Premier FMCG (PTY) Ltd t/a Blue Ribbon Bakery v Food and Allied Workers Union obo Members and Others (C530/2019) [2022] ZALCCT 52; (2022) 43 ILJ 2584 (LC) (22 August 2022)

OF INTEREST TO OTHER JUDGES

THE LABOUR COURT OF SOUTH AFRICA,

HELD AT CAPE TOWN

CASE NO: C530/2019

In the matter between:

PREMIER FMCG (PTY) LTD T/A BLUE RIBBON BAKERY Appellant

and

FOOD AND ALLIED WORKERS UNION OBO MEMBERS First Respondent

COMMISSION FOR CONCILIATION,

MEDIATION AND ARBITRATION

Second Respondent

CECILIA BRÜMMER N.O.

Third Respondent

Date of Set Down: 12 August 2021

Date of Judgment: This judgment was handed down electronically by circulation to the parties’ legal representatives by email, publication on the Labour Court website and release to SAFLII. The date and time for handing down judgment is deemed to be 22 August 2022

Summary: (Appeal – s 10(8) of the Employment Equity Act 55 – Joinder of employees not part of the original dispute – Rule 26 of CCMA rules, cannot circumvent pre-requisite of conciliation – Equal pay claim under s 6(4) read with 6(1) of EEA - Length of service not constituting an arbitrary ground of unfair discrimination per se ­­– appeal dismissed)

JUDGMENT

LAGRANGE J

Introduction

[1] This is an appeal in terms of s 10(8) of the Employment Equity Act 55 of 1998 (‘the EEA’) against an award handed down on 7 August 2019 in which the third respondent (‘the arbitrator’)

found that there was a differentiation in pay between employees of Premier performing the same or similar work. The arbitrator found that this was premised on an arbitrary ground and amounted to unfair discrimination. The appellant also seeks condonation for the late service and filing of its written submissions on 19 December 2019. Oral argument was heard virtually using Zoom.

[2] The first respondent (‘the union’) alleged that there were wage discrepancies between various employees of Premier, and that these employees performed the same or substantially the same work or work of equal value. The appellant (‘Premier’) claimed that these discrepancies were justified on the basis that some employees were a part of an incentive scheme known as the ‘mobility incentive process’ which meant additional

responsibilities and therefore additional pay.

Grounds of Appeal

[3] Premier appeals against the arbitration award on the following grounds:

3.1 The arbitrator erred in fact and law by finding that the dispute involved members of the respondent at both the Mill and the Bakery at the premises of Premier. The arbitrator should have found that the dispute only involved members of the respondent at the Bakery and should have refused to allow non-Bakery employees to be party to the dispute.

3.2 The arbitrator erred in fact and law in finding that Premier had discriminated against the 240 members of the first respondent (the affected employees) on an arbitrary ground as contemplated in s6(1) of the EEA.

3.3 The arbitrator erred in fact and law in finding that Premier had unfairly discriminated against the affected employees by paying them lower wages than other employees of Premier in similar grade and positions.

3.4 The arbitrator should have found that some employees were paid higher wages because they were part of the mobility incentive bonus scheme, whereas the affected employees were not a part of this scheme.

3.5 The arbitrator displayed bias or a reasonable apprehension of bias in favour of the first respondent and against Premier throughout the arbitration proceedings. This bias prevented Premier from properly presenting its case at the arbitration proceedings.

Condonation application

[4] The arbitration award was handed down on 7 August 2019 and the full record of proceedings was received by Premier on 29 November 2019. In terms of Rule 9(6) of the Labour Court Rules, Premier was required to deliver concise written representations in respect of the appeal within ten days of receipt of the written record and reasons. The appellant’s written submissions should have been delivered on 13 December 2019.

[5] The appellant’s submissions were served and filed on 19 December 2019. Consequently, the review application was filed a few days after the prescribed time period. The delay is short and I am satisfied the explanation therefor was adequate. The application is unopposed and there is also no demonstrable prejudice that was caused

to the respondent’s or the court. Condonation should thus be granted.

Joinder

[6] The appellant claimed that the arbitrator erred in fact and law by finding that the dispute involved members of the respondent at both the Mill and the Bakery at the premises of Premier. It claims that the arbitrator should have found that the dispute only involved members of the respondent at the Bakery.

[7] Although it was a matter of dispute at the beginning of the arbitration proceedings whether employees in the Mill were party to the dispute, the union spokesperson in the arbitration ultimately agreed that the union wanted to join such employees and obtain a list of them from the employer. Accordingly it seems to have been common

cause that the Mill employees were not party to the dispute when it was referred to conciliation. After hearing both parties, the

commissioner joined the Mill employees as parties to the dispute in an ex tempore ruling on 7 June 2019, relying on CCMA Rule 26.

[8] CCMA rule 26 allows the commissioner, at any stage before the conclusion of an arbitration, to make an order joining any number of persons if: “(a) the right of the referring party to relief depends on substantially the same question of law or fact, which, if a dispute were to be referred separately against the person sought to be joined, it would arise in a separate claim; (b) the party to be joined has a substantial interest in the subject matter of the proceedings; or (c) the party to be joined may be prejudicially affected by the outcome of the proceedings.” If the rule was the final word on the question of joinder during an arbitration, the arbitrator’s decision could not be faulted even if the Mill employees were not party to the dispute when the matter was referred to the CCMA.

[9] The applicant claims that notwithstanding the CCMA rule the Constitutional Court’s approach to post conciliation joinder in National Union of Metalworkers of SA v Intervalve (Pty) Ltd & others (2015) 36 ILJ 363 (CC) should apply equally to arbitration proceedings and labour court proceedings. In that case the court found that it was an indispensable requirement of s 191(5) that a matter could not be referred to the labour court for adjudication unless 30 days had elapsed since the referral or a certificate of outcome was issued[1]. The difficulty for the union is that the same section applies to arbitration proceedings. Section 10(6) of the EEA also requires a dispute of unfair discrimination to be conciliated before it can be referred for adjudication by the labour court or arbitration, as the case may be. Accordingly, I do not believe Rule 26 can be used to circumvent the requirement of a referral to conciliation.

[10] For this reason, the arbitrator’s ruling in respect of the joinder of employees working in the Mill must be set aside because they were not part of the dispute originally referred for conciliation.

Legal principles

[11] The matter deals with the ‘equal work for equal pay principle’, expressed in section 6(4) of the Employment Equity Act (the EEA).[2] When an applicant alleges that this principle has been breached and that this amounts to unfair discrimination based on an arbitrary

ground, the complainant must prove the following; that the conduct complained of is not rational, that the conduct amounts to discrimination and that the discrimination is unfair.[3]

[12] When examining whether the obligation to comply with pay/remuneration equity in the workplace is being complied with, three questions are asked –

12.1 Are the jobs being compared the same, substantially the same or of equal value in terms of an objective assessment?

12.2 Is there a difference in the terms and conditions of employment, such as pay, between the jobs that are being compared?

12.3 If there are difference in the terms and conditions of employment, can these be justified on fair and rational grounds? Regulation 7 of the Employment Equity Regulations lists a number of grounds which commonly justify a pay differentiation.[4]

[13] The arbitrator had to decide whether the differentiation amounted to unfair discrimination in terms of the two-stage analysis in Harksen v Lane [1997] ZACC 12; 1998 (1) SA 300 (CC). If the differentiation is based on a listed ground, discrimination will automatically be established. If it is not on a listed ground, then the differentiation will amount to discrimination if, “objectively, the ground is based on attributes and characteristics which have the potential to impair the fundamental human dignity of persons as human beings or to affect them adversely in a comparably serious manner.” (emphasis added). The following dictum in the judgement about the characteristics of an unfair ground of discrimination is noteworthy:

“[49] What the specified grounds have in common is that they have been used (or misused) in the past (both in South Africa and elsewhere) to categorize, marginalise and often oppress persons who have had, or who have been associated with, these attributes or characteristics.

These grounds have the potential, when manipulated, to demean persons in their inherent humanity and dignity. There is often a complex relationship between these grounds. In some cases they relate to immutable biological attributes or characteristics, in some to the associational life of humans, in some to the intellectual, expressive and religious dimensions of humanity and in some cases to a combination of one or more of these features.”

[14] More recently, in Minister of Correctional Services & others v Duma (2017) 38 ILJ 2487 (LAC) the LAC held:

“To determine whether the ground alleged constitutes unfair discrimination, recourse must also be had to the dictum of Ngcobo J (as he then was) in Hoffmann v SA Airways (Hoffmann):

‘At the heart of the prohibition of unfair discrimination is the recognition that under our Constitution all human beings, regardless of their position in society, must be accorded equal dignity. That dignity is impaired when a person is unfairly discriminated against. The determining factor regarding the unfairness of the discrimination is its impact on the person discriminated against. Relevant considerations in this regard include the position of the victim of the discrimination in society, the purpose sought to be achieved by the discrimination, the extent to which the rights or interests of the victim of the discrimination have been affected, and whether the discrimination has impaired the human dignity of the victim.’”

[15] In passing, it should be mentioned that the narrow ambit of what might constitute an arbitrary ground has been decisively dealt with in Naidoo & others v Parliament of the Republic of SA (2020) 41 ILJ 1931 (LAC)

The award

[16] The arbitrator concluded that the jobs in the categories submitted appear to be substantially the same or of equal value, that there was a difference in the pay of these employees, and that Premier could not explain or justify the differentiation in rates.

[17] The arbitrator decided that the legal definition of ‘arbitrary’ is something that is “without reason given; capricious; whimsical; random or erratic”. She concluded that the decisions made by Premier were indeed arbitrary and that the human dignity of the individual employees had been impaired.

[18] She concluded that the decision of Premier to pay employees doing the same or similar work constituted arbitrary unfair discrimination, and ordered Premier to effect the following adjustments to the rates by no later than 30 September 2019.

18.1 Driver: Shunter: To be adjusted to R66,56 per hour.

18.2 Driver: Salesman: To be adjusted to R56,00 per hour.

18.3 The rate for Driver, Shunter, and Driver: Salesman are to be adjusted in both the Bakery and in Milling.

18.4 Assistant Sales: To be adjusted to R36,29 per hour.

18.5 Reliever: Leave: To be adjusted to R47,48 per hour.

18.6 Reliever: Lunch: To be adjusted to R47,48 per hour.

The Appeal

Unfair discrimination claim

[19] The appellant claims that the arbitrator erred in fact and law in finding that Premier unfairly discriminated against the affected employees on an arbitrary ground contemplated in s6(1) of the EEA.

[20] The arbitrator stated that the legal definition of arbitrary is something that is “without reason given; capricious; whimsical; random or erratic”. She stated that the decisions made by Premier were indeed arbitrary and that the human dignity of the respondents had been impaired. She concluded that the decision of Premier to pay employees doing the same or similar work constituted arbitrary unfair discrimination and that Premier had to affect adjustments to payment rates.

[21] The arbitrary ground that the arbitrator relied on appears to be length of service.[5] Until the arbitrator suggested this was the alleged arbitrary ground the union and its members were relying on, it had not been

specifically identified by the union.

[22] It is difficult to see how length of service can be likened to an attribute akin to an immutable human characteristic, sexual or social identity, cultural or organisational association, or deeply held moral, political or religious conviction. Consonant with this principle, the EEA Regulations, which were applicable at the time[6] and were “published to prescribe the criteria and methodology for assessing work of equal value contemplated in section 6(4) of the Act[7]” specifically stated that length of service is a fair basis for differential remuneration of individuals performing work of equal value:

“7 Factors justifying differentiation in terms and conditions of employment

(1) If employees perform work that is of equal value, a difference in terms and conditions of employment, including remuneration, is not unfair discrimination if the difference is fair and rational and is based on any one or a combination of the following grounds:

(a) the individuals' respective seniority or length of service;…”[8]

(emphasis added)

[23] It must also be stressed that no case was advanced that length of service as a criterion for receiving additional remuneration or a benefit, indirectly had the consequence of discrimination on a listed or arbitrary ground, which is prohibited by s 6(1) of the EEA.

[24] Accordingly, the differential remuneration complained of based on service did not amount to unfair discrimination on an ‘arbitrary ground’ in the sense that term must be interpreted in s 6(1) of the EEA, and the arbitrator was wrong in law in reaching this conclusion. For this reason alone, the appeal must succeed.

Other grounds of appeal

[25] In view of my finding above, which is dispositive of the appeal, it is not necessary to consider the other grounds of appeal raised.

Order

[1] The late filing of the Applicant’s submissions is condoned.

[2] The appeal is upheld and the joinder ruling and outcome of the award issued by the Third Respondent in case number WECT5686-19 issued on 7 August 2019 are replaced with the following:

2.1 The application to join employees working in the Mill is dismissed.

2.2 The Applicants claim in terms of unfair discrimination in terms of section 6(1) read with section 6(4) of the Employment Equity Act 55 of 1998 is dismissed’

[3] No order is made as to costs.

Lagrange J

Judge of the Labour Court of South Africa

(In chambers)

Appearances:

For the Appellant:

M J Van As instructed by Fluxmans Inc.

For the First Respondent:

M Mbana of FAWU

[1] At paras [31]-[32]

[2] Act 55 of 1998.

[3] S11 of Act 55 of 1998.

[4] Clause 4.4 of the EEA: Code of Good Practice on Equal Pay/Remuneration for Work of Equal Value.

[5] Transcript, page 44, line 17.

[6] Government Notice R595 in Government Gazette 37873 dated 1 August 2014.

[7] Regulation 2

[8] Regulation 7(1)(a)