The right to equality and access to courts for government employees in South Africa: Time to amend the Government Employees Pension Law

4.1 Harksen inquiry

The problem highlighted in this article involves a conflict between the provisions of the Government Employees Pension Law and the rights to human dignity in section 10 of the South African Constitution; access to social security in section 27 of the Constitution; access to courts in section 34 of the Constitution; and the right to equality in section 9 of the Constitution. Section 9, which at this stage is the focus of the article, provides:

(1) Everyone is equal before the law and has the right to equal protection and benefit of the law.

(2) Equality includes the full and equal enjoyment of all rights and freedoms. To promote the achievement of equality, legislative and other measures designed to protect or advance persons, or categories of persons, disadvantaged by unfair discrimination may be taken.

(3) The state may not unfairly discriminate directly or indirectly against anyone on one or more grounds, including race, gender, sex, pregnancy, marital status, ethnic or social origin, colour, sexual orientation, age, disability, religion, conscience, belief, culture, language and birth.

(4) No person may unfairly discriminate directly or indirectly against anyone on one or more grounds in terms of subsection (3). National legislation must be enacted to prevent or prohibit unfair discrimination.

(5) Discrimination on one or more of the grounds listed in subsection (3) is unfair unless it is established that the discrimination is fair.

The courts have held that the above provision protects both formal and substantive equality.34 Formal equality is contemplated in subsection (1), whereas subsection (2) contemplates substantive equality. It is in this context that the Court has emphasised that the society envisioned by the Constitution is one based on the values of human dignity, the achievement of equality and the advancement of human rights and freedoms.35 It has consistently held that t he achievement of equality (formal or substantive) is one of the fundamental objectives of the Constitution.36 In one of the earliest cases dealing with the right to equality, the Court explained the following difficulties faced by any modern government:37

It must be accepted that, in order to govern a modern country efficiently and to harmonise the interests of all its people for the common good, it is essential to regulate the affairs of its inhabitants extensively. It is impossible to do so without differentiation and without classifications which treat people differently and which impact on people differently ... Differentiation which falls into this category very rarely constitutes unfair discrimination in respect of persons subject to such regulation, without the addition of a further element. It is convenient, for descriptive purposes, to refer to the differentiation presently under discussion as ‘mere differentiation’. In regard to mere differentiation the constitutional state is expected to act in a rational manner. It should not regulate in an arbitrary manner that serve no legitimate governmental purpose, for that would be inconsistent with the rule of law and the fundamental premises of the constitutional state. The purpose of this aspect of equality is, therefore, to ensure that the state is bound to function in a rational manner. This has been said to promote the need for governmental action to relate to a defensible vision of the public good ...

In light of the above and in order to deal with the complexities of enforcing the right to equality and determine whether or not an Act of Parliament violates that right, the Court developed a three-staged inquiry in Harksen v Lane under the interim Constitution of the Republic of South Africa Act 200 of 1993, the provisions of which were replaced by the Constitution. The inquiry is described by the Court as involving the following questions: 38

(a) Does the provision differentiate between people or categories of people? If so, does the differentiation bear a rational connection to a legitimate government purpose? If it does not then there is a violation of section 9(1). Even if it does bear a rational connection, it might nevertheless amount to discrimination.

(b) Does the differentiation amount to unfair discrimination? This requires a two stage analysis:

(i) Firstly, does the differentiation amount to discrimination? If it is on a specified ground, then discrimination will have been established. If it is not on a specified ground, then whether or not there is discrimination will depend upon whether, objectively, the ground is based on attributes and characteristics which have the potential to impair the fundamental human dignity of persons as human beings or to affect them adversely in a comparably serious manner.

(ii) If the differentiation amounts to discrimination, does it amount to unfair discrimination? If it has been found to have been on a specified ground, then unfairness will be presumed. If on an unspecified ground, unfairness will have to be established by the complainant. The test of unfairness focuses primarily on the impact of the discrimination on the complainant and others in his or her situation.

If, at the end of this stage of the enquiry, the differentiation is found not to be unfair, then there will be no violation of section 9(2).

(c) If the discrimination is found to be unfair then a determination will have to be made as to whether the provision can be justified under the limitations clause.

The courts have consistently applied the above inquiry to determine numerous allegations of breaches of the right to equality, particularly those alleging violations of subsection (1) of that right.39

4.2 Applying the Harksen inquiry to the Government Employees Pension Fund Law

In Wiese v Government Employees Pension Fund, which dealt with an issue similar to the one being examined here, the High Court considered whether the Government Employees Pension Fund Law was constitutionally invalid due to its failure to apply the clean break principle. The case arose after the Pension Funds Act and Divorce Act 90 of 1979 were concurrently amended in 2007 to grant divorcees of members of pension funds governed by the Pension Funds Act immediate access to their pension benefits on the date of divorce. Prior to these amendments, divorcees’ pension benefits would accrue to them only upon certain exit events such as retirement or resignation by the main pension member. The problem was that the non-member spouse was prejudiced because the value of his or her benefit did not grow during the waiting period before the exit event by the main member. Yet, the main pension member would benefit from the growth in value of the benefit during this period. As the High Court explained, the effect of the 2007 reforms is that they amended the date of accrual of the pension benefits for a non-member spouse so that the non-member spouse’s pension benefits accrue on the date of divorce.40 In other words, following the reforms the non-member spouse no longer has to wait until the main pension member exits the fund in order to gain access to his or her pension benefits. There is no doubt that these reforms brought forth advantages to non-member spouses of pension members in South Africa.

The problem is that the advantages from the 2007 amendments did not apply to the Government Employees Pension Fund Law. In applying the Harksen inquiry to this case, the High Court found that the differentiation in that case was between non-member spouses of members of pension funds regulated by the Pension Funds Act and non-member spouses of members of the GEPF. It also found that the differentiation arose out of Parliament’s omission to apply the ‘clean break’ principle on divorce to non-member spouses of members of the GEPF. The government did not defend the rationality of the differentiation nor did the Court find any legitimate government reason for the differentiation. The Court held that the omission in the Government Employees Pension Fund Law to provide the application of the ‘clean break’ principle rendered it in conflict with section 9(1) of the Constitution. For separation of powers necessities, the Court rejected to read-in words into the Government Employees Pension Fund Law as a remedy in favour of a suspended declaration of invalidity to allow Parliament to remedy the defect. In his study of constraints on judicial review, Okpaluba has correctly noted that ‘as an incident of separation of powers, courts often state that they are ill-equipped to grant orders that could have multiple social and economic consequences’.41 This appears to be what motivated the High Court from not granting the reading-in remedy.

By the time the case reached the Court for confirmation of the order of invalidity as required by the section 167(5) of the Constitution, Parliament had amended the Government Employees Pension Fund Law to address the defect. The Court found that the substantive cause of action by the plaintiff had been rendered moot by that legislative intervention, and that the resolution of the validity of the Government Employees Pension Fund Law would have no practical effect on the parties. Therefore, it held that it was not in the interests of justice to consider the matter.

A similar cause of action was lodged in Ngewu challenging the Post Office Act for its omission to provide for a ‘clean break’ principle in its provisions. Despite the fact that the parties settled the matter, the Court found that the differentiation between the payments of divorced spouses’ interests regulated by the Pension Funds Act and the Government Employees Pension Fund Law versus the Post Office Act was irrational due to the omission of the ‘clean break’ principle in the Post Office Act.42 The Court reasoned that this differentiation did not meet the standard of equality before the law and equal protection and benefit of the law.

As in Wiese, the government did not defend the impugned law nor did it seek to justify it. The Court declared the relevant provisions of the Post Office Act invalid and suspended the order of invalidity for eight months to allow Parliament to cure the constitutional defect. The Court also held that in the event that the defect was not cured within the stipulated time frame, the order to read-in section 24A of the Government Employees Pension Fund Law into the Post Office Act would automatically come into effect. Section 24A of the Government Employees Pension Fund Law was the provision that was passed to cure the constitutional defect identified by the High Court in Wiese.

The jurisprudence in Wiese and Ngewu is relevant to the problem which has preoccupied the pages of this article. There is a clear differentiation between members of the GEPF and members of pension funds governed by the Pension Funds Act with respect to access to justice at the OPFA. The differentiation arises out of the failure by Parliament to make provision for a specialised pension tribunal for members of the GEPF. Given that the Pension Funds Act affords members of pension funds governed by it the advantage of access to justice at no cost, there is no rational reason why the same advantage should be withheld from their counterparts in the GEPF. Unlike their counterparts under the Pension Funds Act, members of the GEPF have to incur substantial legal costs in order to vindicate their rights under the Government Employees Pension Fund Law and its rules. Recently, the Durban High Court highlighted this problem. In explaining why the losing party should not be liable for legal costs of litigation, the High Court in Ntshangase v Government Employees Pension Fund reasoned:43

During the course of argument I enquired from counsel for the respondent as to whether any provision existed in the rules of the respondent for a cost-effective and expeditious dispute resolution mechanism, or for a referral of disputes to an entity like the ... Adjudicator ...The respondent ought to make a conscientious attempt to have disputes resolved efficiently and in a cost-effective manner for members or beneficiaries who may feel aggrieved at a decision. Counsel for the respondent was unable to refer me to any provision in the rules for such mechanism. Moreover, the complete failure of the respondent to engage with the applicant over the issue of the amount of the benefit to be paid following the death of the deceased is regrettable. In light of this, I am of the view that the applicant, although the losing party, should not be liable for costs.

Despite the above reasoning and conclusion, the judgment in Ntshangase highlights the difficulties faced by members and beneficiaries of the GEPF due to the absence of a dispute resolution provision in the Government Employees Pension Fund Law. It is clear from the Ntshangase judgment that at the very least members and beneficiaries of the GEPF, who opt to vindicate their rights in court, have to pay for their own legal costs of litigation. The high cost of legal services and its impact on the underprivileged in South Africa has been well articulated by many commentators, including recently by Chief Justice Mogoeng when he observed that ‘[l]itigation is prohibitively expensive and therefore not an easily exercisable constitutional option for an average citizen’.44

For this reason, the legislative history of the Pension Funds Act is unambiguous that the legislature conceived of a way to give the poor and marginalised access to justice through the OPFA, where members of the pension funds can get the same judicial services that are available in the courts of law at no cost.45 However, the current state of affairs, which prevents members of the GEPF from access to free judicial service at the OPFA, is indefensible and requires urgent legislative intervention. However, what type of legislative interventions or policy considerations are required to be considered?

5.1 Separation of powers

There are a myriad constitutional and international law considerations and policy options that the executive and the legislature will have to consider in its efforts to cure the defect in the Government Employees Pension Law. For reasons of the separation of powers, these considerations and options cannot properly be determined through the institution of judicial review. In other words, this is not a situation where, when approached by a litigant, the judiciary can simply grant a reading-in remedy because there are a range of policy choices available to the elected branches of government. The courts have developed an approach to deal with problems associated with circumstances where there may be more than one rational way of dealing with a particular social challenge.46 In this regard, the Court in Bel Porto School Governing Body47 reasoned as follows:48

The fact that there may be more than one rational way of dealing with a particular problem does not make the choice of one rather than the others an irrational decision. The making of such choices is within the domain of the executive. Courts cannot interfere with rational decisions of the executive that have been made lawfully, on the grounds that they consider that a different decision would have been preferable.

The High Court acknowledged and applied the above approach in Wiese when it rejected the plaintiff’s argument urging a reading-in remedy.49 The High Court offered the following three reasons, namely, that (i) reading-in should not be preferred if it is likely to result in budgetary intrusion;50 (ii) since there were a range of constitutionally defensible choices, including different choices for GEPF versus other private pension funds governed by the Pension Funds Act, it was appropriate to allow the legislature to grapple with those choices rather than the courts usurping that power;51 (iii) a reading-in remedy could have far-reaching and unforeseen consequences, and courts should be wary of granting such remedy when a full legislative process of drafting and consultation could bring to light difficulties or unintended consequences unforeseen by a court.52 What is clear from the separation of powers jurisprudence of the Court is that while a reading-in remedy is permissible, courts are cautious in granting it.53 Hence, it is submitted that the elected branches of government need proactively to address the current constitutional defect in the Government Employees Pension Law in order to prevent possible court intervention.

5.2 South Africa’s dispute resolution framework: What the government should consider when amending the Government Employees Pension Law

In this final part of the article I examine the constitutional framework on the adjudication of disputes that will have to be considered by the legislative and executive branches of government. The primary reason that compels this examination is that the Constitution is the supreme law and any law or conduct in conflict with it is invalid.54 It is well established that South African constitutional law entitles everyone to the right to a fair and public hearing by a court or another independent and impartial tribunal in the determination of his or her legal rights and obligations. This right finds expression in section 34 of the Constitution, which provides that ‘[e]veryone has the right to have any dispute that can be resolved by the application of law decided in a fair public hearing before a court or, where appropriate, another independent and impartial tribunal or forum’.

The above provision embodies the legal framework on dispute resolution in South Africa, of which the scope has been determined by the Court. In De Lange v Smuts the Court dealt with the constitutionality of a presiding officer at an insolvency inquiry, who was empowered to commit a recalcitrant examinee to prison under section 66 of the Insolvency Act 24 of 1936. In resolving this dispute, the Court had to determine whether the presiding officer, for purposes of section 34, is either a court or another independent and impartial tribunal or forum. In the course of adjudication, the Court made some important judicial remarks regarding the scope of section 34. These remarks are important for the executive and legislature to consider in the context of devising a remedy for the defects in the Government Employees Pension Law.

The Court in De Lange ruled that any dispute that can be resolved by application of law has to comply with section 34, that is to say, the dispute must be resolved before a court or, where applicable, another independent and impartial tribunal.55 According to De Lange, when dealing with a section 34 problem, the crucial inquiry is whether a forum involved is either a court or another independent and impartial tribunal or forum.56 If the answer is in the affirmative, the next inquiry will be whether it is appropriate to have the issues in dispute decided by such court or tribunal.57 Given that questions of what constitutes an independent and impartial tribunal or forum had not been comprehensively determined in South Africa prior to De Lange, the Court relied heavily on Canadian case law on these questions to develop South African law.

In this context, the Court found that there were three essentials conditions that characterise a court or another independent and impartial tribunal or forum. These are (a) security of tenure, which embodies the requirement that the decision maker be removable only for just cause and be secure against interference by the executive branch of government;58 (b) a considerable degree of financial security free from arbitrary interference by the executive branch of government that could affect the independence of a tribunal or forum; and (c) institutional independence with respect to matters that relate directly to the exercise of the tribunal’s judicial function, judicial control over the administrative decisions that bear directly and immediately on the exercise of the judicial function.

According to the Court’s reasoning in De Lange, while there is a close link between independence and impartiality, these nonetheless are separate requirements. Independence relates to the traditional value of judicial independence both in relation to the state of mind of the decision maker, but also their status or relationship to others.59 On the other hand, the Court explained that impartiality speaks to a state of mind of the decision maker in connection with the issues and the parties in an individual case.60 Accordingly, since both independence and impartiality are fundamental to individual and public confidence in the administration of justice, it is important that any tribunal or forum should be perceived as independent as well as

impartial.61 Borrowing from the Canadian Supreme Court decision in R v Valente,62 the Court in De Lange declared that the requirement of independence under section 34 means that the ‘status of a tribunal must guarantee not only its freedom from interference by the executive and legislative branches of government but also by any other external force such as business or corporate interests or other pressure groups’.63

To put it differently, section 34 is designed not only to protect against interference from executive or legislative branches of government, but also the inherent dangers from private interests. This interpretation of the scope of section 34 is consistent with the general design of the Constitution, which applies to both state and private action.64 There are other standards and measures of accountability inherent in section 34, such as the public nature of court proceedings, judicial reason-giving in judgments, the deliberative nature of civil procedure, the judicial appointment process and the doctrine of stare decisis.65

Recently, in Financial Service Board66 the High Court applied the above principles to determine whether a tribunal set up under the Financial Services Board Act 1990 was in line with section 34 of the Constitution. In this case, a member of the Financial Service Board (FSB) was appointed to the Appeals Board which is established in terms of section 26A of the Financial Services Board Act. The primary purpose of the Appeals Board is to resolve any dispute brought by a person aggrieved by a decision made by the FSB. The provisions establishing the Appeals Board were challenged on the basis that they were inconsistent with the section 34 of the Constitution. The argument advanced to attack the validity of the Appeals Board was that the presence of a member of the FSB on the Appeals Board exhibited institutional bias and a lack of independence required by sections 34 and 33 of the Constitution.67

In dismissing the challenge, the High Court relied heavily on Canadian authorities. It reasoned that individual and structural independence were not ends in themselves, but were desirable for the faith in the impartiality of a tribunal which they promote. Conradie J noted that the overall objective of guaranteeing independence is to ensure a reasonable perception of impartiality at an institutional and not subjective level. He further observed that the test to determine this type of bias is whether, having regard to the parties who appear before a decision maker, a fully-informed person would harbour a reasonable apprehension of bias in a substantial number of cases. Based on this reasoning, Conradie was satisfied that the Appeals Board was an independent tribunal as envisaged by section 34 of the Constitution. As a result, he ruled that section 26(1) of the Financial Service Act was constitutionally valid. The decision in Financial Service Board was welcomed by some commentators, who observed that ‘[a]s a matter of practical necessity considerable deviations from the standard of independence set for courts will have to be tolerated when it comes to tribunals’.68

Therefore, the constitutional position in South Africa in relation to the resolution of disputes is that any dispute that can be resolved by application of law requires its determination to comply with section 34; that such disputes must be resolved publicly before a court or a tribunal.69 The legislature and the executive have to apply their minds to these constitutional considerations in addressing the defects in the Government Employees Pension Law.

From the foregoing analysis it is clear that the executive and the legislature have several options. Among these are, first, that they could amend the legislation and grant GEPF members access to the OPFA notwithstanding the problems associated with that tribunal; second, that they could establish a stand-alone tribunal and provide complainants with the right to appeal to the High Court as is the case under section 30P of the Pension Funds Act. In the event that a stand-alone tribunal is preferred, there are further options available to the political branches of the state. These include that (i) in terms of the constitution of tribunal members, the political branches of the state, under the authority of Financial Service Board, have an option to appoint a member of the Board of Trustees of the GEPF to occupy a position on the tribunal: (ii) the political branches will have to grapple with the question whether complainants to the tribunal will enjoy the right to legal representation at the tribunal. In this context, a policy decision will have to be made having due regard to section 3(3) of the Promotion of Administrative Justice Act 2000, which grants an administrator the discretion to permit a person to obtain legal representation in serious or complex cases, and the judgment by the Supreme Court of Appeal in Hamata,70 which confirmed the right to legal representation in certain complex cases;71 (iii) the policy makers will have to consider issues of security of tenure of tribunal members, which embodies the requirement that a decision maker be removable only for just cause and be secure against interference.72 This aspect could enhance public confidence in the tribunal and carries with it budgetary implications, which are matters that fall within the domain of the elected branches of government;73 (iv) the legislature and the executive will have to consider whether the tribunal would be conferred with the power to make decisions (over questions of fact and law)74 that will be deemed a civil judgment by a court of law;75 (v) given the jurisdictional difficulties experienced by the Adjudicator, the legislature and executive may have to consider granting broad jurisdictional powers to the envisaged tribunal taking into account recent transformative jurisprudence.76 For instance, I submit that in order to fall within the jurisdiction of the tribunal, the focus must expressly be placed on the substance of a complaint and not the form of the complaint. Ordinary complainants should not be expected to frame their complaints with legal precision; (vi) the question of accessibility is another aspect that will have to occupy the minds of policy makers. As one commentator has correctly observed, this deals with whether hearings would be held in the English language only or include other official languages of South Africa.77

Related to this question is the issue of whether the proceedings would require personal attendance and the giving of direct evidence by complainants or whether hearings would be conducted by means of documentary evidence alone.78 The legislature and the executive will have to apply their minds to questions of enforcement of the tribunal rulings taking into account existing problems in other legislative frameworks.79 The problems around the enforceability of tribunal rulings has in recent years been the subject of debate and academic examination in South Africa.80 In order to devise an effective solution to the problems affecting the GEPF, the legislature and the executive will have to consider existing research and conduct new research on the subject. Aside from the above constitutional and policy considerations, the legislature and the executive will need to have regard to international law,81 a topic that is beyond the scope of this article.