It happens very often that a client calls regarding ‘unfair discrimination’ which is believed to be occurring in various instances, such as, at sports clubs, at work in the employment context or at social venues.

This article is furnished, in plain language, to make it easier for clients to better understand what discrimination is, when it is fair and unfair generally, and particularly in the areas of labour or employment law, administrative law, sports and sports law, schooling or education law.

What is Discrimination?

Essentially in general terms:

discrimination means the behaviour or practice of forming of opinions about others not based on their individual merits, but rather their membership in a group with assumed characteristics.

Discrimination (or prejudice as it is sometimes referred to) usually is motivated by the intention of one person to obtain a benefit, favour or opportunity, directly or indirectly, which is denied to another person without fair reason or at the expense of the latter.

It can also be motivated by the intention to marginalise or disenfranchise any person where the latter is thought to be or perceived to be a threat or rival to the person initiating the discrimination.

In terms of statutory law, discrimination occurs when a person engages in conduct which shows favour, prejudice or bias for or against a person on any arbitrary grounds e.g. on the basis of race, gender, sex, pregnancy, marital status, family responsibility, ethnic or social origin, colour, sexual orientation, age disability, religion, HIV status, conscience, belief, political opinion, culture, language.

While anti-discrimination laws may vary between various jurisdictions in regard to purpose and content, in South African law it is important to understand that discrimination can be fair or unfair and the legal significance of the difference is immensely important.

Education as to the law of unfair discrimination is vital in this respect as is the ability to overcome ignorance, prejudice and bigotry.

In what circumstances is discrimination ‘fair’

The law sets out four grounds on which discrimination is generally permissible:

1. Compulsory discrimination by law;
2. Discrimination based on affirmative action;
3. Discrimination based on inherent requirements of a particular job;
4. Discrimination based on productivity.

In labour law, in regard to compulsory discrimination, the law does not permit an employer to employ children under the age of 15 years or any pregnant women four weeks before confinement and six weeks after giving birth.

Furthermore, in labour law, discrimination by an employer based on the inherent requirement(s) of the particular job does not constitute unfair discrimination. An inherent requirement of a job depends on the nature of the job and required job qualifications. If such requirements can be shown, discrimination will be fair, e.g. if a person with extremely poor eyesight cannot be employed as a pilot or be enlisted in the military.

It is also fair in law for the employer to discriminate on the basis of productivity (or the lack thereof) when determining salary increases, e.g. increases based on meritorious work or service, or promotions, overseas travel for work, perks and other employment enhancing opportunities or employment fulfilment. This is dependent on the fairness of the underlying criteria utilised for assessing performance, productivity and the other inherent requirements for the opportunities.

Unfair discrimination occurs when…

In South African statutory law, discrimination is prohibited not only by the Constitutional guarantee itself in terms of section 9 of the Bill of Rights, but also in terms of the Prevention of Unfair Discrimination Act 4 of 2000, as amended (the Promotion of Equality and Prevention of Unfair Discrimination Act, is it’s full title), which is basically the machinery which gives effect and substance to the Constitutional guarantee, subject, of course, to the limitation clause.

In a nutsell, the Act prohibits unfair discrimination in South Africa by the government and by private organisations and individuals.

This includes associations or entities such as universities, technikons, schools, crèches, nursery schools, sports clubs, country clubs, non-profit organisations, charitable entities, places of worship, private and public companies.

Most importantly, the discrimination law also covers:

• the actions; or
• inaction of such entities or associations:-
• and includes those of it’s-

• members,
• elected directors or representatives,
• committees or managers,
• chairpersons,
• treasurers,
• caterers,
• staff and the like when exercising:
  • any right,
  • entitlement,
  • function,
  • or power in terms of their office or membership.

Decisions regarding participation or team selection or members’ selection by committees of schools, sport clubs and the like, for individual-participant sports or team sports such as league teams, league participation, regional sports participation are all subject to the Act and unfair discrimination is prohibited in this regard.

In regard to ‘r and r’, in respect of the utilisation by members (or in fact visitors) of sports club facilities, venues, bars, restaurants and the like, unfair discrimination practices and conduct is prohibited. It matters not that such clubs or venues are ‘private clubs’.

Right of admission signs or notices do not per se enable circumvention of anti-discrimination laws. The Rule of law prevails.

Unfair discrimination can also occur in respect of conduct (actions or inaction) which has the effect of ignoring or marginalising or disenfranchising persons (or their views or opinions) arbitrarily, whether intentionally or not.

It can also occur in regard to the right to access information of such entities or associations or sports clubs in respect of constitutional documentation, minutes of meetings, financial information, contractual information, documentation evidencing decision-making procedures or processes, employment guidelines, employment contracts and the like.

Disabilities and/or Impairments

The Act also prohibits unfair discrimination against an individual who has a ‘disability’ if he or she has a physical or mental impairment that substantially limits one or more major life activities, a person who has a history or record of such impairment, or a person who is perceived by others as having such an impairment.

It is thus imperative to ensure that when considering legal action in regard to unfair discrimination that expert legal advice is sought to ensure that any such claims are meritorious and professionally considered in law.

ASHLEY SLAMAT ATTORNEYS – no games, JUST LAW™

The following significant cases demonstrate the extent of the vast scope of unfair or anti-discrimination litigation in South African law and the subject matter thereof

• President of the Republic of South Africa and Another v Hugo(1997) — a presidential decision to remit the sentences of imprisoned mothers with young children is not unfair discrimination against similarly-situated fathers.
• Prinsloo v Van der Linde and Another(1997) — a law which imposes a different onus of proof in civil cases involving forest fires does not deny equal protection of the law or amount to unfair discrimination.
• Larbi-Odam and Others v MEC for Education (North-West Province) and Another(1997) — a government policy prohibiting the employment of non-citizens as school teachers is unfair discrimination.
• City Council of Pretoria v Walker(1998) — a municipality’s policy of charging a metered rate for water and electricity in formerly white areas but a flat rate per household in formerly black areas, with the effect that the residents of the white area pay higher rates on average, is not unfair discrimination, as the facilities provided to different areas are significantly different. However, the policy of suing to collect payments in arrears from residents of the white areas, but not suing similarly-situated residents of the black areas, is unfair discrimination.
• National Coalition for Gay and Lesbian Equality and Another v Minister of Justice and Others(1998) — the criminalisation of male same-sex sexual relations is unfair discrimination on the grounds of gender and sexual orientation.
• National Coalition for Gay and Lesbian Equality and Others v Minister of Home Affairs and Others(1999) — an immigration law which provides benefits to married couples discriminates on the basis of sexual orientation and must be extended to provide the same benefits to same-sex life partners.
• Hoffmann v South African Airways(2000) — a government-owned airline’s policy of refusing to hire HIV-positive people as flight attendants violates the right to equality.
• Satchwell v President of the Republic of South Africa and Another(2002) — pension and retirement benefits provided to the spouses of judges must be equally provided to the same-sex life partners of judges.
• S v Jordan and Others(2002) — the gender-neutral criminalisation of prostitution does not discriminate unfairly against women.
• Khosa and Others v Minister of Social Development and Others(2003) — social welfare grants provided to South African citizens must also be provided to non-citizen permanent residents; to do otherwise is unfair discrimination.
• Bhe and Others v Magistrate, Khayelitsha, and Others(2004) — the rule of male primogeniture in the African customary law of inheritance discriminates unfairly against women and against younger children.
• Minister of Home Affairs and Another v Fourie and Another(2005) — the denial of marriage to same-sex couples is unfair discrimination on the basis of sexual orientation. (rf same-sex marriages in South Africa.)

www.slamatlaw.co.za ASHLEY SLAMAT ATTORNEYS – Copyright.

I returned and saw under the sun, that the race is not to the swift, nor the battle to the strong, neither yet bread to the wise,

nor riches to men of understanding, nor yet favour to men of skill, but time and chance happeneth to them all.

-Ecclesiates 9:11.

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EXPERT LABOUR LITIGATION IS THE KEY TO SUCCESS

LABOUR LAW PRIVATE ARBITRATION v CCMA ARBITRATION – KNOW YOUR GAME

The Labour Court adjudicated a case in regard to whether or not the CCMA lacked jurisdiction to entertain an unfair dismissal dispute in circumstances where the parties had previously agreed to refer such dispute to private arbitration in terms of the employees contract of employment.

In the case of Krean Naidoo v Liberty Holdings (JR558/16) [2019] ZALCJHB 56, the Applicant, who was a senior employee, had been dismissed for misconduct and subsequently referred an unfair dismissal dispute to the CCMA despite being required to refer his dispute to private arbitration.

At the arbitration proceedings in the CCMA, the arbitrator found, inter alia, that the employee’s contract of employment incorporated the Employer’s Employee Relations Handbook and therefore the Handbook constituted a term and condition of employment. The Arbitrator also found that the CCMA did not have jurisdiction to hear the case and that the employee was entitled to refer the case to private arbitration in terms of his employment contract.

In subsequent review proceedings before the Labour Court, the employee contended that the employer never furnished him with a copy of the Employee Relations Handbook upon commencement of his employment and that he never agreed to refer disputes to private arbitration, and also that he did not relinquish his right to refer an employment dispute to the CCMA.

The employee further contended that private arbitration meant automatic legal representation and possible arbitration costs as the employer would only pay the initial arbitration costs. The employee further argued that, in terms of section 147(6) of the Labour Relations Act 66 of 1995, as amended, the CCMA arbitrator erred by not directing that the case be referred to private arbitration, but reminded the employee of his election to refer the matter to private arbitration if he chose to do so.

The employer argued that notwithstanding the wording of the Employee Relations Handbook, the employer would according to it’s established practice pay for all the costs associated with the private arbitration, that the presiding chairperson of the disciplinary hearing was one of nine arbitrators and that the parties were in a position to choose an alternative arbitrator, that the rules of natural justice would still apply during the private arbitration and furthermore that the employee would be entitled to apply to the Labour Court to review the decision of the arbitrator if the employee was dissatisfied with the outcome of the private arbitration. Ultimately, the employer argued that the decision to refer the matter to private arbitration in terms of section 147(6) of the Labour Relations Act was solely at the instance of the employee and not the CCMA Arbitrator who was not a party to the employment contract.

The Labour Court held that as a senior employee the applicant should have understood that by signing a contract of employment which incorporated conditions set out in the Employee Relations Handbook bound him to the terms thereof.

The Labour Court held further, that in terms of section 147(6), where the parties are bound by agreement to resolve a dispute by way of private arbitration, the CCMA may refer the dispute to the appropriate person or body for resolution through private arbitration or appoint a commissioner to resolve the dispute in terms of the Labour Relations Act. Therefore, the CCMA arbitrator was correct in finding that the decision to refer the matter to private arbitration (or not to refer a dispute at all), was at the instance of the employee once it was determined that the parties were bound by the private arbitration clause.

This finding of the Labour Court demonstrates that employees are bound to refer an unfair dismissal dispute to private arbitration, if they have agreed to do so in terms of the contract of employment, and senior employees have a higher standard of accountability for their actions.

Furthermore, the CCMA might not have jurisdiction to hear the dispute and the employee has the choice to either refer the dispute to private arbitration or not at all.

It is however important to note that if, at any stage during an arbitration referred to the CCMA or relevant bargaining council, it becomes clear that the case ought to have been referred to private arbitration, the CCMA still has the discretion to either refer the dispute to the relevant private arbitration agency or to appoint a commissioner from its ranks to hear the dispute.

In circumstances where an employee, who earns below the Earnings Threshold of prescribed by the Labour Relations Act, the CCMA must then appoint a commissioner to hear the dispute if the employee was required to pay the costs of the private arbitration or part thereof.

Article published courtesy of RexLex™ Mediations & Arbitrations

www.rexlex.co.za

010 300 0825

Copyright 2021 RexLex™

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RESTRAINT OF TRADE IN SOUTH AFRICAN LAW… AND THE PUBLIC INTEREST?

In essence, a restraint of trade provision is a term in a contract of employment that (typically) provides that after termination of employment, the employee is restricted in the work s/he can perform in that s/he will be restrained/restricted from performing the same/similar work in competition with his/her former employer, for an agreed period of time and in respect of an agreed geographical area. Further restrictions may be agreed to such as the number of people to be restricted, the types of entities and the industries involved.

These restraint provisions/terms aim to protect the employer’s proprietary interests, such as client and customer goodwill and connections, trade secrets, confidential information, know-how, business relationships, business territories, employment confidentiality.

A pertinent question to be asked is: to what extent is an employer legally capable to restrain a former employee?… especially where the employee only has the skills necessary to perform the job which s/he is restrained from performing?

The potential impact of restraint of trade terms/undertakings on former employees of a business is invariably substantially prejudicial and has it has been argued to prevent restrained persons from exercising their constitutional rights to choose their trade, occupation or profession.

A proper understanding and appreciation of how the law and the court will approach any application for a former employee to be restrained from competing with his former employer is to appreciate that there is no statute or legislation or regulation which provides an employer a right to this type of protection.

It is apposite to understand that unless the employee agrees in his contract of employment to be bound by a restraint, the employer has no legal entitlement to try and prevent him from working after termination of the employment relationship, even if this is in direct competition with the erstwhile employer.

Therefore, the manner in which the restraint terms are formulated in the contract of employment is critical, as the courts look very closely at the actual terms and conditions of these undertakings to determine if same should be enforced by the courts.

Invariably, the courts perform a balancing act between the rights of the employer not to be subjected to unfair competition, and the right of the employee to choose his trade.

The leading South African precedent dealing with these issues is Magna Alloys and Research (SA) (Pty) Ltd v Ellis 1984 (4) SALJ 874 (A) which has been referred to with authority on numerous occasions since 1984. The Appellate Court, in 1984, laid down the general principle that, on the face of it, restraint terms are not unlawful per se and every restraint of trade agreement contained in an employment contract signed by an employee is assumed to be lawful and enforceable, The onus thus lies on the employee, if he/she wishes to be released from the restraint, to show that the restraint is unreasonable and contrary to public policy or the public interest as more commonly known.

In determining whether a restraint is enforceable, a court will consider, inter alia, the following factors:

• the duration of time that the restraint operates;
• any limitations on the employee working in his/her personal capacity or through a company;
• whether or not the restraint applies only to the employee or more than one person in association with the employee;
• whether the employee still has the ability to earn a living;
• the geographical area to which the restraint applies;
• whether a restraint payment was paid to the employee;
• the proprietary interests, goodwill, income assets, revenue flows, or capital assets that the employer seeks to protect.

Since 1993 (interim Constitution of South Africa) and 1997 (final South Constitution of South Africa) complex constitutional considerations have become applicable to restraint of trade provisions found in contracts of employment in that competing interests of employers and employees have to be weighed very carefully in light of the relevant constitutional provisions in the Bill of Rights and the manner in which same are applied in the law courts.

In the situation where an employee only possesses the skills of the particular job which s/he is restrained from performing, the consideration of the employee’s ability to continue to earn a livelihood will pose serious problems for the enforceability of any restraint.

The Magna Alloys case above also stated that “It is in the public interest that agreements entered into freely should be honoured and that everyone should, as far as possible, be able to operate freely in the commercial and professional world.” This provides for conflicting interests between the employer and employee which must be balanced in light of the public interest. This view has gained much plaudits and support over the years and particularly in the recent case law since 2010.

It is well established that the proprietary interests that can be protected by a restraint agreement are of two kinds. The first consists of the relationships with customers, potential customers, suppliers and others (trade connections). The second consists of all confidential matter which is useful for the carrying on of the business and which could therefore be used by a competitor to gain a competitive advantage (trade secrets).

In Aranda Textile Mills (Pty) Ltd v Hurn and another [2000] JOL 7350 (E), the court emphasised that employers’ proprietary interests sought to be protected must be properly described as belonging to the employer. The court pointed out that it will generally be contrary to the public interest to enforce an unreasonable restriction on a person’s freedom to trade. The court went on to record that:

“A man’s skills and abilities are a part of himself and he cannot ordinarily be precluded from making use of them by a contract in restraint of trade. An employer who has been to the trouble and expense of training a workman in an established field of work, and who has thereby provided the workman with knowledge and skills in the public domain, which the workman might not otherwise have gained, has an obvious interest in retaining the services of the workmen. In the eye of the law, however, such an interest is not in the nature of property in the hands of the employer. It affords the employer no proprietary interest in the workmen, his know-how or skills. Such know-how and skills in the public domain become attributes of the workman himself, do not belong in any way to the employer and the use thereof cannot be subjected to restriction by way of a restraint of trade provision. Such a restriction, impinging as it would on the workman’s ability to compete freely and fairly in the market place, is unreasonable and contrary to public policy.”

It will generally be contrary to the public interest to enforce an unreasonable restriction on a person’s freedom to trade/earn a living. However, where the proprietary interests of the employer, which needs protection, outweighs the employee’s interest in continuing his trade, such a restraint will be reasonable and enforceable.

In the recent case of PB Hairdressing Organisation v Rudolph Kruger and Jingles Hair Emporium, the Applicant employer in seeking to enforce a restraint of trade provision, failed to demonstrate any protectable interests. The Labour Court dismissed the employer’s application.

In the case of PB Hairdressing Organisation t/a Carlton Hair International v Vinciguerra and Another (J2948/16) [2017] ZALCJHB, the Labour Court dismissed the employer’s application to enforce a restraint of trade. The Labour Court found on the facts, inter alia, that the restraint sought to be enforced was contrary to public policy and thus unenforceable. The employee was 21 years old and had been employed a junior hair stylist. He averred that he only accrued between 20 to 30 regular clients in the 6 months that he spent working at Carlton Hair, where a more senior stylist would have 12 to 20 regular clients a day. In this instance, the court held that the restraint of trade which restrained him until 18 November 2017 from within a radius of ten kilometres (as the crow flies) from the front door of the salon, was against public policy and unreasonable because the employee was a junior employee, qualified for only 6 months and who was only 21 years old.

Clearly, employers face an uphill task to enforce restraint provisions in contracts of employment. It is vital that such restraint terms are professionally crafted, drafted in light of the prevailing business world and changing circumstances.

Copying and pasting of restraint of trade terms into employment contracts does not suffice.

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