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[2016] ZALAC 34
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CCMA v MBS Transport CC and Others, CCMA v Bheka Management Services (Pty) Ltd and Others (J1807/15, J1706/15, JA94/2015) [2016] ZALAC 34; [2016] 10 BLLR 999 (LAC); (2016) 37 ILJ 2793 (LAC) (28 June 2016)
INTHE
LABOUR APPEAL COURT OF SOUTH AFRICA, JOHANNESBURG
Reportable
Court
Case No: J1807/2015
Appeal
Case no: JA94/2015
In the
matter between:
CCMA
Appellant
and
LC
CASE NO: J1807/15
MBS
TRANSPORT CC
First Respondent
DUSTIN
JULIUS
Second Respondent
SHERIFF
OF MAGISTRATES COURT: KWAMHLANGA
Third Respondent
and
LC
CASE NO: J1706/15
BHEKA
MANAGEMENT SERVICES (PTY) LTD
Fourth Respondent
JONATHAN
KEKANA
Fifth Respondent
SHERIFF,
SANDTON
SOUTH
Sixth Respondent
Heard:
10 May 2016
Delivered:
28 June 2016
Summary:
Enforcement of arbitration awards – interpretation of section
143 of the LRA – court
finding that certified awards are
enforceable as if they were orders of the Labour Court in respect of
which a writ had been issued
– interpretation of section 143
does not justify practice that registrar of the Labour Court should
issue writ of execution
– once monetary awards are certified by
the CCMA’s director they are executed as if they were orders of
the Magistrates’
Court. Contempt of court may be instituted in
the Labour Court for non-monetary award. Labour Court may stay
execution of certified
award pending the review application. The
purpose of the new amendment of section 143 is to expedite execution
of awards –
Labour Court erred in finding that CCMA not having
power to issue writ of execution . Legislature provides for a fiction
that grant
power to CCMA which it does not have. Labour Court’s
judgment set aside. Appeal upheld.
Coram:
Davis JA, Musi JA and Murphy AJA
JUDGMENT
C J MUSI
JA
[1] This
appeal which, is with the leave of the court
a quo
, is against
the judgment of the Labour Court (Phatshoane AJ) wherein it dismissed
two urgent applications to stay enforcement awards
issued in terms of
section 143 of the Labour Relations Act 66 of 1995 (the Act) by the
Commission for Conciliation, Mediation and
Arbitration (CCMA).
[2] The
Court
a quo
made the following order:
‘
1
It is declared that the Commission for Conciliation Mediation and
Arbitration (the CCMA) does not
have jurisdiction to issue writs of
execution in respect of the arbitration awards issued by it.
2
In
respect of
MBS
Transport CC v CCMA and others
Case No: J1807/15:
2.1
That
the writ of execution or the enforcement award dated 22 April 2015
issued under Case No GATW79-15 pursuant to
s 143
of the
Labour
Relations Act, 66 of 1995
, against the movable property of MBS
Transport CC, be and is hereby set aside.
2.2
No
order is made as to costs.
3
In
respect of
Bheka
Management Services v Kekana and others
Case No: J1706/15:
3.1
That
the writ of execution or the enforcement award dated 03 August 2015
issued under Case No GAEK1491-15 pursuant to
s 143
of the Labour
Relations Act, 66 of 1995, against the movable property of Bheka
Management Services be and is hereby set aside.
3.2
That
the application by Bheka Management Services (Pty) Ltd to be absolved
from furnishing security succeeds.
3.3
No
order is made as to costs
.’
[3] The
two matters were consolidated by the court
a quo
because the
issues to be decided were similar. In
MBS Transport CC V CCMA and
Others
( Case no J1807/15), the applicant (employer) sought a
rule nisi
calling upon the respondents to show cause why an
enforcement award, issued by the CCMA, should not be stayed pending
the finalisation
of a review application to set aside the arbitration
award which was granted in favour of the employee. The arbitrator had
found
that Dustin Julius (the employee) was unfairly dismissed and
issued an award that the employer should pay him R59 200.00
compensation.
[4] In
Bheka Management Services (Pty) Ltd v Jonathan Kekana and Others
,
the employee (Mr Kekana) was dismissed. The arbitrator found that his
dismissal was substantively unfair and ordered his retrospective
reinstatement. The arrear salary was calculated, by the arbitrator,
as R11 600.00. He ordered the employer to pay the employee
the
said amount before 30 June 2015.
[5] Mr
Julius was not paid compensation and Mr Kekana was not paid his back
pay, in terms of the respective arbitration awards.
Both awards were
certified by the Director of the CCMA and enforcement awards were
issued. The respective employers, on being made
aware of the
enforcement awards, applied on an urgent basis to the court
a quo
to stay the respective enforcement awards.
[6] When
the unopposed stay applications came before the court
a quo,
it
mero
motu
raised the point whether it could grant an
order staying writs issued by the CCMA. As indicated above, the court
a quo
was of the view that the Labour Court had no such power.
[7]
Although the CCMA was cited as a respondent in both applications, it
did not oppose the applications. It was also not forewarned
that the
point would be raised by the court
a quo
. When the judgment of
the court
a quo
became available, the CCMA approached it with
an application for leave to appeal, because of the far reaching
implications of the
judgment.
[8] The
Director of the CCMA filed an affidavit in support of the application
for leave to appeal. Leave to appeal was granted.
[9]
Section 143 of the Act provides:
‘“
143
Effect of arbitration awards”
1)
An
arbitration award issued by a commissioner is final and binding and
it may be enforced
as
if it were an order of the Labour Court in respect of which a writ
has been issued
unless
it is an advisory arbitration award.
2)
If
an arbitration award orders a party to pay a sum of money, the amount
earns interest from the date of the ward at the same rate
as the rate
prescribed from time to time in respect of a judgment debt in terms
of section 2 of the Prescribed Rate of Interest
Act, 1975 (Act 55 of
1975), unless the award provides otherwise.
3)
An
arbitration award may only be enforced in terms of subsection (1) if
the director has certified that the arbitration award is
an award
contemplated in subsection (1).
4)
If
a party fails to comply with an arbitration award certified in terms
of subsection (3) that
orders the
performance of an act, other than the payment of an amount of money,
any other party to the award may, without further
order, enforce it
by way of contempt proceedings instituted in the Labour Court.
5)
Despite
subsection (1), an arbitration award in terms of which a party is
required to pay an amount of money must be treated for
the purpose of
enforcing or executing that award as if it were an order of the
Magistrate's Court.
6)
Subsections
(1), (4) and (5), as amended by the Labour Relations Amendment Act,
2014, takes effect on the date of commencement of
the Labour
Relations Amendment Act, 2014, and applies to an arbitration award
issued after such commencement date.’ (My emphasis.)
[10]
The court
a
quo
correctly stated that any decision, judgment or order of the Labour
Court may be served and executed as if it were a decision,
judgment
or order of the High Court.
[1]
The court
a
quo
found
that it is clear from the language of section 143 that an award of
the CCMA may be enforced as if it were an order of the
Labour Court
provided a writ has been issued in respect thereof.
[11] The
learned Judge concluded that:
‘
[13]
On the plain reading of s 143 and Rule 40 of the CCMA, it is apparent
that the CCMA has not been statutorily
assigned the authority to
issue writs. To the extent that the practice manual suggests that
once an award is certified, it can
be executed upon delivery to the
Sheriff, without a writ having been issued by this Court, the
stipulation must be
ultra
vires
.
The sheriffs are appointed by the Minister of Justice and
Correctional Services for the lower or superior courts. They perform
functions within the area of jurisdiction of those courts for which
they have been appointed by or under any law.’
[2]
[12] The
learned judge correctly pointed out that the CCMA is not a court of
law and that an application to set aside a writ can
only be made to
the court that issued the writ. The court
a quo
concluded
that:
‘
A
stay of a writ issued by the CCMA or by the Magistrates’ Court
fall outside the ambit of this Courts’ powers. Seen
in this
context, the litigants are non-suited to set aside the writs issued
by the CCMA which are the subject of impending review
proceedings
before the Labour Court.’
[13]
The court
a
quo
further concluded that there is no
reason why the writs issued by the CCMA should be stayed pending
review in circumstances where
they are a nullity for lack of
jurisdiction.
[14]
The court
a quo
declared that the CCMA does not have
jurisdiction to issue writs of execution in respect of arbitration
awards issued by it. It
consequently set aside both “enforcement
awards”.
[15]
It is trite that, when interpreting any document, regard must be had
to the language used as well as the context under which
the document
saw the light of the day. This holds true for any document including
contracts and legislative texts. There is no
need for any ambiguity
before the context is considered.
[3]
[16]
The successive amendments of section 143 and the reasons therefore as
set out in the affidavit of the Directors of the CCMA
gives a very
instructive background to the section. In
Hleka
v Johannesburg City Council,
[4]
it was said that in order to ascertain the real meaning of words used
by the legislature and the evil that it intended to remedy,
it is
permissible to have regard to:
1.
What the law was before the measure was
passed.
2.
What the mischief or defeat was, for which
the law did not provide.
3.
What remedy the legislature appointed and
4.
The
reason for the remedy.
[5]
After
considering the above factors, I am then enjoined to construct
section 143 in such a way that it shall suppress the mischief
and
advance the remedy.
[6]
[17]
Section 143(1) as originally enacted by Act 66 of 1995 provided as
follows:
‘
1
An
arbitration award issued by a commissioner is final and binding and
may be made an order of the Labour Court in terms of Section
158 (1)
(c), unless it is an advisory arbitration award.’
[18]
The Director of the CCMA indicated in her affidavit that one of the
major problems with CCMA
awards was that employers paid no attention
to them because they were aware of the cumbersome enforcement
provisions of the Act.
It is self-evident that this procedure was
onerous, time consuming and expensive. It created a two stage
procedure in cases where
the employer failed to comply with an
arbitration award. The employee would get an award in his/her favour
at the CCMA and thereafter
he or she had to go to the Labour Court
(at great expense) and apply for the award to be made an order of
court before such award
could be enforced. This also had an adverse
effect on the Labour Court rolls because of the section 158(1)(c)
applications.
[19]
Section 143 was amended by the
Labour Relations Amendment Act, 2002
to read:
1.
An
arbitration award issued by a commissioner is final and binding and
it may be enforced as if it were an order of the Labour Court,
unless
it is an advisory arbitration award.
2.
If
an arbitration award orders a party to pay a sum of money, the amount
earns interest from the date of the award at the same rate
as the
rate prescribed from time to time in respect of a judgment debt in
terms of
section 2
of the
Prescribed Rate of Interest Act (Act
No. 55
of 1975), unless the award provides otherwise.
3.
An
arbitration award may only be enforced in terms of subsection (1) if
the director has certified that the arbitration award is
an award
contemplated in subsection (1).
4.
If
a party fails to comply with an arbitration award that orders the
performance of an act, other than the payment of an amount
of money,
any other party to the award may enforce it by way of contempt
proceedings instituted in the Labour Court.”
[20] This
amendment gave rise to what the court a
quo
described as the
settled practice in terms of which writs of execution in respect of
arbitration awards made by the CCMA were issued
by the Registrar of
this court prior to execution by the sheriff. This procedure was also
unacceptable because a party armed with
an arbitration award in
his/her favour still had to go to the Labour Court for the Registrar
to issue a writ.
[21] The
Labour Relations Amendment Act 2014 which came into effect on 1
January 2015 further amended Section 143 to read in the
form quoted
at paragraph 8 above.
[22] The
explanatory memorandum that was tabled with the Labour Relations
Bill, 2012 which became the Labour Relations Amendment
Act 2014, set
out the purpose of the last Amendment to section 143 in the following
terms:
‘
Amendments
to this section are intended to further streamline the mechanisms for
enforcing arbitration awards of the commission
and to make these
mechanisms more effective and accessible. Firstly, an award which has
been certified by the Commission can be
presented to the
Deputy-Sheriff for execution if payment is not made. This removes the
need for the current practice in terms of
which parties have a writ
issued by the Labour Court. This has proved to be time-consuming and
expensive, particularly for applicants
in a centre where there is no
Labour Court. Secondly, in the case of award such as reinstatement
which are enforced by contempt
proceedings in the Labour Court, the
need to have an arbitration award made an order of the Labour Court
before contempt proceedings
can be commenced is removed. Finally, the
enforcement of awards to pay money will occur in terms of the Rules
and Tariffs applicable
to the Magistrate’s Court, thus
simplifying and reducing the costs of these proceedings. These
amendments are anticipated
to simplify and expedite the enforcement
of arbitration awards by the Commission and bargaining councils’.
[23] The
successive amendments to section 143 clearly indicate that the
legislature wanted to provide a remedy to address the problems
surrounding the enforcement of arbitration awards. It clearly states
that the purpose of the amendment is
inter alia
that certified
awards can be presented to the sheriff for execution if payment is
not made.
[24] The
state of the law before the current section 143 was passed was that
there was still uncertainty as to how arbitration awards
should be
enforced. The “settled practice” was unacceptable because
parties still had to go to the Labour Court in
order for the
Registrar to issue a writ. In areas where there is no Labour Court a
person with a monetary arbitration award in
his/her favour would have
to travel to the Labour Court (sometimes more than once) to have a
writ issued by the Registrar.
[25] The
legislature decided, as I will demonstrate below, to make certified
CCMA awards enforceable in terms of section 143 without
the need to
go to the Labour Court. The procedure created by section 143 makes it
easier, inexpensive, effective and accessible
for a person to enforce
a certified arbitration award.
[26] I
now turn to look at the words used in section 143. In terms of
section 143(1), an arbitration award may be enforced as if
it were an
order of the Labour Court in respect of which a writ has been issued.
I disagree with the court
a quo’s
assertion that the
clear language of section 143 “ is that the award of the CCMA
may be enforced as it if were an order of
the Labour Court
provided
a writ has been issued in respect thereof.”
[27] The
court
a quo
erred when it added the word “provided”
in its interpretation. There is no word in section 143 that
approximates the
word “provided”. The crux of the matter
lies in the words “as if it were”. An understanding of
those words
and their implication unlocks the entire interpretation
problem.
[28]
The words “as if” are defined as, “as the case
would be if”;
[7]
in other words, it means in the same way that it would be if.
[29] By
using the words “as if it were”; the legislature created
a legal fiction. The CCMA is not a court of law and
writs are issued
by courts of law and not administrative tribunals like the CCMA. In
order to overcome this reality, the legislature
had to create this
fiction. The legislature deemed the CCMA to have a status which it
would not otherwise have, and consequently
established an arrangement
which, without the fiction, would be objectionable because it is
incompatible with legal principle.
There are many fictions in law,
e.g. once a legal child is legally adopted, the biological parents
become legal strangers to the
child, i.e. they are treated by the law
as if they were not related to the child. Likewise, the adoptive
parents are treated as
if they were the biological parents of the
child. A legal fiction therefore requires us to assume as fact that
which we know is
not true.
[30]
Therefore, section 143(1) read with section 143(3) means that when an
arbitration award is certified by the Director, it may
be enforced as
if it were an order of the Labour Court in respect to which a writ
has been issued. We must therefore not only assume
that it is an
order of the Labour Court but also assume that a writ has been issued
in respect of that order.
[31] The
practical effect of section 143(1) and 143(3) is that a certified
arbitration award may be enforced without the need for
a writ to be
issued by any court or the CCMA.
[32]
Section 143(5) provides that an arbitration award sounding in money
must be treated for the purpose of enforcing or execution
it as if it
were an order of the Magistrate’s Court. The Deputy-Sheriff may
enforce and execute orders of the Magistrate’s
Court and
therefore the Deputy-Sheriff would, by virtue of section 143(5), have
the power to enforce and execute a certified arbitration
award.
[35]
Section 143(5) deals with awards sounding in money only. Section
143(4) on the other hand provides as follows:
‘
If
a party fails to comply with an arbitration award certified in terms
of subsection (3) that orders the performance of an act,
other than
the payments of an amount of money, any other party to the award may
without further order enforce it by way of contempt
proceedings
instituted in the Labour Court.’
[36]
Section 143(1) tells us what the status of a certified award is.
Subsections (4) and (5) tell us how it should be enforced.
The effect
of subsection (5) is, if the certified award to be enforced sounds in
money, it is enforced and executed as if it is
an order of the
Magistrates’ Court. It does not become an order of the
Magistrates’ Court. It is still assumed to be
an order of the
Labour Court in respect of which a writ was issued; however if it
sounds in money it is treated for enforcement
and execution purposes
only as an order of the Magistrates’ Court. The words “despite
subsection (1)” in subsection
(5) makes it plain that despite
the assumption in subsection (1) a certified award sounding in money
may be enforced and executed
as if it is an order of the Magistrates’
Court. There are Magistrates’ Courts in all districts in the
country and this
makes the enforcement of certified awards sounding
in money accessible to most workers. The enforcement order in terms
of section
143 clearly empowers the sheriff to execute in the same
manner as would be the case if he or she received a warrant signed
and
issued by the registrar of the Magistrates Court.
[36] If
the certified award to be enforced is for the performance of an act
which was not done, then contempt proceedings may be
instituted in
the Labour Court, in terms of subsection (4). This may be done
because in terms of subsection (1), the certified
award is assumed to
be an order of the Labour Court in respect of which a writ has been
issued.
[37] The
court
a quo
should have found that a certified arbitration
award may be enforced in the same way that it would be if it was an
order of the
Labour Court in respect of which a writ was issued.
[38] The
court
a quo
seems to have laboured under the mistaken view
that the CCMA actually issues writs. This is evident from paragraph 1
of its order
which reads:
‘
it
is declared that the CCMA does not have jurisdiction to issue writs
of execution in respect of the arbitration awards issued
by it’
[39] The
CCMA does not issue writs in the conventional way. The certified
award is the equivalent of a Labour Court order in respect
of which a
writ has been issued. The certified award is therefore not only
assumed to be an order of the Labour Court but it must
also be
assumed that a writ was issued in respect of that order. The
certified award is therefore the writ. The conclusion that
there is
no reason why writs issued by the CCMA should be stayed pending
review in circumstances where they are a nullity for lack
of
jurisdiction is therefore incorrect.
[40]
Section 145(3) of the Act provides that the Labour Court may stay the
enforcement of an award pending its decision. The court
a
quo
reasoned that the Labour Court properly stayed writs issued by the
Registrar of the Labour Court in terms of the old practice.
The
learned Judge however opined that the position changed when the 2014
amendment to section 143 became operational, because the
CCMA issued
their own writs or enforcement awards in respect of its own
arbitration awards.
[41] I
fail to understand the court
a quo
’s reasoning. Section
145(3) is clear. The enforcement of an arbitration award may be
stayed by the Labour Court. The section
has no qualification or
limitation. The enforcement of any arbitration award issued in terms
of the Act may be stayed by the Labour
Court. Therefore, the
enforcement of a certified award which is deemed to be an order of
the Labour Court in respect of which a
writ was issued may be stayed
by the Labour Court pending its decision. The Labour Court may
therefore stay the enforcement of
an award pending its decision in
the review application. It follows that the court
a quo’s
conclusion in relation to the Labour Court’s lack of
jurisdiction to stay CCMA certified awards is incorrect.
[42] In
case number J1807/15, the applicant requested a
rule nisi
calling
upon the respondent to show cause why the enforcement award should
not be stayed pending the outcome of the review application.
In
J1706/15, the applicant sought final relief to stay the enforcement
award pending the outcome of the review application. Much
water has
flown under the bridge since the court
a quo’s
judgment.
It is also not clear what happened to the review applications in the
interim. In my judgment, these matters should be
remitted to the
court a
quo
so that the issues can be properly ventilated if
the applicants are still desirous to move for the relief which they
sought.
[41] I
therefore make the following order:
a)
The appeal is upheld with no order as to
costs.
b)
The court
a
quo’s
order is altered to the
extent set out below;
c)
Paragraphs 1 - 3.1 of the court
a
quo’s
order are set aside.
(c)
Both cases (case no: J1807/15 and case no: J 1706/15) are remitted to
the court
a quo
so that they may be dealt with in terms of
this judgment.
d)
Paragraph 3.2 and 3.3 of the court
a
quo’s
order are not interfered
with.
e)
The registrar is directed to send a copy of
this judgment to all the applicants and respondents in the two
applications.
______________
C.
J. Musi JA
Davis JA
and Murphy AJA agreed with C J Musi JA.
APPEARANCES
FOR THE
APPELLANT:
Adv. Maenetje
SC
Instructed
by
Cheadle
Thompson & Haysom
Inc
FOR THE
RESPONDENT:
No appearance
[1]
See Section
163 of the Act.
[2]
Footnotes
omitted. Rule 40 of the CCMA Rules reads as follows:
40.
Certification and enforcement of arbitration awards
(1) An
application to have an arbitration award certified must be made on
or contain the information in
(a) LRA
Form 7.18 in respect of an award by a commissioner;
(b) LRA
Form 7.18A in respect of an award in arbitration conducted under the
auspices of a bargaining council.
(2) Any
arbitration award that has been certified in terms of section 143 of
Act that orders the payment of an amount of money,
may be executed:
(a) by
using the warrant of execution in the LRA Form 7.18 or LRA Form
7.18A; or (b) the warrant of execution prescribed in the
Rules for
the Conduct of Proceedings in the High Court.
(3) For
the purposes of subrule (2), an arbitration award includes an award
of costs in terms of section 138(10), a taxed bill
of costs in
respect of an award of costs and an arbitration fee charged in terms
of section 140(2).
[3]
Novartis
SA (Pty) Ltd v Maphill Trading (Pty) Ltd
2016 (1) SA
518
(SCA) at para 29;
KPMG
Chartered Accountants SA V Security Ltd and Another
2009 (4) SA 399
(SCA) at para 39;
2012 (4) SA 593
(SCA) at para 18.
[4]
[4]
1949 (1) SA 842
(A).
[5]
At page 852
and 853.
[6]
See
Olley
v Maasdorp and
Another
1948 (4) SA 657
(AD) at 666;
Hleka
v Johannesburg City Council
1949 (1) SA 842
(AD) at 852 to 853.
[7]
Shorter
Oxford Dictionary Sixth Ed Oxford University Press at page 127.