employment ENSight | 8 August 2018

Can an employer be held liable for racial discrimination towards an employee by one of its customers?

by Henry Rossouw and Faryn Nana
In an interesting and (as yet) unreported judgment handed down by the Labour Court, which considered an appeal against a Commission for Conciliation, Mediation and Arbitration (“CCMA”) award (rather than a review), the court confirmed the principle that an employer cannot be held liable in terms of the Employment Equity Act, 1998 (the “EEA”) for unfair discrimination resulting from actions towards one of its employees by one of its customers.

In this case, the employee alleged that the controllers and managers at the Shoprite branch at which she worked victimised, bullied and harassed her because of her race, and further, during an incident in which a customer called the employee a “stupid k*****”, that the company had failed to protect her from the racist remark of the customer. The employee referred the dispute to the CCMA alleging unfair discrimination in terms of section 60 of the EEA. 

Is the company liable under section 60 of the EEA?

Section 60 of the EEA provides that, if it is alleged that an employee, while at work, contravened a provision of the EEA or engaged in any conduct that, if engaged in by that employee’s employer, would constitute a contravention of a provision of the EEA, the alleged conduct must immediately be brought to the attention of the employer. The employer must consult all relevant parties and must take the necessary steps to eliminate the alleged conduct and comply with the provisions of the EEA.

In this case, the CCMA commissioner accepted that the employee had indeed been bullied and victimised. However, the commissioner also found that this was not due to her race. On the question of the company’s liability in terms of the EEA for alleged unfair discrimination arising from the remark made by the customer, the commissioner found that the company should have done more to ensure that the conduct did not happen again, such as considering preventing the customer from accessing the store in future. The commissioner found that the company had indirectly subjected the employee to unfair discrimination on the ground of race, and ordered that she receive an amount of ZAR75 000 in compensation.

This arbitration award was then taken on appeal to the Labour Court by the company. The court could not find anything in the EEA that extended the vicarious liability of the company (to prevent and eliminate unfair discrimination) to apply also to the conduct of a third party, such as the customer who made the racist remark, deplorable as such remark was. The court confirmed that, while the employee may have had other legal remedies against the customer in question (such as a claim in terms of section 10 of the Promotion of Equality and Prevention of Unfair Discrimination Act, 2000), it was clear that section 60 of the EEA applied only to conduct by the employees of the employer. The employee therefore did not have a remedy against the company in terms of this section of the EEA. 

The Labour Court therefore upheld the appeal and substituted the award of the CCMA arbitrator with an award finding that the company had not unfairly discriminated against the employee in terms of the EEA. 

Could there be liability for the company under the common law?  

Although it is correct that an employee may not have any remedy against their employer in terms of the EEA for the conduct of a customer (or anyone other than a fellow employee) which contravenes the EEA, the employee may have a remedy under common law. The Supreme Court of Appeal, in Media 24 Ltd and another v Grobler confirmed the common law duty of an employer to take reasonable care for the safety of its employees. This includes, in appropriate circumstances, a duty to protect employees from psychological harm caused, for example, by sexual harassment by co-employees, as was the case in the Media 24 case. 

In our view, this principle would extend to situations similar to those of the Shoprite case, where the harassment was not perpetrated by an employee. If it can be established that an employer did not take reasonable care to protect its employees from the actions of third parties, an employee may be able to approach the civil courts with a claim in delict against his or her employer for its failure to protect him or her from psychological harm caused by a customer’s comments. Approaching the courts in this manner is of course a much more arduous, time-consuming and costly process than approaching the CCMA with a claim of alleged unfair discrimination in terms of the EEA.

It should therefore be borne in mind that, while an employer may be able to successfully defend a claim of alleged unfair discrimination brought by one of its employees to the CCMA in terms of the EEA, if the only basis for such a claim is the conduct of someone other than a fellow employee (a customer, in this case), aggrieved employees (apart from being able to approach the civil courts for relief against the customer/third party in question) may still seek redress against the employer in the civil courts in terms of the employer’s common law duty to protect its employees from psychological harm.  

Reviewed by Peter le Roux, executive consultant in ENSafrica’s employment department. 


Henry Rossouw

employment | senior associate
cell: +27 82 708 0469

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Faryn Nana

employment | associate
cell: +27 82 310 0447

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