Employers: be aware – discrimination in the workplace might end up costing you more than you would expect

Jun 1, 2009


What is an employer’s duty when an employee complains about sexual harassment (or for
that matter any other kind of discrimination) in the workplace?

Harassment on any of the grounds listed in s6(1) of the Employment Equity Act 55 of
1998 (‘EEA’), including sexual harassment, is regarded as a form of discrimination in
terms of the EEA. Section 60 of the same Act states that when an employee has
contravened a provision of the EEA, such contravention must immediately be brought to
the attention of the employer and the employer must then consult all relevant parties and
take all necessary steps to eliminate the alleged unfair conduct. If the employer fails to act
accordingly, s60(3) of the EEA then provides that ‘If the employer fails to take the
necessary steps referred to in subsection (2), and it is proved that the employee has
contravened the relevant provision, the employer must be deemed also to have
contravened that provision’. This creates potential personal liability for the employer
resulting from the conduct of one of its employees, which might include some serious
financial ramifications. Apart from the above, it now further seems from the recent labour
court decision in the matter of Dial Tech CC v Hudson & Another [2007] JOL 19639 (LC)
that the financial implications for an employer could be even more damaging than initially

During June 2004, Ms. Hudson, an ex-employee of Dial Tech CC (‘the employer’), referred
two disputes to the CCMA, i.e., a discrimination dispute arising from alleged sexual
harassment and a constructive dismissal dispute. Keep in mind that both disputes arose
from the same set of facts. It was common cause that the MD of the employer downloaded
pornographic material from the internet at the office and as his computer was linked to
that of the employee, the material also popped up on the employee’s screen. After the
employee complaint about this, the pornographic pop up was removed, but was replaced
by a pornographic screen saver. To aggravate the situation even more, the employee
alleged that after she had lodged the complaint, the MD started to ignore her, refused to
speak to her and ignored her work and related correspondence. As a result of this
‘intolerable’ work situation the employee resigned and instituted the aforementioned two
claims against the employer.

The claims were based on an alleged failure by the employer to take reasonable steps to
prevent pornographic material from appearing on the employee’s computer screen and as
such failing to take reasonable steps to safeguard her from sexual harassment in the
workplace. The employer failed to attend any conciliation hearing and the discrimination
dispute was thereafter referred to the LC, whereas the unfair dismissal dispute was
referred for arbitration. The employer again failed to attend any of these processes, as a
result of which the LC granted default judgment against the employer in the amount of R58
080.00. The CCMA also granted a default arbitration award against the employer in the
amount of R58 080.00, being a maximum of 12 months’ compensation. The employer at a
very late stage decided to join the party and argued that the award granted by the LC was
erroneously granted as compensation had already been awarded to the employee by the
CCMA in the unfair dismissal dispute.

The LC should therefore not have awarded compensation to the employee for the
discrimination claim as well, as it arose out of the same set of facts as the dismissal
claim. The employer averred that the MD and the employee had viewed pornographic
material together on a number of occasions, during which the employee never complained
about it. However, when the employee did complain, the MD immediately took steps to
remove the material from the computer screen. The MD admitted that he must have failed
to remove it properly as the material thereafter appeared as a screen saver. This was not
a deliberate omission, but merely an ‘error’ on his part. The employer placed reliance on
the so-called ‘once and for all’ common law principle, which in general provides that an
employee has to claim all damages already sustained and still to be sustained, flowing
from the same cause of action, in one action.

The court held that the ‘once and for all’ principle did not apply in this case and as such
an argument that the constructive dismissal and discrimination claims should have been
instituted in one claim did not have any merit. With the introduction of the EEA, sexual
harassment was now deemed to be a form of unfair discrimination which afforded
employee’s relief, whether they resigned or not. Whilst the cause of action in both the
constructive dismissal and sexual harassment cases arose from the same set of facts and
circumstances, their remedies were located in completely different and separate statutes,
in this case the LRA and the EEA. In the present matter the constructive dismissal dispute
arose out of the failure by the employer to correct the intolerable environment that had
been created by its MD. The dispute concerning unfair discrimination arose out of the
failure by the employer to take reasonable steps to prevent sexual harassment in the
workplace. There was no provision in the LRA and the EEA that required the court, in
awarding compensation for sexual harassment, to take into account any compensation that
might have been awarded by the CCMA for an unfair dismissal dispute.

The employer was therefore ultimately faced with two awards against it, both in the
amount of R58 080.00 for the same transgression. So, what should employers learn from
this case?

Employers should realise that there is a fairly stringent duty on them to create a safe and
discrimination free working environment (in terms of the EEA). Employers should thus be
aware of the fact that where an incident of discrimination, whichever form it may take, is
brought to their knowledge, they need to act quickly to remedy the situation. This includes
prompt investigation of the complaint, instituting disciplinary action if the facts support
this, and offering assistance to the victim.

June 2009

This information is published for general information purposes and is not intended to constitute legal advice and should not be construed as such. Specialist legal advice should always be sought in relation to any particular situation. Maserumule will accept no responsibility for any actions taken or not taken on the basis of this publication. Consent must be obtained from Maserumule before the information provided herein is reproduced in any way. No person shall have any claim of any nature whatsoever arising out of, or in connection with, the information provided herein against Maserumule and/or any of its personnel.