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[2024] ZALCJHB 102
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Bhekani Abantu Services (Pty) Ltd v Redelinghuys and Others (J145/24) [2024] ZALCJHB 102; (2024) 45 ILJ 1242 (LC) (4 March 2024)
FLYNOTES:
LABOUR
– Review – Suspension of award –
Security
to satisfaction of court – Security provided in form of
movable assets – Employee objects to security
provided and
urges court to reject it as unsatisfactory – No explanation
how applicant would pay shortfall in event
value of assets
diminished – Security furnished is unsatisfactory and
rejected – Applicant afforded an opportunity
to provide
security that satisfies court –
Labour Relations Act 66 of
1995
,
s 145(7).
IN
THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
Not
Reportable
Case
No: J145/24
In
the matter between:
BHEKANI
ABANTU SERVICES (PTY) LTD
Applicant
and
JOHAN
REDELINGHUYS
First
Respondent
COMMISSION
FOR CONCILIATION,
MEDIATION
AND ARBITRATION
Second Respondent
SHERIFF
OF THE MAGISTRATES COURT:
ROODEPOORT
NORTH
Third Respondent
Heard:
27 February
2024
Delivered:
4 March 2024
T
his
judgment was handed down electronically by circulation to the parties
and legal representatives by email. The date and time
for hand-down
is deemed to be 4 March 2024
JUDGMENT
MAKHURA, J
Introduction
[1]
In January 2015, section
145(7) and (8) of the Labour Relations Act
[1]
(LRA) was promulgated. Section 145(7) provides:
‘
The
institution of review proceedings does not suspend the operation of
an award, unless the applicant furnishes security to the
satisfaction
of the Court in accordance with subsection (8).’
[2]
Subsection 8 reads:
‘
Unless
the Labour Court directs otherwise, the security furnished as
contemplated in subsection (7) must –
(a)
in the case if an order of reinstatement or re-employment, be
equivalent to 24 months’ remuneration; or
(b)
in the case of an order of compensation, be equivalent to the amount
of compensation awarded.’
[3]
Section 145(3) of the LRA was retained. In terms of this provision,
the
Court has discretionary powers to stay the enforcement of
arbitration awards.
[4]
Almost 10 years since the promulgation of the above provisions, this
Court
remains inundated with applications to stay writs of execution
where security is not furnished or not furnished in compliance with
the provisions, and without an application for exemption. The
attitude adopted by some employers is that because the security must
be to the satisfaction of the court, and the court at that time has
not ordered otherwise, they can put any form of security that
they
believe is reasonable. Employees, on the other hand, believe that
security must be strictly in compliance with section 145(8)
and that
for as long as the security provided does not comply with this
provision, they are entitled to execute. This inevitably
leads to
employers approaching this court for an interdict and a declaration
that the security furnished is to the satisfaction
of the court.
[5]
Employers who seek to be exempted from section 145(7) and (8) must
provide
reasons for not complying with these provisions and why the
security furnished should be found by this Court to be satisfactory,
or why the failure to provide security should be exempted. In my
view, this type of litigation can be avoided if employers provide
security in accordance with section 145(7) and (8) of the LRA,
alternatively, if they immediately launch proceedings for exemption.
[6]
In
casu
, the applicant has provided security. However, the
security provided is in the form of movable assets, the motor
vehicles. The
first respondent (employee) objects to the security
provided and urges this Court to reject it as unsatisfactory.
Material
facts
[7]
Briefly, the facts are that on 18 October 2023, the Commission for
Conciliation,
Mediation and Arbitration (CCMA) issued an arbitration
award declaring the dismissal of the employee substantively unfair
and ordering
the applicant to pay the employee R326 050.00 as
compensation.
[8]
On 14 December 2023, the applicant launched review proceedings
against
the award. The applicant did not furnish security as
contemplated in section 145(7) and (8) of the LRA.
[9]
On 10 January 2024, the employee’s attorneys addressed a letter
to the applicant’s attorneys, noting the applicant’s
failure to comply with the security provisions. The employee gave
the
applicant ten days to furnish security in terms of the provisions,
failing which he would proceed to enforce the award. The
ten-day
period lapsed without a response from the applicant. According to the
employee, he then instructed the sheriff to proceed
with the
enforcement on 29 January 2024.
[10]
On 2 February 2024, the applicant filed a security bond. The
applicant provided four vehicles
as security bond – all Nissan
NP200. However, one of the vehicles’ title holder and owner is
Soccer Scene Outfitters
CC. According to the applicant and the
valuations on the vehicles, the collective retail value of the
vehicles, including the fourth
one owned by a third party, is
R335 600.00.
[11]
On 8 February 2024, the employee’s attorneys served a notice of
objection on the
applicant’s attorneys. The employee sets out
the grounds for objecting to the form of security furnished by the
applicant
as follows:
‘
1.
It is unclear where the vehicles are held, whether it is being used,
or kept in a safe
place;
2.
Whether it is sufficiently insured;
3.
What would happen if it gets damaged or stolen;
4.
The value of vehicles irrespective of whether it is used or kept in a
safe place,
continuously depreciates;
5.
The court’s roll is currently so clogged that it might take
years before
the review may be finalised and by then the value of the
vehicles would have drastically diminished.’
[12]
On 9 February 2024, the sheriff attached the applicant’s
assets. The assets attached
include the four vehicles, lockers,
office desks and chairs.
[13]
The applicant then launched these proceedings. It seeks an order that
the security furnished
is satisfactory, staying the execution of the
award pending the finalisation of the review application and
interdicting the sheriff
from removing the attached assets pending
the finalisation of the award. In its founding affidavit, the
applicant seeks, in the
alternative that in the event the Court is
not satisfied with the security furnished, to make an order in
relation to the manner
in which the security ought to be furnished.
Legal
principles
[14]
In
City
of Johannesburg v SA Municipal Workers Union on behalf of Monareng
and another
,
[2]
the Labour Appeal Court held that:
‘
[7]
The Labour Court has discretionary power under s 145(3) of the LRA to
stay the enforcement
of an arbitration award pending its decision in
the review application. It may stay the enforcement of an arbitration
award pending
finalisation of a review application against the award
with or without conditions. It may in terms of s 145(8) of the LRA
dispense
with the requirement of furnishing security. Properly
construed, s 145(3) read with s 145(7) and (8) should be interpreted
to mean
that where an applicant in a review application furnishes
security to the Labour Court in accordance with s 145(8) of the LRA,
the operation of the arbitration award is automatically suspended
pending its decision in the review application. In other words,
the
employer need not make an application in terms of s 145(3) of the LRA
to stay the enforcement of the arbitration award pending
finalisation
of the review application.
[8]
However, should the employer wish to be absolved from providing
security or provide
security in an amount less than the threshold in
subsection (8)(a) and (b), then it is required to make an application
to the Labour
Court, in terms of s 145(3), for stay of the
enforcement.
[9]
The words ‘unless the Labour Court directs otherwise’ in
s 145(8) of the
LRA must be construed broadly to mean that the Labour
Court is afforded a discretion to either: (a) exempt the employer
from paying
security on the stay of the enforcement of an arbitration
award pending its decision on review or (b) reduce the quantum of
security
to be furnished by the employer to an amount below the
threshold in s 145(8)(a) and (b) of the LRA.’
[3]
[15]
In
Moqhaka
Local Municipality v Motloung and others
,
[4]
this Court, per Lagrange J, considered the type of security that may
be furnished by the review applicant. Lagrange J held that
although
the furnishing of a bond of security may be the typical and most
convenient form of security, other forms of security
might also be
considered satisfactory, such as depositing funds with the
sheriff.
[5]
Snyman AJ in
Rustenburg
Local Municipality v South African Local Government Bargaining
Council and others
[6]
also found that security can also be provided by payment into a court
or sheriff’s trust account and that a security bond
by a legal
practitioner or a registered banking institution would suffice.
[7]
He added that other forms of security such as a movable or immovable
assets may be provided as security and that the value
of the asset
would have to be determined to satisfy the amount in terms of section
145(8) of the LRA.
[8]
Evaluation
[16]
The applicant’s case is that there is a pending review
application before this Court
and that it has furnished security.
That there is a review application is common cause. The primary issue
is whether the security
provided by the applicant, in the form of
motor vehicles, is to the satisfaction of this Court.
[17]
The applicant was made aware as early as 8 February 2024 of the
employee’s grounds
for objection of the type of security
furnished. The applicant did not respond to the objections nor did
it, in light of the argument
that the value of the assets diminishes,
supplement the security bond.
[18]
Instead, when confronted by the sheriff’s attachment of its
assets, the applicant
decided to approach this Court on an urgent
basis. The attitude adopted by the applicant is that it provided
security and that
if the employee is not happy, the court should make
a determination. The applicant’s founding affidavit provides no
reasons
why it could not provide any other form of security than the
vehicles or that this is the only form of security it could provide.
The valuations only speak to the value of the vehicles on 29 January
2024. The value of these vehicles is only known on 29 January
2024,
not in the future.
[19]
In its replying affidavit, the applicant flimsily appears to provide
the reason for not
providing cash as security and a response to the
employee’s objection to the form of security provided. The
applicant said:
‘
I
replied to this email and indicated that the matter will be discussed
internally. Upon this letter being discussed by the decision
makers
in the employ of the Applicant
it
became apparent that it would have a detrimental impact on the
business and operations of Applicant should this amount of cash
be
put up as security for the duration of the review application
.
The Applicant was advised that the security may be provided in any
form as long as the security so provided is to the satisfaction
of
the court as stipulated by the act.’ (Own emphasis)
[20]
During arguments, Mr Biggs, appearing for the applicant, submitted
that there will be nothing
stopping the applicant from paying the
awarded amount in cash in the event its review application is
unsuccessful. He submitted
that the LRA does not provide the manner
in which security should be furnished and that the security bond
furnished by the applicant
is satisfactory. Mr Biggs conceded,
however, that the assets may depreciate
albeit,
according to
him, nominally.
[21]
The employee argued that it is discomforting that the applicant’s
view is that the
payment of cash or setting aside of the awarded
amount would have a detrimental impact on the applicant’s
operations. He
argued that this in fact makes it more compelling for
the applicant to provide monetary security as this may suggest that
the applicant
may not be able to satisfy its obligation in terms of
the award should its review application be unsuccessful. The
applicant has
not provided any facts before this Court regarding its
financial position, whether it would comply with the award and how it
would
comply with it in the event of an unsuccessful review
application. There is also no explanation on how the applicant would
pay
the shortfall in the event the value of the assets diminished.
The applicant’s argument, unsubstantiated as it is, raises
issues of affordability now and in the future. The dismissed employee
should have comfort that in the event the review application
is
unsuccessful, the award is complied with and implemented.
[22]
In response to the concern raised by the employee that the assets may
be stolen, the applicant
argued that even if it makes payment of the
awarded amount into its attorneys’ trust account, there is no
guarantee that
the money would not be stolen. This is a very weak
argument. Comparing the vehicles with payment into the attorneys’
trust
account is farfetched and an attempt to play down the high-risk
factor of theft of motor vehicles.
[23]
The applicant faces a number of challenges. The value of the security
depreciates. Second,
the fourth vehicle, retail valued at R87 300.00,
is not, on the papers before me, owned by the applicant. Therefore,
the security
bond before this Court and in the security bond is
R87 300.00 less. Third, although the applicant submitted that
the vehicles
are insured, no proof of insurance has been provided.
Therefore, it is not known whether the vehicles are insured for
incidents
such as theft, damage and/or hijacking and whether they are
insured on retail or market value. Fourth, the applicant has not
provided
how, in the event the assets are found to have depreciated,
it would pay the shortfall. Finally, the applicant did not provide
proof of its audited financial statements and/or management reports,
which would also disclose its total assets.
[24]
As the LAC said, the phrase ‘
unless the Labour Court directs
otherwise’
means that this Court can exempt the employer
from paying security or reduce the quantum of security to be
furnished by the employer
to an amount below the threshold in section
145(8)(a) and (b) of the LRA. Read together with the phrase ‘
to
the satisfaction of the Court’
, there can be no doubt that
this is a matter within the Court’s discretion. In my view, the
Court’s discretion extends
to directing the type of security to
be furnished.
[25]
Whilst I note from
Rustenburg
Local Municipality
judgment
that movable assets may be provided as security, this form of
security that depreciates in value is objectionable and will
inevitably lead to this type of litigation, further burdening the
already overloaded court roll. I note that the purpose of sections
145(7) and (8) of the LRA is to reduce the number of review
applications brought to frustrate or delay the compliance with
arbitration
awards and finalisation of review applications.
[9]
In my view, these provisions also serve another important purpose –
to ensure that the arbitration awards issued in favour
of employees,
even after many years of litigation, are still complied with and/or
implementable and employees get their redress,
regardless of the
status of the company at the end of the litigation process.
[26]
All the applicant said in its papers is that if the cash amount is
provided as security,
this would have a detrimental impact on its
operations. No further details are provided. There are no facts to
show how the payment
of R326 050.00 would be to the applicant’s
detriment and why the vehicles should be considered to be to the
court’s
satisfaction.
[27]
The applicant decided that because the LRA does not prescribe the
manner and form of security,
it would put a depreciating asset as
security. Even after the objection, the applicant’s attitude
was that the Court should
decide on the issue and that it is of the
view that the security furnished is satisfactory. Well, it is not. It
is incomprehensible
how an employer would believe that a depreciating
asset would be satisfactory security for the purpose of section
145(7) of the
LRA. Accordingly, the security furnished by the
applicant is unsatisfactory and is hereby rejected.
Conclusion
[28]
The rejection of the applicant’s security bond is not the end
of the enquiry. The
discretion granted on this Court extends to
determining or prescribing the form of security to the be furnished.
I have considered
that the applicant has applied to review and set
aside the award. In my view, the applicant will suffer irreparable
harm and injustice
if it is not afforded the opportunity to provide
the security that satisfies this court and the underlying
causa
is later removed. Therefore, the applicant should be afforded an
opportunity to provide security that satisfies this court. The
court
will be satisfied if the applicant pays the awarded amount into its
attorneys’ trust account.
[29]
Regarding costs, the parties asked that no costs order be awarded. In
the circumstances,
I have decided to exercise my discretion in favour
of both parties’ wish.
[30]
In the premises, the following order is made:
Order
1.
The matter is heard as one of urgency.
2.
The security bond dated 1 February 2024 and
filed on 2 February 2024
is not to the satisfaction of this court and is therefore rejected.
3.
The execution of the arbitration award issued
by the second
respondent under case number GAVL3886-23 is suspended pending the
finalisation of the review application instituted
under case number
JR2245/23.
4.
The suspension in paragraph 3 above is conditional
on the applicant
paying an amount of R326 050.00 into the trust account of its
attorneys of record within 21 days of this
order and delivering a
security bond to that effect.
5.
In the event that the applicant fails to comply
with paragraph 4
above, the order in paragraph 3 shall lapse.
6.
There is no order as to costs.
____________________
M. Makhura
Judge of the Labour Court
of South Africa
Appearances:
For
the Applicant
:
Mr. J. Biggs of Snyman
Attorneys
For
the First Respondent :
Adv. C.P. Naude
Instructed
by
: Isaac Teke Mothibe Attorneys
[1]
No.
66 of 1995, as amended.
[2]
(2019)
40 ILJ 1753 (LAC).
[3]
Ibid
at paras 7 - 9.
[4]
(2017)
38 ILJ 649 (LC).
[5]
Ibid
para 25.
[6]
(2017)
38 ILJ 2596 (LC).
[7]
Ibid para 18.
[8]
Ibid
para 19.
[9]
Memorandum of Objects, Labour Relations Amendment Bill, 2012.