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Accommodating Diversity in the Workplace

By Judith Griessel, Griessel Consulting

Employers are increasingly required to navigate an ever-changing workplace with people from diverse backgrounds, cultures and religions. In a society with such diverse beliefs as ours, employers are challenged not only to be tolerant, but also to accommodate that diversity in the workplace. Given the need for efficient and quality services, the question is however to what extent the (religious / cultural) beliefs and practices of employees have to be accommodated. The Courts have stated that it must be left to employers and their employees to develop systems in their workplaces when confronted with these challenges. Here are some guidelines. 

Introduction

In terms of the Constitution, parliament has the power and obligation to draft enabling legislation to support and give effect to constitutional imperatives. The courts are continuously called upon to determine legal disputes which may include the interpretation of legislation and testing compliance with constitutional principles. Although individual rights are guaranteed in the Constitution, they are not unlimited. In the workplace, the right to freedom of religion may for example be limited by the employer’s right to freedom of economic activity (i.e. the right to conduct business). However, in the same way that the employee’s rights are limited by those of the employer, the reverse is true as well: the employer cannot ride roughshod over the rights of employees. When rights clash, a balance has to be struck and this has to be done in a fair and transparent manner.

Diversity as a concept encompasses more than race, gender, religion and culture: however these are the aspects that have received the most attention and are possibly the most controversial. These issues are far from settled and the workplace continues to evolve. The Supreme Court of Appeals in Solidarity obo Barnard v South African Police Service 2014 (2) SA 1 (SCA) referred to “nationhood’s growing pains” and the Labour Appeal Court in Kievits Kroon Country Estate (Pty) Ltd v Mmoledi and Others [2012] 11 BLLR 1099 (LAC) made the following observations:

“It would be disingenuous of anybody to deny that our society is characterised by a diversity of cultures, traditions and beliefs. That being the case, there will always be instances where these diverse cultural and traditional beliefs and practices create challenges within our society, the workplace being no exception. The Constitution of the country itself recognises these rights and practices. It must be recognised that some of these cultural beliefs and practices are strongly held by those who subscribe to them and regard them as part of their lives. Those who do not subscribe to the others’ cultural beliefs should not trivialise them ……….. What is required is reasonable accommodation of each other to ensure harmony and to achieve a united society.” 

Religion and Culture

These are abstract concepts and therefore not so easy to pinpoint as perhaps race or gender. There is generally greater legal precedent of dealing with disputes based on religion than on culture. Cultural aspects, especially in the South African context, are however gaining ground and the courts have addressed both issues in recent judgements.

The Constitutional Court described religion to be ordinarily concerned with personal faith and belief, while culture generally relates to traditions and beliefs developed by a community – often there will be a great deal of overlap between the two. However, the court made it clear that the importance of culture should not be minimised; and that constitutional protection also applies to voluntary (non-obligatory) religious and cultural practices.

Principles and obligations

An employee’s human rights are specifically protected in relation to the workplace, inter alia by the Employment Equity Act (EE Act) which prohibits unfair discrimination on particular prohibited grounds in any employment policy or practice; as well as s 187 of the Labour Relations Act (LRA) which declares dismissal of an employee on grounds such as religious or cultural beliefs, as automatically unfair.

There are two concepts central to dealing with these issues in the workplace, i.e. “reasonable accommodation” and “fairness”.

  • Differentiation and discrimination is not prohibited in our law. Unfair discrimination is.

S6 of the EE Act: “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 or social origin, colour, sexual orientation, age, disability, religion, HIV status, conscience, belief, political opinion, culture, language, birth or on any other arbitrary ground”.

It is therefore imperative to determine when a discriminatory practice may nevertheless be fair – which comes back to the notion of balancing various opposing rights.

  • This is where the notion of ‘reasonable accommodation’ comes in.

In terms of the EE Act, affirmative action measures include “making reasonable accommodation for people from designated groups in order to ensure that they enjoy equal opportunities and are equitably represented”. The Act defines ‘reasonable accommodation’ as any modification or adjustment to a job or to the working environment that will enable a person from a designated group to have access to or participate or advance in employment in the workforce of a designated employer.

According to the Constitutional Court, this concept has at its core the notion that sometimes the community, whether it is the State or an employer, must take positive measures and possibly incur additional hardship or expense in order to allow all people to participate and enjoy all their rights equally. This does not imply an automatic right for people to be exempted by their beliefs from the laws of the land or the rules of an organisation / employer. However, wherever reasonably possible and without causing undue harm, these should be accommodated. A society which values dignity, equality and freedom, must require people to act positively to accommodate diversity.  Those steps might be as simple as granting and regulating an exemption from a general rule or they may require that the rules or practices be changed or even that buildings be altered or monetary loss incurred.

The difficult question then is not whether positive steps must be taken, but how far the employer must be required to go. Reasonable accommodation is, in a sense, an exercise in proportionality that will depend intimately on the facts of the particular case and the nature of the interests involved. 

It is accordingly clear that reasonable accommodation and the extent to which an employer will be burdened by the accommodation, will always be an important factor in the determination of the fairness of discrimination.

Exceptions to the rules

The employer is entitled to make workplace rules and require certain standards to be upheld by all its employees. Such rules / standards generally have a legitimate operational, or business, justification - but should not be held absolute. Many popular arguments forwarded by employers (and community institutions such as schools) in an attempt to justify rigid and indiscriminate application of such rules, have already been rejected by the courts.

For example:

  • The argument that allowing a person to have tattoos, piercings or dreadlocks for religious or cultural reasons in contravention of the organisation’s dress code will necessarily lead to others joining in or complaining about unfair treatment, was rejected by the Constitutional Court in MEC for Education, Kwazulu-Natal and Others v Pillay 2008 (1) SA 474 (CC). The court emphasised that the possibility for abuse should not affect the rights of those who hold sincere beliefs. Also, that the acceptance of one practice does not require the organisation to permit all practices. If accommodating a particular practice would impose an unreasonable burden on the organisation, it may refuse to permit it.
  • The argument that a relaxation of the dress code for some employees for sincere religious / cultural reasons would undermine the organisation’s objective to engender uniformity, neatness and discipline was rejected by the Supreme Court of Appeals in Department of Correctional Services and another and Another v Police and Prisons Civil Rights Union (POPCRU) and Others (2013) 34 ILJ 1375 (SCA).

The court had to consider the dismissal of two employees of the Department of Correctional Services for refusing to cut off their dreadlocks. It held that (on the facts of this particular case) the employees’ sincerely held cultural beliefs were constitutionally protected and in the absence of any evidence that the dreadlocks had any impact on their job performance or unreasonably imposed a burden on the Department, their dismissals were automatically unfair.

  • The issue of beliefs relating to traditional healers and cultural ceremonies / rituals was dealt with in Kievits Kroon Country Estate (Pty) Ltd v Mmoledi and Others (2014) 1 All SA 636 (SCA).

The court held that these aspects should not be evaluated in terms of western principles and that it could, under given circumstances, constitute a valid reason for absence from work. It said that there is an obligation on the employer to attempt to ‘reasonably accommodate’ such (sincere) beliefs, even if it does not believe in it. This does not necessarily mean that the employee should be granted paid sick leave, but accommodation, such as permission to take unpaid leave or a similar compromise, could be considered.

“Our courts are familiar with and equipped to deal with disputes arising from conventional medicine, which are governed by objective standards, whereas questions regarding religious doctrine or cultural practice are not. Courts are therefore unable and not permitted to evaluate the acceptability, logic, consistency or comprehensibility of the belief. They are concerned only with the sincerity of the adherent’s belief, and whether it is being invoked for an ulterior purpose. This of necessity involves an investigation of the grounds advanced to demonstrate that the belief exists. Secular authorities, including courts and tribunals, should avoid attempting to resolve civil disputes by applying reasoning that involves interpreting and weighing religious doctrine” (my emphasis).

The argument that the effect of these findings is to open the floodgates to malpractices that operate towards turning the work environment into total disarray, was rejected by the court.

Practical implementation

The principles taken from all of the above can be summarised as follows:

  • The organisation’s rules, standards, policies and practices may not be (directly or indirectly) unfairly discriminatory – this is an obligation placed on all employers by the Employment Equity Act. The rules or policies themselves may even make accommodation for different religious practices, e.g. grant alternative or additional public holidays.
  • Even in faith-based organisations, reasonable tolerance of other faiths, beliefs and cultures can be expected. They should create a social, intellectual, emotional, behavioural, organisational and structural environment that engenders a sense of acceptance, security and respect for persons with differing values, cultural backgrounds and religious beliefs.
  • Whilst rules and practices (such as dress code) may have perfectly valid operational or business justification and not be arbitrary or discriminatory on any particular ground, applying or enforcing the rule in certain instances could be deemed as unfair discrimination. 
  • There is an obligation on employees who feel that their religious or cultural beliefs are being jeopardised or threatened by the organisation’s practices or rules, to make these beliefs known to the employer.
  • As part of observing ‘reasonable accommodation’, the employer should, in addition to its Code of Conduct or other rules, have a mechanism in place that allows for employees to raise objections or to apply for exemption of such rules.
    • The employer may put protocols and procedural requirements in place, such as the requirement that the applicant for exemption provide a written explanation for requiring the exemption.
    • Each case must then be determined on its own merits, weighing up the nature of the objection and/or the motivation of the application for exemption from the rule.
    • The importance of the religious or cultural practice to the individual, including the question of whether it needs to be pursued during working hours, will need to be weighed against the effect that the granting of the exemption may have on the important and legitimate principles that support the particular rule or standard. 
    • The approach to the granting of exemptions will thus require an exercise in proportionality that will depend on the facts of the particular case and the nature of the interests involved. If accommodating a particular practice would impose an unreasonable burden on the employer, it may refuse to permit it.
  • In performing this exercise, the employer needs to be fully apprised of the religious or cultural importance of the practice to the individual.
    • The employer may require the employee to provide some credible proof (e.g. an affidavit from a religious minister) as to the centrality of the particular belief to the employee’s religion. This may not be necessary where it is well known that certain religions require strict adherence to certain practices, e.g. male Muslims attending Friday prayers, or (true) Rastafarians not being permitted to cut their dreadlocks.
    • Whether a religious or cultural practice is voluntary or mandatory is irrelevant at the threshold stage of determining whether it qualifies for protection; however, the centrality of the practice, which may be affected by its voluntary nature, is a relevant question in determining the fairness of alleged discrimination.
    • The employer is not permitted to evaluate the acceptability, logic, consistency or comprehensibility of the belief, but only the sincerity of the adherent’s belief, and whether it is being invoked for an ulterior purpose. This of necessity involves an investigation of the grounds advanced to demonstrate that the belief exists.
  • Defences available to an employer against allegations of unfair discrimination are (1) inherent requirements of the job; and/or (2) valid affirmative action measures. When considering inherent requirements of the job, care must be taken not to state the employer’s interests too widely. Evidence must show that the employee’s job performance would be adversely impacted by allowing the exemption, or that it would impose an unreasonable burden on the employer.

For more information please contact Judith Griessel at [email protected] for further information, or for assistance with a policy in this regard.

 

 

Is commission included in the calculation of minimum wage?

 

In terms of the National Minimum Wage Act 9 of 2018, an employer may not pay any employee less than the prescribed minimum wage for time worked. The aforementioned is unambiguous, but can an employer pay an employee a basic salary which is less than the minimum wage, or even no guaranteed basic salary, provided that the commission earned by the employee exceeds the minimum wage as prescribed by the Act? This is what had to be determined in Atlas Finance (Pty) Ltd v CCMA & 2 others, 2022 JR57/21.

 

2022/05

By Jan du Toit

 

During 2020, I assisted one of our longstanding clients with arbitration under Section 73A of the Basic Conditions of Employment Act 75 of 1997 (the BCEA). The dispute related to an alleged underpayment in terms of the National Minimum Wage Act 9 of 2018 (the NMWA). In terms of the NMWA, an employer may not pay any employee less than the prescribed minimum wage for time worked.

 

The nature of the employer’s business was that of microlending, with sales representatives employed and responsible for securing new business. During 2018, the employer by agreement amended the commission structure of most of its sales representatives employed throughout South Africa, except for those employed in Rustenburg. The employees in Rustenburg refused to accept amended employment conditions and threatened the employer with industrial action.

 

The changes to the remuneration structure of the sale representatives, which included the earning of commission, were deemed necessary to ensure compliance in anticipation of the announcement of an effective date for the commencement of the National Minimum Wage Act 9 of 2018.

 

Facing possible industrial action, the employer abandoned its attempt to amend the remuneration structure of the Rustenburg sales representatives. The employees withdrew their dispute lodged with the Commission for Conciliation, Mediation and Arbitration (the CCMA) at the time and continued to accept, as demanded, remuneration in terms of the originally agreed remuneration structure.

 

In terms of the originally agreed remuneration structure, which was applicable to the employees by choice, their basic remuneration was below the prescribed minimum wage for the 40.5 hours that they were required to work weekly. However, in addition to their basic remuneration, the employees also earned commission for work performed during their working hours. The commission was calculated as a percentage of the value of successful new business secured per month. The basic remuneration of the employees combined with the commission they earned by far exceeded the requirements of the NMWA. To ensure full compliance with the NMWA, the employer also committed to top up employees’ remuneration to be at least equal to the minimum wage if an employee failed to generate sufficient commission.

 

During the period of January 2019 to October 2020, after the NMWA became effective, the employees were paid remuneration consisting of their basic agreed salaries as well as commission. Their basic salaries combined with their commission exceeded the minimum wage prescribed by the NMWA for 40.5 hours of work per week. Despite the aforementioned, a dispute was lodged with the CCMA in terms of Section 73A of the BCEA. The employees were advised and assisted by Mr Isaac Mokgatle from Workers Against Regression, a registered trade union. Mr Mokgatle was of the view that the employees’ basic salaries had to be increased to be equal to the minimum wage for 40.5 hours of work per week. This was despite the fact that their basic salaries and commission combined by far exceeded the minimum wage for the time worked.

 

Currently, there is no uniform stipulation of which earning components should be included in the calculation of national minimum wages. The BCEA defines remuneration as “any payment in money or in kind, or both in money and in kind, made or owing to any person in return for that person working for any other person, including the State”. “Wages” is a component of remuneration paid to an employee “in respect of ordinary hours of work, or if they are shorter, the hours an employee ordinarily works in a day or week”.

 

The specification of “ordinary hours” is important because it excludes, for example, productivity or overtime pay. In South Africa, wages are calculated based on the ordinary hours of work, which ensures that workers receive premium payments for work done outside of ordinary hours.

 

Internationally, regarding productivity and performance pay, there is no standard definition of the components of a National Minimum Wage (NMW), however, if one has regards to international standards, productivity and performance pay are considered supplemental forms of remuneration. They specifically include commission work, piecework and tipped work. Commission work refers to any system under which an employee receives supplemental pay based on the value or volume of sales.

 

At arbitration, Mr Mokgatle submitted that commission earned by an employee cannot be considered for the purpose of determining whether such individual is paid less, equal to or more than the prescribed NMW. It was further submitted that the employees were paid a basic salary less than the NMW, and that despite them earning a basic salary combined with commission for work done during normal working hours, such commission must, in terms of the definition of “wage” and as per Sections 4(4) to 4(7) of the NMWA, be excluded for the purposes of the dispute before the Commission.

 

I submitted on behalf of the employer that commission earned for work done during an employee’s normal working hours cannot be excluded for the purposes of determining whether an employee is paid less than, equal to or more than the NMW. The employees earned in excess of the prescribed NMW and Section 5(1) of the NMWA does not list commission as an exclusion for the purposes of calculating an employee’s wage. Furthermore, Section 5(3) of the NMWA also provides for the payment of an employee on a basis other than the number of hours worked, provided that such employee is not paid less than the NMW.

 

By virtue of his submissions at arbitration, Mr Mokgatle effectively introduced a mutual interest dispute pertaining to an increase in remuneration under the guise of a dispute related to the NMWA.

 

Commissioner Rakale from the CCMA in Rustenburg held that the employer was in contravention of the NMWA. He, furthermore, ordered that an amount in excess of one million rand be paid to the employees as backpay in addition to a fine as provided for in the BCEA.

 

We approached the Labour Court on review and submitted that Commissioner Rakale:

 

  1. committed a material error of law by excluding commission earned by the third respondents (the employees) in determining whether the applicant (the employer) complied with the NMWA.

 

  1. misdirected himself to such an extent that the outcome of the arbitration amounts to a gross irregularity, in that his conclusion was not objectively correct, and that a reasonable arbitrator would not have reached the same conclusion considering the evidence available at the hearing of the matter.

 

  1. misdirected himself by relying solely on the definition of “wage” as found in the NMWA, and by failing to properly consider the provisions of Sections 5(1) and 5(3) of the NMWA.

 

  1. misdirected himself by finding that the employer did not pay the employees according to the hours they worked, which is in stark contradiction to Section 5(3) of the NMWA.

 

  1. misdirected himself by failing to consider that employees whose basic salaries and commission payments were not sufficient to ensure compliance with the NMWA, were, as provided for in Section 5(3) of the Act, topped up to ensure compliance.

 

  1. misdirected himself by including in the calculation of the amounts underpaid the months of April, May and June 2020, during which the third respondents did not work due the lockdown imposed at the time.

 

  1. misdirected himself by applying an unknown calculation method in determining the value of alleged underpayments, resulting in amounts awarded that are inconsistent with the evidence placed before him by both the third respondents as well as the applicant.

 

  1. exceeded his powers by ordering the applicant to increase the agreed basic salaries of the third respondents.

 

Acting Judge Deane agreed and held that commission is not a discretionary payment, which is not related to an employee’s hours of work, but forms a part of the employee’s wages and that the intention was not to exclude commission from the NMW. However, commission workers must still be paid at least the NMW. Workers do not have to be paid the minimum wage for each hour worked, but they must be paid the minimum wage, on average, for the time worked in a pay reference period.

 

It was, furthermore, held that the Commissioner misdirected himself by failing to take into account the evidence placed before him showing that the employees were paid in excess of the NMW. He further misdirected himself by failing to consider that the employer acknowledged that employees whose basic salaries and commission payments were not sufficient to ensure compliance with the NMWA, were, as required per Section 5(3) of the NMWA, topped up to ensure compliance.

 

The Commissioner’s decision to exclude commission earned by the employees in determining whether the applicant indeed complied with the NMWA was not a reasonable decision and constituted a material error of law. The Commissioner misdirected himself to such an extent that the outcome of the arbitration award amounted to a gross irregularity. It was ordered that the employer was not in breach of the NMWA by virtue of including commission earned in calculating the minimum wages of employees.

 

Jan du Toit is a director at Labour Guide and can be contacted at [email protected].

 

This article does not constitute legal advice. For an informed opinion and/or assistance with a labour-related matter, you are encouraged to arrange a formal consultation with the author.

 

 

 

 

 

 

 

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