Essential Corporate News: Week ending December 3, 2021
On November 26, 2021 the Financial Conduct Authority (FCA) published Policy Statement PS21/16, summarising feedback to a Consultation Paper (CP21/25) it published in July 2021
In February 2017, in National Union of Metal Workers of South Africa obo Members v Element Six Production (Pty) Ltd (JS1106/14) the Labour Court held that token payments to non-strikers performing the work of striking employees amounted to unfair discrimination.
Whilst a violation of the constitutional right to equality can have serious consequences, in this instance the court only made a declaratory order prohibiting further conduct of this nature. This surprising outcome arose from the way in which the protection against discrimination is drafted in the Labour Relations Act, 1995 (LRA), as well as the particular circumstances of the case.
Section 5 of the LRA prohibits discrimination against employees for exercising any right conferred by the LRA. In particular, no person may prejudice or threaten to prejudice an employee for striking or otherwise participating in trade union activities.
In the current instance, non-striking employees were requested to perform the work of striking employees. After the strike, these employees were paid an additional “token” in “goodwill and appreciation” of their assistance.
The court upheld NUMSA’s contention that the payment of the token to non-striking employees only constituted differentiation which amounted to unfair discrimination. But problems arose when the suitable remedy had to be determined. Monetary relief, in the form of payment to striking employees of the token, was deemed inappropriate as it could condone or compound the illegitimate conduct of the employer, and because NUMSA failed to quantify the value of the “token” at trial. The court made a declaratory order prohibiting further conduct of this nature, with no order of costs.
Chapter 2 of the LRA, which deals with disputes of this nature, does not make provision for specific remedies. When making orders for the payment of money, the LRA is generally limited to making orders of compensation, damages and costs. Compensation is a solatium awarded to employees for the breach of essential rights. The Labour Court has previously awarded compensation in unfair discrimination cases.
Compensation may be a more appropriate remedy in matters where loss or damage cannot be proven, as in this case.
Recent decisions by the Court of Justice of the European Union (CJEU), the EU’s top court, have abolished the rights that EU investors previously had to bring claims against EU member states in international arbitration.
© Norton Rose Fulbright LLP 2021