LAC overturns ruling in Eskom racial discrimination case

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AP Erasmus, a long-serving employee, applied for a senior managerial post. Despite being shortlisted and recommended, he was not appointed. He alleged racial discrimination, arguing that his exclusion was based solely on his race. The Labour Court agreed, but the Appeal Court found that Eskom’s employment equity measures were lawful and rational.

Legal implications

This case provides important clarity on how affirmative action must be implemented under South African law:

• Affirmative action must be purpose-driven and rational

  The court applied the three-part test from SAPS v Barnard, confirming that restitution measures must:

  • target a class of people previously subjected to unfair discrimination;
    
  • be designed to advance those groups; and
    
  • promote the achievement of equality.

  Absolute barriers are prohibited

  Section 15(4) of the Employment Equity Act prohibits any policy or practice that creates an absolute barrier to employment or promotion for non-designated groups. The court found that Eskom’s pipelining did not amount to such a barrier, as white males were not categorically excluded.

  Quotas vs targets

  The judgment reinforces that while numerical goals are permissible, quotas are not. Employers must avoid rigid numerical enforcement and instead apply EE measures with flexibility and discretion.

  Known practices can be lawful even if not explicitly in policy

  Although pipelining was not mentioned in Eskom’s EE plan, the court accepted it as a rational and known practice aligned with transformation objectives.

  Discrimination claims must be substantiated

  The fact that Erasmus was shortlisted and interviewed, despite his race being known, weakened the claim of unfair discrimination. The court emphasised that exclusion must be proven, not presumed.

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Employer obligations under the Employment Equity Act

• Develop and implement a valid EE plan: Employers must have a legally compliant EE plan that sets out numerical goals, strategies, and timelines for transformation.

• Avoid quotas and absolute barriers: Preferential treatment is allowed, but rigid exclusion of non-designated groups is unlawful.

• Ensure fair and transparent recruitment processes: All recruitment decisions must be documented and justifiable, especially where EE considerations influence outcomes.

• Train managers and HR practitioners: Those involved in recruitment must understand the legal boundaries of affirmative action and how to apply EE measures fairly.

• Allow for motivated exceptions: EE plans should include mechanisms for motivated exceptions where business needs or individual merit justify deviation from targets.

Employee rights in employment equity contexts

• Right to fair treatment: All employees, regardless of race, gender, or background, have the right to be treated fairly in recruitment and promotion processes.

• Right to challenge discrimination: Employees who believe they have been unfairly discriminated against may lodge grievances internally and escalate to the Commission for Conciliation, Mediation and Arbitration (CCMA) or the Labour Court.

• Right to transparency: Employees are entitled to understand how EE policies affect recruitment and promotion decisions, and to request clarity where needed.

• Right to accurate classification: Employees must ensure that their self-identification on application forms is accurate, as misclassification can affect shortlisting and legal outcomes.

• Right to equal dignity and respect: Affirmative action must be implemented in a way that respects the dignity of all employees and avoids stigmatisation or exclusion.

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Key takeaways for employers

• Align EE practices with constitutional and statutory requirements.
  
• Avoid rigid shortlisting criteria that exclude non-designated groups.
  
• Document motivations and decisions transparently.
  
• Train HR teams on the nuances of affirmative action.

Key takeaways for employees

• Understand the legal framework of affirmative action.
  
• Use grievance procedures to raise concerns early.
  
• Know that EE measures must be fair and rational.
  
• Be accurate in self-identification on application forms.

Conclusion

The judgment underscores the delicate balance between promoting transformation and ensuring fairness in recruitment. While affirmative action remains a constitutional imperative, it must be implemented with flexibility, transparency, and respect for all employees.

Employers must avoid rigid practices that amount to exclusion, and employees must understand their rights and the broader goals of employment equity. The judgment affirms that transformation is not about exclusion; it is about inclusion, redress and building a representative workforce for the future.