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Key Words
Constitutional Law – Equality – Statutory
exclusion of common law right – Compensation for Occupational Injuries and
Diseases Act – Fair labour practices – Access to courts – Labour Law –
Injured on duty – Compensation – Common Law – Compensation for Occupational
Injuries and Diseases Act – Delict – Bodily injury – Sustained at work
Mini Summary
Application for confirmation of High
Court decision declaring a provision of the Compensation for Occupational
Injuries and Diseases Act (which prevented employees from claiming damages
from their employers, except where provided for in the Act)
unconstitutional. Applicant had claimed compensation for injuries in terms
of common law after she slipped and fell, alleging negligence of fellow
workers had caused some of her injuries. Against the contention that she was
precluded from bringing such a claim by the disputed provision, applicant
argued that such was unconstitutional in that it violated her rights to
equality, fair labour practices, and access to courts. Held, the provision
clearly differentiated between employees and non-employees but this
discrimination was rationally connected to a legitimate government purpose.
The legitimate purpose of the Act was to provide a system of compensation
for employees for disability or death caused by injuries or diseases in the
workplace. Such a system supplants the common law right of an employee to
damages from a negligent employer. Instead, it allows the employee to claim
limited compensation from a fund (to which employers are obliged to
contribute) even where the employer was not negligent. Therefore, viewed in
the context of the Act as a whole, the challenged provision depriving
employees of their common law right to damages from their employer was not
arbitrary or irrational. The decision of the High Court could not be
confirmed.
YACOOB J:
Introduction
[1] On 27 December 1995 the applicant
fell and was injured in the respondent's supermarket where she worked as a
cashier. On 29 April 1997 she began an action in the Eastern Cape High Court
claiming, inter alia, general damages resulting from her injuries,
which she alleged were a direct result of the negligence of one or more
employees of the respondent during the course and scope of their employment.
[2] In its special plea the respondent
took the point that the applicant's claim was barred by section 35(1) of the
Compensation for Occupational Injuries and Diseases Act 130 of 1993 ("the
Compensation Act").
This special plea elicited a replication which advanced
the proposition that section 35(1) was inconsistent with the interim
Constitution in that its provisions violated the right to equality before
the law and to equal protection of the law and the right not to be unfairly
discriminated against, the right of access to courts and the right to fair
labour practices, enshrined in sections 8(1) and (2),
and 27(1)
of that Constitution respectively. The applicant accordingly sought
to have the special plea dismissed with costs, alternatively to have the
issue of the constitutionality of section 35(1) referred to this Court,
presumably pursuant to section 102(1) of the interim Constitution.
[3] No evidence was led at the hearing
of the special plea and the matter was argued before, and determined by,
Zietsman JP in line with the attitude of the parties that the 1996
Constitution was applicable to its determination. That Constitution
came into force on 4 February 1997, after the
applicant was injured but before proceedings were commenced.
[4] The case was decided in the High
Court on the basis that it was necessary to determine whether the impugned
section was in conflict with the provisions of sections 9(1) and (3)
and 23(1)
of the 1996 Constitution. On that basis, the High Court was empowered
by section 172(2) of the 1996 Constitution to make a finding concerning the
constitutionality of an Act of Parliament but an order of invalidity would
have no force unless confirmed by this Court. Although notice of this
constitutional challenge was not given to any organ of state, Zietsman JP
found that section 35(1) was inconsistent with the equality provisions of
the 1996 Constitution and invalid, dismissed the special plea with costs and
referred his order of constitutional invalidity to this Court for
confirmation.
[5] The applicant seeks confirmation of
the order of the High Court pursuant to section 172(2)(d) of the 1996
Constitution read with Constitutional Court rule 15(4). The respondent
opposed confirmation, belatedly filed a notice of appeal and an appropriate
application for condonation. The applications were not opposed and are now
granted. We have accordingly before us both an opposed application for the
confirmation of the finding of invalidity of section 35(1) by the High Court
and a contested appeal against the whole of the judgment of that court.
Which Constitution?
[6] It has been mentioned that the High
Court decided the matter on the basis, firstly, that it was empowered to do
so by section 172(2)(a) of the 1996 Constitution and, secondly, that chapter
2 of that Constitution was applicable to the case even though it did not
exist at the time the applicant was injured. The High Court now undoubtedly
has power under the 1996 Constitution to make a finding of constitutional
invalidity of an Act of Parliament in proceedings which are instituted after
that Constitution came into force.
However, the constitutionality of an Act or statutory
provision is ordinarily to be determined by the substantive constitutional
provisions in force at the time the cause of action arose.
The interim Constitution was in force when the applicant's
cause of action arose and the validity of section 35(1) must,
therefore, be determined against sections 8(1) and (2),
and 27(1)
of the interim Constitution. This judgment proceeds accordingly. This
course might have occasioned some difficulty if the conclusion concerning
constitutional consistency were to vary depending on whether the interim or
1996 Constitution was to apply. In this case, however, that does not arise
as there is no material difference whether the provisions of section 8 of
the interim Constitution or section 9 of the 1996 Constitution are applied.
Joinder
[7] It is undesirable for a court to
make an order of constitutional invalidity in relation to an Act of
Parliament or Provincial Act unless the relevant organ of state which is not
a party to the proceedings has had an opportunity to intervene in those
proceedings.
Because rule 6(2)
had not been complied with, the Minister of Labour,
who is the relevant organ of state and who had not been given
any opportunity to intervene in the case before the High Court, was notified
and given the opportunity to intervene in the proceedings before this Court.
The Minister chose to intervene, opposed the confirmation of the finding of
the High Court and presented helpful argument in support of that opposition.
It is however necessary to consider the
consequences arising from the matter having been determined by the High
Court without notice to any organ of state. It was contended on behalf of
the applicant that the Minister of Labour had no direct interest in the
proceedings and that there was accordingly no need for an opportunity for
intervention to have been afforded to that office.
[9] The contention has no substance.
The Compensation Act is important social legislation which has a significant
impact on the sensitive and intricate relationship amongst employers,
employees and society at large. The state has chosen to intervene in that
relationship by legislation and to effect a particular balance which it
considered appropriate. Section 35(1) is an element of that legislation and
the Minister, as the representative of the state responsible for the
administration of this legislation, clearly had a direct, abiding and
crucial interest in the outcome of the litigation. This Court may well have
declined to confirm the order solely on the ground that notice of the
proceedings in the High Court was not given to the minister. But there is no
need to consider this course of action any further because these proceedings
can be disposed of on more substantive grounds without any prejudice to the
state.
The equality and non-discrimination
challenge
[10] It was contended in the High Court
that section 35(1) infringed both sections
9(1) and 9(3) of the 1996 Constitution. The applicant's
equality challenge was based on a contention that employees, by being
deprived of the common law right to claim damages against their employers,
are placed at a disadvantage in relation to people who are not employees and
who retain that right. The challenge was not based on any of the grounds
specified either in section 8(2) of the interim Constitution or section 9(3)
of the 1996 Constitution. In dealing with these contentions Zietsman JP
said:
"The question ... is whether section
35 of the Act, which denies to employees the right to claim compensation
from their employers, has a rational connection to the purpose of the Act.
If not it constitutes unfair discrimination against employees."
[11] This approach is not consistent
with the equality jurisprudence that has been developed by this Court in a
series of cases over the past two years.
The correct approach to cases in which there is alleged to
be an infringement of sections 8(1) and 8(2) of the interim Constitution (or
sections 9(1) and 9(3) of the 1996 Constitution), but the differentiation is
not based on a specified ground, is this:
a. The first inquiry is whether there
is a rational relationship between the differentiation and a legitimate
government purpose. If there is no rational relationship, the
differentiation in question amounts to a breach of section 8(1) or 9(1)
respectively.
b. The issue as to whether there is
unfair discrimination in terms of section 8(2) or 9(3) would
ordinarily arise only if there is such a rational relationship.
If so, the party challenging the constitutionality of the
differentiation must establish that the differentiation amounts to unfair
discrimination.
c. If unfair discrimination is
established, the party seeking to support the disputed measure attracts a
duty to establish that the measure passes the test for limitation laid down
in section 33 of the interim Constitution.
[12] In oral argument before this Court
counsel for the applicant rightly accepted that there was no evidence in
support of the proposition that the differentiation in issue amounted to
unfair discrimination and advanced no contention in this regard. The
submission on behalf of the applicant was accordingly that the only issue of
relevance to the equality challenge was whether the impugned section was
rationally connected to a legitimate government purpose. If there was a
rational connection, the applicant should fail because unfair discrimination
had not been established; if not, the applicant should succeed because no
justification was shown in terms of section 33 of the interim Constitution.
Whether any such rational connection exists must now be examined, for
clearly the section differentiates between persons who are employees and
those who are not. Zietsman JP held that there was no rational relationship
between the impugned section and a legitimate government purpose on the
basis that the purpose as stated in the Compensation Act was for the benefit
of employees but that section 35 operated to their disadvantage.
[13] The purpose of the Compensation
Act, as appears from its long title, is to provide compensation for
disability caused by occupational injuries or diseases
sustained or contracted by employees in the course of their
employment. The Compensation Act provides for a system of compensation which
differs substantially from the rights of an employee to claim damages at
common law. Only a brief summary of this common-law position is necessary
for the purposes of this case. In the absence of any legislation, an
employee could claim damages only if it could be established that the
employer was negligent. The worker would also face the prospect of a
proportional reduction of damages based on contributory negligence and would
have to resort to expensive and time-consuming litigation to pursue a claim.
In addition, there would be no guarantee that an award would be recoverable
because there would be no certainty that the employer would be able to pay
large amounts in damages. It must also be borne in mind that the employee
would incur the risk of having to pay the costs of the employer if the case
were lost. On the other hand, an employee could, if successful, be awarded
general damages, including damages for past and future pain and suffering,
loss of amenities of life and estimated "lump sum" awards for future loss of
earnings and future medical expenses, apart from special damages including
loss of earnings and past medical expenses.
[14] By way of contrast the effect of
the Compensation Act may be summarised as follows. An employee who is
disabled in the course of employment has the right to claim pecuniary loss
only through an administrative process which
requires a Compensation Commissioner to adjudicate upon the claim and to
determine the precise amount to which that employee is entitled.
The procedure provides for speedy adjudication and for
payment of the amount due out of a fund established by
the Compensation Act to which the employer is obliged to
contribute on pain of criminal sanction.
Payment of compensation is not dependent on the employer's
negligence or ability to pay, nor is the amount susceptible to reduction by
reason of the employee's contributory negligence.
The amount of compensation may be increased if the
employer or co-employee were negligent but not beyond the extent of the
claimant's actual pecuniary loss.
An employee who is dissatisfied with an award of the
Commissioner has recourse to a court of law which is, however, bound by the
provisions of the Compensation Act.
That then is the context in which section 35(1) deprives
the employee of the right to a common-law claim for damages.
The Compensation Act supplants the essentially
individualistic common-law position, typically represented by civil claims
of a plaintiff employee against a negligent defendant employer, by a system
which is intended to and does enable employees to obtain limited
compensation from a fund to which employers are obliged to contribute.
Compensation is payable even if the employer was not negligent. Though the
institution of the regime contemplates a differentiation between employees
and others, it is very much an open question whether the scheme is to the
disadvantage of employees.
[16] Counsel for the applicant did not
base his contention on a comparison of the position of the worker under the
scheme contemplated by the Compensation Act with the position at common law.
He submitted instead that section 35(1) had to be viewed independently of
the rest of the Compensation Act because it did not have to be an
integral part of the scheme, that there was no
reason why a negligent employer should not be obliged to pay both the
assessed contributions to the fund and common-law damages, and that there
was accordingly no rational basis for the inclusion of section 35(1) as part
of the scheme. He said that the assumption that it was unduly onerous for
the employer to be obliged to pay both contributions to the fund and
common-law damages if negligent was ill founded. Indeed, counsel confessed
that his contention concerning the absence of a rational connection amounted
to the employee having "the best of both worlds". In essence, the contention
amounted to this: the nature of the balance achieved by the legislature
through the Compensation Act tilts somewhat in favour of the employer while
requirements of policy and the nature of the relationship between the
employee and the employer indicate that a different balance is appropriate.
It was contended that the object of the Act is to provide compensation for
workers, not to benefit employers. Section 35(1) benefits only employers. It
is therefore not rationally related to the purpose of the legislation.
[17] But that argument fundamentally
misconceives the nature and purpose of rationality review and artificially
and somewhat forcibly attempts an analysis of the import of the impugned
section without reference to the Compensation Act as a whole. It is clear
that the only purpose of rationality review is an inquiry into whether the
differentiation is arbitrary or irrational, or manifests naked preference
and it is irrelevant to this inquiry whether the scheme chosen by the
legislature could be improved in one respect or another.[30] Whether an
employee ought to have retained the common-law right to claim damages,
either over and above or as an alternative to the advantages conferred by
the Compensation Act, represents a highly debatable, controversial and
complex matter of policy. It involves a policy choice which the
legislature and not a court must make. The
contention represents an invitation to this Court to make a policy choice
under the guise of rationality review; an invitation which is firmly
declined. The legislature clearly considered that it was appropriate to
grant to employees certain benefits not available at common law. The scheme
is financed through contributions from employers. No doubt for these reasons
the employee's common-law right against an employer is excluded. Section
35(1) of the Compensation Act is therefore logically and rationally
connected to the legitimate purpose of the Compensation Act, namely, a
comprehensive regulation of compensation for disablement caused by
occupational injuries or diseases sustained or contracted by employees in
the course of their employment.
[18] It may be mentioned in passing
that courts in the United States of America, Canada and Germany have found
similar legislation providing for worker compensation and limiting the right
of the worker to claim common-law damages not to be irrational or arbitrary.
[19] In so far as the attack on section
8(2) is concerned, there is no evidence of unfair discrimination, no
contention in this regard and no apparent basis upon which unfair
discrimination could be said to exist. In the circumstances, nothing more
need be said on this aspect.
Other grounds of attack
[20] The other bases on which the
applicant sought to impugn the section, namely the alleged inconsistency
with sections 22 and 27(1) of the interim Constitution, were not pursued in
argument before this Court. A few words should nevertheless be said about
each.
[21] The contention in regard to
section 22 of the interim Constitution was not
that the statutory mechanism and tribunal for the speedy determination of
compensation created by the Compensation Act violates the right of access to
courts. Rather, it was argued that the denial of the right to claim general
damages is somehow a denial of the right of access to a court. The section
does not deny such access. The fact that the plaintiff cannot go to court to
claim damages against the employer really follows from the removal of the
right to claim common-law damages. Section 22 of the interim Constitution
does not call for the retention of all common-law rights of action which
existed at any stage.
[22] With regard to the alleged
infringement of section 27(1)
of the interim Constitution, there is also no evidence which
establishes that section 35(1) is unfair. Consequently the question whether
the provisions of section 35(1) constitute a labour practice can be left
alone.
Ancillary matters
[23] It follows that the order of
Zietsman JP that section 35(1) is constitutionally
invalid cannot be confirmed, on the basis of the section's
inconsistency with either the interim or the 1996 Constitution. It was
common cause that this Court should uphold the respondent's special plea if
the challenge to the constitutional validity of section 35(1) failed. It is
unnecessary to decide whether such an order would have been appropriate if
the opposed application for confirmation were the only matter before this
Court. There is however no doubt that this order is the competent outcome of
the appeal which is properly before this Court.
[24] Counsel for the respondent and the
Minister of Labour indicated that neither sought an order that the applicant
pay the costs incurred by them before this Court or the High Court. This is
both appropriate and fair.
The order
[25] The following order is made:
1. The order of constitutional
invalidity of section 35(1) of the Compensation for Occupational Injuries
and Diseases Act 130 of 1993 is not confirmed.
2. The appeal succeeds.
3. The whole of the order of the High
Court is set aside and substituted by the following order:
3.1 The defendant's special plea is
upheld.
3.2 The plaintiff's claim is
dismissed.
3.3 There is no order as to costs.
4. There is no order as to the costs
of the application for confirmation and the appeal before this Court.
(Chaskalson P, Langa DP, Ackermann,
Goldstone, Kriegler, Madala, Mokgoro, O'Regan and Sachs JJ concur in the
judgment of Yacoob J.)
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