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[2018] ZALAC 51
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NUMSA obo Masana v Gili Pipe Irrigation (Pty) Ltd (JA 90/2016) [2018] ZALAC 51; (2019) 40 ILJ 813 (LAC) (12 December 2018)
IN
THE LABOUR APPEAL COURT OF SOUTH AFRICA, JOHANNESBURG
Reportable
Case no: JA 90/2016
In the matter between:
NUMSA OBO E MASANA
Appellant
and
GILI PIPE IRRIGATION
(PTY) LTD
Respondent
Held:
22 November 2018
Delivered:
12 December 2018
Summary: Rescission
application – Labour Court dismissing rescission application by
employee– Labour Court holding the
view that award prescribed
and no prospects of success in rescission application –
principles relating to prescription
restated –
Metrobus
and
Pieman’s Pantry
decisions in Constitutional Court
applied - On the facts, prescription had not run its full term;
employee’s right
of action had not prescribed – premise
upon which application dismissed by Labour court incorrect - Appeal
upheld and matter
remitted to the Labour Court for consideration of
the merits of the rescission application.
Coram: Sutherland and
Jappie JJA and Murphy AJA
______________________________________________________________________
JUDGMENT
SUTHERLAND JA
Introduction
[1]
This
appeal is from a judgment of Cele J in the Labour Court, given on 22
November 2012. An application was brought by the appellant
(Masana)in
terms of Rule 16A(1)(b)
[1]
of
the Labour Court Rules to rescind a judgment given by default by
Bhoola J, given on 16 September 2011. The application before
Bhoola J
had been an application in terms of Section 158(c)
[2]
of the Labour Relations Act 66 of 1995 (LRA) to make an award, given
on 4 January 2005 by a commissioner of the Commission for
Conciliation Mediation and Arbitration (CCMA), an order of court. On
the premise that the rescission would be granted, the Section
158(c)
application was put before the court again. Cele J dismissed the
rescission application and thus did not need to address
the section
158(c) application. The appeal lies against the dismissal of the
rescission application and its logical consequences.
[2]
The judgment of Cele J addressed, first, a
preliminary application by Masana for condonation of the late filing
of the rescission
application. It was one day late. However, although
that degree of lateness would probably have been condoned, Cele J
also, quite
correctly, examined the prospects of success to determine
the question. Cele J made a finding that the right to make the award
an order of court had prescribed because a period well in excess of
three years had elapsed between 4 January 2005, when the award
was
issued, and 17 September 2009 when the section 158(c) application had
been initiated (ie a period of four years and eight months).
Therefore, he held that this fact was fatal to the rescission
application and he dismissed the condonation application.
Axiomatically,
having made that finding, Cele J did not find it
necessary to address the merits or demerits of the rescission
application
per se
which were concerned with the circumstances under which Bhoola J had
dismissed the section 158(c) application, in the absence of
Masana or
his representative, when the matter had been called in her court.
[3]
The critical issue in the appeal is whether
Cele J was correct in his appreciation of the law regarding
prescription.
[4]
In
the judgment, Cele J alluded to the impending amendment of Section
145 of the LRA to add Section 145(9) which eventually came
into force
pursuant to section 22 of Act 6 of 2014, two years after he gave
judgment, in terms whereof a review application in
terms of section
145 would interrupt prescription.
[3]
This matter is, therefore, one, among many, which at the time it came
before this Court, the legal controversy
per
se,
is a matter of history.
Awards of the CCMA and
the law of prescription
[5]
The period during which this litigation has
been conducted has been an era of great uncertainty about the
application in Labour
Relations litigation of the principles of
prescription as encapsulated in the Prescription Act 68 of 1969 (PA)
[6]
Cele J drew on the earlier decision by
Molahleli J in
Public Servants
Association obo Khaya v CCMA and Others
(2008)
29 ILJ 1546 (LC) to decide the case before him. The stance taken by
Molahleli J was that the PA applied to Labour Relations
litigation
and that section 13(1)(f) of the PA envisaged a three-year period of
prescription to apply to an award. On that premise,
Cele J dismissed
the rescission application.
[7]
Late
in 2016, the Constitutional Court decided the matter of
Myathaza
v Johannesburg Metropolitan Bus Services Ltd t/a Metrobus
[4]
(Metrobus).
The critical controversy in that matter was whether the PA applied to
awards issued under the aegis of the LRA. Eight judges sat
in that
case and, in the result, the Constitutional Court was evenly split
between those who held the PA did not apply and those
who held it did
apply to matter decided under the aegis of the LRA. Axiomatically,
the discernment of a
ratio
was
impossible.
[5]
[8]
The
controversy about the applicability of the PA to matter decided under
the aegis of the LRA was, however, resolved by the Constitutional
Court in the matter of
FAWU
obo Gaoshbelwe v Pieman’s Pantry (Pty) Ltd
[6]
(Pieman’s Pantry.)
That matter was not concerned with an award
per
se
,
but rather about what juridically recognised event interrupted
prescription, if prescription applied. Again, the Constitutional
Court was divided on the question of whether the PA applied at all.
However, a clear majority held that the PA indeed was applicable
to
Labour Relations litigation.
[9]
In
the Judgment of Kolapen AJ, for the majority, it was held that PA is
compatible with the LRA and further, held that an alleged
unfair
dismissal is a debt as contemplated by the PA.
[7]
The controversy about what juristic act might interrupt prescription
running was resolved by the finding that a referral of such
a dispute
for conciliation was the first step in the litigious process and had
the effect of interrupting prescription.
[8]
Kolapen J went on to hold thus:
‘
[202]
In addition, given the mandatory nature of conciliation as a
requirement for arbitration or a referral to the Labour Court, it
follows, in my view, that the proceedings for the recovery of
the debt, that arise from an unfair dismissal, commence when
a
dispute is referred to conciliation. To hold otherwise would simply
mean airbrushing the important and legally mandated process
of
conciliation, from what can only be seen as a continuum in the legal
process from conciliation to adjudication that the
LRA
evidences. In
Cape
Town Municipality
,
the court held that a process that initiates proceedings for
enforcement of payment of a debt interrupts prescription:
‘
It
is sufficient for the purposes of interrupting prescription if the
process to be served is one whereby the proceedings [began]
there
under are instituted as a step in the enforcement of a claim for
payment of the debt. A creditor prosecutes his claim
under that
process to final, executable judgment, not only when the process and
the judgment constitute the beginning and end of
the same action, but
also where the process initiates an action, judgment in which finally
disposes of some elements of the claim,
and where the remaining
elements are disposed of in a supplementary action instituted
pursuant to and dependent upon that judgment.’
[203]
What is instructive from this decision is that it recognises that the
judicial process may consist of various steps that are
intertwined
and that it is not necessary that the process that commences
proceedings must result in a judgment in the same action.
Thus, it
matters not that the process that constitutes a referral to
conciliation does not result in a judgment. It may still,
and does
indeed, constitute the commencement of proceedings for the
enforcement of a debt.
[204]
For these reasons, I would conclude that, although prescription began
to run when the debt became due on 1 August 2001,
it was interrupted
by the referral of the dispute to the CCMA on 7 August 2001 and
continued to be interrupted until the dismissal
of the review
proceedings by the Labour Court on 9 December 2003. Accordingly, when
the dispute was referred to the Labour Court
for adjudication on
16 March 2005, it clearly had not prescribed. It is for these reasons
that the appeal must succeed.’
[10]
This Judgment in
Pieman’s
Pantry
must be read with the judgment
of Froneman J in
Metrobus
.
The judgment of Froneman J, for one half of that Court, held as
follows regarding the effect of the institution of review proceedings
in respect of an award:
‘
[85]
It is important to note that this division of adjudicative labour is
not premised on a substantive distinction between the
nature of
the different disputes: all are disputes ‘that can be resolved
by the application of law’. A pragmatic
choice was made that
certain disputes should preferably be resolved through the possibly
speedier process of arbitration and that
choice was fortified by not
allowing appeals against arbitration awards, only review. In
contrast, Labour Court judgments
are subject to appeals to the Labour
Appeal Court and further up the judicial hierarchy. Arbitration
under the LRA is merely
adjudication without a right of appeal.
Instead of a right of appeal only a right to review exists.
[86]
The restriction to review only provides a cogent and
compelling reason for re-interpreting the
Prescription Act to
include statutory reviews under
s 145
of the LRA as included in the
judicial process that interrupts prescription until finality is
reached under
s 15
of that Act
. The restriction infringes the
right of access to courts more severely than where a right of appeal
is allowed. An interpretation
that best protects the right of access
should be preferred. That can be achieved by allowing the
right of review to
play the same role of finality as the right of
appeal does in ordinary matters.
[87]
Just as there are statutory provisions and court rules regulating the
lodging and prosecution of appeals, the LRA provides
that the review
of an arbitration award must take place within six weeks of the date
of service of the award, or within six
weeks of the date that the
applicant discovers corruption where the defect involves
corruption. This avoids the difficulty
that the absence of
certain time-limits may have in the case of common-law review.
And, to reiterate, logically a judgment cannot be final and
executable under
s 15
of the
Prescription Act while
it is still
subject to a final pronouncement by a court.
[88]
The institution of a review of the arbitration award by the
employer in this case was thus part of the process that interrupted
prescription in terms of
s 15(1)
of the
Prescription Act. Until
the
review was finally determined prescription did not run
. The new
s145(9)
of the LRA, which came into force in January 2015, merely
confirms 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.’
(Underling
supplied)
[11]
In my view, once it accepted that the PA
applies to all litigation under the aegis of the LRA, there can be no
rational basis to
conclude that any aspect or stage of such
litigation, including an award, is not subject to prescription. In
Metrobus,
Froneman
J held that prescription applies specifically to awards. In the light
of
Pieman’s Pantry,
the view of one half of the Constitutional Court in
Metrobus
to that effect, must now be accepted as a definitive statement of the
law. This Court endorses that view.
The Relevant Facts
[12]
The critical chronology reveals the
following:
12.1.
The date of the dismissal which was the
subject of the alleged unfair dismissal does not appear from the
record.
12.2.
4 January 2005 – the award is
issued
.
12.3.
(13 months elapse and prescription runs.)
12.4.
6 February 2007 – A review is
launched.
12.5.
(13 months elapse and prescription is
interrupted)
12.6.
30 June 2009 – the review
application is dismissed
.
12.7.
(Two months elapse and prescription runs)
12.8.
25 August 2009 – a tender is made to
work.
12.9.
27 August 2009 – the tender is
refused.
12.10.
(One month elapses and prescription runs.)
12.11.
17 September 2009 – the
section
158(c)
application is launched.
12.12.
(Two years elapse and prescription is
interrupted)
12.13.
16 September 2011 – Bhoola J
dismisses
section 158(c)
application
12.14.
(Three weeks elapse and prescription runs)
12.15.
8 October 2011 – Rescission
application is launched
12.16.
(13 months elapse and prescription is
interrupted)
12.17.
22 November 2012 – Cele J
dismisses rescission application
12.18.
(5 weeks elapse and prescription runs)
12.19.
11 December 2017 - Appeal is noted
12.20.
(Further elapse of time during prescription
is interrupted pending the outcome of the appeal)
[13]
On this computation, as at the date that
Cele J heard the matter, at best for the respondent’s
contention that prescription
was running, a total of 19 months can be
counted as periods during which prescription was running in relation
to any given right
of Masana.
The remedy
[14]
For these reasons, it is appropriate to
uphold the appeal.
[15]
However, owing to the basis for the
judgment
a quo
,
ie a dismissal of the condonation application, the merits of the
rescission application were not considered. Thus, no decision
on that
issue is before this Court.
[16]
Accordingly, the matter should be remitted
to the Labour Court to adjudicate that case.
The costs
[17]
The circumstances, as described, in my view
suggest that no costs order should be made.
The order
(1)
The appeal is upheld.
(2)
The case is remitted to the Labour Court for adjudication.
______________
Sutherland
JA
Sutherland
JA (with whom Jappie and Murphy JJA concur)
APPEARANCES:
FOR THE APPELLANT:
Adv Kabelo Lengane,
Instructed by Phungo Inc
FOR
THE RESPONDENT:
Attorney Ben McDonald.
[1]
Rule16A(1)
(b) provides:
The
court may, in addition to any other powers it may have-
(a)
…
.
(b)
on application of any party affected,
rescind any order or judgment granted in the absence of that party.
[2]
Section
158(c)
provides:
(1)
The Labour Court may-….
(c)
make any arbitration award or any
settlement agreement an order of the Court;
[3]
Section
145(9)
provides:
An
application to set aside an arbitration award in terms of this
section interrupts the running of prescription in terms of the
Prescription Act, 1969 (
Act
68 of 1969
)
in respect of that award.
[Sub-s.
(9) added by
s.
22
of
Act
6 of 2014
(wef
1 January 2015).]
[4]
(2017)
38 ILJ 527 (CC).
[5]
See Davis JA in
Van
Tonder v Compass Group (Pty) Ltd
(2017) 38 ILJ 2329 (LAC) at paras 11 – 12 and 27 – 30.
[6]
(2018)
39 ILJ 1213 (CC).
[7]
At paras 156 - 157 and 196.
[8]
At Paras 197 -, 199.