[1996] 1 LRC 64

Nyambirai v National Social Security Authority and Another

Zimbabwe Supreme Court Gubbay CJ, Korsah, Ebrahim, Muchechetere JJA and Sandura AJA 13 July 1995 (1) Constitutional law Fundamental rights Protection of property Exception 'Tax' Proviso saving acquisition of property in satisfaction of tax Mandatory contributions to pensions and other benefits scheme Whether 'tax' within meaning of proviso Appropriate test National Social Security Act 1989, s 3 National Social Security Authority (Pension and Other Benefits Scheme) Notice 1993 (NSSA (POBS) Notice), ss 4(1), 7 Constitution of Zimbabwe 1980, ss 16(1), (7). (2) Constitutional law Fundamental rights Protection of property Exception Tax Limitation Whether not reasonably justifiable in democratic society Onus of proof Appropriate test Mandatory contributions to pensions and other benefits scheme Compulsory acquisition of property amounting to tax Whether legislative objective justifying imposition of tax Whether measure rationally connected to legislative objective Whether measure no more than necessary to accomplish objective Whether measure arbitrary or excessive Whether onus on complainant to prove measure not reasonably justifiable in a democratic society National Social Security Act 1989 National Social Security Authority (Pension and Other Benefits Scheme) Notice 1993 (NSSA (POBS) Notice), ss 4(1), 7 Constitution of Zimbabwe 1980, s 16(1), (7). The applicant was an employee in a private firm and a member of a private pension scheme, which, he averred, provided adequate security for himself and his family. In terms of s 3 of the National Social Security Act 1989 the second respondent minister established by statutory instrument a pensions and other benefits scheme, which was administered by the first respondent. The applicant and his employer were obliged under ss 4(1) and 7 of the National Social Security Authority (Pension and Other Benefits Scheme) Notice 1993 (NSSA (POBS) Notice) to make monthly contributions to a fund to provide retirement pensions and other benefits and since October 1994 had been contributing $120 every month to the fund. The applicant applied to the court under s 24(1) of the Constitution of Zimbabwe 1980 for redress, contending that the said provisions of the NSSA (POBS) Notice infringed s 16(1) of the Constitution, which provided that 'No property of any description or interest or right therein shall be compulsorily acquired'. It was common cause that the contributions payable by employees and employers to the fund under the authority of ss 4(1) and 7(1) amounted to a compulsory acquisition of property in the form of moneys. Section 16(7) expressly provided that protection against deprivation of property did not extend to any law making provision for the acquisition of property or [1996] 1 LRC 64 at 65

property rights 'in satisfaction of any tax or rate except so far as [such] was shown not to be reasonably justifiable in a democratic society' and the questions for the court's determination were whether such mandatory contributions were saved from being held to be in contravention of s 16(1) as being in satisfaction of a 'tax' and, if so, whether they were reasonably justifiable in a democratic society. HELD: Application dismissed. (1) For an imposition to be properly designated as 'tax' qualifying as an exception within s 16(7) of the Constitution to the protection by s 16(1) against compulsory acquisition of property, the imposition had to be (i) a compulsory and not an optional contribution, (ii) imposed by the legislature or other competent public authority, (iii) imposed upon the public as a whole or a substantial sector thereof and (iv) raising the revenue from which was to be utilised for the public benefit and to provide a service in the public interest. National authorities were, in principle, better placed than the judiciary to appreciate what social and economic policies would be to the public benefit and a government's intention to establish a particular service or programme had to be respected by the courts, unless such an assessment was manifestly without reasonable foundation. It was clear that mandatory participation in the pension and other benefits scheme was indispensable to its fiscal success and voluntary participation would render the scheme difficult, if not impossible, to administer. The fact that the beneficiaries of the scheme were the employees or their survivors, and not the members of the public in general, did not mean that the contributions were not utilised for the public benefit to provide a service in the public interest. The government's interest in assuring the compulsory and continuous participation in and contribution to the scheme was very high. Accordingly, the contributions payable under the authority of s 4 of the NSSA (POBS) Notice were in satisfaction of a 'tax' (see pp 7273, 7475, post). Constantinides v Electricity Authority of Cyprus [1982] 3 Cyp LR 798 and James v United Kingdom (1986) 8 EHRR 123 applied. (2) The abridgment of the guarantee in s 16(1) of the Constitution against the compulsory acquisition of property by the imposition of a tax was invalid under s 16(7) if it was shown not to be reasonably justifiable in a democratic society, an elusive concept defying precise definition. The question was whether the measure arbitrarily or excessively invaded the enjoyment of the fundamental right according to the standards of a society with a proper respect for individual rights and freedoms. This required the court to consider whether: (i) the legislative objective was sufficiently important to justify limiting a fundamental right, (ii) the measures designed to meet the legislative objective were rationally connected to it and (iii) the means used to impair the right or freedom were no more than were necessary to accomplish the objective. The onus was on the challenger to establish that the legislative provisions went beyond what was reasonably justifiable in a democratic society. On the facts, the government had learned from the results of a commission of inquiry that there was a general consensus regarding the need for social security and in implementing the scheme it had followed the tradition of many developed and lesser developed countries in resolving to provide benefits for a large number of employees who [1996] 1 LRC 64 at 66

formerly had enjoyed no social security coverage. Furthermore, the right to social security and social insurance was embodied in several international instruments and the fact that the government had undertaken to meet its international obligations was cogent evidence that the scheme was sufficiently important to justify the imposition of the tax. To allow funding of the scheme to be optional would jeopardise its very existence and, since the government could not afford to finance the scheme on its own, in order to meet its responsibility to care for its people in their old age it had to insist on compulsory contributions. It followed that those measures designed to meet the legislative objective were rationally connected to that objective. To meet the third criterion the court had to weigh the impact of the limitation upon the right of the applicant against the importance of the legislative objective. The importance of the objective and the reasonableness of the manner in which it was achieved had to be measured against the gravity of the infringement of the protected right, which in the instant case involved weighing the significance of the public interest in the limitation against the seriousness of the infringement of the private right protected by the Constitution. Where employee and employer considered that the benefits under the compulsory scheme were inadequate or not as beneficial as those offered under a private scheme they were at liberty to cover any shortcomings under a private pension or insurance scheme. In addition, numerous democratic countries had enacted similar legislation. It followed that the compulsion to contribute to a national scheme was outweighed by the objective to which the limitation was directed. There had therefore been no infringement of the applicant's rights under s 16 of the Constitution (see pp 75, 76, 77, post). R v Oakes [1987] LRC (Const) 477 considered. Woods v Minister of Justice, Legal and Parliamentary Affairs [1994] 1 LRC 359 applied. [Editors' note: Section 3 of the National Social Security Act 1989, so far as material, is set out at p 68, post. Sections 4 and 7 of the National Social Security Authority (Pension and Other Benefits Scheme) Notice 1993 (NSSA (POBS) Notice), so far as material, are set out at pp 6869, post. Section 16 of the Constitution of Zimbabwe 1980), so far as material, is set out at p 70, post.] Cases referred to in judgment Alberts v Roodepoort-Mariasburg Municipality 1921 TPD 133 Apostolou v Republic of Cyprus [1985] LRC (Const) 851, Cyp SC Bethel Baptist Church v United States (1987) 822 F 2d 1334, US Ct of Apps (3rd Cir) Bull v Minister of Home Affairs [1987] LRC (Const) 547, 1986 (1) ZLR 202, 1986 (3) SA 870 (ZSC), Zim SC City Treasurer and Rates Collector, Newcastle Town Council v Shaikjee 1983 (1) SA 506 (N) Constantinides v Electricity Authority of Cyprus [1982] 3 Cyp LR 798

Fouche v Randfontein Stadsraad 1964 (2) SA 318 (T), TPA Hewlett v Minister of Finance (1981) ZLR 571, 1982 (1) SA 490 (ZSC), Zim SC James v United Kingdom (1986) 8 EHRR 123, ECt HR Leake v Commissioner of Taxes (State) (1934) 36 WALR 66 [1996] 1 LRC 64 at 67 Mellacher v Austria (1989) 12 EHRR 391, ECt HR NSW v Collector of Customs of NSW (1908) 5 CLR 818, Aus HC Permanent Estate and Finance Co Ltd v Johannesburg City Council 1952 (4) SA 249 (W), WLD R v Oakes [1987] LRC (Const) 477, [1986] 1 SCR 103, Can SC Schweiker v Wilson (1981) 450 US 221, 67 L Ed 2d 186, US SC United States Railroad Retirement Board v Fritz (1980) 449 US 166, 66 L Ed 2d 368, US SC United States v Lee (1982) 455 US 252, 71 L Ed 2d 127, US SC Woods v Minister of Justice, Legal and Parliamentary Affairs [1994] 1 LRC 359, 1995 (1) SA 703 (ZSC), 1995 (1) BCLR 56 (ZSC), Zim SC Zimbabwe Township Developers (Pvt) Ltd v Lou's Shoes (Pvt) Ltd 1983 (2) ZLR 376, 1984 (2) SA 778 (ZSC), Zim SC Legislation referred to in judgment Cyprus Constitution of Cyprus 1960, art 24(2) Social Insurance Law 1980 United States Constitution 1787, First Amendment Zimbabwe Constitution of Zimbabwe 1980, ss 16, 24(1), 113, Pt 2 National Social Security Authority Act 1989, s 3 National Social Security Authority (Pension and Other Benefits Scheme) Notice 1993 (NSSA (POBS) Notice), ss 4, 7, 10, 13, 21, 2225, 26, 29, 30, 32, 3336, 63, 74 National Social Security Authority (Pension and Other Benefits Scheme (Rates of Benefits) Notice 1994, SI 1994/193C, s 3

National Social Security Authority (Pension and Other Benefits Scheme) (Registration and Contribution) Notice 1994, SI 1994/146A Pension and Provident Funds Regulations 1991, SI 1991/323 Other sources referred to in judgment Black's Law Dictionary (abridged 5th edn) Convention for the Protection of Human Rights and Fundamental Freedoms (the European Convention on Human Rights) (Rome, 4 November 1950; TS 71 (1953); Cmd 8969), First Protocol, art 1 Digest of Case Law 19551967 pp 441443 International Covenant on Economic, Social and Cultural Rights 1966, arts 6, 9 International Labour Organisation: Convention 102 (27 April 1955), art 57, Convention 157 (11 September 1986) United Nations Universal Declaration of Human Rights 1948, art 22 Webster's Third International Dictionary [1996] 1 LRC 64 at 68 Application The applicant, Nyambirai, applied to the court under s 24(1) of the Constitution of Zimbabwe 1980 for redress claiming that the provisions of the National Social Security Authority (Pension and Other Benefits Scheme) Notice 1993 (NSSA (POBS) Notice), which required his employer and himself to make monthly contributions to a retirement fund established by the second respondent, the Minister of the Public Service, Labour and Social Welfare in order to provide national pensions and other benefits infringed s 16(1) of the Constitution. The scheme was under the administration of the first respondent, National Social Security Authority. The facts are set out in the judgment of the court.

The applicant appeared in person. B Patel for the first respondent. P A Chinamasa and A V M Chikumira for the second respondent. 13 July 1995. The following judgment of the court was delivered. GUBBAY CJ. Introduction The applicant is a professional assistant in the employ of a firm of legal practitioners. The first respondent, the National Social Security Authority (NSSA), is a body corporate established under the National Social Security Authority Act 1989 (the Act), and capable of suing and being sued.

In terms of s 3(1) of the Act, the second respondent, who is the Minister of the Public Service, Labour and Social Welfare (the minister), may, by notice in the Gazette, establish one or more schemes for the provision of benefits to or in respect of all employees, or such classes of employees, as may be specified in the notice, and may in like manner amend or abolish any such scheme. Under s 3(2)(c) any such notice may provide for:
'The compulsory payment of contributions by employers and employees, the rates of such contributions and the deduction of contributions payable by employees from any salary, wages or other moneys payable to them.'

On 24 December 1993 the minister, by statutory instrument, the National Social Security Authority (Pension and Other Benefits Scheme) Notice 1993, SI 1993/393, (the NSSA (POBS) Notice), established a scheme to be known as the Pension and Other Benefits Scheme. Section 4 reads:
'(1) Subject to this notice, any person who, on or after a date specified by the Minister by notice in the Gazette, is working in a profession, trade or occupation specified by the Minister in the notice, and(a) is a citizen of or ordinarily resident in Zimbabwe; and (b) has attained the age of sixteen years; and (c) has not attained the age of sixty years; shall register and contribute as an employee in terms of this notice. (2) Subject to this notice, every employer who has a place of business in Zimbabwe shall, within one month after becoming an employer of a

[1996] 1 LRC 64 at 69
person who is required to register in terms of subsection (1), register and contribute as an employer in terms of this notice.'

Section 7 of the NSSA (POBS) Notice expresses the obligations of the employer. The most important of these are the following: (i) to notify the general manager of NSSA by the sixteenth day of each month the amount of contributions payable by him in respect of every employee for the previous calendar month, (ii) to maintain a record in respect of every employee and (iii) to notify the general manager within one month of any change of address, termination of employment or death of an employee, of his ceasing to be an employer, and of any other relevant information. The rate of contribution of each employee and employer, as laid down in s 10 of the NSSA (POBS) Notice, as read with s 3 of the National Social Security Authority (Pension and Other Benefits Scheme (Rates of Benefits) Notice 1994, SI 1994/193C, is 3% of the employee's 'insurable monthly earnings' (as defined). The maximum amount of monthly earnings in respect of which contributions under the scheme are payable is $4,000, that is, $120 per month. Under s 13(1) of the NSSA (POBS) Notice, the contributions paid by the employer are deemed to be contributions paid by the employee. The benefits under the Pension and Other Benefits Scheme are listed in s 21 of the NSSA (POBS) Notice. They consist of: (a) invalidity pensions, (b) invalidity grant, (c) retirement pension, (d) retirement grant, (e) survivor's pension, (f) survivor's grant and (g) funeral grant. Where an employee retires at the age of 60 years (or 55 years in the case of

an employee who has been employed in arduous occupations and subject to the production of a medical certificate), he becomes entitled to a retirement pension if he has contributed for more than 120 months. A retirement grant will be made if the employee has contributed for less than 120 months but more than 12 months (ss 26 and 29). Other benefits may be paid in addition or instead of, such as invalidity benefits (ss 2225), funeral grants (s 32) and survivor benefits to widows and widowers or, in the event of their demise, to dependants (ss 3336). An employee who has contributed for less than 12 months before his employment terminates is entitled to receive a refund of contributions with interest (s 30). On 8 July 1994, under the National Social Security Authority (Pension and Other Benefits Scheme) (Registration and Contribution) Notice 1994, SI 1994/146A, the minister specified that every person who is gainfully employed in Zimbabwe in any profession, trade or occupation, other than persons employed in the service of the state or as domestic workers in private households, shall be liable to register and, with effect from 1 October 1994, to contribute as employees for the purposes of the NSSA (POBS) Notice. The constitutional dispute The applicant comes under s 4(1) of the NSSA (POBS) Notice. Since October 1994 both he and his employers have been contributing $120 every month to the Pension and Other Benefits Fund (the fund) established pursuant to s 63 of the NSSA (POBS) Notice. As a member of a private pension scheme which provides adequate security for himself and his family in the event of his disability or retirement and for his family upon his demise, the applicant [1996] 1 LRC 64 at 70 strongly objects to being liable to contribute to the fund. He approaches this court for redress in accordance with his entitlement to do so under s 24(1) of the Constitution of Zimbabwe 1980, upon the contention that the provisions of ss 4(1) and 7 of the NSSA (POBS) Notice infringe s 16 of the Constitution. He has the support of his employers who, while not seeking any relief, do not consider it equitable that they are compelled to contribute to the fund. Except under the authority of a law as described in paras (a)(f), none of which pertain, s 16(1) of the Constitution mandates 'No property of any description or interest or right therein shall be compulsorily acquired.' Subsections (4), (5), (7), (8) and (9) are provisions which derogate from the protection afforded by sub-s (1). Of relevance is sub-s (7) which reads in relevant part:
'Nothing contained in or done under the authority of any law shall be held to be in contravention of subsection (1) to the extent that the law in question makes provision for the acquisition of property or any interest or right therein in any of the following cases(a) in satisfaction of any tax or rate except so far as that provision or, as the case may be, the thing done under the authority thereof is shown not to be reasonably justifiable in a democratic society.'

It was common cause that the contributions payable by employees and employers to the fund under the authority of ss 4(1) and 7(1) of the NSSA (POBS) Notice amount to a compulsory acquisition of property in the form of moneys. In contention, however, was whether such mandatory contributions are saved from being held to be in contravention of s 16(1) as being: (i) in satisfaction of a 'tax' and are (ii) reasonably justifiable in a democratic society.

It is to these issues that I now turn, the second only arising for determination if an affirmative answer is given to the first. Whether the contributions payable by employees and employers are in satisfaction of a tax within the meaning of s 16(7)(a) of the Constitution Section 113(1), in Pt 2 of the Constitution, provides that 'unless the context otherwise requires tax includes duty or due.' At the outset it is important not to overlook the caution of Isaacs J, sitting in the High Court of Australia, in NSW v Collector of Customs of NSW (1908) 5 CLR 818 at 848:
'The word tax and its plural taxes are not words of invariable signification indicating any exercise whatever of the power of taxation; they are not infrequently used to denote a particular species of imposition, in contradistinction to duties and to duties of various kinds.'

Examples of the term being used by the lawmaker in this wide sense are to be found in Alberts v Roodepoort-Mariasburg Municipality 1921 TPD 133 at 136 (sanitary fees charged by a local authority), Fouche v Randfontein Stadsraad 1964 (2) SA 318 (T) (a levy contribution to be paid by every person employing a Bantu worker within the jurisdiction of the council), City Treasurer and Rates Collector, Newcastle Town Council v Shaikjee 1983 (1) SA 506 (N) at 507508 (a general rate on immovable property). [1996] 1 LRC 64 at 71 In Permanent Estate and Finance Co Ltd v Johannesburg City Council 1952 (4) SA 249 (W) at 259 Ramsbottom J expressed the view that to
'require any person who carries on a business or who owns a dog or a motor car to pay a prescribed fee is, I think, to impose a tax. The money paid is taken into general revenue and is used for general purposes; the person who pays receives no specific service in return for his payment. Endowment money paid by a township owner is quite a different thing; it is an agreed payment for services which are to be performed for the improvement of the township and from which the township owner will derive financial benefit.'

In another Australian decision, Leake v Commissioner of Taxes (State) (1934) 36 WALR 66 at 67, Dwyer J specified the characteristics of a tax:
'A compulsory contribution, or an impost may be nonetheless a tax, though not so called; the distinguishing features of a tax being in fact that it is a compulsory contribution imposed by the sovereign authority on, and required from the general body of subjects or citizens, as distinguished from individual levies on individuals.'

These criteria accord with the meaning of the word 'tax' as given in Black's Law Dictionary (abridged 5th edn) and in Webster's Third International Dictionary. With particular reference to whether compulsory contributions to a social insurance fund fell within the meaning of the term 'tax' in art 24(2) of the Constitution of Cyprus, the Supreme Court in Constantinides v Electricity Authority of Cyprus [1982] 3 Cyp LR 798 held:
'That an imposition is a tax if it is found to fulfil certain characteristics, namely, (a) it is compulsory and not optional, (b) it is imposed or executed by the competent authority, (c) it must be enforceable by law, (d) it is imposed for the

public benefit and for public purposes and (e) it must not be for a service for specific individuals but for a service to the public as a whole, a service in the public interest.'

From these authorities the following features which designate a tax may be said to emerge: (i) it is a compulsory and not an optional contribution, (ii) imposed by the legislature or other competent public authority, (iii) upon the public as a whole or a substantial sector thereof, (iv) the revenue from which is to be utilised for the public benefit and to provide a service in the public interest. The applicant argued that the fourth requirement of a 'tax' is lacking since the NSSA (POBS) Notice provides no direct benefit to members of the public in general. The benefits under it derive only to employees specified by the minister in statutory instrument, SI 1994/146A, or their survivors in the event of demise. In short, so it was urged, what has been created is a scheme pursuant to which specified employees receive a service or benefits in return for contributions made; the nature of the scheme, save for the element of compulsion, being similar to other schemes established in compliance with the provisions of the Pension and Provident Funds Regulations, SI 1991/323, for the benefit of members only. [1996] 1 LRC 64 at 72 The social and economic policies that moved the government to introduce a compulsory pensions scheme are pertinent to the inquiry of whether the terms of the Pension and Other Benefits Scheme so formulated, benefit the public and provide a service in the public interest. They are spoken to by the minister in his opposing affidavit, and may be restated and summarised as follows. (1) Previously about a third of the workforce in the country enjoyed no social security. So a scheme was designed both to provide employees with the security they deserve and are entitled to enjoy in retirement and in old age, and to play a significant role as a basis for national social protection. Although presently restricted to formal sector employees, the Pension and Other Benefits Scheme is the foundation of a more comprehensive coverage, drawing on the underlying concept of national solidarity and as an integral part of national development. (2) For a considerable period of time the government was concerned to alleviate the miseries of numerous employees who, after many working years, end up destitute upon leaving employment either on old age or as a result of disability. It was recognised that this country had fallen far behind very many developed and lesser developed countries in the provision of adequate social security for employees. (3) The objective of social security is to promote the quality of life and to guarantee income security. It is meant to give individuals and families the confidence that their level of living will not be eroded by social ills such as work accident, sickness, death and old age. (4) It is the government's national responsibility to make adequate provision for employees. It cannot afford to carry the heavy burden alone. Hence it is necessary to raise the funds for a social security scheme through enforced contributions payable by employers and employees. The employer bears a

moral obligation to improve the protection and welfare of the employee. And the employee, as a matter of self-interest, must contribute to his own social security. Furthermore, it is of significance that Zimbabwe has acceded to the International Covenant on Economic, Social and Cultural Rights 1966. Article 6 thereof reads:
'The State parties to the present Covenant recognise the right of everyone to social security, including social insurance.'

By its accession, the government undertook an international commitment to establish and maintain a system of social security for its people. The passing of the Act and the NSSA (POBS) Notice fulfils that obligation. Put otherwise, the welfare and well-being of the substantial number of employees (with the exception of the state and domestic service sectors) were seen to be too important a legitimate governmental and public concern to be left in abeyance any longer: the aim being to eliminate what was adjudged a grave social injustice in the sphere of employment. I do not doubt that because of their superior knowledge and experience of society and its needs, and a familiarity with local conditions, national authorities are, in principle, better placed than the judiciary to appreciate what is to the public benefit. In implementing social and economic policies a government's [1996] 1 LRC 64 at 73 assessment as to whether a particular service or programme it intends to establish will promote the interest of the public, is to be respected by the courts. They will not intrude but will allow a wide margin of appreciation, unless convinced that the assessment is manifestly without reasonable foundation: see James v United Kingdom (1986) 8 EHRR 123 at 142 (para 46), Mellacher v Austria (1989) 12 EHRR 391 at 410 (para 51), United States Railroad Retirement Board v Fritz (1980) 449 US 166 at 175, Schweiker v Wilson (1981) 450 US 221 at 230. The minister has proclaimed that the Pension and Other Benefits Scheme provides a service in the public interest. That is an assessment which this court should respect. Certainly, it is not manifestly without reasonable foundation. The few authorities dealing with social insurance schemes, to which this court was referred in argument, support the view that compulsory contribution payments made thereunder are utilised for the public benefit to provide a service in the public interest. In Apostolou v Republic of Cyprus [1985] LRC (Const) 851 the validity of a social insurance scheme, that imposed on all self-employed persons a contribution payable to the Social Insurance Fund established under the Social Insurance Law 1980, was considered by the Supreme Court of Cyprus. It was submitted by the applicants, who were self-employed practising lawyers, that the enforced contributions, being 12% of a person's insurable earnings, were not contributions by way of tax within the meaning of art 24 of the Constitution of Cyprus 1960 and, therefore, could not be levied. In rejecting the submission, the court said ([1985] LRC (Const) 851 at 859):

'There is no doubt that this constitutional command and the international commitments undertaken by the Republic in furtherance thereof are for the public benefit, have cast an obligation on the State to promote the welfare of the individual and, as in this instance, by an all embracing Social Insurance System providing benefits for the people in their time of need, such ensuing public burden being met by contributions as prescribed by the law. These contributions are a form of tax in the sense of Article 24 of the Constitution, that satisfy the test laid down in the Constantinides case (supra) That they are contributions towards a public burden there is no doubt in the light of the obligations of the State to care for the welfare and well being of its citizens.'

The Digest of Case Law relating to the Convention for the Protection of Human Rights and Fundamental Freedoms (the European Human Rights Convention) (Rome, 4 November 1950; TS 71 (1953); Cmd 8969) (1955 1967) at pp 441, 442 and 443 cites three reports of the European Commission of Human Rights concerning the obligation to pay social security as prescribed by legislation. In each, the commission was of the opinion that the mandatory payment of the contributions was compatible with the second paragraph of art 1 of the First Protocol to the European Human Rights Convention, which expressly reserves the right of a state 'to enforce such laws as it deems necessary to secure the payment of taxes or other contributions,' the schemes having been established in the public interest. In United States v Lee (1982) 455 US 252 a member of the Old Order Amish, who believe that it is sinful not to provide for fellow members the kind of [1996] 1 LRC 64 at 74 assistance contemplated by the Act, namely old age and unemployment benefits, and that, therefore, both the acceptance of such benefits and contributions to the social security system are prohibited, employed several other Amish as workers on his farm and in his carpentry shop. For several years the Amish employer refused to withhold social security contributions from the wages of his employees or to pay his share as their employer. But upon being assessed by the Inland Revenue Service for overdue taxes, he paid a portion thereof. Thereafter he sued for a refund, claiming that the compulsion to make such payments violated his First Amendment free exercise rights and those of his employees. While recognising that mandatory participation in the social security system may interfere with the free exercise rights of religious groups who provide for their members, the United States Supreme Court held that the state may justify the infringement by demonstrating that it is essential to the accomplishment of an overriding governmental interest (see (1982) 455 US 252 at 258). It found that the national social security system served the public interest by providing a comprehensive insurance system with a variety of benefits available to all participants with costs shared by employees and employers. This governmental interest outweighed any private religious interest in the non-payment of the compulsory contributions. See also Bethel Baptist Church v United States (1987) 822 F 2d 1334 (3rd Cir) at 1339, a decision to the same effect. James v United Kingdom is apposite in so far as it dispels a contention similar to that advanced by the applicant. It was there argued before the European Court of Human Rights that the 'public interest' test was not met where the compulsory transfer of property was not for the benefit of the public generally but for the benefit of a few private individuals. The argument did not find

favour. The court held that, depending on the circumstances, compulsory transfer of property from one individual to another carried out in pursuance of legitimate social, economic or other policies, may be in the public interest as required by the second sentence of art 1 of the First Protocol to the European Human Rights Convention, even if the community at large had no direct use or enjoyment of the property (see (1986) 8 EHRR 123 at 140141 (para 40) and at 142 (para 45)). The leasehold reform legislation was not, therefore, ipso facto an infringement of art 1 merely because the immediate beneficiaries of the compulsory transfer of property which it empowered were private parties. By parity of reasoning, the fact that the beneficiaries of the Pension and Other Benefits Scheme are the employees or their survivors and not the members of the public in general, does not mean that the contributions are not utilised for the public benefit in order to provide a service in the public interest. The design of the Pension and Other Benefits Scheme involves a system which necessitates support by compulsory contributions from employees and employers. Such mandatory participation seems to me indispensable to its fiscal success. Individual voluntary coverage would undermine the inherent soundness of the scheme. Moreover, voluntary participation would be almost a contradiction in terms and would render the scheme difficult, if not impossible, to administer. Thus, in my opinion, the government's interest in assuring a compulsory and continuous participation in and contribution to the scheme is very high. [1996] 1 LRC 64 at 75 I conclude, accordingly, that the contributions made payable under the authority of s 4 of the NSSA (POBS) Notice are in satisfaction of a 'tax'. Whether the 'tax' so constituted is reasonably justifiable in a democratic society In Woods v Minister of Justice, Legal and Parliamentary Affairs [1994] 1 LRC 359, 1995 (1) SA 703 (ZSC), this court emphasised that an abridgement of a guaranteed right should not be arbitrary or excessive. It was said ([1994] 1 LRC 359 at 362, 1995 (1) SA 703 (ZSC) at 706):
'What is reasonably justifiable in a democratic society is an elusive concept. It is one that defies precise definition by the courts. There is no legal yardstick, save that the quality of reasonableness of the provision under attack is to be adjudged on whether it arbitrarily or excessively invades the enjoyment of the guaranteed right according to the standards of a society that has a proper respect for the rights and freedoms of the individual '

From a procedural aspect the onus is on the challenger to establish that the enactment under attack goes further than is reasonably justifiable in a democratic society and not on the state to show that it does not: see Zimbabwe Township Developers (Pvt) Ltd v Lou's Shoes (Pvt) Ltd 1983 (2) ZLR 376 at 382383, 1984 (2) SA 778 (ZSC) at 783. The standard of proof is a preponderance of probability. In effect the court will consider three criteria in determining whether or not the limitation is permissible in the sense of not being shown to be arbitrary or excessive. It will ask itself whether: (i) the legislative objective is sufficiently important to justify limiting a fundamental right; (ii) the measures designed to meet the legislative objective are rationally connected to it; and (iii) the means

used to impair the right or freedom are no more than is necessary to accomplish the objective: see R v Oakes [1987] LRC (Const) 477, [1986] 1 SCR 103, a decision of the Supreme Court of Canada. I shall deal with each in turn. (i) Is the legislative objective sufficiently important to justify the imposition of a tax upon employees (save for those presently excluded) and employers? The answer, in my view, is emphatically in the affirmative. In establishing a national social security pension and other benefits scheme for the very large number of employees who formerly enjoyed no social security coverage, the government followed the tradition of many developed and lesser developed countries. Annexed to the minister's opposing affidavit was a list of social security programmes operated by 163 countries throughout the world. It reflects that Zimbabwe was one of only five countries which provided the least coverage for employees, namely social security for work injury. In resolving to improve the social security of employees the government, during the early years of the country's independence, set up a commission of inquiry. It recommended the introduction of a national social security system to provide income protection to employed persons in the event of contingencies such as old age, invalidity, death, unemployment and sickness. The International Labour Organisation, as well as various other bodies, such as the [1996] 1 LRC 64 at 76 Employers' Confederation of Zimbabwe, the Association of Pension Funds and the Zimbabwe Congress of Trade Unions, were also consulted. There was general consensus as to the need for social security. Furthermore, the right to social security and social insurance is embodied in several international instruments. I mention, especially, art 22 of the United Nations Universal Declaration of Human Rights 1948 and art 9 of the International Covenant on Economic, Social and Cultural Rights 1966. In addition, there are about 20 international labour organisation conventions dealing variously with medical care, sickness, old age, invalidity, survivors, employment injury and unemployment benefits. See, in particular, art 57 of Convention 102 (27 April 1955) and Convention 157 (11 September 1986). The internationally recognised right to social security in the wide sense and the extent to which that obligation has been implemented throughout the world, offers cogent evidence of the government's objective in establishing the Pension and Other Benefits Scheme in 1993, as one sufficiently important to justify the imposition of the tax. (ii) Are the measures designed to meet the legislative objective rationally connected to such objective? It appears to me that the rational connection is self-evident and merits little elaboration. For a national social security scheme to be viable and effective, contributions payable by employees and employers to it must be made compulsory. To allow such funding to be optional would place the very existence and life span of the scheme in jeopardy. As stressed by the minister, it is the government's national responsibility to care for its people who have no

social security and no means to provide for themselves in old age. Government cannot afford to carry the burden for such a scheme alone. It is necessary to finance it through contributions by employees and employers. (iii) Are the means used to impair the right or freedom no more than is necessary to accomplish the objective? Under this part of the inquiry into the means by which the objective is attained, the court must weigh the impact of the limit upon the right of the applicant against the importance of the legislative objective. There must be a balancing process. The importance of the objective and the reasonableness of the manner in which it is achieved must be measured against the gravity of the infringement of the protected right. Generally, this involves weighing the significance of the public interest in the limit against the seriousness of the infringement of the private right protected by the Constitution. This is so in this case. One asks: is the infringement too high a price to pay for the benefit of the law? The applicant complains that the Pension and Other Benefits Scheme does not take into account that some employees have their own private schemes or other arrangements which provide similar or even better benefits. And that the effect of compelling such class of employees to contribute is to require them to be doubly insured. I do not accept this proposition. Section 74 of the NSSA (POBS) Notice specifically permits but does not oblige an employer to continue operating any [1996] 1 LRC 64 at 77 scheme which provides benefits for employees, whether such benefits are similar to, greater or lesser than the benefits provided under the compulsory scheme. Existing private pension schemes are not abolished. They may be operated in conjunction with the Pension and Other Benefits Scheme. If employee and employer consider that the benefits under the compulsory scheme are inadequate or not as beneficial as those offered under a private scheme (an issue much in contention), they are at liberty to cover any shortcomings under a private pension or insurance scheme. To my mind, the limitation on the applicant's right, that is, the compulsion to contribute to a national pension scheme, is far outweighed by the objective to which the limitation is directed. For that objective is of major import. As has been noted already, numerous countries, which most people would consider democratic, have chosen to enact and sustain similar social security legislation. Their attitudes are relevant and confirm my opinion as to which side of the scale the limitation placed upon the applicant falls. Order For the reasons aforegoing, the application must be dismissed. In line with the approach to costs adopted in Hewlett v Minister of Finance (1981) ZLR 571 at 596, 1982 (1) SA 490 (ZS) at 508 and Bull v Minister of Home Affairs [1987] LRC (Const) 547 at 555, 1986 (3) SA 870 (ZS) at 876, the applicant is not to be penalised because a decision adverse to him has been given. The issue raised by him was important and controversial and the proceedings he instituted have led to its resolution.

There is to be no order as to costs. Solicitors: Scanlen and Holderness for the first respondent: Civil Division of the Attorney General's office for the second respondent.

Search Terms [(([1996] 1 LRC 64))] (57) View search details Source [Law Reports of the Commonwealth]

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