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THE LABOUR APPEAL COURT OF SOUTH AFRICA, JOHANNESBURG

 

Not Reportable

Case no: JA20/2023

 

In the matter between:

 

ASSOCIATION OF MINEWORKERS AND

CONSTRUCTION UNION (AMCU)                                    Appellant

 

and

 

CHAMBER OF MINES OF SOUTH AFRICA                     First Respondent

 

NATIONAL UNION OF MINEWORKERS (NUM)               Second Respondent

 

UNITED ASSOCIATION OF SOUTH AFRICA (UASA).     Third Respondent

 

SOLIDARITY                                                                      Fourth Respondent

 

Heard:          20 February 2024

Delivered:    14 May 2024

Coram:         Savage ADJP, Musi JA and Jolwana AJA

 

Judgment

 

SAVAGE, ADJP

 

Introduction

 

[1]  This appeal, with the leave of the Labour Court, is against the judgment and orders of that Court (per Prinsloo J) in which the appellant’s application to amend its statement of claim in a discrimination dispute filed under section 6(1) of the Employment Equity Act[1] (EEA) was refused with costs. A cross-appeal filed by the first respondent, formerly the Chamber of Mines and now known as the Minerals Council of South Africa (MCSA), is against the Court’s failure to determine its counter-application to exclude certain of the evidence put up by the appellant, the Association of Mineworkers and Construction Union (AMCU).

 

[2]  On 19 July 2021, AMCU gave notice of its intention to amend the statement of claim that it had filed on 1 February 2017 against the MCSA and the two gold mining companies it represents, AngloGold Ashanti Limited and Harmony Gold Mining Company Limited. After the MCSA indicated that it opposed the amendment sought, AMCU applied to the Labour Court for leave to amend its statement of claim. The MCSA filed a counter-application in which it objected to the evidence put up by AMCU, which related to the subject matter of its amendment application.

 

Background

 

[3]  Following the conclusion of a 2015 - 2018 collective agreement (the collective agreement) between majority unions and employers in the gold mining sector and the subsequent extension of such agreement to non-parties, AMCU referred a discrimination dispute to the Commission for Conciliation, Mediation and Arbitration (CCMA). In doing so, it summarised the dispute as follows:

‘The extension of the collective agreement concluded on 2 October 2015 in the gold sector to employees who are not members of the registered trade union or trade unions party to the agreement in terms of section 23(1)(d) of the LRA, perpetuates growing income inequalities in breach of section 27 of the Employment Equity Act and the BCEA, which amounts to unfair discrimination. The unfair discrimination is provided for in the collective agreement. The collective agreement in its current formulation, fails to take into account and address the severe income disparity between different categories of employees in contravention of section 27 of the Employment Equity Act, and continues to perpetuate income inequality between different categories of employees over the three-year period.’

 

[4]  The dispute was not resolved at conciliation and in August 2016, AMCU referred the matter as a discrimination claim under section 6(1) of the EEA to the Labour Court for determination. The United Association of South Africa (UASA), which subsequently has elected to fall out of the dispute, raised an exception to the claim inter alia on the basis that the employees in categories 4 - 8 were not all pleaded to be black; and that a claim for discrimination on the basis of status alone was not cognisable under the EEA. The Labour Court (per Mooki AJ) upheld the exception and gave AMCU 30 days to amend its statement of claim.

 

[5]  AMCU delivered an amended statement of claim during February 2017, in response to which UASA filed a further objection. In addition, the MCSA raised a special plea and an objection to the amended claim. UASA’s objection was that AMCU had failed to demonstrate a cause of action in that its claim was concerned with large-scale income differentials and that section 27 of the EEA, as opposed to section 6(1), provided a specific remedy to address such a claim. Further, that AMCU had failed to demonstrate that race was a factor in the appointment into positions in lower or higher categories when it had selected "artisans, miners and officers as its comparator” but failed to “allege that either the majority of or all persons employed as artisans, miners, or officers are white”. Finally, UASA took issue with AMCU’s reliance on the difference in the standard rate of pay on the basis that “as the arbitrary ground”, its reasoning was circular and that the difference in the standard rate of pay cannot simultaneously be the result of and reason for discrimination, with “AMCU not plead[ing] that the difference is irrational and that this irrationality amounts to discrimination”.

 

[6]  The MCSA objected to AMCU’s proposed amended claim inter alia on the basis that there was a pending review application on the same cause of action between the same parties before the Labour Court; and that the proposed amendment was bad in law in that a cause of action premised on section 6(1) of the EEA is confined to unfair discrimination between employees on the same or comparable occupational levels, with income differentials between employees in different occupation levels to be addressed by the remedies in section 27.

 

[7]  The Labour Court dismissed both objections raised, finding that section 6(1), read with section 10(2) of the EEA, enables a party to refer a dispute relating to alleged unfair discrimination within a specified time period and that section 27 does not concern the grounds of discrimination as contained in section 6(1). AMCU was found to have presented sufficient averments in respect of the allegations of unfair discrimination based on race and pleaded as the selected comparator in respect of such claim, those employees employed at the level of artisans, miners and officers.

 

[8]  The Court rejected the special plea of lis pendens in respect of the review application pursued by AMCU which sought the setting aside inter alia of the extension of the same collective agreement to non-members of a registered trade union on the basis that the relief sought in the two matters was not the same.

 

Further application to amend

 

[9]  Shortly before the trial was due to commence on 7 June 2021, AMCU filed an application to further amend its statement of claim so as to insert a broad additional comparator group, described as “the CEO”, “employees in higher categories”, “senior executives”, “directors and senior executives” and the “highest paid worker”. AMCU contends that the insertion of this additional comparator group is merely clarificatory in what is a novel test case. The amendments sought by AMCU, highlighted below, read in context, are as follows:

 

[10]  In paragraph 14:

‘On or about 12 May 2015 the union addressed correspondence to Harmony, Ashanti and Sibanye concerning wages and other conditions of employment for the 2015 review period in which the union raised a concern with the ever-widening income disparity gap between ordinary workers and members of management (the first comparator) and in particular the wage gap between category 4-8 employees and other employees in the workplace.'

 

[11]  In paragraph 18:

'A more pressing concern raised by the union during the course of the gold sector negotiations was that in light of the way in which the agreement is framed, the income disparity between category 4 – 8 employees, on the one hand, and officials, miners and artisans (the second comparator) will grow at a rate over the three-year period of the 2015-2018 collective agreement.’

 

[12]  Paragraph 30:

‘There are historical wage disparities and gaps between category 4 - 8 employees in the workplace and other classes of employees i.e. the first and second comparators. These disparities are discriminatory on the ground of race, and alternatively are arbitrary.’

 

[13]  Paragraph 32:

‘The unfair discrimination is provided for in the collective agreement itself and is reflected in the difference in the increase calculations to the standard rates of pay between category 4 - 8 employees and miners, artisans and other officials the second comparator over the three-year period of the collective agreement.’

 

[14]  By the following insertion in paragraph 34.1:

‘Declaring that there are at the first respondent (and its members that they represent) historical age disparities and gaps between category 4 – 8 employees in the workplace and others i.e. the first and second comparators. These disparities are discriminatory on the ground of race and alternatively are arbitrary.’

 

[15]  In seeking to make such amendments, AMCU relied on a reference in its statement of claim, in its unamended form, to “members of management” in paragraph 14 and the reference in paragraph 15.2 to “the wage gap between the lowest paid employee and the CEO's salary”. It contends that in paragraph 14, reference is made to its correspondence of 12 May 2015 in which it raised “its concern with the ever-widening income disparity gap between ordinary workers and members of management and in particular the wage gap between category 4-8 employees and other employees in the workplace”.

 

[16]  The MCSA took issue with AMCU’s further amendment application on the basis that it sought to introduce, at a late stage in proceedings, a new cause of action through the introduction of an additional management comparator in an already complex and costly wage discrimination dispute, in which expert reports had already been delivered and the matter had been determined to be trial ready. The MCSA disputed that the amendments sought were merely clarificatory, that the claim constitutes a novel test case or that it has sought to confine AMCU to an unduly narrow case to insulate it from the discrimination claim filed. In particular, the MCSA took issue with the interpretation sought to be given to paragraph 14 which referred to management as a class of employees against whom a comparison could be drawn when the use of the words “in particular” identified the specific concern for purposes of the discrimination claim, distinguishing the comparator from “members of management”. The MCSA contended that paragraph 14 supports a narrower pleaded case than the wider one contended for by AMCU.

 

[17]  In relation to paragraph 15.2, the MCSA contends that the reference in this paragraph to “the wage gap between the lowest paid employee and the CEO's salary" was made in the context of correspondence exchanged preceding or during the wage negotiations and did not permit a reading which would allow AMCU to insert a new comparator into the dispute at such a late stage. In addition, the MCSA argues that the demand in paragraph 15.2 for “an overall review of the job grading system to address the closing of the wage gap between the lowest paid employee and the CEO's salary, as per the Employment Equity requirement” is a demand for a jobs review and is unrelated to the relief claimed in AMCU’s discrimination claim. Furthermore, the reference to the review of the job grading system to eliminate vertical discrimination “as per the Employment Equity requirement” refers to section 27 of the EEA which requires regular reviewing of “the remuneration and benefits received in each occupational level of that employer's workforce”. This, the MCSA contends, has nothing to do with a discrimination claim under section 6(1) of the EEA.

 

[18]  The MCSA notes that paragraph 18 of the statement of claim contains a clear reference to the dispute before the Labour Court. The paragraph states:

‘A more pressing concern raised by the union during the course of the gold sector negotiations was that in light of the way in which the agreement is framed, the income disparity between Category 4 - 8 employees, on the one hand, and officials, miners, and artisans on the other will grow at a rate over the three-year period of the 2015 - 2018 collective agreement.’

 

[19]  The MCSA states that the reference in paragraph 19 to “(t)his income disparity”, to “these very concerns” in paragraph 20 and the detailed table setting out the differential wage increases between the category 4 - 8 employees and the miners, on the one hand, and artisans and officials on the other, supports its contention that the comparator AMCU has relied upon has been miners, artisans and officials, with no reference to management wage increases included in the table. Paragraph 22 also expressly refers to the miners, artisans and officials’ increases and is pleaded as being “in contradistinction” with what the category 4 - 8 employees will receive.

 

[20]  Paragraph 23 states:

‘The increases to be paid to the different categories of employees being calculated in monetary term [sic] in respect of categories 4 - 8, and in percentage terms or CPI in respect of, miners, artisans and officials will continue to widen income inequality (particularly at Harmony) as miners and artisans all have a basic salary that is much higher than categories 4 - 8, both prior to and during the subsistence of the 2015 - 2018 collective agreement on which their percentage increases will be calculated, factoring inflation into account as well. These increases:

23.1    Prejudices the category 4- 8 employees;

23.2    Perpetuates income disparities and discriminatory wage gaps in the workplace and

23.3    Perpetuates the discrimination against category 4-8 employees on the ground of their race and alternatively are arbitrary.’

 

[21]  Paragraph 24 references AMCU's complaint about the extension of the collective agreement only in respect of category 4 - 8 employees and miners, artisans and officials. Furthermore, paragraphs 25 to 29 concern the referral of the dispute to the CCMA, with the MCSA submitting that the placement of these averments straight after the discrimination case pleaded in relation to miners, artisans and officials as a comparator can only mean that the only dispute that was referred to the CCMA was a dispute about discrimination vis-à-vis miners, artisans and officials.

 

[22]  Paragraph 30 refers to wage disparities between “employees in the workplace and other employees”. The MCSA contends that the only wage disparities that have been properly pleaded in the paragraphs preceding it are those of category 4 - 8 employees on the one hand and miners, artisans and officials on the other hand. On that basis, the “other classes of employees” cannot include members of management.

 

[23]  Paragraph 32 states that:

‘The unfair discrimination is provided for in the collective agreement itself, and is reflected in the difference in the increase calculations to the standard rates of pay between category 4 to 8 employees and miners, artisans and other officials over the three-year period of the collective agreement.’

 

[24]  This paragraph, the MCSA submits, leaves it in no doubt that the unamended claim does not relate to members of management as a comparator for the simple reason that members of management are not covered by the collective agreement.

 

[25]  AMCU argues that its claim is litigated in the context of the continued apartheid wage gap in a country which remains the most unequal in the world and that it approached the matter, including its trial preparation, on the basis that the comparators in its claim include members of management of the relevant mining companies, as well as miners, artisans and officials. It argues that its pleadings refer to members of management, including the CEO, as does the evidence included in its expert reports and trial bundle, and that it gave full and proper particulars of its claim and comparators in such expert reports. It recognises however that “there may be some ambiguity” in its statement of claim in relation to the comparators, but contends that the MCSA “sought to exploit that ambiguity”. AMCU pleaded that, with the increase or adjustment to the salaries of category 4 - 8 employees, an overall review of the job grading system is required to close the wage gap and that the “wage disparities and wage gaps… remain discriminatory as against category 4 - 8 employees on the ground of their race and alternatively on the arbitrary ground”. It is the income disparity which exists that, AMCU submits, perpetuates such discrimination.

 

[26]  In its counter-application, the MCSA objects to AMCU’s inclusion of evidence, delivered in the report of Dr Forslund and the witness statement of its national treasurer, which related to the gap in remuneration between the lowest and highest paid employee and other senior executives. The MCSA contends that it was impermissible to introduce this evidence which relates to a new cause of action which is not reflected in the pleadings and that this evidence diverges from the claim pleaded and the basis on which the MCSA had prepared for trial.

 

[27]  AMCU delivered a second notice of intention to amend its claim which was attached to its heads of argument filed in the Labour Court. This amendment stated that:

‘The unfair discrimination is provided for in the collective agreement itself, and is reflected in the difference In the increase calculations to the standard rates of pay between category 4 to 8 employees and miners, artisans and other officials (the second comparator) over the three-year period of the collective agreement. The unfair discrimination is also reflected in the wage rates and increases of the category 4 to 8 employees, relative to those of the first comparator.’

 

[28]  The MCSA contends that such proposed amendment sought is not simply definitional since it finds no factual basis in the particulars of claim in their unamended form.

 

Pre-trial minute

 

[29]  In a pre-trial minute concluded between the parties in August 2019, it is recorded that on 27 March 2015, the MCSA responded to AMCU’s request for information in respect of salary scales and the number of employees per recognition unit. On 12 May 2015, AMCU wrote to Harmony, AngloGold Ashanti and Sibanye concerning wages and other conditions of employment for the 2015 review. The union’s demands were recorded as that all employees falling within categories 4 – 8 receive an increase/adjustment of R 7000.00 in addition to the current basic salary; that an increase of R 6500 be granted to miners and artisans, and officials at levels C1 to C5; and a review of the job grading system be undertaken to address the closing of the wage gap between the lowest paid employee and the CEO's salary, as per the Employment Equity Requirement. It was recorded that the agreement concluded concerned three recognition units, namely category 4 – 8 employees, miners and artisans, and officials.

 

[30]  The facts in dispute were recorded in the minute as including whether there was differentiation based on race; whether the three recognition units covered by the agreement, namely category 4 – 8 employees, miners and artisans and officials, include black and white employees; whether progression of category 4 – 8 employees occurs all the time; whether there are other positions and jobs performed by such employees; and whether the union had raised its concerns regarding the widening wage gap “between ordinary workers and members of management and in particular the wage gap between category 4 – 8 employees and other employees in the workplace”. Also in dispute was whether the wage disparities and gaps were and remain discriminatory against category 4 – 8 employees on the grounds of race, alternatively, on an arbitrary ground.

 

[31]  It was recorded as disputed by the MCSA that “a more pressing concern raised by the union (during the course of the gold sector negotiations) was that in light of the way in which the agreement is framed, the income disparity between category 4 - 8 employees, on the one hand, and officials, miners, and artisans on the other will grow at a rate over the three-year period of the 2015 - 2018 collective agreement”.

 

[32]  Also recorded as being in dispute was whether the income disparity prejudices category 4 - 8 employees, perpetuates income disparities in the workplace and perpetuates discrimination against such employees on the grounds of their race, alternatively on arbitrary grounds. It was stated that the MCSA contends that “the difference in income between the recognition units is a reflection of various factors, including the work performed by the employees in each job, the value of the job and/or required training or licensing, and is not based on race or an arbitrary ground”.

 

[33]  Disputed was also whether “the increases to be paid to the different categories of employees being calculated in monetary terms in respect of categories 4 - 8, and in percentage terms or CPI in respect of miners, artisans and officials will continue to widen income Inequality (particularly at Harmony) as miners and artisans all have a basic salary that is much higher than categories 4 - 8, both prior to and during the subsistence of the 2015 - 2018 collective agreement on which their percentage increases will be calculated, factoring inflation into account”.

 

[34]  The issues agreed by the parties to be for determination by the Court were recorded in the minute as:

‘4.1   Whether there is unfair discrimination in terms of section 8(1) of the EEA, either directly or indirectly, on a listed ground of race, and alternatively on an arbitrary ground, being the difference in the standard rate and pay attached to the positions and job functions of the employees, which undermines the dignity and integrity of these workers in the workplace.

4.2   Whether the extension of the collective agreement on 2 October 2015 in the gold sector to employees who are not members of the registered trade union or unions party to the agreement in terms of section 23(1)(d) perpetuates growing income inequalities and constitutes discrimination on the ground of race, and alternatively on an arbitrary ground, in breach of section 8(1) of the EEA, and amounts to unfair discrimination.

4.3   Whether the unfair discrimination is provided for in the collective agreement itself and is reflected in the difference in the increase calculations to the standard rates of pay between category 4 to 8 employees and miners, artisans and officials over the three-year period of the collective agreement.

4.4   Whether the collective agreement, in its current formulation, fails to take into account and address the severe income disparity between different categories of employees in contravention of section 6(1) of the EEA, and continues to perpetuate income inequality between different categories of employees over the three-year period.

4.5   Whether the applicant has disclosed a cause of action under section 6(1) of the EEA, either directly or indirectly on the listed ground of race, and alternatively on the arbitrary ground.’

 

[35]  It was recorded that the relief sought by AMCU was a declaratory order regarding the historical wage disparities and gaps between category 4 - 8 employees in the workplace and others on the basis that these disparities are discriminatory on the grounds of race and alternatively, on arbitrary grounds. In addition, AMCU seeks a further declaratory order that the extension of the collective agreement on 2 October 2015 in the gold sector to employees who are not members of the registered trade union or trade unions party to the agreement in terms of section 23(1d) of the LRA, perpetuates growing income inequalities and constitutes unfair discrimination on the ground of race, and alternatively on an arbitrary ground in breach of section 8(11) of the EEA and amounts to unfair discrimination. AMCU therefore seeks an order adjusting the wages and remuneration of category 4 – 8 employees to a minimum wage amount of R12 500 from 1 July 2015, alternatively a monthly increase of R1000 from the same date, with compensation in the sum of R50 000 each for the unfair discrimination suffered by category 4 - 8 employees as solatium.

 

Judgment of Labour Court

 

[36]  The Labour Court upheld the MCSA’s objection to AMCU’s application to amend its claim on the basis that the agreement concluded regulated only the increase of wages in categories 4 - 8 and those of miners, artisans and officials; and that the inclusion of “members of management” as a comparator into the dispute would render the claim unsustainable and irregular in that it would not reflect a coherent or sustainable cause of action pleaded. It rejected AMCU’s contention that the matter was res judicata since Mabaso AJ had dismissed the exception raised by the MCSA in relation to the case pleaded by AMCU relative to miners, artisans and officials.

 

[37]  Several difficulties were found to exist with AMCU’s proposed amendment to include members of management as the first comparator for purposes of its discrimination claim, with miners, artisans and officials being the second comparator. These included that the 2015 - 2018 collective agreement formed a fundamental basis of the pleaded case and it did not concern management remuneration, and that the material facts pleaded as forming the basis of the case did not support such a fundamental amendment to the claim. The Court therefore refused AMCU's application to introduce the new management comparator and concluded that the matter should proceed on the statement of claim as it stood on the eve of trial. In doing so it ordered that costs, including those of two counsel, be borne by AMCU.

 

[38]  At paragraph 93 of its judgment, the Court stated that:

‘If the amendments are permitted, or if it is found that it ought not to be permitted on the basis that the pleadings already encompass members of management as comparators, it would render the counter-application academic. Only if the application for leave to amend is refused, without it being found that the pleadings sans the amendment encompass members of management as comparators, the counter application is to be determined.’

 

[39]  Despite this, the Court found there to be no need to determine the counter-application. This was so despite having found that AMCU could not amend its statement of claim to introduce the new comparator group and when the counter-application concerned an objection to evidence put up.

 

On appeal

 

[40]  AMCU contends on appeal that its claim has always been based on two comparators pleaded by it, namely the comparison between the salaries of category 4 - 8 employees as the lowest paid employees with those of the highest paid employees, being management, including the CEO; and the comparison between the salaries of the lowest paid employees with those of miners, artisans and officials. The amendments sought, it submits, are therefore clarificatory in nature and are bona fide, going no further than eliminating any scope for ambiguity and introducing precision, without altering the scope of the case. If the amendments are refused, it argues that this will cause severe prejudice to AMCU and its members in that the dispute will not be fully or properly ventilated as there will not be a determination of whether, on the evidence, category 4 – 8 employees were discriminated against on the grounds of race, when compared to other employees. It would be unduly narrow if the case were to be limited to a comparison with the salaries only of miners, artisans and officials and did not address the long shadow of the apartheid wage gap and the Court would be unduly hamstrung in its determination of the matter.

 

[41]  AMCU submits that the MCSA’s objections were dismissed by Mabaso AJ, that the issue is, therefore, res judicata and that in the pre-trial minute, the demand for a review of the job grading system was articulated to close the wage gap. AMCU contends that the Labour Court did not adopt a permissive approach to the amendment application and that its refusal to allow such amendment has undermined AMCU’s right of access to court to ventilate the dispute when its pleaded case is sufficiently broad to include the management comparator and even if it not, it was entitled to amend its pleadings to broaden its case on the basis of the material facts pleaded. In addition, it submits that the Court failed to find that sections 6 and 27 of the EEA are directed at different wrongs and contemplate different remedies, with section 6 confined to claims of horizontal equality whereas section 27 concerned with vertical equality. Further, the Court erred in finding that the amendments proposed did not sustain a cause of action in that AMCU had failed to plead that the job functions are allocated according to race and that salary differences exist which are based on race and not the value or nature of the work performed. Finally, AMCU contends that the costs order made against it was imposed without regard to the decision of Union for Police Security and Corrections Organisation v South African Custodial Management (Pty) Ltd and Others.[2]

 

[42]  The MCSA opposes the appeal on the basis that the proposed amendments are bad in law since a cause of action brought under section 6(1) is confined to unfair discrimination between employees on the same or comparable occupational levels, while a claim of vertical income disparities is not justiciable under section 6(1), but falls to be addressed exclusively by the remedies in section 27. The MCSA submits that if the amendment were to be granted it would make AMCU’s claim excipiable. Furthermore, if permitted, the statement of claim will lack the averments necessary to sustain a cause of action. The collective agreement, which is fundamental to and underlies AMCU’s claim was the sole basis for the referral to the CCMA. It does not regulate wages of employees in categories other than 4 - 8, miners, artisans and officials. In addition, the allegations relating to the management comparator do not sustain a cause of action and are vague and embarrassing. This, when to sustain a claim of discrimination on the grounds of race, alternatively on an arbitrary ground, comparators must be identified with precision. In spite of this, the amendment that sought to introduce a management comparator is far from clear, with it not indicating which members of management reference is made.

 

[43]  The MCSA contends further that there is no causal link pleaded between the wage differentiation and a listed ground of unfair discrimination or a specific, identifiable arbitrary ground of discrimination. This when AMCU has since 2016 pleaded that its claim related to category 4 – 8 employees having been unfairly discriminated against vis-à-vis the two recognition units immediately above, namely miners, artisans and officials. It was on this basis that the MCSA prepared intensively for the trial that was postponed in June 2021, as is apparent from the expert report and remuneration data it advanced. A week before trial, AMCU for the first time, in its expert report and affidavit filed, sought to change the focus of its claim. If the proposed amendment was permitted, it would cause severe prejudice in the further delay of a trial which will proceed on an entirely new basis. The Labour Court erred in failing to determine the MCSA’s objection to the inclusion of this evidence, which was unrelated to the pleaded case. Consequently, the MCSA seeks that the cross-appeal be upheld.

 

Evaluation

 

[44]  The immediate purpose of a statement of claim is to provide an opponent with sufficient detail of the material facts and legal issues arising from such facts on which the applicant will rely to enable the other party to respond to the claim. As was made clear in Candy and others v Coca Cola Fortune (Pty) Ltd[3]:

‘In its simplest terms, the statement of case must at least inform the respondent party what the pertinent facts are on which the applicant will rely in the case, and further, what the cause of action is that the applicant will pursue as founded on these facts. That must be done in sufficient particularity so as to enable the respondent to provide a proper answer to these facts and the related cause of action. The statement of claim and the answering statement thereto are not just for the benefit of the parties. They also serve the court, in that the issues in dispute are properly determined and other possible alternative causes of action are eliminated from having to be considered by the court. A proper statement of claim and answering statement are imperative to the fundamental requirement of expeditious resolution of employment disputes in terms of the LRA.’

 

[45]  A party may apply for an amendment of its pleadings at any time prior to judgment being handed down in a matter. In determining an application for amendment, the court must have regard to whether the amendment seeks to introduce a new cause of action or rather to introduce new or alternative facts in support of the original cause of action.[4] The court may, in the exercise of its judicial discretion, grant or refuse such an application having regard to whether the amendment sought raises a triable issue, which would if granted allow the proper ventilation of the real dispute between the parties, with due regard to issues of prejudice.[5] A delay in seeking an amendment is not in itself, in the absence of prejudice to the other party, a basis on which to refuse the amendment. An appeal court will not lightly interfere with the exercise of such discretion unless it is satisfied that the lower court misdirected itself or failed in its exercise of the judicial discretion. 

 

[46]  Section 6(1) of the EEA, as amended,[6] provides that:

‘No person may unfairly discriminate, directly or indirectly, against an employee, in any employment, policy, or practice, on one or more grounds, including race, gender, sex, pregnancy, marital status, family, responsibility, ethnic social, origin, colour, sexual orientation, age, disability, religion, HIV status, conscience, belief, political opinion, culture, language, birth, or on any other arbitrary ground.’

 

[47]  Section 6(4) of the EEA states that:

‘A difference in terms and conditions of employment between employees of the same employer performing the same or substantially the same work or work of equal value that is directly or indirectly based on any one or more of the grounds listed in subsection (1), is unfair discrimination.’

 

[48]  The Labour Court correctly noted that the test set out in Harksen v Lane NO and others[7] (Harksen) applies in the determination of a discrimination claim under section 6(1); and that in order for the alleged grounds of arbitrary discrimination to qualify as such, these must, objectively, constitute grounds based on attributes and characteristics which have the potential to impair the fundamental human dignity of persons as human beings or to affect them adversely in a comparably serious manner to a listed ground. The unequal treatment alleged must therefore be based on attributes and characteristics attached to a person before it will fall within the meaning of discrimination. In Naidoo and others v Parliament of the Republic of South Africa[8], this Court made it clear that an “arbitrary ground” must be analogous to a listed ground of discrimination in the sense that it has the potential to impair human dignity in a comparable manner or have a similar serious consequence.

 

[49]  The amendment sought by AMCU in paragraph 14 of its claim is made in the context of a paragraph, which the Labour Court correctly identified, concerned correspondence addressed to Harmony, Ashanti and Sibanye concerning wages and other conditions of employment for the 2015 review period. AMCU pleads that it raised the issue of the wage gap and the disparity “between ordinary workers and members of management”. The amendment sought, in this context, is that the words “members of management”, and the words “the first comparator” be inserted. The Labour Court accepted MCSA’s objection to this amendment on the basis that AMCU failed to plead which persons, offices, and all occupational classes or categories constitute “members of management” for purposes of the litigation, when, to succeed, discrimination must be shown to be relative to another person or a clearly identified category of persons. Correctly, the Court noted that, for purposes of such a claim, a comparator must be clearly and precisely identified.

 

[50]  The Labour Court cannot be faulted for finding that the amendment in paragraph 14 is sought when no facts have been pleaded to make out a discrimination case based on any comparator other than miners, artisans and officials, with as much further apparent from the agreed nature of the dispute set out in the pre-trial minute. Had AMCU intended that members of management would constitute a comparator, it would have been reasonably expected that it expressly recorded as much in its statement of claim, which it did not. And to justify the insertion of members of management as a new comparator, which amounts to a significant amendment of its claim, both material facts and the relevant legal issues would have had to have been pleaded or sought to have been inserted into the particulars of claim, to allow the claim to be determined on this basis. Having done so, the Labour Court cannot be faulted for finding that the amendments sought amounted to a belated attempt to broaden the dispute to include all levels of employees, without clarity as to the basis on which such extended claim is pursued or pleading the necessary material facts to support such a broad claim. This, when the agreement concluded, on which the Court correctly noted the discrimination claim is based, makes no reference to remuneration for members of management. It follows that in the absence of the material facts pleaded to support the amendment sought, the Labour Court cannot be faulted for concluding that were the amendment to be permitted, it would not arise from the material facts pleaded and would not comply with the requirements of Rule 6(1)(b)(iii).[9]

 

[51]  The amendment sought to paragraph 18 seeks to record for the first time that officials, miners and artisans are “the second comparator”. This when the paragraph expressly indicates that AMCU raised during negotiations that “income disparity between category 4 – 8 employees, on the one hand, and officials, miners and artisans” will grow during the period in which the agreement has force. There was no prior indication in the statement of claim and no material facts previously pleaded which would support an amendment to the effect that the miners, artisans and officials’ categories of employees pleaded is not the only comparator but one of two comparators to be considered in determining the claim. Similarly, the amendment sought to paragraph 32 seeks to record that miners, artisans and officials are part of “the second comparator” group.

 

[52]  In paragraph 30, AMCU relies on the reference to the “historical wage disparities and gaps between category 4 - 8 employees in the workplace and other classes of employees”, in an attempt to justify the insertion of the words “the first and second comparators” after the word “employees”. This when there had been no prior indication that “other classes of employees” are to be the first comparator for purposes of its discrimination dispute. In paragraph 34.1, AMCU seeks a declaration that there are “historical age disparities and gaps between category 4 – 8 employees in the workplace and others”, with the insertion of the words “i.e. the first and second comparator” immediately thereafter. The amendments, which seek to insert members of management or “other classes of employees” as a comparator, are not based on material facts pleaded, nor are they appropriately specific, but are unduly broad and far-reaching. This is far from the claim as pleaded in its unamended form and is not simply clarificatory in nature, as AMCU suggests, nor was this the dispute referred to the CCMA for conciliation. In exercising its discretion to refuse the introduction of an amendment to include members of management or the broad reference to “other classes of employees” who are unspecified as the first comparator group, it follows that the Labour Court did not err and cannot be faulted for arriving at the conclusion that if the amendment of the claim was permitted on the basis sought, this would render the consequent amended pleading excipiable and irregular.

 

[53]  This is so since the amendments sought did not sustain a pleaded cause of action in relation to a comparator involving management employees or “other classes of employees”. AMCU failed to plead that the job functions of category 4 - 8 employees and those of this broad “first comparator” group of employees are allocated on the basis of race, what the differences in the rate of pay attached to the job functions of category 4 - 8 employees and other such necessary material facts on which its claim is based. The Labour Court cannot be faulted for noting its concern that the result is that the attempt to include the “first comparator” employees appears to seek to impose vertical pay differentials which would be better dealt with under section 27 of the EEA.

 

[54]  As to the issue of prejudice, the Labour Court rejected AMCU’s submission that it and its members would suffer severe prejudice if the amendments were not permitted and members of management were not included as a comparator in the matter. AMCU, on the other hand, contended that the dispute would not be fully ventilated and that the determination was unduly limited to miners, artisans and officials as comparators and that the main issue between the parties, namely whether category 4 – 8 parties were unfairly discriminated in their level of pay, would remain the same. AMCU is not barred from bringing a discrimination claim, properly pleaded, in due course. It has shown no prejudice to exist which would warrant this Court reaching a different conclusion to that of the Labour Court when it failed to make out a case for the relief it sought.

 

[55]  Section 27 of the EEA is concerned with income differentials in the workplace. Section 27(1) requires every designated employer to submit a statement to the Employment Conditions Commission (the Commission) on the remuneration and benefits received in each occupational category and level of that employer’s workforce. Where disproportionate income differentials exist, a designated employer is obliged in terms of section 27(2) to “take measures to progressively reduce such differentials subject to guidance as may be given by the Minister as contemplated in section (4)”. The measures which may be taken include, in terms of section 27(3), collective bargaining, compliance with sectoral determinations made by the Minister, applying the norms and benchmarks set by the Commission and relevant measures contained in skills development legislation. The Commission is required by section 27(4) to “research and investigate norms and benchmarks for proportionate income differentials and advise the Minister on appropriate measures for reducing disproportional differentials”, with parties to a collective bargaining process entitled to request for collective bargaining processes the information contained in the employer’s statement submitted in terms of section 27(1).

 

[56]  Section 27 is distinct from a claim for discrimination under section 6(1) in that it is aimed at addressing income disparities across the workplace and provides for a clear process by which to do so. The remedies contained in section 27 remain available to AMCU, or any other party, to address income differentials which exist. The Labour Court cannot therefore be faulted for finding that the amendments sought amounted to an attempt to broaden the dispute to address such differentials across the workplace when section 27 provides for the process by which to do so and when such a case was neither referred to the CCMA for conciliation, nor was the basis on which the discrimination claim was pleaded in the Labour Court. To permit the far-reaching amendments sought by AMCU would be to allow it to proceed with an entirely different claim in circumstances in which the necessary underlying basis for such claim has not been pleaded, nor reflected in the contents of the agreed pre-trial minute. There is consequently merit in the MCSA’s contention that were the amendment application to have been permitted this would risk such amended claim being excipiable. It follows for all of these reasons that the Labour Court did not err in refusing the amendment application and the appeal cannot therefore succeed.

 

[57]  Turning to the counter-application, despite recognising that the MCSA’s counter-application was to be determined in the event that the amendments sought by AMCU to the statement of claim were refused, the Labour Court found that there was no need to decide such counter-application. In finding as much, the Court clearly erred. Since it cannot be faulted for exercising its discretion in the manner it did in relation to the amendment application, the Labour Court ought properly to have determined that the objection raised held merit given that such evidence pertained to the issues which form the basis for the appellant’s unsuccessful application to amend its the statement of claim. For these reasons, the cross-appeal must be upheld.

 

[58]  As to costs, the Labour Court noted that it held a broad discretion in terms of section 162 to make orders for costs according to the requirements of law and fairness and found that the issues which formed the subject of the application were of a technical nature and that the MCSA was entitled to the full costs, including those of two counsel. While AMCU tendered the costs of the amendment, it argued that it should not be burdened with all the costs and that the costs order made against it should be limited. The MCSA, on the other hand, contended that the costs order made by the Labour Court in its favour, including the costs of two counsel, was warranted given the nature of the amendment application and the fact that such application was found to have been without merit and refused. In making a costs order, the Labour Court exercised a true discretion and on appeal, this Court will not interfere with the exercise of that discretion unless there was a material misdirection by the lower court.[10] No basis has been advanced which would warrant a finding that in the exercise of its discretion to make a costs against AMCU, the Labour Court committed any such material misdirection. No basis consequently exists to justify the setting aside of such an order by the Labour Court.

 

[59]  Turning to the costs of the appeal, with regard had to the nature of the dispute between the parties, the issues raised on appeal, the nature of the continued relationship between the parties and considerations of law and fairness, a costs order is not in my mind justified on appeal.

 

[60]  In the result, the following order is made:

 

Order

1   The appeal is dismissed.

2   The cross-appeal is upheld.

3   The objection raised by the first respondent, the MCSA, to the evidence filed by the appellant, AMCU, in the expert report of Dr Forsland and the affidavit of the appellant’s national treasurer, which evidence pertains to the issues which form the basis for the appellant’s application to amend its the statement of claim, is upheld.  

4   No order of costs is made in respect of this appeal.

 

SAVAGE ADJP

Musi JA and Jolwana AJA agree.

 

APPEARANCES:

 

FOR THE APPELLANTS:   F A Boda SC and R Itzkin

Instructed by LDA Inc.

FOR THE RESPONDENT: A Myburgh SC, J Raizon and P Maharaj-Pillay

                                           Instructed by ENS Africa

 

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