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[2017] ZALAC 56
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Van Tonder v Compass Group (Proprietary) Limited and Others (JA58/16) [2017] ZALAC 56; (2017) 38 ILJ 2329 (LAC); [2017] 10 BLLR 1024 (LAC) (1 June 2017)
IN
THE LABOUR APPEAL COURT OF SOUTH AFRICA, JOHANNESBURG
Reportable
Case no: JA 58/16
In
the matter between:
CHRIS
VAN TONDER
Appellant
and
COMPASS
GROUP (PROPRIETARY) LIMITED
First Respondent
LYNCH
DT NOMINE
OFFICII
Second Respondent
COMMISSION
FOR CONCILIATION,
MEDIATION
AND
ARBITRATION
Third Respondent
Held: 01 June 2017
Coram: Landman JA, Davis JA and
Phatshoane AJA
EX
TEMPORE JUDGMENT
DAVIS
JA
Introduction
[1]
This case once more raises the
question of the relationship between prescription in general, in
particular, s 15 of the Prescription
Act 68 of 1969 (‘the Act’)
and the Labour Relations Act 66 of 1995 (‘LRA’). In these
proceedings the decision
of the Constitutional Court in
Myathaza
v Johannesburg Metropolitan Bus Services (SOC) Ltd t/a Metro and
Others
[1]
(
Myathaza
)
which dealt with this relationship looms large.
The
background
[2]
The present dispute was
triggered by an application to review and set aside an arbitration
award of 14 September 2012.
[3]
The appellant was dismissed by
his employer, first respondent, having been charged with dishonesty,
in that while in possession
of a safe key an amount of R 18 100
“went missing” from the employer’s safe.
Further he was
charged with gross negligence in that the appellant
had given the safe key to Thuli Busani without following “handover”
procedures. The dispute eventually formed the subject of an
arbitration before second respondent, who found that the appellant’s
dismissal, while procedurally fair, had been substantively unfair.
Accordingly, he ordered that the respondent pay compensation
to the
appellant in the amount of R 228 000.00. The award was made on
14 September 2012. On 04 December 2012 first
respondent
launched an application to review this award.
[4]
Third respondent filed a notice
of compliance in terms of Rule 7 A (3) on 24 December 2012. The
transcribed record of the
arbitration proceedings, together with the
items set out in the notice pursuant to Rule 7 A (3), were filed by
first respondent
on 14 February 2013 and 13 March 2013 respectively.
Subsequent thereto, the appellant delivered an answering affidavit on
10 April 2013. In this answering affidavit, he requested that the
court “confirms the arbitration award as an order of this
Honourable Court.” The first respondent then filed a replying
affidavit on 17 May 2013. On 26 January 2016 the first respondent
filed a further supplementary affidavit in which it took the point
that, as the arbitration award was dated 14 September 2012,
it had
prescribed on 21 November 2015. In this affidavit, on behalf of the
first respondent, Mr Jabu Mathebula said:
‘
The
mere fact that a review is pending does not bar the first respondent
from launching an application in terms of s 158 (1) (c)
to make an
arbitration award an order of court. it would be prudent to
state that the first respondent did not at any stage
prior to the
hearing of this matter, launch an application in terms of
s 158
(1)
(c) of the
Labour Relations Act 66 of 1995
.’
[5]
Mr Mathebula also informed the
court by way of this affidavit that:
‘
Throughout
the proceeding before this Honourable Court, the applicant has not
been dilatory in its prosecution of the review.
The noticeable
time delay on finalisation of the review was caused by the loss of
the court file and the subsequent anticipation
of the set down of the
matter. The first respondent has not taken the requisite steps
to interrupt prescription in this matter
and the point
in
limine
should be upheld with no order as to costs
.’
Proceedings
before the court
a quo
[6]
In his judgment in the court
a
quo,
Steenkamp J referred
to a passage in the appellant’s answering affidavit, namely
that the court should dismiss the review
application ‘and
confirm the arbitration award as an order of court’.
The key question then posed by the
learned judge was whether this
prayer constituted a form of interruption of prescription.
[7]
In the judgment of this Court
in
Myathaza v Johannesburg
Metropolitan Bus Service (SOC) Ltd t/a Metrobus
[2]
Coppin JA referred to s15
(1) of the Act which provides that the running of prescription shall,
subject to the provisions of s 15
(2), “be interrupted by the
service on the debtor of any process whereby the creditor claims
payment of the debt’.
The learned judge of appeal then
went on to say at paras 76-77:
‘
An
application to make an arbitration award an order of court could,
however, be construed as a ‘process whereby the creditor
claims
payment of the debt’. It is the substance rather
than the form of the application that matters.
By bringing such
an application the creditor is in effect asking the court to order
the debtor to pay the debt (represented by
the award).
The
application to make an award a court order will interrupt
prescription by its mere service on the debtor. But, for it
to
actually and effectively interrupt prescription, the creditor will
have to prosecute his claim under that process to final judgment.’
[8]
Applying these
dicta
to the present dispute, Steenkamp J found that the filing of an
answering affidavit by the winning party in terms of the arbitration
award which was not the subject of a review application against the
arbitrator’s decision, did not amount to taking a legal
step to
recover the ‘debt’ owing in terms of the award,
sufficient to interrupt the running of prescription in terms
of s 15
(1) of the Act.
[9]
I should add that the learned
judge came to this decision extremely reluctantly, commenting: “I
am not persuaded that justice
has been served. The law is, in
this case, an ass; but I am reluctantly forces to hand down an
asinine judgment.”
[10]
He observed that the LRA had
been amended pursuant to a new provision, s145 (9), which provides
that an application to set aside
an arbitration award in terms of the
section interrupts the running of prescription in terms of the
Prescription Act in
respect of that award. However, the commencement
date for this amendment was such that it applied to arbitration
awards issued
after 1 January 2015 and therefore, could not come to
aid of the appellant in the present dispute.
The
appeal
[11]
Subsequent to the decision of
Steenkamp J on 02 March 2016, the judgment of the LAC in
Myathaza,
supra,
was overruled by the
Constitutional Court. Unfortunately, two judgments were delivered by
the Constitutional Court, each supported
by four justices of the
court, which, as I shall make clear, leaves the
ratio
somewhat uncertain.
[12]
Briefly the facts of the case
were as follows: An arbitration, pursuant to a dismissal of an
employee, was conducted in September
2009. The arbitrator found
that the dismissal had been both substantively and procedurally
unfair and ordered Metrobus to
reinstate the employee, Mr Myathaza,
with retrospective effect from the date of his dismissal, being 09
July 2008, on the same
terms and conditions that were applicable but
for the unfair dismissal and without any loss or benefits that would
have accrued
to him. In terms of this order, Mr Myathaza was
entitled to back pay. In a subsequent award, the back pay was
quantified
in the amount of R 90747, 86, excluding tax.
[13]
Metrobus failed to pay this
amount. When Mr Myathaza reported for duty within five
days as required by the award, Metrobus
sent him home, informing him
that it had decided to challenge the award on review. It
instituted review proceedings
on 21 October 2009. These were opposed
and eventually pleadings in the matter were closed. Although the
matter was ripe for hearing,
no date was sought and fixed and the
review was still pending in the Labour Court some seven years later.
Understandably Mr Myathaza
was frustrated and approached the Labour
Court in August 2013 with an application that the award be made an
order of court.
This application was opposed by Metrobus, inter
alia, on the basis that the award had prescribed upon the expiry of
three years
under the Act; that is on 16 September 2012.
[14]
In the first judgment, Jafta J
held that prescription periods determined by s11 of the Act ‘are
at odds with the scheme of
the LRA. Even the shortest period of
three years is way out of line with the speed and periods within
which the LRA requires
disputes to be resolved. The period of three
years is far too long to have an award enforced. Without condonation
granted on good
cause, a party who sits on an award until the last
day of three years allowed by the
Prescription Act would
be barred
under the LRA when enforcing the award on the basis that such party
did not act within a reasonable time. (para 32)
[15]
Jafta J also found that the Act
“does not cater for a situation where the claim or dispute has
been adjudicated and an outcome
binding on the parties has been
reached, but before that outcome is made an order of court. In terms
of s 143 of the LRA, a certified
arbitration award is deemed to be an
order of court and is enforced as if it were an order of the Labour
Court, except an arbitration
award for payment of money which is
executed as if it were an order of a Magistrate’s Court.
Since an award is a final
and binding remedy it is difficult to
determine a prescription period applicable to it under the
Prescription Act. The
three-year period is meant for claims of
disputes which are yet to be determined and in respect of which
evidence and witnesses
may be lost if there is a long delay.”
(para 44)
[16]
Jafta J observed that the
structure of s15 of the Act is predicated on the idea that the
judicial interruption envisaged in this
section must relate to claims
that are yet to be prosecuted to final judgment or where judgment is
abandoned or set aside.
This is not the same situation as an
arbitration award which is itself binding and final. See para 49.
[17]
Referring to the time periods
set out in the LRA, Jafta J held that the party against whom an award
is issued can, by way of a review,
challenge the award provided that
the review is instituted within six weeks from the date on which the
award was served. Section
145 (5) of the LRA requires that the review
must be heard within six months from the date it was launched, save
for an extension
which may be granted by the Labour Court. In the
learned justice’s view, even where there is a review challenge,
an award
that has survived the challenge must be enforced within one
year. Were the Act to apply it would mean that the award may not be
enforced within a year. If the Act were to apply “the party in
whose favour it was issued may wait almost three years and
only seek
to enforce it on the last day of the third year to interrupt
prescription. If this were to happen such party may have
found out
that it is no longer open to it to enforce the award under the LRA,
owing to a long delay.” (para 51)
[18]
Referring to s 158 of the LRA,
which empowers the Labour Court to make an award an order of court
for the purposes of enforcement,
Jafta J held that the application of
the Act to such awards would effectively achieve the opposite
outcome, in that, once prescribed,
an award becomes unenforceable and
the Labour Court would not be able to exercise its power to make the
award an order of court.
In this context, the Act would trump the LRA
designed process that was specifically crafted to enforce the right
to fair labour
practices. See para 56.
[19]
Jafta J then assumed that the
Act could apply to a LRA case. He then said that even then, if the
Act were to apply, the main award
granted in favour of appellant
could not prescribe because Metrobus was not under obligation to pay
money, deliver goods or render
services to the appellant and hence
there was no “debt” as required by the Act.
[20]
Given that the Act did not
apply, Jafta J and three other justices consequently found that the
appeal must succeed and the order
of the Labour Appeal Court should
be set aside. In terms of s145 (5) of the LRA Metrobus was obliged to
apply for a date for the
review to be heard within six months of the
lodging of the review, subject to the rules of the Labour Court. The
unduly long delay
undermined the LRA’s objective of a speedy
resolution of disputes and severely prejudiced the appellant.
Jafta J thus
found that it would be just and equitable to grant an
order which the Labour Court should have granted, namely to make the
award
an order of the Labour Court.
[21]
By contrast, Froneman J, also
supported by three justices of the Court, although finding that the
appeal had to succeed, held that
the relevant provisions of the two
Acts were capable of complimenting each other in a way that best
protected the fundamental right
of access to justice while preserving
the objective of a speedy resolution of labour disputes in terms of
the LRA.
[22]
Froneman J differed with the
findings of the first judgment, where the latter held that a
reinstatement order is incapable of falling
within the scope of “a
debt” under the Act. In his view, a claim for the
enforcement of legal obligations should
qualify “as a debt”
in terms of the Act. An unfair dismissal claim under the
LRA seeks to enforce three
possible legal obligations against an
employer, namely reinstatement, reemployment and compensation, all of
which impose legal
obligations upon an employer of a kind that fall
within the scope of the concept ‘debt’ as employed in the
Act.
[23]
Once Froneman J accepted that
the claim under an unfair dismissal falls within the scope of ‘a
debt’, the question arose
as to why prescription should run
before the finalisation of court proceedings. In his view,
there is little reason ‘
to
say that instituting review proceedings does not also have the effect
of extending the finalisation of the judgment until the
review is
decided
’
. (para
83)
[24]
The LRA provides for two
different routes in respect of dispute resolution after an initial
referral to conciliation. If the latter
fails, arbitration can take
place under the aegis of the CCMA or a bargaining council.
Alternatively, provision is made for adjudication
by the Labour
Court. Unfair dismissal disputes concerning an employee’s
conduct or capacity, continued employment made intolerable
by the
employer, or where no clear reason is provided to an employee for the
dismissal, are dealt with by way of arbitration. Where
it is alleged
that the dismissal is automatically unfair, based on an employee’s
operational requirements or due to an employee’s
participation
in an unprotected strike or pursuant to lockout disputes,
adjudication is conducted in the Labour Court. That Labour
Court
judgments are subject to appeal to the Labour Appeal Court, while
arbitration award can only become the subject of review
should not,
in Froneman J’s view, justify a distinction insofar as the
application of prescription is concerned. There
is no plausible
reason why a statutory review under s145 of the LRA is not to be
considered as a judicial process that interrupts
prescription until
finality is reached. In other words, the right to review should play
the same role in respect of prescription
as does the right of appeal.
[25]
Froneman J considered that the
new provision to the LRA which took effect after the dispute in
Myathaza, namely s145 (9) of the
LRA “merely confirmed what I
consider to have been the legal position before its enactment. It
provides that an application
to set aside an arbitration award
interrupts the running of prescription.” (para 88). In the
final analysis, until the review
was finalised in this case, the
appellant’s claim could not have prescribed.
[26]
To the argument that as the LRA
provides that unfair dismissal referrals must be instituted within 30
days of the date dismissal,
Froneman J classified this as a time bar
rather than a true prescription period which “may admit of
amelioration through
condonation.” (para 94). Accordingly, the
30-day period for the referral, being a time bar, can thus be
interpreted to be
congruent with the normal prescription periods
provided for under the Act. (See para 96).
Implications
[27]
This Court is therefore faced
with two judgments which have taken different approaches to the very
problem that confronts this Court.
Jafta J found that the Act has no
application. Froneman J found that a review of an arbitration award
which constitutes a debt
in terms of the Act is suspended pending the
finalisation of the review.
[28]
In normal circumstances, given
the equipoise in the Constitutional Court, this Court would follow
the decision of this Court in
Myathaza,
supra
or, if it considered
that judgment to be palpably wrong, it would be free to adopt what it
considered to be the correct approach.
[29]
But, the split in the
Constitutional Court notwithstanding, all the justices agreed that
the order of this Court in
Myathaza
had to be set aside. For this reason, it cannot be considered to
remain the default position. See the subsequent judgment of the
Constitutional Court in
Mogaila
v Coca Cola Fortune (Pty) Ltd
[3]
(
Mogaila
)
which finds that upon either approach, the appeal must succeed.
Regrettably, the court in
Mogaila
did not resolve the difference between the eight justices.
[30]
While I consider that the
approach of Froneman J, which seeks to reconcile the Act with the LRA
to be preferable, in that I to have
some difficulty in understanding
why an arbitration award does not constitute a debt which falls
within the scope of the Act, mercifully,
on the basis, of either
judgment this case must be decided in terms of the unanimous order of
the Constitutional Court.
[31]
This was sensibly the approach
adopted by the respondents’ counsel at the hearing before this
court, namely that in the light
of the Constitutional Court’s
judgment, in
Myathaza supra
,
the appeal had to succeed and the order of the court
a
quo
had to be set aside.
[32]
In summary, on the basis of
Jafta J’s approach, the Act does not apply and accordingly the
debt owed by respondent to the
appellant in the amount of R
228 000.00 has not prescribed. On the basis of the approach
adopted by Froneman J, the review
has not been finalised and hence,
prescription has been interrupted.
[33]
The result, on either judgment,
prevents the injustice of which Steenkamp J in the court
a
quo
referred which is
described as follows by Froneman J:
‘
The
manifest injustice of depriving the applicant of the arbitration
award in his favour by first avoiding its implementation by
way of
instituting review proceedings and then crying prescription on the
back of the time wasted by the review can be met by application
of
the principle that prescription should not run until court
proceedings are finalised.
’
(para
67)
[34]
In the result the following
order is made:
1.
The appeal is upheld.
2.
The order of the court
a
quo
is set aside and
replaced with the following order:
‘
The
arbitration award of 15 September 2012 has not prescribed.’
_________________
DAVIS JA
Landman
JA and Phatshoane AJA concurred.
APPEARANCES:
FOR
THE APPELLANT:
Adv AJ Nel
Instructed by Lee and McAdam attorneys
FOR
THE FIRST RESPONDENT:
H Pretorius of Macgregor Erasmus Attorneys
[1]
2017
(4) BCLR 473 (CC).
[2]
2016 (3) SA 74 (LAC).
[3]
[2017]
5 BLLR 439 (CC).