Minister of Finance and Another v Van Heerden

• Jurisdiction: South Africa

Minister of Finance and Another v Van Heerden
2004 (6) SA 121 (CC)

2004 (6) SA p121

Citation	2004 (6) SA 121 (CC)
Case No	CCT 63/03
Court	Constitutional Court
Judge	Chaskalson CJ, Langa DCJ, Madala J, Mokgoro J, Ngcobo J, O'Regan J, Sachs J, Skweyiya J, Van Der Westhuizen J and Yacoob J
Heard	February 24, 2004
Judgment	July 29, 2004
Counsel	G B Marcus SC (with him M Chaskalson) for the applicants.; E W Fagan and P B J Farlam for the respondent.; A Louw for the amicus curiae.

Flynote : Sleutelwoorde B

Constitutional law — Right to equality before the law — Content of right — Constitutional understanding of equality including 'remedial or restitutionary equality' — Measures taken under these notions not deviating from or invasive of right to equality guaranteed by Constitution — Provisions of s 9(1) and (2) of Constitution of the Republic of South Africa Act 108 of 1996 complementary — Legislative and other measures properly falling within requirements of s 9(2) not presumptively unfair — Remedial measures not derogation from, but C forming substantive and composite part of, equality protection envisaged by provisions of s 9 and of Constitution as a whole — Differentiation aimed at protecting or advancing persons disadvantaged by unfair discrimination warranted provided measures shown to conform to internal test set by s 9(2). D

Constitutional law — Right to equality before the law — Content of right — When measure challenged as violating equality provision, its defender could meet E claim by showing that measure in question contemplated by s 9(2) of Constitution of the Republic of South Africa Act 108 of 1996 in that it promoted achievement of equality and had been designed to protect and advance persons disadvantaged by unfair discrimination — Threefold enquiry envisaged for s 9(2): whether measure targeting persons or categories of F persons who had been disadvantaged by unfair discrimination; whether measure designed to protect or advance such persons or categories of persons; and whether measure promoting achievement of equality.

Pension — Pension fund — Rules of — Constitutionality of — Whether rule of Political Office-Bearers Pension Fund providing for lower employer G contribution rates in respect of certain category of parliamentarians unconstitutional for being discriminatory and offending equality rights — Evidence showing clear connection between membership differentiation made by scheme and relative need of each category for increased pension benefits — Scheme designed to distribute pension benefits on equitable basis with purpose of H diminishing inequality between privileged and disadvantaged parliamentarians — Scheme promoting achievement of equality and reflecting clear and rational consideration of need of Fund members — Scheme serving purpose of advancing persons disadvantaged by unfair discrimination — Rule not invalid. I

Headnote : Kopnota

The respondent brought an application in a High Court for an order declaring the provisions of rule 4.2.1 of the Political Office-Bearers Pension Fund (the Fund) to be unconstitutional and invalid. The High Court upheld the claim and the respondents sought leave to appeal from that decision. The respondent was a member of Parliament who had served since 1987 and he J

2004 (6) SA p122

was consequently a member of both the Fund and the Closed Pension Fund (CPF), a pension fund set A up for members of Parliament who had been members of Parliament and political office bearers who held office before 1994. The Fund was set up to cater for the retirement funding of members who entered Parliament following the general election in 1994. The CPF was financed fully from public funds whereas the Fund was based on employer and B employee contributions made to it. The Fund was established in 1998 but took effect retrospectively to 1994 and was registered in terms of the Pension Funds Act 24 of 1956. The rules of the Fund created three categories of members, category A being for members under the age of 49 who were not members of the CPF, category B being for members who were over 49 and were not members of the CPF, and category C being for C members who were members of the CPF. The employer contribution rates in respect of the three groups differed, with category B receiving the highest employer contribution rate and category C the lowest. The rates covered only the period from 1994 to 1999, whereafter there was one rate for all members. The respondent contended that over the five-year period the differentiated employer contribution rates improperly disfavoured him and other category C members who were in D receipt of pensions from the CPF in comparison with other members who were not members of the CPF. The respondent contended that the measures were arbitrary, unreasonable, unfairly discriminatory and consequently they were unconstitutional. In its judgment upholding the claim the High Court found that the challenged provisions were not mere 'differentiation' but rather 'discriminatory in nature' because for E five years lower employer contributions were paid for the less favoured class of members of the Fund to which they all belonged and contributed equally, with the result that the less favoured class of members received substantially smaller pensions than members of the favoured classes. It also found the differentiation to be prima facie F unfair on the grounds that it was arbitrary, no reason having been advanced for it and that it was based on intersecting grounds of race and political affiliation - the latter a matter of conscience and belief - both being prohibited grounds listed in s 9(3) of the Constitution of the Republic of South Africa Act 108 of 1996. The Court held that a person who relied on s 9(2) to justify discriminatory measures bore the onus of establishing on a balance of probabilities that the measures had been G taken to promote the achievement of equality and that this was not an easy onus to discharge. It held that the discrimination had to be convincingly justified to discharge the presumption of unfairness under s 9(5). The Court found that the Minister and the Fund had failed to discharge such onus. On appeal,

Held (per Moseneke J; Chaskalson CJ, Langa DCJ, H Madala J, O'Regan J, Sachs J, Van der Westhuizen J and Yacoob J concurring, Mokgoro J concurring but adopting a different route), that our constitutional understanding of equality included 'remedial or restitutionary equality' and such measures were not in themselves a deviation from, or invasive of, the right to equality guaranteed by the Constitution nor were they 'reverse discrimination' or 'positive discrimination' argued by the respondent: they are integral to the I reach of our equality protection. In other words, the provisions of s 9(1) and s 9(2) were complementary; both contributing to the constitutional goal of achieving equality to ensure 'full and equal enjoyment of all rights'. A disjunctive or oppositional reading of the two subsections would frustrate the foundational equality objective of the Constitution and its broader social justice imperatives. (Paragraph [30] at 136A/B - D.) J

2004 (6) SA p123

Held, further, that the Constitution and in particular s 9 A thereof, read as a whole, embraced for good reason a substantive conception of equality inclusive of measures to redress existing inequality. Absent a positive commitment progressively to eradicate socially constructed barriers to equality and to root out systematic or institutionalised under-privilege, the constitutional promise of equality before the law and its equal protection and benefit must, in the context of our country, ring hollow. (Paragraph at [31] at B 136E - F.)

Held, further, that Legislative and other measures that properly fell within the requirements of s 9(2) were not presumptively unfair. Remedial measures were not a derogation from, but a substantive and composite part of, the equality protection envisaged by the provisions of s 9 and of the Constitution as a whole. Their primary object was to promote the achievement of equality. To that end, C differentiation aimed at protecting or advancing persons disadvantaged by unfair discrimination was warranted provided the measures were shown to conform to the internal test set by s 9(2). (Paragraph [32] at 137B - C.)

Held, further, if restitutionary measures, even based on any D of the grounds of discrimination listed in s 9(3), passed muster under s 9(2), they could not be presumed to be unfairly discriminatory and to hold otherwise would mean that the scheme of s 9 was internally inconsistent or that the provisions of s 9(2) were a mere interpretative aid or even surplusage. Such an approach, at the outset, tagged s 9(2) measures as a suspect category that may be permissible only if shown not to discriminate unfairly. Secondly, such presumptive E unfairness would unduly require the Judiciary to second-guess the Legislature and the Executive concerning the appropriate measures to overcome the effect of unfair discrimination. The Court a quo had erred in imposing such a burdensome onus in this regard. (Paragraphs [33] - [35] at 137D - 138A.)

Held, further, that when a measure was challenged as violating the equality provision, its defender could meet the claim by F showing that the measure was contemplated by s 9(2) in that it promoted the achievement of equality and was designed to protect and advance persons disadvantaged by unfair discrimination. To determine whether a measure fell within s 9(2) the enquiry was threefold: The first yardstick related to whether the measure targeted persons or categories of persons who had been disadvantaged by unfair G discrimination; the second was whether the measure was designed to protect or advance such persons or categories of...