George v Liberty Life Association of Africa Ltd [1996] 8 BLLR 985 (IC)

Division: Industrial Court, Pretoria

Date: 03 / 06 / 1996

Before: Prof AA Landman, President & RS Roth, Senior Member

Flynote

Section 46(9) application

Appointment ­ Employer’s right to choose ­ Court will not generally interfere on merits with employer’s decision to appoint, but will do so where employer has discriminated against other applicants according to unacceptable criteria.

Affirmative Action ­ Beneficiaries ­ Affirmative action not viewed as unfair discrimination only if it benefits persons actually prejudiced by past unfair discrimination ­ Not intended to benefit members of undifferentiated groups.

Affirmative action ­ Objective ­ To remove obstacles to advancement of persons actually prejudiced by unfair discrimination in the past ­ Not necessarily fair if applied on undifferentiated group basis.

Constitution of the Republic of South Africa Act 200 of 1993 ­ Equality clause ­ Section 8 (prohibiting discrimination but permitting measures to protect and advance previously disadvantaged) not applicable to private employers, but private employers not precluded from adopting affirmative policies.

Discrimination ­ As unfair labour practice ­ Discrimination by employers against employees on arbitrary grounds constitutes unfair labour practice.

Labour Relations Act 66 of 1995 ­ Application ­ Though not yet in force can be used as a source of values in disputes before Industrial Court ­ “Residual unfair labour practice” considered.

Managerial prerogative ­ Extent ­ Employers’ freedom of choice circumscribed by developing principles of labour, constitutional and common law ­ Employers no longer free to appoint or promote using discriminatory or unfair criteria.

Promotion ­ Failure to promote ­ Can constitute an unfair labour practice if based on discriminatory criteria or if employer fails to adhere to promotion procedures ­ Employer considering outside applicant before interviewing internal applicants as required by its own hiring policy ­ Departure from policy unfair.

Unfair labour practice ­ What constitutes ­ Definition wide enough to encompass refusal by employer to promote or transfer laterally which is based on unacceptable grounds.

Editor’s Summary

The applicant, while already in the employ of the respondent, applied unsuccessfully for another post within the company and contended that the respondent’s failure to appoint

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him thereto constituted an unfair labour practice in that he was unfairly discriminated against and that the company had violated its own procedures by appointing an outsider.

When the respondent decided to create a new department and post within one of its divisions, it informed a personnel consultancy of the plan and posted an internal advertisement aimed at existing staff. Shortly thereafter the personnel consultancy placed its own advertisement in a newspaper, without identifying the respondent. The applicant replied to the internal advertisement and received a strong endorsement from his superior, subject to the reservation that he would need training for the new job. The personnel consultancy was then given further specifications and an instruction that the appointment should preferably be “affirmative”. The applicant was interviewed for the position at about the same time as a “coloured” applicant, “Mr A”, who had applied from inside the respondent’s group. Soon thereafter, the applicant was informed that he was one of two short­listed candidates, and that the other was a person of colour. When the other candidate was finally selected it was explained to the applicant that the other candidate had been selected because he had been responsible for the development of a computer system that could be utilised for human resources development, and the applicant was assured that he would be given another job in the new division in due course. The applicant thereupon expressed dissatisfaction about the respondent’s alleged violation of its own recruitment policy, complaining that affirmative action was being applied which contradicted company policy. He was told “Mr A” had greater experience and that the fact that he was not white was a “bonus”. The applicant proceeded with his grievance, and the respondent issued an internal memorandum stating that the job had been given to the best person, and that his race had been a secondary consideration.

Turning to the law, the court noted that while corporate employers enjoyed a wide discretion to decide on specifications which ideal candidates for positions it offered should have, and to discriminate between candidates; developing labour, constitutional and common law principles had gradually eroded the managerial prerogative in this respect. If an employer could undertake to follow a certain process in recruiting new employees, or promoting or transferring present employees, it could be contractually bound by such undertaking. Moreover, the notion of a labour relationship was wide enough to embrace issues relating to promotion or lateral transfer, which brought such issues within the definition of unfair labour practice. In giving content to such definition, the court was to be guided by the rights enshrined in the Constitution. No court had yet been called upon to decide on a case involving

a conflict between the right of every person not to be unfairly discriminated against on the grounds of race or colour and the application of measures designed to protect and advance persons disadvantaged by unfair discrimination. Section 8 of the Constitution stated that there shall be no discrimination on various grounds, but permitted measures to protect and advance the previously disadvantaged. It was unlikely that the limitation clause in the Constitution (section 33) applied to affirmative action measures of the kind contemplated in section 8, as it had been held that the Constitution did not have horizontal application. Although employers were not bound by the Constitution in its dealings with its employees, they could voluntarily give effect to considerations mentioned in section 8. The draft final constitution, in so far as it was relevant to establishing the values which were to be followed by the Industrial Court, was of much the same effect.

International Labour Organisation Recommendations and Conventions and the new Labour Relations Act 66 of 1995 were further sources of values to which the Industrial Court could turn since the latter, especially, had been accepted by labour, employers and the State through the medium of NEDLAC. While the new Act dealt expressly with unfair discrimination and refusal to promote in the residual unfair labour practice definition contained in Schedule 7, the current definition of unfair labour practice embraced such conduct by virtue of the inclusion of acts which unfairly affected employees or prejudiced or jeopardised their employment opportunities. An employer who

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stooped to racial discrimination in the course of conducting relations with its employees would unfairly affect their employment opportunities, including their aspirations, and the employment relationship would be detrimentally affected by the application of racial criteria.

However, the socio­economic inequalities which had been inherited from apartheid raised the question whether, despite the general bar on race and other discrimination, an employer might act positively and discriminate in favour of employees and applicants for employment who had suffered discrimination in the past, even where this would be to the detriment of a present employee and such action would normally be regarded as an unfair labour practice.

The present case turned not on the merits of the respondent’s selection of “Mr A”, but on a conflict between two competing values ­ the right not to be discriminated against on the ground of race and the right to be assisted because of previous disadvantage caused by institutionalised race discrimination. While an employer had to take into account its own internal values such as efficiency, economic reality and employee loyalty, it was also part of the larger society and could validly look at external values and customer preferences. One such value was affirmative action ­ which in the Constitution was not “racially based remedial action”, but designed to assist groups or categories of persons who had in fact been disadvantaged by unfair discrimination. Affirmative action was not a value in itself but a procedure or means to an end and, although discriminatory, was accordingly deemed not to be “unfair”. Fairness, equity and economic considerations dictated that affirmative action in South Africa should at this stage be allowed to outweigh the injunction not to discriminate on the basis of race or gender, although this need not necessarily always be the case.

If affirmative action was a temporary deviation from a universal norm against discrimination, its parameters had to be defined by identifying its permissible beneficiaries. These were the disadvantaged. Although in the South African context disadvantage was coupled with race and gender, this did not apply to all individuals. In the United States, affirmative action based on race had been criticised because it primarily benefitted middle­class blacks who were able to look after themselves. The Industrial Court would accept that an employer did not commit an unfair labour practice if it applied affirmative action to a candidate for promotion or appointment who had personally been unfairly discriminated against.

Turning to the facts, the court held that it did not wish to pronounce on the merits of the respondent’s decision to appoint “Mr A”. The court accepted that from the outset the respondent’s intention had been to consider an affirmative action candidate, but viewed this against its awareness of the social need for affirmative action in the workplace and of the possible economic implications of not pursuing this policy. The applicant had been aware that this was a consideration. The applicant was white and privileged. “Mr A” was neither. The respondent’s decision to appoint the latter was not subject to review by the court unless it led to an unfair labour practice. Even if the applicant had been discriminated against by being passed over for appointment to the new position, it could not be said that the respondent had acted unfairly in the context of the contemporary South African workplace by appointing a black person who had suffered past discrimination.

However, the respondent had a formalised procedure for dealing with staffing and promotions in terms of which it was bound to advertise posts internally before considering outside applicants. The norm for internal advertising was three weeks. The respondent had decided to reduce this period to two weeks, and it was bound to show that this departure from normal practice was not unfair. Its staff generally, and the applicant in particular, had not been informed that the job advertising scheme would be deviated from. The applicant contended that the respondent had no right in terms of its

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policy to turn to the external pool of candidates once he had been accepted as a satisfactory candidate. On a proper interpretation of the policy the applicant was entitled to be given preferential consideration over an external candidate. Although the court accepted that this was done, it nevertheless found that the respondent’s decision to look for an external candidate before the time specified for internal advertisement constituted an unfair labour practice. If “Mr A” had not been identified as a candidate before the applicant was interviewed, the applicant would have been considered without being compared to “Mr A”. Although the applicant may or may not have been given the job, he was entitled to be considered in relation to internal candidates only. The company’s failure to follow the job posting procedure laid down by its staff handbook was declared an unfair labour practice, and the applicant was awarded costs on the Supreme Court scale.

Judgment

Landman P

“Nor is there any racial discrimination, or any marked domination by one province by another.”

George Orwell Nineteen Eighty­Four 167.

Introduction

On 8 March 1996 this court dismissed two points in limine which Liberty Life had raised against the jurisdiction of this court to entertain an application brought by Dion George (hereafter George) for relief in terms of s 46(9) of the Labour Relations Act 28 of 1956 (the LRA). Of relevance here is that this court found that the point in limine to the effect that there is no employment relationship existing between George and Liberty Life in regard to his application for promotion within the ranks of Liberty Life to be unfounded.

The facts

Certain background facts have been set out in the judgment of 8 March and will not be repeated here.

1. George was employed as a supervisor in a division of Liberty Life.
2. Liberty Life, George’s employer, is engaged nationally and internationally in insurance based financial services. It provides services to its client in regard to life insurance and pension funding which is largely based on the direct linkage of equities and quality real­estate to policyholder’s benefits. According to its corporate mission, also known internally as “The Liberty way”:

“Liberty Life takes pride in employing effective and productive people and rewarding them for work well done. We inspire our staff by setting high standards and direction, and we support them through constructive performance feedback and career development ­ by granting financial assistance for educational courses and through innovative in­house training projects. We aspire to an environment that creates individual job satisfaction while stimulating personal performance. (Page 54 of bundle 1.)

1. In October 1993 a new department was established within Liberty Life’s division known as Group Benefits. The Group Benefits Division was primarily responsible for that part of the company’s business which involved

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services to groups and collective entities as opposed to individuals. Within the Group Benefits Division a human resources capacity was established. Ms J Ferrao (Ferrao is spelt with a horizontal accent above the “a” but unfortunately I cannot reproduce it with the means at my disposal) headed up the Human Resources Department of the Group Benefits Division.

1. At some time prior to June 1994 Ms Ferrao and her trainee, Ms Tanya Southey, had discussed within the department and with Ms Ferrao’s superiors the creation of the post of an “HR Officer” in the Group Benefits

Human Resources Department.

1. Prior to receiving formal permission to create the post and recruit an incumbent Ms Southey let Ms Joanne Kaplan of Exclusive People Personnel Consultants know that such a post was in the offing.
2. Before 3 June 1994 Ms Ferrao’s superiors approved the job specifications and advertising of the post of an HR Officer. The written authorisation and the specifications of this post were not available to this court as this document was missing.
3. In pursuance of the commission to create and advertise the post and in compliance with the job posting policy of Liberty Life Ms Southey posted an internal advert for the job on the office notice boards. In view of the importance of this advert it is set out in full. It reads:

“Group Benefits HR Officer

Group Benefits HRD Hay Grade 6 Corporate only:

Variety is the spice of life! Utilise your tertiary qualification in this busy environment. Become involved in all aspects of HR. If you have good communication skills, are able to liaise at all levels and can handle pressure, perhaps this is the opportunity you’ve been waiting for. Previous training experience and computer literacy would be an advantage. Interested?

Call Tanya Southey on X4126.” (See page 1 of bundle 1.)

1. On 14 June 1994 an advert appeared in “The Star”. This advert was placed by Ms Kaplan of Exclusive People.

It was for the post of an HR Officer. It did not identify the employer as Liberty Life. This advert read as follows:

“HR Officer

R5 500 × 13. Braamfontein. High profile financial services Co. Under 30, degree/IPM, min 2 yrs exp as a personnel generalist. Your brief includes recruitment, IR, management development, job grading and personnel administration. Computer literate? Joanne 78802030. (Page 1A of bundle 1.)

1. According to the testimony of Ms Kaplan she was trying to be proactive and was recruiting for this position although she had not at this stage received a mandate to advertise it nor had she been formally appraised of

the details of the job specification.

Nevertheless she knew that the post was going to be advertised externally. It is probable that she knew this at a time before the internal candidates had

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been properly considered. This is consistent with Ms Southey and Ms Ferrao having taken a decision to seek a recruit outside the corporation before considering internal candidates.

1. George, who knew that this position was coming up, became aware of the advertisement for the HR Officer post on the office notice board and applied for a transfer from his position as a supervisor in the New

Business Department of Group Benefits to the HR Division. George completed parts of the application for transfer form in his own handwriting and presented it and himself to Ms Southey.

1. Ms Southey interviewed him on 6 June 1994 and added other information to this form in her own handwriting.
2. George stated in answer to the question “Why are you applying for a transfer?”, “I intend to study towards a master’s degree in industrial psychology and require exposure to the human resources field”. He left a question “Why do you think you are suited to the position applied for?”, blank.
3. Ms Southey wrote the following on the transfer application form: “Strong candidate, high energy levels, positive, enthusiastic. Would, however, need guidance, support and training.” She marked her answer to the question “Does the applicant meet the basic requirements for the position?”, in the block marked “Partially”. She added the comments: “No HR exposure, needs full training on the job.”
4. According to Ms Southey she telephoned Ms Kaplan on 20 June 1994 to advise her that they were recruiting externally ie outside the Liberty Life Group. Ms Kaplan was to assist with this recruitment process. Ms Kaplan says that on 20 June 1994 she recorded the necessary particulars in her handwriting. She said she scrawled it down. This document containing her scrawled notes has gone missing. Ms Kaplan explained that her office had been moved twice in the intervening two years. The storage space wherein the files were kept was also flooded when the roof gave in.
5. Ms Kaplan says that after making a scrawled note of the particulars she then transferred this to a job specification form. This job specification form has also gone missing. However she says the parties have a copy of it. This is so because on 16 August 1994 she faxed a copy of the completed job specification form to Liberty Life at their request. A copy of the fax was handed in (see page 16 of the bundle). The fax itself has also gone missing.
6. The job specification is dated 20 June 1994. George stated in his evidence that he believes that the date had been altered and that Tippex has been used to do this. I cannot find from an examination of the job specification form or rather the photocopy of a fax of this document that date has been altered. I note that George’s principal reason for suspecting the authenticity of this document is the fact that he believes the instructions were given to Exclusive People prior to 14 June 1994.
7. Essentially the job specification form records that an HR Officer is sought. This person is to have two years generalist experience to be bilingual and “A(?)/R/S”. A degree or IPM was the minimum educational qualification

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required. The candidate was to be under 32 years of age. The job specification also notes:

“Pref affirmative action position. Recruit and selection. IR. Manage/develop, Job grade (Hay exposure). Good people person. Pressure ­ doing so many things at once. Educos ­ comp’d data­base and adv (manpower, career path planning, succession).”

The starting date was to be as soon as possible and the salary offered was R5 500.

1. At some stage prior to 20 June 1994, according to the evidence of Ms Southey and Ms Ferrao, the divisional head, Mr Lipshitz, approved that the position be advertised externally. This document which appears to have included Liberty Life’s original job specification has gone missing. Mr Lipshitz died in July 1995.
2. On 24 to 31 July the advert for the HR Officer post was again placed on the office notice boards. It still referred to corporate only. Ms Southey said this was an error. It was her fault. She should have checked it as it should have been marked for external recruitment as well.
3. On 24 June 1994 George was interviewed by Ms Ferrao. Although he did not deal with this in evidence he states in a statement of grievance dated 6 July 1994 that:

“During the interview, we explored our understanding of the position and the role of the Human Resources Department within the Division. We specifically discussed the need to ensure that the company’s human resources policy was compatible with the need for affirmative action. After the interview, Mrs Ferrao informed me that the outcome would be communicated to me early in the following week.”:

1. At some time either before after Ms Ferrao’s interview with George she interviewed a coloured male. I shall refer to this person as Mr A. There is no need to reveal the identity of this person. This case was not of his

making.

1. Mr A made contact with Exclusive People Personnel Consultant, according to Ms Kaplan, in May 1994. He completed their confidential questionnaire and supplied them with a copy of his curriculum vitae. Mr A was described by Ms Ferrao as a coloured man who had come from a disadvantaged background. By this she meant that he had not had the benefit of schooling at what she termed a European school.
2. At the time Mr A approached Exclusive People he was working as a personnel officer in the Human Resources Division (Personnel Services) of the Standard Bank. In his CV he stated that his duties included performing or providing a support service to the divisional personnel manager through the divisional advice and guidance on personnel policies and procedures to line managers and through the co­ordination of future manpower succession and career development plans. (See page 7 of bundle 1.) Whoever interviewed him also noted the following:

“Development Manpower Planning Database, Re­integrating staff, ongoing staff, DEV networking in various diff. Very proactive.”

He listed as special achievements the development of a manpower and succession planning database. He also stated that he had completed a number of

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courses in computer software packages such as Database advanced, Lotus 1­2­3 advanced, Macros, WordPerfect, as well as in the behavioural skills. He added that these skills had been used in developing procedures assistance such as a manpower planning database, a training database, and other systems used to monitor staff performance and business operations.

1. Ms Kaplan placed a similar advert to that referred to above for an HR Officer post in “The Star” of 22 June 1994. This advert also did not identify the client.
2. Mr A was interviewed by Ms Ferrao. Ms Ferrao gave evidence and testified in respect of her assessment of Mr A.
3. On Friday 1 July 1994 George telephoned Ms Southey about the HR Officer post. She informed him that a decision had not yet been taken. She wrote down his home phone number and said that she would call him when a decision was reached.
4. That Friday evening Ms Southey phoned George at home. George invited his flatmate and friend Mr McDonald to listen in to the conversation by way of the speaker telephone. Ms Southey was unaware that McDonald was listening to the conversation.
5. According to George Ms Southey told him that a short list had been narrowed to two candidates, himself and a coloured man who was currently employed at the Standard Bank. According to George Ms Southey suggested that this situation presented a major problem since it appeared necessary to send a message to line management by selecting a person of colour. Nevertheless he acknowledged that there were many other current personnel fears to consider. She added that this issue had been discussed at an open forum of MANCOM. Ms Southey also said that they had done a “liberty” on him. He was not familiar with this term nor had he previously heard about the institution referred to as MANCOM.
6. Ms Southey admits that she made a telephone call on Friday evening to George. She made this call from her home and she was preoccupied with a young child. Her version of the telephone conversation is the following. She says that she said to George that no decision had been made but that a decision would be made on Monday. He asked who the candidates were. She said that there was a gentleman from the Standard Bank. She told him that he was a coloured man with HR experience. George asked her what was Liberty Life’s affirmative action policy. She replied that Liberty did not have one but if two candidates were of equal stature the affirmative action candidate would get the job.
7. McDonald gave evidence and he substantially corroborates George’s version of this telephonic conversation. I see no reason to doubt the evidence of McDonald in this respect even though he is a flatmate and a friend of George. This is one reason why I intend to prefer the evidence of George, but not uncritically, when set against that of Ms Southey.
8. According to George, on Monday 4 July 1994, Ms Southey telephoned him and asked him to come and see her. He went to see her and she explained that the other candidate had been selected because he had developed a computer

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system that could be utilised for human development. She added that she and Ms Ferrao lacked experience in the area of development and therefore would have been unable to provide guidance to George in this area had he been selected for the position. Ms Southey added that the vacancies would arise in January and that George would be offered a position without having to be interviewed. She also stated that it had been the most agonising decision that she and Ms Ferrao had had to make.

1. On the same day, 4 July 1994, George expressed his dissatisfaction about the violation of the company policy in respect of its external recruitment. He complained that an “affirmative action” policy was being applied in

the absence of a currently stated company policy.

1. Ms Southey stated in her evidence that she wrote a letter to George on 4 July 1994. She says that this letter was delivered to him by her secretary. Her secretary however has returned to Germany and is unavailable to give evidence. She also says that this letter was copied to Dennis Arsenis who was George’s manager at the time.
2. It is common cause that Arsenis states that he did not receive this document. George also states that he did not receive this document. The letter reads as follows:

“Dear Dion

Re: Your application for HR Officer

Your application for the position of HR Officer was strongly considered. It is my opinion that you possess the potential to fulfil the role as you have the theoretical framework as well as divisional line experience.

However, since the inception of our department we have been acutely under­ resourced which has prevented us from meeting some of our accountabilities. In light of this, it was imperative that the incumbent in this position be fully productive from day one. In addition, it was necessary to fill the position with someone who supplements the existing skills in the department. This was our primary reason for selecting the candidate who has accepted our offer.

A secondary consideration was the issue of race and gender. We interviewed several black candidates, none of whom would have been productive from the start, as they all lacked the required experience, and they were therefore unsuccessful in their applications. Apart from having the necessary skills and experience, the incumbent is an Affirmative Action candidate and this too counted in his favour.

As we value your experience in the division and feel that you would fit into the department, we would welcome your application, should another vacancy arise.

I trust you understand our position. Kind regards

Tanya Southey

Assistant Manager: GB­HRD

cc: Dennis Arsenis”

1. In my view it must be accepted firstly that this letter did not reach George and secondly that a copy did not reach Arsenis. Had it reached George or Arsenis then it is probable that, in view of the correspondence passed between George and various officials in Liberty Life, he would have made

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mention of this letter. George’s case is indeed that this letter was not written on 4 July. He believes that it was a backdated fabrication.

1. As a result of a suggestion made to George by Arsenis and steward Carr, the Assistant General Manager, George met with Ms Ferrao on 5 July 1994. He met with her in order to express his dissatisfaction over the

manner in which the selection process had been handled as well as his concern that “methodologically incorrect affirmative action” had been applied. George says that Ms Ferrao assured him that the decision had been taken on merit and that affirmative action had not been involved. She acknowledged that he had been one of the two final candidates but stated that the other candidate, Mr A, had greater experience. She also said that Mr A would be able to perform the job immediately whereas George would require extra training. George says that Ms Ferrao did not answer his question as to why the “goal posts” for the job as advertised had been shifted. She added that the fact that the candidate was coloured was a bonus and that she initially hoped to employ an African.

1. George was not satisfied and proceeded with his grievance. A grievance meeting was convened. Ms Ferrao prepared a statement as to the purpose of the grievance meeting. Her statement corresponds with her

evidence and it is necessary to set out this statement in full. The statement reads:

“The Group Benefits Human Resource Development Department was established to provide a comprehensive HR service to the Group Benefits Division.

From inception, the department has been under­resourced, and therefore unable to provide such a comprehensive service. In addition, a number of corporate HR initiatives have been undertaken, and these have put additional strain on the department.

In order to address this situation, a vacancy for an HR Officer was approved. In order to facilitate the prompt appointment of a suitable candidate, permission was obtained to look at external job candidates 2 weeks after the vacancy was approved. The job was posted on 3 June 1994 as Corporate only and given to agencies on 20 June 1994 for external placement.

A number of candidates ­ both internal and external ­ were interviewed. Preferential consideration was given to suitable internal candidates, but ultimately the vacancy was filled by the best person for the job.

The application for the vacancy made by Mr D George was strongly considered because of his divisional line experience; however, because our under­resourced situation had been preventing us from meeting some of our accountabilities, it was imperative that the incumbent in this position be fully productive from day one ­ this requirement necessitated and experienced candidate who would need minimal training. In addition, it was necessary to fill the position with someone who supplements the existing skills in the department. This was our primary reason for selecting the candidate who is now in our employ.

A secondary consideration was the issue of race and gender. An African appointment would have been desirable, and to this end we interviewed several African candidates, none of whom would have been productive from the start, as they all lacked the required experience; they were therefore unsuccessful in their applications. Apart from having the necessary skills and experience, the incumbent (a coloured man) is an Affirmative Action candidate and this too counted in his favour.

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I list below the experience the person employed . . . [Mr A] brings to the job:

Mr A was involved in designing a system that captured individual development plans for staff at Standard Bank. Liberty Life has never been involved in this type of initiative, but will be embarking on a similar exercise in the light of Affirmative Action objectives. With this knowledge, we felt it was imperative that our department had some skills in this area. Development and implementation of a structured on­the­job training course to develop staff job specific skills. The programme was also designed to train supervisors and line managers in performance management procedures, compiling job descriptions, and managing productivity and quality standards.

Development and implementation of a training database to track training initiatives, monitor training costs and to measure and report on the effectiveness of training.

Development and implementation of a recruitment and selection guide to train line managers in selecting staff to effectively meet the business requirements.

Training staff and monitoring initiatives in respect of quality improvement procedures.

Provision of a support service to the Divisional Personnel Manager through the provision of advice and guidance on personnel policies and procedures to line managers and through the co­ordination of future manpower, succession and career development plans. Duties included:

• • Administration and record maintenance, monitoring wastage, recruitment and staff complements.
  • Research and develop projects to address manpower and succession plans for the division.
  • Analyse staff appraisals and identify training needs, interview/counsel staff regarding personnel and career development issues.
  • Audit information on the Personnel Database and assist the business divisions in effective use thereof.

At all times during the recruitment process, Dion George was kept informed of the progress on the vacancy. Tanya Southey phoned him approximately every week to ensure that he did not assume he was no longer being considered and to give him feedback in terms of where we were regarding the interviewing of external candidates.

Jennifer Ferrao 16 August 1994″

1. At some stage George had a discussion with Mr Lipshitz, the head of Group Benefits Division. Nothing much

turns on this discussion save that according to George he was not told by Mr Lipshitz that he had given permission to have the post of HR Officer advertised externally. He was also not told that permission had not been given. The issue just simply does not seem to have been raised.

1. George exhausted all the internal grievance proceedings. He thereafter applied for a conciliation board and when this failed to resolve the issue he commenced proceedings in this Court. Why he did so is possibly best

summarised in his own words in his address to the grievance meeting where he said:

“The rules of the company state that a corporate only position will be filled inside the company. Only when this fails can the position be filled externally.

Liberty Life has a policy of in­house promotion and development on a non­sexual and non­racial basis. Recruitment in this instance has belied that entire concept.

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It should also be asked why give bursaries to people who on that basis might never have the opportunity of using them. I put it to you that on­going training becomes a waste of company money which was supposed to have been invested in the advancement of the staff of Liberty Life.

This matter concerns everyone in this company. I am fighting not only for myself, but for everyone else on the basis of this philosophy. (See p 34 of bundle 1.)

I have indicated above that where the evidence of Ms Southey conflicts with that of George I prefer the evidence of George. I should also add that the task of judging the case has been complicated by the fact that Mr Lipshitz has died and that the secretary who allegedly brought the letter to George has left the country. Added to this these are crucial documents which have gone missing. Explanations have been offered but I am left with an uncomfortable feeling. I do not wish to overstate this but the fact that Liberty Life has been unable to produce vital evidence must be taken into account.

George was left in the dark regarding the decision to recruit externally and I cannot but have reservations that this court has not been informed of all relevant facts and their proper sequence.

Managerial prerogative: recruitment and promotion

It is axiomatic that corporate employers, which engage in commercial activities or otherwise, need to engage the services of natural persons as employees or agents to perform those activities. Liberty Life which engages in the business of insurance and pension funding is an example of such a corporate employer. An employer, especially a corporate employer, will, in the exercise of a prerogative which can be described as a managerial prerogative ie the totality of the capacity of the employer, decide whether its activities require or make desirable the employment of an employee or the promotion of an employee.

Following from this the employer would decide on the nature and extent of the functions which are required to be performed and would decide on the specifications which an ideal or suitable candidate for the job should have. Thereafter the employer, in the case of a corporate employer, other employees or agents of the employer would set about recruiting a candidate which they believe meets the specifications and who is acceptable to the employer.

Inherent in the exercise of the managerial prerogative regarding the process of a selection of a candidate or recruit for the vacant post is the exercise of a discretion. In the exercise of this wide discretion it may be necessary for the employer to discriminate, in a sense of making a choice or selection between, available candidates and indeed the employer may decide to defer appointment or not to make any appointment at all. Indeed the employer would have been perfectly entitled to withdraw the search for an employee and terminate the recruitment process.

An appointment would, of course necessarily, involve an offer of employment. It would usually be initiated by the employer who would make an offer to a person regarded as appropriate to be appointed to a post.

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The exercise of the managerial prerogative also includes the consideration or selection of an existing employee for transfer or a promotion. Even a demotion could be considered, particularly in such circumstances which are necessitated by a reorganisation in a redundancy situation, an exercise of managerial prerogative.

In days gone by the managerial prerogative of an employer was considerably wide and, at times, could be said to have been unfettered. The development of modern labour law has been, in many senses, a slow and gradual erosion or reduction of that unfettered managerial prerogative. Of course in some instances employers have regained the “lost” part of their prerogative but this is not the usual trend. This erosion or reduction was prompted by a change in the social standing of employees and by the slow progress towards a democracy which sometimes engulfed the workplace and which sometimes (as was the case in South Africa with regards to the majority of the population) commenced in the workplace.

The limitations or restrictions and possibly abrogation of some facets of the managerial prerogative stem from various initiatives and may be found in various sources. The restrictions or limitations may arise from the general body of the law which in a South African context would include Constitutional, statutory law and common law.

These sources included the individual contract, collective bargaining agreements, statute law, public policy as reflected in common law and the concept of the unfair labour practice.

As far as common law is concerned its primary impact on the exercise of managerial prerogative has been through the institution of the employment contract. Individual contracts of employment, either on their own or flowing from or based on a collective arrangement also limited, restricted or influenced the exercise of managerial prerogative.

Although there has been and still is, in a majority of cases, inequality in bargaining power between an employer and employee nevertheless employees collectively, and especially through the medium of trade unions, have entered into collective agreements with employers which have limited, affected or influenced the way in which the managerial prerogative may be exercised.

The limitations or restrictions or pre­conditions for the exercise of managerial prerogative could be divided into two types. First procedural limitations and secondly substantive limitations. As far as procedural limitations are concerned this aspect is discussed below in the context of an unfair labour practice.

For present purposes it is sufficient to state that an employer may undertake to follow a certain process in seeking to recruit a person for a post or promoting or transferring an existing employee. As far as substantive limitations are concerned, this was touched on when I dealt with the points in limine which were raised on 5 February 1996. At page 27 of that judgment it is stated:

“An employer has, we assume, a prerogative or wide discretion as to whom he or she will promote or transfer to another position. An employer can go so far as to bind him or herself in regard to the procedure to be followed prior to the filing of the post and indeed the employer may bind him or herself to award the post to a certain employee. See the observations in Borg Warner SA (Pty) Ltd at 26E.”

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The unfair labour practice

The Common Law and Statute Law in general need not detain us in this case. An important source of limitation or restriction of exercise of managerial prerogative is to be found in the concept of the unfair labour practice. Indeed George relies on this concept to found his application for relief.

The definition of an unfair labour practice reads as follows:

“‘Unfair labour practice’ means any act or omission, other than a strike or lock­out, which has or may have the effect that­

1. any employee or class of employees in or may be unfairly affected or that his or their employment opportunities or work security is or may be prejudiced or jeopardised thereby;
2. the business of any employer or class of employers is or may be unfairly affected or disrupted thereby;
3. labour unrest is or may be created or promoted thereby;
4. the labour relationship between employer and employee is or may be detrimentally affected thereby.”

In the judgment on the point in limine this court came to the conclusion that the definition of an unfair labour practice, more particularly that part of the definition which is founded on a “labour relationship”, is wide enough to embrace issues regarding promotion or a lateral transfer to another job with the employer.

Values: the Interim Constitution

In giving content to the concept of the unfair labour practice, it is in my view, imperative to take into account the values of the broader community. An important source of such values, which will guide this court, are the rights enshrined in the Interim Constitution. In Association of Professional Teachers and Another v Minister of Education and Others (1995) 16 ILJ 1048 IC 1076A it is stated that:

“In exercising our present jurisdiction we do not purport to exercise any jurisdiction in regard to the Constitution, but just as this court has had regard to other expressions of applicable values and norms in labour relations, even more so, unless prohibited from doing so, we must strive to uphold the democratic values enshrined in the Constitution.”

In the Rademan case it was also said at 1077G that:

“When interpreting the values contained in the Constitution, expressed as rights, a weighing off process of competing values or rights is required. This process is in keeping with the principle that no right is ever absolute. In terms of the general limitations clause contained in s 33(1) of the Constitution, every fundamental right may be legitimately limited provided such limitation passes the test of being reasonable, justifiable in the democratic and open society, does not negate the essential content of the right, and (with regard to certain specified rights) is also necessary.”

The Rademan case was concerned with an issue relating to the imperative that in our society there should be equality between men and women. Those parts of the Constitution are equally important in the context of racial equality.

The preamble of the Constitution provides: “In humble submission to Almighty God, We, the people of South Africa declare that­

Whereas there is a need to create a new order in which all South Africans will be entitled to a common South African citizenship in a sovereign and democratic constitutional

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state in which there is equality between men and women and people of all races so that all citizens shall be able to enjoy and exercise their fundamental rights and freedoms.”

The afterword to the Constitution which, by virtue of section 232(4) of the Constitution has no lesser status than any other provision of the Constitution but is deemed for all purposes to form part of the substance of the Constitution, provides:

“National unity and conciliation

This Constitution provides a historic bridge between the past of a deeply divided society characterised by strife, conflict, untold suffering and injustice, and a future founded on the recognition of human rights, democracy and peaceful co­ existence and development opportunities for all South Africans, irrespective of colour, race, class, belief or sex . . .”

It was said in the Rademan case at 1078D that:

“Two other parts of the Constitution, both of which embrace the values on which the Constitution is based, are particularly important as both contain a strong affirmation of the intention of the drafters of the Constitution to strive towards ensuring equality between the citizens of South Africa irrespective of their sex, colour and race.”

(The two parts referred to were the preamble and the afterword.)

Section 8 of the chapter on fundamental human rights (chapter 3) provides:

“(1) Every person shall have the right to equality before the law and to equal protection of the law.

1. No person shall be unfairly discriminated against, directly or indirectly, and, without derogating from the generality of this provision, on one or more of the following grounds in particular: race, gender, sex, ethnic or social origin, colour, sexual orientation, age, disability, religion, conscience, belief, culture or language.
2. (a) This section shall not preclude measures designed to achieve the adequate protection and advancement of persons or groups or categories of persons disadvantaged by unfair discrimination, in order to enable their full and equal enjoyment of all rights and freedoms.

(b) Every person or community dispossessed of rights in land before the commencement of this Constitution under any law which would have been inconsistent with subsection (2) had that subsection been in operation at the time of the dispossession, shall be entitled to claim restitution of such rights subject to and in accordance with sections 121, 122 and 123.

1. Prima facie proof of discrimination on any of the grounds specified in subsection (2) shall be presumed to be sufficient proof of unfair discrimination as contemplated in that subsection, until the contrary is established.”

Neither the Constitutional Court of South Africa nor any division of the Supreme Court of South Africa has been called upon to render judgment in the situation where there is an apparent conflict between the right that no person shall be unfairly discriminated against on the grounds of race or colour and the application of a measure designed to achieve adequate protection and advancement of persons or groups or categories of persons disadvantaged by unfair discrimination.

Section 8 follows a very definite pattern; it progressed from an abstract statement of rights to concrete examples followed by very specific exceptions. The section commences with a statement of principle, namely that there shall be equality before the law and equal protection. Then it goes on to state that this

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means that there shall be no unfair discrimination. Examples are given of what is included under unfair discrimination. Race and gender discrimination are mentioned by name. Then follows an exception, in essence, authorising measures designed to achieve the adequate protection and advancement of persons disadvantaged by unfair discrimination in order to enable their full and equal enjoyment of all rights and freedoms.

I must emphasise that ss 8(3)(a) of the Interim Constitution does not appear itself to create a right to advancement of the disadvantaged. It creates a right to be a beneficiary of measures (presumably established legislatively and administratively but just conceivably also judicially) designed to achieve the purpose set out in the subsection. I believe that this wording and more importantly this conceptualisation is of the utmost importance.

It is necessary to form some appreciation as to how the Constitutional Court would set about balancing a right not to be discriminated against on the grounds of race with measures designed to restore equality.

It would seem to me that it is highly likely that the Constitutional Court would come to the conclusion that the limitation in s 33(1) which provides that a limitation of the chapter three rights shall be permissible only to the extent that it is reasonable, justifiable in an open and democratic society based on freedom and equality does not apply to s 8 where the limitation of these rights is encompassed within the same section.

The Constitutional Court has recently held in Du Plessis, D and Others v De Klerk GFJ and Another (CCT 8/95) that the Constitution does not have horizontal application. See especially the judgment of Kentridge AJ at page 43 and the order of the court at page 55. The relevant portion of the order reads:

“The two questions referred by the judge a quo, and reformulated by this Court as set out in paragraph 10 above are answered as follows­

. . .

(b) No: The provisions of Chapter 3 of the Constitution are not in general capable of application to any relationship other than that between persons and legislative or executive organs of state at all levels of government . . .”

This does not in my opinion seriously affect the use of the Constitution by this court as a source of common values.

It does mean that an employer would not be bound by the Interim Constitution in its dealings with employees. Unless prevented by some other binding measure an employer could voluntarily give effect to the considerations set out in s 8.

Values: The Constitution (as adopted on 8 May 1996)

The Constitutional Assembly adopted a new Constitution for the Republic of South Africa on 8 May 1996. This Act is not yet law and must still await certification by the Constitutional Court in terms of s 71(2) of the Constitution of the Republic of South Africa Act 209 of 1993. As a source of contemporary values it is of lesser importance that the new Constitution is not law.

Section 7(1) introduces Chapter 2, the Bill of Rights, in the following way:

“This Bill of Rights is a cornerstone of democracy in South Africa. It enshrines the rights of all people in our country and affirms the democratic values of human dignity, equality and freedom.

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Section 9 of the new Constitution deals with Equality. It provides:

“(1) Everyone is equal before the law and has the right to equal protection and benefit of the law.

1. Equality includes the full and equal enjoyment of all rights and freedoms. To promote the achievement of equality, legislative and other measures designed to protect or advance persons, or categories of persons, disadvantaged by unfair discrimination may be taken.
2. The state may not unfairly discriminate directly or indirectly against anyone on one or more grounds, including race, gender, sex, pregnancy, marital status, ethnic or social origin, colour, sexual orientation, age, disability, religion, conscience, belief, culture, language and birth.
3. No person may unfairly discriminate directly or indirectly against anyone on one or more grounds in terms of subsection (3). National legislation must be enacted to prevent or prohibit unfair discrimination.
4. Discrimination on one or more of the grounds listed in subsection (3) is unfair unless it is established that the discrimination is fair.”

The style is different to that of the Interim Constitution but the thrust of the new Constitution is essentially the same.

Values: ILO Recommendations and Conventions

A further source of values and guidance in dealing with competing values is to be found, although not very clearly, in Convention no 111 The Convention Concerning Discrimination in respect of Employment and Occupation of 1958 read together with the Recommendation of the same number. Article 1 of the Convention defines the term “discrimination”. It provides:

“1. For the purposes of this convention, ‘discrimination’ includes­

• 1. any distinction, exclusion or preference made on the basis of race, colour, sex, religion, political opinion, national extraction or social origin, which has the effect of nullifying or impairing equality of opportunity or treatment in employment or occupation;
  2. such other distinction, exclusion or preference which has the effect of nullifying or impairing equality of opportunity or treatment in employment or occupation as may be determined by the Member concerned after consultation with representative employers’ and workers’ organisations, where such exist, and with other appropriate bodies.

1. Any distinction, exclusion or preference in respect of a particular job based on the inherent requirements thereof shall not be deemed to be discrimination.
2. For the purpose of this Convention the terms ’employment’ and ‘occupation’ include access to vocational training, access to employment and to particular occupations, and terms and conditions of employment.”

Article 5(2) of the Convention provides that:

“Any member may, after consultation with representative employers’ and workers’ organisations, where such exist, determine that other special measures designed to meet the particular requirements of persons who, for reasons such as sex, age disablement, family responsibilities or social or cultural status, are generally recognised to require special protection or assistance, shall not be deemed to be discrimination.”

Values: The Labour Relations Act of 1995

In 1995 Parliament, after receiving the advice of the social partners assembled at the National Economic Development Labour council (NEDLAC), passed the

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Labour Relations Act 66 of 1995. Certain parts of this Act have been implemented in preparation for the introduction of a new labour relations dispensation. The remainder of the Act is expected to come into operation in the second half of this year.

The new Labour Relations Act does not confer jurisdiction on this Court. Rather it provides for the repeal of the Industrial Court but stays this provision until this court has completed its workload. The New Labour Relations Act is not applicable to the present problem because this problem arose and was referred to this Court in terms of the

Labour Relations Act 28 of 1956 Act.

The new Labour Relations Act provides in the 7th Schedule for a residual unfair labour practice. This concept which is based on the existing concept of an unfair labour practice is designed inter alia to combat discrimination in the workplace. It however also allows an exception to be made in certain circumstances.

The new Labour Relations Act although not binding on this court nevertheless represents the official views of the representatives of the South African people assembled in Parliament. It is therefore a document enacting not only law but contemporaneously also the values which should govern the workplace. These values, as I have indicated above, are of prime importance because they are the values accepted by labour, employers and the State through the medium of NEDLAC. For this reason it is important to examine the treatment of racial equality in the new Labour Relations Act.

The residual unfair labour practice is defined in item 2(1) of Schedule 7 as follows:

“(1) For purposes of this item, an unfair labour practice means any unfair act or omission that arises between an employer and an employee, involving:

• 1. the unfair discrimination, whether directly or indirectly, against an employee on any arbitrary ground, including, but not limited to race, gender, sex, ethnic or social origin, colour, sexual orientation, age, disability, religion, conscience, belief, political opinion, culture, language, marital status or family responsibility . . .

1. For the purposes of sub­item (1)(a)­
   1. ’employee’ includes an applicant for employment;
   2. an employer is not prevented from adopting or implementing employment policies and practices that are designed to achieve the adequate protection and advancement of persons or groups of persons disadvantaged by unfair discrimination, in order to enable their full and equal enjoyment of all rights and freedoms . . .”

Professor John Grogan Workplace Law (1996), the first published work on the new Act, says the following about unfair discrimination and conduct at 136:

“Whether an act is discriminatory is a relative question: it does not necessarily involve actual prejudice to the individual concerned. It is measured, rather, against the treatment accorded others. Unfair discrimination may therefore be said to exist where others are accorded benefits which the victim is denied, even though it entails no actual prejudice to the victim. Thus employees denied promotion lose nothing in an objective sense; they are merely denied benefits accorded to those who are promoted. The relative disadvantage becomes unfair only where there is no objective justification for so distinguishing the allocation of benefits where the distinction is arbitrary, meaning that it is based on some irrelevant criterion. In the employment context, what

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grounds are irrelevant must inevitably be determined by whether it is rational when measured against the requirements of the job concerned. In this regard, however, the legislature has defined the kind of criteria that must be regarded as arbitrary ie race, gender, sex, ethnic or social origin, colour, sexual orientation, age, disability, religion, conscience, belief, political opinion, culture, language, marital status and ‘family responsibility’ or any other ‘arbitrary’ ground.

Discrimination on these grounds will, however, be justifiable where it is ‘based on the inherent requirements of the particular job’ (s 2(c) of Schedule 7), and the residual unfair labour practice may not be interpreted so as to prevent employment policies and practices designed to achieve ‘adequate protection and advancement of persons disadvantaged by unfair discrimination’ (ie affirmative action policies).”

Negative racial discrimination an unfair labour practice

I now return to the statutory concept of an unfair labour practice in the LRA.

Undoubtedly as this court has held in the past discrimination which is unrelated to the requirements for the job, whether direct or indirect, will be regarded as unfair unless perchance that conduct can be justified. See the cases cited in the Rademan case at 1073­1074. This approach is consonant with the fundamental values in our society and in particular that expressed in the Interim Constitution.

Discrimination in this context given, the open­endedness of the definition of the unfair labour practice concept, to use the expression used by Prof E Mureink as regards an earlier definition, includes all arbitrary distinctions. These would include but are not limited to race, sex and gender.

As a starting point it is necessary to make an observation that it will be in line with previous decisions of this court that, as a general rule, an employer commits an unfair labour practice if that employer decides not to promote an employee on the grounds of his or her race, gender or for some other arbitrary reason. This is so because the conduct of the employer has or may have the effect that­

“Any employee or class of employees is or may be unfairly affected or that his or their employment opportunities or work security is or may be prejudiced or jeopardised thereby” (para (i); or

“The labour relationship between employer and employee is or may be jeopardised or detrimentally affected thereby” (para iv).

An employer who stoops to racial discrimination in the course of conducting relations with his or her employers will unfairly affect the employment opportunities, including the aspirations, of the employees so victimised and the relationship between the employer and the employees will be detrimentally affected by the intrusion of racial criteria into the relationship.

Positive racial discrimination as an exception

I stress that the bar on racial discrimination is one of the aspirations in our world of work. Indeed the principle of non­discrimination, inter alia, on the grounds of race is a universal principle even though in pre­Wiehahn era of labour relations in the country it was honoured in its breach and not in its observance save for minor exceptions regarding wage determinations.

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The workplace mirroring the broader community bears the fruits of the legacy of racial discrimination. See the remarks of Mokgoro J in Du Plessis, D and Others v De Klerk GFJ and Another (supra) at page 121:

“The unique and stark reality in South Africa is that decades of injustice associated with apartheid gave rise to gross socio­economic inequalities that persist at every level of our society. The disparities between the beneficiaries of state­ imposed racial discrimination and its victims which will doubtlessly endure for many years to come, makes oppression and discrimination in the ‘private’ sphere both possible and likely.”

If the status quo is maintained then the in­built inequalities will be perpetuated in the workplace. This raises the question whether despite the general bar on racial or other discrimination an employer may act positively and discriminate in favour of employees or potential employees who have suffered discrimination in the past in a bid to rectify an acknowledged imbalance where it will be to the detriment of another existing employee and the action of the employer would normally be regarded as the commission of an unfair labour practice.

This issue is considered by Dr Carol Louw in the context of sex discrimination. Dr Louw Sex Discrimination in Employment, LLD thesis, UNISA 1992 says at 333, where she deals with “affirmative action” in the context of gender equality:

“It is submitted that the Industrial Court should not regard affirmative action by an employer as discrimination (against the male employees). The Court may impose the same standard as that which is generally accepted, namely, that the action should be a temporary measure and that it should not show undue disregard for the rights of unprotected employees.”

These remarks are made with regard to the Industrial Court’s unfair labour practice jurisdiction.

Normally an unfair labour practice takes place within a relationship involving an employer and an employee or more than one employee or a collectivity of employees usually organised as a trade union. This interaction in a microcosm of society such as a workplace or industry, take place with the wider backdrop of civil society. Although rarely mentioned explicitly the values of the broader community are invariably, with adjustments where required, play their part in determining lawfulness, fairness and equity. Public morality has played a role in key decisions. Indeed the Appellate Division has described the adjudication process concerned with the finding of whether an unfair labour practice has been committed to be “the passing of a moral judgment”. See Media Workers Association of SA and Others v The Press Corporation of SA Ltd (1992) 13 ILJ 1391 (A) 1400D.

In this case the major factor which has exercised my mind, as regards the substantive aspects, relates to the apparent conflict between two competing values. These values are the right not to be discriminated against on the grounds of race and the right to be advantaged because of previous disadvantage caused by the institutional system of racial discrimination.

I purposely do not deal with the merits of his appointment. He may have been appointed on what is termed his merits. I do not decide this.

As I see it the conflict in values relates to Liberty Life and George. However it also has another dimension. An employer has not only its own, what I would

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term, internal values such as efficiency, economical realities and employee loyalty into account but, because it is part of the larger society and because of economic reasons (eg customer preferences) concern about being socially responsive and probably simply being a good corporate citizen, may validly look at external values.

One of the values which an employer may, in my opinion fairly, take into account is the need for what is usually called “affirmative action”. The first use of the phrase “affirmative action” is credited to Lyndon B Johnson. See Lourens M du Plessis in N Steytler The Freedom Charter and Beyond ­ Founding Principles for a Democratic South African Legal Order at 107. There it is said:

“Lyndon B Johnson, former president of the United States of America, first referred to this racially based remedial action as affirmative action, maintaining that it is based on the idea of ‘equality as fact and as a result’ (Eastland Bennett 1979, 6).”

Affirmative action means different things to different people but it “stems from the observation that the banning of discrimination is not enough to eliminate it in actual practice”. See ILO Equality in Employment and Occupation 1988

177. The Institute for Democracy in South Africa (IDASA) in Making Affirmative Action Work 1995 at 12 defines, as a working definition, affirmative action as:

“Affirmative action is a process designed to achieve equal employment opportunities. In order to achieve this goal, the barriers in the work­place which restrict employment and progressive opportunities have to be systematically eliminated.”

Disadvantage arising from discrimination is not necessarily to be equated with race. Of course in South Africa disadvantage and race have gone hand in hand for decades. Nevertheless the Constitution, the supreme law of the land, recognises that even within a racial group which has suffered discrimination there may be and indeed are

persons who have had opportunities and who have not been, or not been disadvantaged to the extent of their fellows. Affirmative action in a South African context is not primarily intended for their benefit. Affirmative action as used in the Constitution is not premised on the American concept of affirmative action being “racially based remedial action”.

For purposes of the judgment I intend to use the expression “affirmative action” to encompass voluntary measures adopted by an employer which are designed to achieve equal employment opportunities by the adequate protection and advancement of persons or groups or categories of persons disadvantaged by unfair discrimination.

Affirmative action, viewed positively, is designed to eliminate inequality and address systemic and institutionalised discrimination including racial and gender discrimination. It is a mechanism which is capable of eventually ensuring equal opportunities.

Affirmative action is a socio­political priority and may be said to assume something of the nature of a latter day value. Without denigrating the importance of the concept “affirmative action” I would not be inclined to view it as a universal value. It should be stressed that affirmative action is strictly a procedure, a strategy, a means to an end or, as termed in our Interim Constitution, a “measure” to achieve a goal. So although affirmative action or positive discrimination is and will be viewed to be discriminatory in its effect against the

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advantaged, it is not unfair. Non­discrimination is a value and a Constitutional right. Affirmative action is a means to an end and not an end in itself.

The next inquiry must be whether one can harmonise or, if not, accommodate, the two concepts. This is foreshadowed by Albie Sachs (now Sachs J) Affirmative Action and Black Advancement in Business SA Constitution Centre UWC 1992 who says at 24:

“What we need to do is to develop a principle which contains the possibilities of simultaneously outlawing racial or gender discrimination and looking at the real disadvantages suffered by some persons compared to others because of race or gender.”

I note the remarks of Ackermann J in Vryenhoek v Powell and Others 1996 (1) SA 984 (CC) 1017D where he says:

“I also accept that it is not possible in all circumstances to fully harmonise all the chap 3 rights with one another and that, in a given case, one right will have to be limited in favour of another. As Berlin* points out:

‘. . . since some values may conflict intrinsically, the very notion that a pattern must in principle be discoverable in which they are all rendered harmonious is founded on a false a priori view of what the world is like.

*Berlin ‘Introduction’ in ‘Two Concepts of Liberty’ in Four Essays on Liberty (Oxford University Press) 1969 121 at 1i.”

The goal of harmonising an affirmative action with non­racialism possibly, in the field of employment, can be most closely achieved through the medium of the unfair labour practice jurisdiction of the Industrial Court. It seems that the concept of the unfair labour practice will allow the primary value (non­discrimination on the basis of race) to be integrated with the pragmatic necessity (grounded on economic and social purposes) of temporarily accommodating a limited exception to this value. Some support for holding that affirmative action (in the context of gender) is not incompatible with the principle of equality is to be found in the remarks of Penelope E Andrews “Affirmative Action in South Africa: Some theoretical and practical issues” in S Liebenberg The Constitution of South Africa from a Gender Perspective 1995 55.

In my opinion the concept of the unfair labour practice is one which must keep in touch with contemporary values or priorities in society and should reflect the realities of society. Fairness and equity as well as other considerations, including economic considerations, dictate that affirmative action in South Africa is an imperative which at this stage of our history must be allowed to outweigh the injunction not to discriminate on the basis of race and gender.

The equitable nature of the unfair labour practice jurisdiction and its ability to alter course according to time and circumstances allows for this court to be flexible and adaptable even to the extent of calling a halt to the implementation of the exception. Even Grades of disadvantage can be accommodated.

Affirmative action is not a value as such but a measure,an interim measure. Being a measure and not a universal value it will be temporary in nature. Although this court will not be here to witness the transformation of our society (because of the repeal of its empowering statute subject to an obligation to complete work on hand), if it could be here I venture to suggest that this court would blow the whistle and signal the normalisation of our society. This would mean that from that moment an employer would no longer be permitted, as a

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measure of fairness, to implement affirmative action as in an equal society it would constitute discrimination on the grounds of race and gender.

The beneficiary

If we accept that affirmative action is an exceptional and temporary deviation from adherence to a universal norm then it follows that the parameters of the exception and the duration of the exception need to be considered.

Who are to be the beneficiaries of affirmative action. This question is really intimately connected with the purpose of affirmative action. It is primarily a means of ensuring that the previously disadvantaged are assisted in overcoming their disadvantages so that society can be normalised.

Does this then mean that the focus must be on the disadvantaged? The answer must be in the positive. In the

South African context, disadvantage is coupled with race and gender. This needs no elaboration. However within race and gender there are persons who probably have not been disadvantaged. This problem is articulated by M Banton Discrimination 1994 as follows:

“As a means of combating discrimination, law works through the creation of protected classes; this may result in only rough justice, since not all members of a class are equally placed. One of the main criticisms of affirmative action in the United States has been that it has primarily benefited middle­class women and black people who were well able to look after their own interests and less deserving assistance than those trapped in the under class. The creation of privileged classes benefiting from quota hiring has been intended to secure equal treatment for individuals in the long run, but as it is never possible to define the classes so exactly that only the most deserving benefit, the short­run results may be open to criticism.”

It is considerations like these which have promoted some to debate the question whether affirmative action programmes should not be based on racial criteria, but on other, temporary and non­racial criteria, for example aimed at persons who were educated under the segregated educational system. See FS Barker referring to the remarks of Judge Goldstone at the 1991 Labour Law Conference in The South African Labour Market ­ Critical Issues for Transition 1992 172.

In my opinion this court would accept that an employer who applies affirmative action ie by preferring in the case of a transfer or promotion a candidate who has personally been historically unfairly discriminated against does not commit an unfair labour practice as regards a person who has not suffered such a deprivation.

A time limit to affirmative action

Support for the necessity to allow affirmative action until a state of general equality has been achieved can be found in the views expressed by the Black Management Forum (the BMF) on affirmative action. The views of the BMF are recorded by IDASA at 10. After stating that the goal of affirmative action is the fair representation of all sectors of South African society at all levels and in all fields in proportion to their presence in the population, it is noted:

“However, the BMF believes that affirmative action programmes will no longer be necessary and should be ended once a ‘critical mass’ of the decision­makers in an

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organisation come from previously under­represented categories. Selection processes can then take place ‘naturally’ without policy intervention.”

Liberty Life’s decision

The evaluation of the candidates for promotion or for appointment (from outside the organisation) is one which belongs to the employer alone. This court will intervene if in making an appointment an existing employee is prejudiced by the procedure which is followed or by the substantive decision if that decision is made for reasons which are unfair, as comprehended by the concept of an unfair labour practice.

Substantive fairness

It is imperative, for this court, in adjudicating on this matter to avoid, completely and if that is impossible then as far as possible, making a decision on the merits of an appointment. I endorse the remarks made by Prof PAK le Roux writing in Cheadle, Landman, Le Roux and Thompson Current Labour Law 1991/1992 who in discussing the case of Van Zyl v GEC Alsthom SA (Pty) Ltd (Machines Division) NH 13/2/6015 (which was bound by the LAC decision in Borg Warner; itself subsequently set aside by the Appellate Division) says at 17:

“While it is submitted that the Court should be careful not to intervene too readily in disputes regarding promotion, especially to senior management positions, and should regard this as an area where managerial prerogative should be respected unless bad faith or improper motives such as discrimination are present, this decision seems to be incorrect.”

Liberty Life had a vacancy for an HR Officer in the Group Benefits Human Resources Department. Those charged with filling this process decided that affirmative action should be applied in filling this post. In the course of the evidence we were told that this option was only to be considered when all things were equal. We do not doubt that this was a thought which passed through the minds of Ms Ferrao and Ms Southey. However it is equally true that their intention, from the outset ie prior to the informal communication of the job specification by Ms Southey to Ms Kaplan, was to consider an affirmative action candidate.

This must be seen against the background that Liberty Life was aware of the social need for affirmative action in the workplace and was aware of the possible economic implications of not pursuing such a course of action. Ms Ferrao said as much. George also knew that Liberty Life was pursuing or intended to pursue affirmative action. he says that he discussed this topic with Ms Ferrao during his interview for the HR Officer Post. Liberty Life’s stance and commitment to accelerate affirmative action was also communicated to its staff in the March edition of its internal newspaper Liberty News.

Liberty Life, through Ms Ferrao, narrowed down the choices for the post to George and Mr A.George and Mr A, according to George, each had “a different basket of skills” to offer. I do not wish to pursue this avenue as it invariably leads to a weighing up of the merits of the appointment. That is not the function and business of this court.

However George is white and can be described as privileged. Mr A is coloured and was disadvantaged educationally, (he was schooled under an inferior educational system). The position was offered to Mr A and not to George.

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Ms Ferrao has given her reasons for making the choice. For reasons which I have expressed above I do not consider it desirable for me to review or investigate those reasons. The decision was hers and it is not subject to review save where it results in an unfair labour practice.

If however the decision disadvantaged or discriminated against George on the grounds of his race it could have been fair. Assuming even that all things were not equal, it cannot be said that in making its decision, with the consequence that George was passed over, that Liberty Life acted unfairly. Mr A was historically disadvantaged educationally and his appointment by Liberty Life was a decision which cannot be said to be unfair in the contemporary circumstances of the South African work­place. Even if my analysis and understanding of the concept of fairness in the present setting may be found wanting then I am in no doubt that affirmative action of the sort applied by Liberty Life in the case of Mr A could be justified even though George may suffer discrimination by virtue of the affirmative appointment of Mr A.

Procedural fairness

I have already remarked that managerial prerogative may be limited by such measures as contract, practice or policy. These may be self­limiting or imposed as a result of collective bargaining. An employer is bound, in the absence of special circumstances, to follow its procedure or policy even if the procedure or policy has no higher status than a practice. I have no doubt that an employer such as Liberty Life is aware of the need to follow procedures and the reasons underlying this requirement.

Liberty Life has a formalised procedure dealing with staffing and promotions. This procedure is detailed in the Staff Handbook 1993 and in the Manager’s Handbook 1993. I quote from the Manager’s handbook:

“Job posting

Eligible staff may apply for vacancies in the company for which they are qualified and which will encourage their development in Liberty Life.

An important concern of any staff member applying for one of these positions may be whether or not there will be any repercussions from their current management. Staff are assured that if they do apply for these jobs, there will be no recriminations and this has been agreed to at the senior levels of our company.

Eligibility

In order to be considered eligible the applicant must:

1. have at least a year’s service with the company;
2. have received a satisfactory performance rating by the manager of the department from which he wishes to transfer;
3. not have any pending disciplinary action against him;
4. be at the same or at no more than one level lower than the job grade of the advertised vacancy;
5. meet the minimum job requirements for the vacancy.

If all these requirements are met the application will be considered.

Details of the Job Posting System

1. For the first 3 weeks jobs will be listed as ‘for divisional placement only’ ie only applicants from the division with the vacancy will be considered (if the division so chooses).

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1. If no suitable candidate applies for the position, the vacancy will be advertised as ‘for internal company placement only’ ie applicants from all other divisions and participating associate companies will be considered for a further period of at least 3 weeks.
2. If no suitable candidate from the rest of the company applies, recruitment from outside the company may be an option. Approval of the relevant Divisional Head is needed before proceeding with external recruiting.
3. No eligible staff member will in any way, be prevented by anybody from utilising the job posting system.
4. Any exceptions to the above­mentioned policy and procedure will need the authorisation of the relevant Divisional Head who will inform Human Resources about the exception in writing.

All queries about the system should be directed to the Divisional Manager: HR Development and Recruitment or in the case of IBD specific application procedures to the Deputy General Manager: IBD Training and Development.”

Paragraph (v) which I have emphasised does not appear in the Staff Handbook. It does appear in the manager’s Handbook. George was not aware of its existence at the time.

According to the policy the norm for internal advertising was three weeks. Only then could Liberty Life recruit externally. Ms Southey and Ms Ferrao state that Mr Lipshitz had given permission for this period to be reduced to two weeks. As this is an exception to the policy and as George was unaware that the three week period could be reduced I believe that it is incumbent on Liberty Life to show that there was an authorised deviation and that it was fair.

I have already alluded to the problem of the missing documents. I do not accept the evidence of Ms Southey and Ms Ferrao in this regard. There should be two sources of written evidence. The authorisation signed by Mr Lipshitz and the communication of this to Human Resources in writing. Neither documents were available.

Suitability

It is common cause that George met all the requirements for eligibility and was therefore entitled to be considered by Liberty Life as a candidate for the HR Officer post. His application was considered after a fashion. I will revert to this after dealing with the outlines of Liberty Life’s job posting scheme.

Ms Southey placed the job advert for an HR Officer on a notice board marked “Corporate Only”. It seems as if placement in the division was skipped. This was permissible in terms of the policy. George applied. After two (and not the usual three weeks) the advert appeared again as corporate when it should have indicated that it was being advertised outside the company. Of course I must immediately add that this is not the true sequence of events for I have found that Kaplan was aware that Liberty Life was proceeding to stage 3 before stage 2 had been completed.

What we have here is a deliberate flouting of the Liberty Life Policy. Ms Southey and Ms Ferrao point to paragraph (v) of the Managers Handbook which allows exceptions to the policy and procedure with the authorisation of the relevant Divisional Head; in this case Mr Lipshitz. There may have been an authorised deviation from the policy. When this authorisation was given is not

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clear. What is clear is that the staff, below the rank of manager, including George were not aware and had not been informed that the job posting scheme could be modified and departed from by a decision of the head of a department. The staff should have been told of this possibility. Undoubtedly they would have been interested to learn that the policy could be suspended unilaterally. George was not even told that there was authorisation for a departure from the policy.

Part of George’s complaint relates to the failure to follow the policy. At the hearing his attorney amended his statement of case so that 12 now alleges that Liberty Life has committed an unfair labour practice which is substantively and procedurally unfair for one or more of the following reasons:

“12.1 Refusal to appoint the applicant in the position applied for was due to his race only.

12.2 The applicant was contractually or as provided for in the Staff Handbook entitled to be given preference in the selection process.” (Amendment emphasised.)

This contention is founded on the following interpretation of the job posting policy.

It is said that Liberty Life must first consider only applicants from the division with the vacancy; ie the fishing is restricted to the divisional pool. Then if no suitable candidate applies for the position, the bait is dangled in the corporate pool; all eligible applicants from all other divisions and participating associate companies may apply and be considered.

George’s case is this, as he himself puts it:

“The rules of the company state that a corporate only position will be filled inside the company. Only when this fails can the position be filled externally.”

As I understand George’s contention Liberty Life had no right to dangle the bait in the external pool. They could only do so, in the words of the policy, “if no suitable candidate applies for the position”. George says he applied and he was told he was suitable. Ms Southey who conducted the initial interview says she told him he was “good”. He says she said he was “excellent”. He was at least, in the eyes of Ms Southey a good candidate.

George objects to Liberty Life having fished in the external pool. This being so he should have got preference and the post of HR Officer should have been offered, if not awarded to him. It is inherent in his case that Liberty Life should have been oblivious to the existence of external talent because he had been found suitable.

George had a legitimate expectation that because he was regarded as eligible for the post (potentially suitable), Liberty Life was obliged to consider him. This was done. Had Liberty Life considered him to be suitable he should have been given the position.

I turn to the question of George’s suitability. The foundations of Liberty Life’s job posting and placement policy were, at the relevant time, the following:

1. The principle of equal opportunities. By this was meant that no discrimination would be made on the basis of race and gender. Merit would be the only criterion. See the March edition of Liberty News.

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1. The principle of encouraging staff loyalty and advancement by the policy of giving them progressive preferential consideration (but not necessarily appointment) for vacancies.
2. The principle of encouraging staff to assist in recruiting “the right kind of people” by “introducing friends and relatives they think may be suitable”. See the Staff Handbook (1993). (See p 58 of bundle 1.)
3. A concern for “affirmative action” and its effects on the equal opportunities principle.

On a proper interpretation of the policy George was entitled to be given preferential consideration to an external candidate. So preferential was this process to be that Liberty Life was not at liberty to consider an external candidate unless “no suitable candidate from the rest of the company applies”.

A distinction must clearly be drawn between eligibility and suitability. An eligible candidate must meet certain formal requirements. There may even be a number of eligible candidates. A suitable candidate would generally be someone who is acceptable to the employer as the person who should get the job. There could, in my view, within the context of this policy, only be one suitable candidate.

Because the decision who is suitable is a decision of Liberty Life it means that the company must have identified the candidate as suitable. Once this identification takes place the appointment is a formality. That a candidate

regards her or himself as “suitable” is not decisive. It is Liberty Life’s decision.

The question who, on behalf of the company, identifies a suitable candidate must be answered. If Liberty Life identified George as a suitable candidate then it is clear, that in terms of that policy, they could look no further unless they were lawfully and fairly entitled to side­step the policy.

It seems to me to be clear that the officer who was to decide the question of suitability was the person whose decision would be decisive. Even this decision may have had to be confirmed at some higher level. Applying this test it seems clear to me that Ms Southey, a trainee and understudy to Ms Ferrao, was not empowered to decide on the suitability of the candidate drawn from the corporate pool. At best she would advise her superior. According to George’s statement of grievance, when he was interviewed by Ms Southey (6 June 1994):

“She strongly suggested that I might well be a suitable candidate for the position since I am suitably qualified and meet the requirements for the position.”

I pause here to note that Ms Southey, according to George’s record, is using the word “suitable” in a very loose manner to mean eligibility.

There is no indication that Ms Ferrao took a decision on George’s suitability although she was probably aware of Ms Southey’s opinion of George by virtue of the close working relationship between the two of them.

If there had not been a premature decision to recruit externally then in the absence of an indication by Ms Ferrao that George was suitable for the post I would be obliged to find that Liberty Life did not think that George was suitable but that he was not being discarded. If Liberty was obliged to wait three weeks (and if I assume that this had been the case) this period expired on 24 June. On this date George was interviewed by Ms Ferrao. She did not say to him that he

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was suitable. She merely told him that she would communicate with him the following week.

George is nevertheless right in complaining that it was unfair for Liberty Life not to comply with its policy requirements regarding job posting. I have dealt with the facts above. I have found that Liberty Life commenced fishing in the external pool at nearly the same time as it began looking for a suitable person in its divisional pool. This it was not entitled to do. This was unfair.

What is the effect of this breach of policy? This court has been particularly constrained to emphasise the value of process. The unpredictability of the course and outcome of a process, especially where it should have involved consultation which is a chance afforded an employee, employees or their union to influence a managerial decision has been stressed on numerous occasions. See United Peoples Union of SA and Another v East Rand Proprietary Mines Ltd (unreported IC NH 11/2/18608) where Shear AM says at 5­6:

“There always remained the possibility that another solution could have been found. Again, at the risk of repeating myself, to hold otherwise is to negate the process of consultation. This was an open­ended situation where the parties were still engaged in a process of negotiation.”

A defect in procedure ie the failure to follow a fair, agreed or standing practice can lead to the substantive decision being unfair. It is all very well to examine the position with hindsight and indeed the courts have at times said that a procedural irregularity would have made no difference. The “no difference approach” has its place but if used outside of its limited ambit it can devalue the rationale and opportunities which process creates.

What about this case? The policy was not followed in so far as Liberty Life took a decision to look outside the corporation for a suitable recruit prior to their having properly considered whether an internal candidate, George in particular, was suitable for the post.

If Mr A had not been introduced to Liberty Life by Ms Kaplan, George would have been properly considered without being compared to Mr A. He may or he may not have been considered suitable for the job. He was entitled to be considered in this way but he was denied this opportunity. It follows that in my opinion that Liberty Life failed to conform to its published policy as set out in the Staff Handbook 1993.

This constituted an unfair labour practice. Had the procedure been properly followed that is to say that there had been sequential publication of the vacancy (assuming George not to have been found suitable at the internal publication stage) and resulted in a decision against George, because a decision to employ a formerly disadvantaged person was taken then, Liberty Life could not have been said to have committed an unfair labour practice vis­à­vis George. As I have no way of knowing whether Liberty Life would have been faced with a choice between George and Mr A, I am bound to find Liberty Life’s conduct, as a whole, to be an unfair labour practice and declare it to be so.

This court was not asked to make a determination that generally the application of affirmative action by an employer, such as Liberty Life, as a measure designed to redress discrimination suffered by a historically disadvantaged person even though a privileged or advantaged person may suffer discrimination by virtue of

Page 1014 of [1996] 8 BLLR 985 (IC)

the decision of the employer does not constitute an unfair labour practice. Liberty Life’s case was simply that Mr A had been appointed on merit. I have indicated why I am not prepared to investigate the merits of the appointment. It however follows that no formal determination need be made, in this case, on the application of affirmative action.

Costs

Liberty Life did not ask for costs. George sought costs in the event that he be successful. He has been successful.

He has had grounds for complaint. Had Liberty Life followed its procedure and policy this litigation might not have ensued.

I am mindful of the fact that there is an ongoing employment relationship and that George has in the meantime been promoted within the company. Nevertheless George is an individual. I would allow him his costs on the Supreme Court scale.

Determination

1. It is declared that the failure by Liberty Life to follow the job posting procedure laid down in its Staff Handbook (1993) as regards the filling of the post of the HR Officer Group Benefits constitutes an unfair labour practice.
2. The costs of the application, subject to the cost order made on 8 March 1996, are to be paid by Liberty Life on the Supreme Court scale.
3. The taxing master is directed to ensure that professional fees are not charged for work done by persons who are not admitted attorneys.

(Roth SM concurred in the judgment of Landman P.)

For applicant:

Mr AG Heyns, instructed by Snyman, Van den Heever & Heyns

For respondent:

Adv G Pretorius, instructed by Hofmeyer Inc