If you are a member of a retirement fund and you have been the victim of unfair discrimination in the past, there is a good chance you could claim compensation. But don't count your chickens before they hatch, Kobus Hanekom of Old Mutual, warns: the pay-outs may not be as big as all that.
The plight of victims of discrimination in retirement funds hit the headlines again recently when women teachers, who lost their permanent jobs under the old government when they married, announced their intention to claim compensation for the loss of their pension rights.
In the private sector, black victims of discrimination have already won compensation in the ground-breaking Leonard Dingler case, where the Labour Court ordered the employer to pay the workers out for damages suffered in the past.
Billions of rands are at stake if the courts order employers and retirement funds to pay out those who suffered financially as a result of unfair discrimination, Hanekom, who is a senior legal consultant for Old Mutual Actuaries and Consultants, says.
But, he warns, if employers and retirement funds are ordered to pay full damages, they may face bankruptcy.
"Employers and retirement fund trustees who allowed or committed these unfair practices may simply not be in a position to redress the loss suffered and may collapse, causing losses to many more thousands of individuals."
He says other countries have faced the same dilemma and where necessary have introduced legislation to "cap" claims so that retirement funds are not bankrupted.
In Europe, for instance, the Treaty of Rome, the founding treaty of the European Union, provides for equal pay (including pension benefits) between men and women. But to redress past discrimination would have cost the countries concerned more than £50 billion (more than R500 billion at today's exchange rate). In a test case in 1990 , the court set May 17, 1990, as the cut-off date for claims for back-pay.
Hanekom says the European Court of Justice has also held that the laws of member states could impose time limits on claims. The United Kingdom passed legislation insisting that employees make claims within six months of leaving the job and limiting backdated membership of retirement funds to two years. The British Court of Appeal has upheld these time limits in the face of action by part-time employees claiming discrimination for longer periods.
"The position adopted by the South African courts is likely to be much the same," Hanekom says.
He points out that in many cases the Constitutional Court has ruled that though an ordinance, act or practice is unconstitutional, the court will not come to the assistance of the victim.
"In a case in KwaZulu Natal, for instance, the court found that a particular ordinance was unconstitutional but was not prepared to strike it down because that would lead to chaos which would not be in the interest of the community."
In the Leonard Dingler case, though the workers filed a significant damages claim, the court limited the compensation to start only from the date on which the complaint was lodged, and not from the beginning of the discrimination.
It seems, Hanekom says, that members are unlikely to be awarded damages going back beyond the date at which they filed the claim. And if the courts do make big awards for retrospective compensation, which could cripple employers and funds, laws are likely to be passed, as has happened in Britain, to limit payouts.