Employment equity and protected disclosures: lessons to note

The plaintiff sued three entities – the holding company, its subsidiary and the CEO, in his personal capacity, for economic losses she allegedly suffered due to their wrongful actions. She was suspended from her job after lodging a grievance against the CEO for racial discrimination.

The Protected Disclosures Act 2000 protects employees who lodge certain categories of complaints against their employers from being dismissed provided that the complaint is made in good faith, substantially in accordance with the procedure prescribed in sections 5-9 of the Act and the employee reasonably believes the complaint is substantially true and does not make it for purposes of personal gain¹.

After having been overlooked for the position at the subsidiary for a second time despite being initially assured the position, the plaintiff tendered her resignation. In an attempt to have her retract her resignation, a meeting was held with her. During the meeting, the CEO referred to her as “a female, employment equity” appointee in the presence of other managers at the Company. The utterances offended her.

As a result, she laid a formal grievance against the CEO through a letter addressed to the Chairman of the Group. The plaintiff felt that the remark was “totally unprofessional and unacceptable” and she felt humiliated, degraded and objectified on the basis of her race and gender especially in light of the fact that the remark was made in the presence of three senior executives. The Chairman and the nominations committee of the board of directors resolved to investigate her grievance in order to determine the “veracity and accuracy of [her] claims.”

In implementing the resolution to conduct the investigation, the Company suspended the plaintiff on the pretext that it required “clear field in which to operate”. She was not afforded an opportunity to make representations prior to her suspension. Following the investigation, it was decided that her claims were “completely without foundation” and “devoid of substance” and that the plaintiff’s actions constituted misconduct and an abuse of the grievance procedure. She was formally charged and dismissed following a two-day disciplinary hearing.

The court held that the disclosure made by the plaintiff was a protected disclosure in terms of the Act. The court also found that the CEO and the Group’s actions impaired her dignity without recognition of her status as a professionally qualified chartered accountant with a wealth of experience. The court ruled that the CEO and the holding company would have to pay damages (still to be quantified) as a result of such impairment.

The judgement serves as a warning to employers to be careful when dealing with sensitive employment equity and gender issues in the workplace and to recognise employees’ rights to make protected disclosures before subjecting them to unnecessary disciplinary action.