowan, Mr Lamberti, the AMH CEO and CFO. At this meeting, it is not disputed that Mr Lamberti told Ms Chowan that she is "a female, employment equity, technically competent" and that she required 3 to 4 years to develop her leadership skills, and he made it clear he would not be having any more meetings with her.

Ms Chowan felt deeply upset by these comments, made in the presence of other senior executives, which she categorised as constituting racial and gender discrimination against her. She felt humiliated and degraded, and submitted there was no need to mention her race or gender in this context. In her evidence, she also said she felt discriminated against in the light of AMH's poor performance on diversity as far as its senior leadership was concerned. They were all white males, aside from one white female, and of the 14 executives appointed in the 2 and a half years preceding mid-2015, 13 were white males.

Ms Chowan testified that the AMH CEO apologised to her for Mr Lamberti's remarks, and further said he did not think she had a career within the Imperial Group because Mr Lamberti would be obstructive to it, and that he would give her a very good reference. She told him and the human resource manager at AMH that she intended lodging a grievance against Mr Lamberti, and was warned that this may be "a career limiting move".

Ms Chowan subsequently lodged a grievance of racial discrimination and unfair treatment against Mr Lamberti with the Imperial Group Chairman, seeking an apology for offending her human dignity and for him to honour his promises to her about future promotions. She also lodged a grievance against her superior, the AMH CFO. Ms Chowan was then advised she was suspended whilst these grievances were being investigated, without being given an opportunity to motivate why she should not be suspended. An investigation was subsequently conducted by a senior associate from a law firm that had apparently already given advice to Mr Lamberti on Ms Chowan's suspension. The report on the outcome of this investigation, which did not contain any findings or recommendations, was tabled at a meeting of Imperial's non-executive directors.

Ms Chowan was subsequently advised that it had been resolved that her allegations were "completely without foundation....and are devoid of substance", and her grievance was dismissed. Ms Chowan was further advised that her actions in lodging these grievances constituted misconduct and an abuse of the grievance procedures, and that disciplinary action would be taken against her as a result. A disciplinary hearing was conducted, chaired by an attorney, and Ms Chowan was dismissed.

As a result of these developments, Ms Chowan claimed damages based on economic losses she said she suffered from her employer's wrongful actions, and due to injuries to her reputation and sense of self-worth.

The judgment makes it clear that the Court was impressed by Ms Chowan as a witness and was equally unimpressed by some of the employer's witnesses; as a result the Court accepted Ms Chowan's version of most disputed events. Mr Lamberti elected not to give evidence in the matter.

The Court regarded Ms Chowan's grievance complaint as a 'protected disclosure' in terms of the Protected Disclosures Act, in that it was information that showed unfair discrimination as contemplated in the Promotion of Equality and Prevention of Unfair Discrimination Act of 2000. Flowing from this, the Court regarded her employer's actions in suspending and then dismissing her as an 'occupational detriment' prohibited by the Protected Disclosures Act (PDA) - the Act defines an occupational detriment to include suspension, dismissal, harassment etc.

Whilst these findings were central to the Court finding the employer liable for Ms Chowan's damages, we question the applicability of the Promotion of Equality and Prevention of Unfair Discrimination Act to a labour matter. Section 5(3) of that Act makes it clear that Act does not apply to any person covered by the Employment Equity Act, which is meant to deal with these matters in the employment situation. We are puzzled why the Court did not refer to the Employment Equity Act.

The Court rejected the employer's arguments that there were tailor made avenues available to her to process her claims through the LRA and EEA, and that s157 of the LRA should be interpreted to always exclude delictual claims for damages through the ordinary courts. The Court pointed out that s4(1) of the PDA provides that an employee who has been subjected to an occupational detriment may approach any court having jurisdiction, including the Labour Court, for appropriate relief. The Court felt this was a classic example of an appropriate case where delictual liability should be imposed.

The Court noted that the duty not to subject an employee to occupational detriments under the PDA rested with the employer. As such, the Court made AMH, as Ms Chowan's employer, liable for the payment of her economic losses, and not Imperial and Mr Lamberti.

Having regard to Ms Chowan's claims for damages based on injuries to her reputation and sense of self-worth, the Court found that Mr Lamberti's statements were not defamatory but did impair her dignity. Both a subjective and an objective test had to be satisfied in order for such a claim to be well founded - the person must have felt insulted, and a reasonable person would have to also feel insulted by this conduct. The Court felt this was the case in this instance, and ordered that Mr Lamberti and Imperial be jointly and severally liable for Ms Chowan's damages.

By agreement between the parties, the amount of damages to be awarded on both claims is to be determined at a later date. The Court also awarded costs to be shared between AMH (70%) and Imperial and Mr Lamberti (jointly liable for the balance).

Having regard to what can be learned from this judgment, what stands out in the sequence of events in this case is that under normal circumstances it is blatantly unfair to suspend and discipline someone for lodging a grievance. That appears to be the most important factor that led to the outcome of this case, even though most press reports focussed on what was said to Ms Chowan during various meetings. A grievance inevitably relates to how a person feels about how she/he has been treated within an organisation: we cannot see how this would justify suspension and disciplinary action, unless lodged with some ulterior motive. By her own evidence, all Ms Chowan was looking for was an apology and a commitment to honour career promises made to her, and yet in the end this case culminated in the CEO's resignation.

There was much speculation in the media about the significance of this case in relation to how employees appointed in terms of an organisation's affirmative action programme can thereafter be referred to: whether it would be discriminatory to refer to that appointment process in relation to that employee, once the appointment is made. When considering such remarks, it is crucial to recognise the context within which such comments are made. So, if made to belittle and undermine, this would clearly be discriminatory: on the other hand, we suggest that comments for example made positively in support of the success of an organisation's employment equity policies, would cause no harm. For these reasons, we don't think this judgment creates any general principles limiting references to employees appointed in accordance with an organisation's affirmative action policies.

Taking a step back, this case shows how 'out of hand' a situation can become as it worsens. It highlights the need for someone (invariably an HR/legal person?) in many situations to stand up against a tide of opinion building within an organisation as to how a particular situation should be handled: in this case for example, to query, whether intended disciplinary action for lodging a grievance is a wise course of action.

Lastly, and not uncontroversially, this case shows that labour disputes can still end up in the high courts, despite views expressed in Chirwa v Transnet Limited and Others (Case CCT 78/06; 28 November 2007) and other related judgments. The High Court has now dealt with Ms Chowan's claims for damages based on economic losses she said she suffered from their wrongful actions, and due to injuries to her reputation and sense of self-worth. We are unaware whether unfair dismissal claims under the LRA have at any stage been lodged - time periods within which to lodge such claims will probably have expired, if it hasn't happened by now.

Extract from the judgment:

(Meyer J)

[43]   Adv NA Cassim SC, who appears with Adv R Itzkin for AMH, Imperial and Mr Lamberti, argues that Ms Chowan did not make a protected disclosure as contemplated in the PDA: First, so he argues, she lodged a grievance which did not contain a bona fide disclosure of any impropriety. Second, she did not do so in the reasonable belief of its truthfulness. Third, she did not report it through the appropriate reporting channel, but instead address a 'grievance' to the chairman of Imperial's board of directors. Fourth, the disclosure on which she relies is excluded from being a protected disclosure by s 9(b) of the PDA, which provides that '[a]ny disclosure made in good faith by an employee . . . who reasonably believes that the information disclosed, and any allegation contained in it, are substantially true . . . and . . . who does not make the disclosure for purposes of personal gain, . . . is a protected disclosure . . .'. (Emphasis added.) I cannot agree with these submissions for the reasons that follow.

[44]   Section 6 of the PDA, and not s 9, finds application in this case. The scheme of the PDA encourages internal procedures and remedies to be exhausted before the disclosure is made public. (See Tshishonga v Minister of Justice and Constitutional Development and another [2007] 4 BLLR 327 (LC), para 196. The requirements for protection become more onerous as the disclosure becomes more public. As was held in Tshishonga, para 198:

'The tests are graduated proportionately to the risks of making disclosure. Thus the lowest threshold is set for disclosures to a legal advisor. Higher standards have to be met once the disclosure goes beyond the employer. The most stringent requirements have to be met if the disclosure is made public or to bodies that are not prescribed, for example the media.'

[45]   The requirements for protection of a disclosure to an employer in terms of s 6 of the PDA, read with the definition of disclosure in s 1, are that it must be 'information' that the employee 'has reason to believe' shows or tends to show the commission of a listed impropriety, the disclosure must be made 'in good faith' and substantially in accordance with any prescribed or authorised procedure for the reporting of the impropriety, or to the employer where there is no such procedure.

[46]   The procedure followed by Ms Chowan in reporting her grievance to the group chairman of Imperial's board of directors was, as I have held, consented to by the CEO of her employer, AMH. It thus follows that it was an 'authorised procedure' within the meaning of s 6(1)(a) of the PDA and, although she made the disclosure to a person other than her employer (AMH), it is, in terms of s 6(2), deemed to be one made to her employer. Furthermore, it was Mr Gcabashe, having taken the matter to the Nominations Committee, who resolved to refer Ms Chowan's grievance to an independent investigator for 'a proper and detailed investigation' and to refer her grievance against Mr Janse van Rensburg, which she handed not to him but to AMH's group human resources manager, to the same investigator for simultaneous investigation. It can in all the circumstances not be said that Ms Chowan's disclosure was an external one that falls under s 9 of the PDA and to which the more stringent requirements - inter alia that it may not be made for purposes of personal gain - apply in order for it to be protected.

[47]   I am of the view that Ms Chowan also satisfies the requirement of 'reason to believe that the information concerned shows or tends to show' unfair discrimination as contemplated in the Promotion of Equality and Prevention of Unfair Discrimination Act. The test for determining whether an employee had the requisite 'reason to believe' is subjective and objective. The employee who makes the disclosure is required to hold the belief and that belief has to be reasonable, or as was said in Tshishonga, para 185, 'whether the belief is reasonable is a finding of fact based on what is believed.' The information contemplated in the definition of 'disclosure' in s 1 of the PDA includes 'such inferences and opinion based on facts which show that the suspicion is reasonable and sufficient to warrant an investigation.' (Tshishonga, para 179.) Furthermore, as was also held in Tshishonga para180,:

'The standard of quality that the information must meet is pitched no higher than requiring the impropriety to be "likely". It is enough if the information "tends to show" an impropriety. That anticipates the possibility that no impropriety might ever be committed or proven eventually. If the suspects are cleared, the protection will not be lost. "Likely" and "tends to show" must therefore mean that the impropriety can be less than an improbability but must be more than a mere possibility.'

[48]   I have extensively dealt with the context in which Ms Chowan ultimately directed her grievance to Mr Gcabashe. She is academically appropriately qualified, has extensive experience as a chartered accountant and in corporate life, had held the position of CFO in the past and also acted as CEO on one occasion, she is experienced in the motor industry, she is on everyone's version technically good, she has held the fort for three months at AMH in the absence of a CFO, she enjoyed the support of two previous CFO's to be appointed in their positions as CFO when they vacated that position and Mr Lamberti himself, it is undisputed, promised her that she would be appointed into the position of CFO within the Imperial Group within one year from the time when he made that promise. Furthermore, at the time when she directed her grievance of gender and racial discrimination to Mr Gcabashe, the senior management of AMH was white male dominated and, with one exception, the last fourteen appointments were all white males. Again a white male, who had no experience in the motor industry at the time of his appointment and little understanding of the Imperial Group accounting and complexity of the transactions, was appointed as the AMH CFO, and not her. Ms Chowan's inference of racial and gender discrimination against her based inter alia on those facts, as well as what had been said to her by Mr Lamberti when he made the utterance, was justified and an 'impropriety' as contemplation in the PDA was, at the very least, likely. It is common cause that Ms Chowan subjectively believed that she was the victim of unfair discrimination based on race and gender. Her subjective belief, in my judgment, was a reasonable one within the meaning of the definition of 'disclosure' in s 1 of the PDA.

[49]   In Street v Unemployed Workers' Centre [2004] 4 All ER 839 para 41, Auld LJ considered the meaning of the requirement 'in good faith' for a disclosure to qualify as a protected disclosure as contemplated in a legislative instrument - the purpose of which is to protect individuals who made certain disclosures in the public benefit and to allow them to bring an action in respect of victimisation - and attributes the following meaning to the words: 'Shorn of context, the words 'in good faith' have a core meaning of honesty. Introduce context, and it calls for further elaboration. Thus in the context of a claim or representation, the sole issue as to honesty may just turn on its truth. But even where the content of the statement is true of reasonably believed by its maker to be true, an issue of honesty may still creep in according to whether it is made with sincerity of intention for which the Act provides protection or for an ulterior and, say, malicious purpose.'

[50]   Ms Chowan's wish for an apology from Mr Lamberti for, as she viewed it, insulting her and offending her human dignity, and for him to honour the promise that he had made to her, do not seem to me to be sufficient reason to find that the disclosure had not been made bona fide. (Compare Grieve v Denel (Pty) Ltd [2003] 4 BLLR 366 (LC) para 12.) She reasonably believed in the truth of the content of her statement and made it with honesty and sincerity of intention aimed at remedying the wrong. She, in my view, has established that her disclosure to Mr Gcabashe was also made bona fide. There is not a single fact presented in this trial, which dissuades me from arriving at this conclusion. Ms Chowan exhausted the internal avenues available to her before she elevated an indisputably serious matter to the Imperial group chairperson. He, himself, considered her allegations to be 'of a very serious and most troubling nature', which, despite the fact that her letter to him 'does not follow the provisions of the Grievance Procedure itself', warrant 'a proper and detailed investigation'.

[51]   The disclosure made by Ms Chowan, therefore, is a protected disclosure and the occupational detriments - being suspended, subjected to disciplinary action and ultimately dismissed - to which she had been subjected by her employer, AMH, on account of having made the protected disclosure are in violation of the provisions of s 3 of the PDA and unlawful.

AQUILIAN CLAIM

[52]   Adv Cassim SC, on behalf of AMH, Imperial and Mr Lamberti, argues that there are a variety of tailor-made avenues available to persons in Ms Chowan's position through which to seek remedies, such as the Labour Relations Act 66 of 1995 (the LRA) and the Employment Equity Act 55 of 1998 (the EEA), which, so counsel argues, militate against extending the aquilian action to import wrongfulness and fashion a remedy in delict for Ms Chowan. The fact that there are other available remedies may in an appropriate case not satisfy the requirement of wrongfulness for delictual liability to follow, but the present matter, in my view, is not such a case.

[53]   In Gcaba v Minister for Safety and Securtiy and others 2010 (1) SA 238 (CC), Van der Westhuizen J, who wrote the unanimous judgment of the Constitutional Court, said the following:

'[52] First, it is undoubtedly correct that the same conduct may threaten or violate different constitutional rights and give rise to different causes of action in law, often even to be pursued in different courts and fora. It speaks for itself that, for example, aggressive conduct of a sexual nature in the workplace could constitute a criminal offence, violate equality legislation, breach a contract, give rise to the actio iniuriarum in the law of delict and amount to an unfair labour practice. Areas of law are labelled or named for purposes of systematic understanding and not necessarily on the basis of fundamental reasons for a separation. Therefore, rigid compartmentalisation should be avoided.

. . .

[73] Furthermore, the LRA does not intend to destroy causes of action or remedies and the section 157 should not be interpreted to do so. Where a remedy lies in the High Court, section 157(2) cannot be read to mean that it no longer lies there and should not be read to mean as much. Where the judgment of Ngcobo J in Chirwa speaks of a court for labour and employment disputes, it refers to labour- and-employment-related disputes for which the LRA creates specific remedies. It does not mean that all other remedies which might lie in other courts like the High Court and Equality Court, can no longer be adjudicated by those courts. If only the Labour Court could deal with disputes arising out of all employment relations, remedies would be wiped out, because the Labour Court (being a creature of statute with only selected remedies and powers) does not have the power to deal with the common law or other statutory remedies.

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[60]   The present matter, in my view, is a classroom example of an appropriate case where delictual liability should be imposed. There are ample public-policy reasons in favour of imposing liability. The constitutional rights to equality and against unfair discrimination are compelling normative considerations. There is a great public interest in ensuring that the existence of systemic discrimination and inequalities in respect of race and gender be eradicated. As blatant and patent as discrimination was in the days of apartheid, so subtle and latent does it also manifests itself today. The protection afforded to an employee, such as Ms Chowan, by the PDA against occupational detriments by her employer on account of having made a protected disclosure that was 'likely' to show unfair racial and gender discrimination, is one of the measures taken by the legislature to eradicate the existence of systemic discrimination and inequalities. If employers are too easily insulated from claims for harms, such as the occupational detriments to which Ms Chowan was subjected to on account of having made a protected disclosure to her employer, they would have little incentive to conduct themselves in a way that complies with the provisions of s 3 of the PDA.

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[62]   The duty not to subject an employee to occupational detriments on account of making protected disclosure as contemplated in Protected Disclosures Act, is one imposed upon an employer. AMH, and not Imperial nor Mr Lamberti, was Ms Chowan's employer. AMH, therefore, is liable for payment of the delictual damages proven by Ms Chowan. My conclusion on Ms Chowan's aquilian claim renders it unnecessary to consider her contractual claim.

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[65]   What Ms Chowan has to prove in order to succeed with her iniuria claim for defamation is the publication by Mr Lamberti of defamatory matter of or concerning her. If she accomplishes this, it is presumed that the statement was both wrongful and intentional, and if Imperial and Mr Lamberti had wished to avoid liability for defamation they should have raised a defence which excludes either wrongfulness or intent, which they have not done. (Le Roux, paras 84-85.)

[66]   The primary meaning of a statement is, as was said by Brand AJ in Le Roux para 87, 'the ordinary meaning given to the statement in its context by a reasonable person. An implied meaning of the statement "is regarded as part of its primary or ordinary meaning"'. Ms Chowan elected to rely on the primary or ordinary meaning of the utterance. I am unable to find that the ordinary meaning given to Mr Lamberti's words in its context by a reasonable person, is one that is defamatory of or concerning Ms Chowan.

[67]   I now turn to the other part of Ms Chowan's iniuria claim, viz. her dignity claim. The common law requirements for a dignity claim to succeed are thus set out by Froneman J and Cameron J in Le Roux para 174:

'. . . What the common law requires for a dignity claim to succeed are three elements: a deliberately inflicted, wrongful act, that impairs the plaintiff's dignity.'

[68]   Brand AJ said the following about a dignity claim in Le Roux para 138:

'In terms of our Constitution, the concept of dignity has a wide meaning which covers a number of different values. So, for example, it protects both the individual's right to reputation and his or her right to a sense of self-worth. But under our common law "dignity" has a narrower meaning. It is confined to the person's feeling of self-worth. While reputation concerns itself with the respect of others enjoyed by an individual, dignity relates to the individual's self-respect. In the present context the term is used in the common-law sense. It is therefore used to the exclusion and in fact, in contradistinction to reputation, which is protected by the law of defamation.'

And further (para 143):

'. . . Broadly stated, the claim for impairment of dignity comprises both a subjective and an objective element. The subjective element requires that the plaintiff must in fact feel insulted. To satisfy the objective element our law requires that a reasonable person would feel insulted by the same conduct.'

(Footnotes omitted.)

[69]   As to the subjective element, I have referred to Ms Chowan's evidence that she had never been addressed in that manner before, she was extremely upset, humiliated, degraded and objectified in terms of being a female empowerment equity candidate without recognition for the fact that she was a professional qualified chartered accountant with extensive experience and achievements, which evidence was corroborated by that of Mr de Canha, and is accepted my me. In this light the subjective element of the dignity claim is clearly established. The objective element, as was stated by Froneman J and Cameron J in Le Roux para 179, reflects 'outwardly', as opposed to the subjective element, which reflects 'inwardly'. The question is thus whether the reasonable person would conclude 'that objectively seen, the injury to [Ms Chowan's] feelings was palpable and reasonably felt, and hence actionable'. Such is the inevitable conclusion, in my judgment, which the reasonable person would reach about the injury to Ms Chowan's feelings.

[70]   Ms Chowan has established the common law requirements for her dignity claim to succeed. Imperial and Mr Lamberti are liable, jointly and severally, for Ms Chowan's damages, as quantified in due course, as a result of the impairment of her dignity.