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[2011] ZALCJHB 202
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SATAWU obo Phakathi v Ghekko Services SA (Pty) Ltd and Others (J1262/09) [2011] ZALCJHB 202 (9 February 2011)
Page
17
of
17
Reportable
and of interest to other judges
IN THE LABOUR COURT OF SOUTH AFRICA
(HELD IN BRAAMFONTEIN)
Case no: J1262-09
In
the matter between:
SATAWU
obo TIMOTHY PHAKATHI
.........................................................
APPLICANT
v
GHEKKO
SERVICES SA (PTY) LTD
................................................
1
st
RESPONDENT
RICARDO
MARIO GASPAR
............................................................
2
nd
RESPONDENT
MARK
JOUBERT
..............................................................................
3
rd
RESPONDENT
JUDGMENT
AC
BASSON, J
The applicant in this matter is
SATAWU obo Timothy Phakathi (“Phakathi”). The 1
st
Respondent is Ghekko Services SA (Pty) Ltd (“Ghekko”).
The 2
nd
Respondent is Mr. Ricardo Caspar (“Caspar”)
a director of Ghekko and the 3
rd
Respondent is Mr. Mark
Joubert (“Joubert”). Where appropriate I will refer to
the three respondents collectively
as “
the respondents
”.
This is an application for an order
to hold Ghekko in contempt for its failure to comply with the award
under case number D1343/
JHB/72/ 38/ 2004A dated 20 March 2006 which
was certified in terms of section 143(3) of the Labour Relations Act
66 of 1995 (“the
LRA”) on 21 June 2006. The applicant
also sought an order ordering that Ghekko take the necessary steps
to re-employ Phakathi
within 10 days upon granting of this order.
Relevant background facts
I do not intend to dwell on the
background facts save for referring to the facts that are pertinent
to deciding this matter. Phakathi
was dismissed by Ghekko in October
2004. On 20 March 2006 the arbitrator of the National Bargaining
Council for the Road Freight
Industry issued an award in terms of
which Ghekko was ordered to re-employ Phakathi on the same terms and
conditions that applied
to his employment prior to his dismissal.
Ghekko was further ordered to effect the re-employment within 10
days of the date of
the award. Ghekko was, in addition ordered to
pay Phakathi an amount of R 11 727.00 within 10 working days form
the date of the
award. It is common cause that Ghekko has in fact
paid Phakathi the aforementioned sum of money together with
interest. Ghekko
has, however, not re-employed Phakathi.
It is common cause that the award was
certified in terms of section 143 of the LRA on 21 June 2006.
Ghekko filed an application to have
the award reviewed and set aside on 15 November 2006. The review was
argued before this court
and on 3 September 2008 the Labour Court
issued an order dismissing Ghekko’s review application with
costs. The Court did
not, as part of its order, make the arbitration
award an order of court.
On 1 July 2009 Phakathi (represented
by SATAWU) launched this application for contempt. (I will refer to
the present application
as the “contempt application”.)
From the aforementioned facts it
appears that the contempt application was launched more than three
years (3 years and 3 months)
after the award was made and also more
than three years after the award was certified (3 years and 9 days).
Whilst the respondents do not dispute
the fact that the award was certified, the respondents contend that
they cannot be held
in contempt on the basis of an arbitration award
that was certified in terms of section 143 of the LRA:
(i) Firstly, the certification in
terms of section 143 does not have the effect of transforming the
arbitration award into an order
of this court. In this regard the
respondents raised a special plea in terms of which it prayed for the
dismissal of this application
on the basis that Phakathi’s
application is materially defective.
(ii) Secondly, the respondents raised
a special plea of prescription. It was argued that the award which
forms the underlying
causa
of the present application has
prescribed in terms of the provisions of section 10(1) and 11(d) of
the Prescription Act no 68 of
1969 (“the
Prescription Act&rdquo
;)
in that more than 3 years have lapsed since the award was made (20
March 2006) and three years since the award was certified
(21 June
2006). In addition hereto, it was argued that the award had not been
made an order of this court in terms of the provisions
of
section
158(1)(c)
of the LRA.
(iii) Thirdly, in the event of a
finding that the respondents have been incorrect in their
understanding of the legal position,
the respondents then contend
that they have been
bona fide
in their understanding !nd
accordingly deny that they willfully and
mela fide
refused or
failed to #omply wi4h !n order of coqrt.
Legal principles
Status of a certified !ward
An`arbitration culmiNAtes in a final
and binding decision. The award is, however, not enforceable until
it has"been certIfied
(in terms of
sectiOn 143
of thd`LRA) or
made an order of court (in terms of
section 158(1)(g)
of the LRA).
In terms of
section 143(1)
of the LRA, an arbitrAtion award may be
certified and enforced as if it was an order of the Labour Court. In
terms of
section 143(3)
of the LRA an arbitration award will only be
enforced in terms of
section 143(1)
of the LRA if the director has
certified that the award is an award as contemplated in subsection
(1).
Section 143
reads as follows:
“
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, unless it is an advisory
arbitration award.
(2) If an arbitrat)on award orders
a pArty to pay A sum of Money, the amouNt earns interest from the
date of the award at the same
rate asthe rate prescribed from time to
time in respEcTof ajudgment Debt In terms of section 2 of the
Prescribed Rate of Interest
Act
975 (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 asbitration award
is an award contemplated mn subsection
(1).
(4) If A party failw to comply with
an arbitrAtion award that order the performance of an act,`Other than
the pcyment of an am/unt
of money, an} othez rasty to the
award!m!y%.fo2ce it by 7qy of contempt proCeedings iNstituted`in the
Labour Court.”
Section 143(3) of the
RA was introduced by way`of an
amendment to the LRA
1
.
The reason for thm insertion of this subsection appears from the
explanaTory memorandum which states the following in regard
to this
section:
“
It is proposed that the
enforcement of awards be expedited by according arbitration awards
the same status as orders of a Civil
Court (such as the Labour Court,
the High Court or the Magistrate’s Court).”
Prior to this amendment, awards by
the CCMA had to be made orders of court in terms of section
158(1)(c) of the LRA. The above
mentioned amendment did not,
however, repeal section 158(1)(c) of the LRA and a party therefore
still has a choice to either
certify the award in terms of section
143 of the LRA or to approach the Labour Court in terms of section
158(1)(c) of the LRA.
The question, however, is whether an award
certified in terms of section 143 of the LRA has the same status as
an order in terms
of section 158(1)(c) of the LRA. The answer is no.
The mere fact that an order has been certified and may be enforced
“
as if it were an
order of the Labour Court
”
does
not mean that the award is now transformed into an order of the
Labour Court. The certified CCMA award remains an award.
Because the
CCMA award remains an award, it can still be the subject of a
rescission under the jurisdiction of the CCMA (or the
bargaining
council). If the intention was that certification converted the CCMA
award into an order of the Labour Court, the
CCMA would not have
been able to consider rescission applications. All those
applications would then have had to be heard by
the Labour Court.
Also, an application for review does not automatically stay an
award. For an award of the CCMA to be stayed,
the applicant for
review must first apply to stay the award pending the review
thereof. (See
Olivier v
University of VendaI
2
and Blue Marine (Pty) Ltd v CCMA &
Others
.
3
)
The Labour Court has also in two
decisions made it clear that certification does not afford the award
the status of a court order.
A certified award consequently does not
have the same status as an order in terms of section 158(1)(c) of
the LRA. See in this
regard:
Gois
t/a Shakespeare's Pub v Van Zyl & Others
:
4
“
[24] The Amendment Act - the
new s 143 - did not alter the nature or the composition of the award.
The award remains a CCMA arbitration
award.
It
is not transformed into a court order as a result of the
certification process
and
as such there is no need to involve this court in the process of
rescinding CCMA awards.
”
5
The approach of the court in
Goise
was endorsed by the court in
Chillibush Communications (Pty) Ltd v
Gericke & Others
(2010) 31
ILJ
1350
(LC), the
Labour Court also expressly held as follows:
“
[14] In order to reach the
status 'as if it were an order of the Labour Court' such an award
needs to be certified as such by the
Director of the CCMA or any
commissioner delegated to perform such function. The powers of the
director in performing this function
do not in my view extend to
correcting the substantive determination made by the commissioner in
the award, but he or she may suggest
to the commissioner a variation
of the award if there are typographical errors and errors in the
calculation of the compensation.
[15] In my view and by way of
comparison what the legislature intended with this section was
nothing different to the function performed
by a notary public where,
if a party wishes to execute a notarial deed, he or she simply
appears before the notary public, presents
the document with his or
her identity document and then the document is notarially executed.
The function of the director in this
respect is simply to confirm
that the arbitration award is one issued by a person who is properly
appointed as a commissioner by
the CCMA board and that the
arbitration award whose status is sought to be changed to be 'as if
it is an order of the Court' is
the one issued by such a
commissioner.
[16] The other unintended
consequence that has become a challenge to the enforcement of the
arbitration awards is, with due respect,
the bureaucratic process
designed by the CCMA in its interpretation of s 143.
As
indicated earlier the incorrect interpretation given to s 143 by the
CCMA prior to the Shakespeare's Pub case was that the status
of an
award changes to that of being the same as an order of court issued
for instance in terms of
s 158(1)(c)
of the
Labour Relations Act
>.
It would seem to me that that interpretation informed and became the
basis of designing the process of dealing with enforcement
of
arbitration awards in terms of
s 143.
”
6
Under the old regime the courts have
also held that
section 17(15)
of the now repealed LRA did not render
the judgment of the Industrial Court to be a judgment of the Supreme
Court. This section
read as follows:
“
Any decision, award, order
or determination of the Industrial Court may be executed as if it is
a decision, an award, order or determination
made by the Supreme
Court.”
See also
NUMSA
v Med Laboratories (Pty) Ltd
7
where the court was of the view that
the decision of the Industrial Court “
is
not metamorphosed into a Supreme Court judgment
”
.
The same view was held in
CWIU
v Price Candles (SA) (Pty) Ltd
.
8
)
See also
Wright v St Mary’s
Hospital, Melmoth and Another
9
where
the
High Court also ruled that an award is not converted in an order of
the Supreme Court. With reference to the word “execute”
in
section 17(15)
of the now repealed LRA, the court ruled that these
words only mean that the procedure for executing an order of the
Industrial
Court was the same as the procedure for executing a
similar order of the Supreme Court.
Lastly, despite the fact that an
award was certified in terms of
section 143
of the LRA party is not
prevented from still applying to have the award made an order of the
Labour Court in terms of
section 158(1(
c) of the LRA (see in this
regard
Viljoen v Nketoana
Local Municipalit.
10
).
In the premises, an arbitration award
is not transformed into an order of the Labour Court once it has
been certified.
Can a contempt application be
brought against an award that has been certified in terms of
section
143
of the LRA?
In light of the aforegoing, the
question arises whether or not it is competent to bring contempt
proceedings merely on the strength
of an award which has been
certified in terms of
section 143
of the LRA. Put differently, must
the award first be made an order of the Labour Court in terms of
section 158(1)(c)
of the LRA before contempt proceedings may be
instituted in the Labour Court?
Section 143(4)
of the LRA does not
expressly indicate whether or not contempt proceedings may be
brought merely on the strength of a certified
award. This section
also does not require that only an award that has been made an order
of court in terms of
section 158(1)(c)
of the LRA may be the subject
of a contempt application. This section does, however, specifically
state that a party to an award
may approach the Labour Court by way
of contempt proceedings
“
if
a party fails to comply with an arbitration award that order the
performance of an act, other
11
than the payment of an amount of
money
”
.
On behalf of the respondent it was
argued that because a certified award is not an order of this court,
it is not competent to
institute contempt proceedings against a
party who fails to comply with a certified award. It further argued
that a failure to
comply with a certified award of the CCMA (or a
Bargaining Council) can only constitute contempt of the CCMA or the
Bargaining
Council.
Section 142(9)
of the LRA provides for the
procedures to be followed in the event of a finding by a
commissioner of the CCMA that a party is
in contempt of the CCMA.
I do not agree. I have already
indicated that
section 143
specifically states that a party may
approach the Labour Court in contempt proceedings in the
circumstances contemplated by that
section.
12
Section 143
of the LRA was enacted to
allow for an inexpensive and expeditious procedure to enforce an
award. To require that a party who
has obtained a certified order to
again approach this court for an order in terms of
section 158(1)(c)
of the LRA seems to defeat the whole purpose of this section.
Although certification does not convert the award into a court
order, nothing prevents a party from approaching the Labour Court in
terms of
section 143(4)
of the LRA for an order for contempt for
non-compliance with an award ordering reinstatement. In this regard
I am in agreement
with the view expressed by my learned brother Van
Niekerk, J in
Molaetsa v
Meyer & Another
13
that it is not necessary to first
approach the Labour Court for an order in terms of
section 158(1)(c)
of the LRA before a party can approach this court for an order for
contempt:
“
9 As I noted above, the
applicant approached this court primarily to seek an order in terms
of which he was to be paid remuneration
from the date on which he
alleges that he tendered his services, ie 1 June 2006, to the
present. I agree that it is not competent
for this court, in these
proceedings, and on the papers before it, to make such an order. The
applicant ought properly to have
instituted contempt proceedings
given his claim that the second respondent had refused his tender of
services, and given that the
arbitration award reinstating him in the
second respondent's employ had been certified in terms of
s 143(3).
10
Section 143(4)
provides that 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.
It
seems to me on a proper construction of this subsection that it is
not necessary for a party to approach this court for an order
in
terms of
s 158(1)(c)
, prior to initiating any contempt proceedings
14
(see MIBCO v Osborne & others
[2003] 6 BLLR 573 (LC)).
Section 143
was enacted to provide an
expeditious and inexpensive mechanism to enforce arbitration awards.
The construction that the applicant
seeks to place on
s 143
is not
only at variance with its wording, but also its purpose.”
In the event I am of the view that in
principle, a party may bring an application for contempt of a
certified order in this court
without first having to approach this
court in terms of
section 158(1)(c)
of the LRA. The respondents’
first special plea is therefore dismissed.
Prescription
It is common cause that the award was
issued on 20 March 2006. The respondents argue that the award had
prescribed in terms of
the provisions of
section 10(1)
and
11
(d) of
the
Prescription Act. It
is trite that an award is considered to be
a “
debt
”
as envisaged by the
Prescription Act.
The
notion as to what constitutes a “
deb
t”
in the context of the
Prescription Act has
been described by the
court in
HMBMP Properties
(Pty) Ltd v King
15
as referring to the obligation to do
something either by way of payment or by delivering goods and
services or not to do something.
16
In terms of
section 12(1)
of the
Prescription Act prescription
commences to run as soon as the debt
is due.
17
A debt is not deemed to be due until
the creditor has knowledge of the identify of the debtor and the
facts from which the dept
arises, provided that a creditor is deemed
to have such knowledge if he could have acquired it by exercising
reasonable care
(see
section 12(3)
of the
Prescription Act).
18
Section
11 of the
Prescription Act
provides
for the period within which a debt becomes prescribed: Any
other debt apart from a debt owed to the state (where the
prescriptive
period of 15 years applies) and a debt arising from a
bill of exchange or negotiable instrument (where the prescriptive
period
of 6 years applies), is governed by a three year period
prescriptive period. It has been accepted in numerous cases that
extinctive
prescription as envisaged in the
Prescription Act applies
to labour law matters (see,
inter
alia
,
Mpanzama
v Fidelity Guards Holdings (Pty) Ltd.
19
)
In
terms of
section 10(1)
,
11
(d) and
12
(1) the debt shall be
extinguished by prescription after the lapse of a period of three
years from the date the debt is due. Prescription
will be
interrupted once the creditor serves a process whereby the creditor
claims payment of the debt.
Section 15
of the
Prescription Act set
out the circumstance under which prescription will be interrupted:
“
Section 15(1):
The running
of prescription shall, subject to the provisions of subsection (2),
be interrupted by the service on the debtor of
any process whereby
the creditor claims payment of the debt.
Section 15(2)
Unless the debtor
acknowledges liability, the interruption of prescription in terms of
subsection (1) shall lapse, and the running
of prescription shall not
be deemed to have been interrupted, if the creditor does not
successfully prosecute his claim under the
process in question to
final judgment or if he does so prosecute his claim but abandons the
judgment or the judgment is set aside.
Section 15
(6:) For the purposes of
this section, 'process' includes a petition, a notice of motion, a
rule nisi, a pleading in reconvention,
a third party notice referred
to in any rule of court, and any document whereby legal proceedings
are commenced.”
The launching of the review does not,
however, interrupt prescription (see
Police & Prison Civil
Rights Union on behalf of Sifuba v Commissioner of the SA Police
Service
(2009) 30
ILJ
1309 (LC) where the court held that
the filing of a review does not interrupt prescription as envisaged
by
section 15(6)
of the
Prescription Act).
In
order to execute an award a
successful party has to make application on form 7.18 to the CCMA in
terms of
section 143
of the LRA for the certification of an award.
This certified award is then presented to the Registrar of the
Labour Court who
issues a writ of execution (for the payment of
money).
The question which arises is whether
an application for
section 143
certification constitutes a process a
process whereby the ‘
creditor
claims payment of the debt’
as
prescribed by section 15(1) and of the Act. I am of the view that it
is. This conclusion is supported by the definition of
“
process’
”
as set out in
section 15(6)
of the
Prescription Act. Moreover
, it is the only process (apart from
approaching the Labour Court in terms of
section 158(1)(c)
of the
LRA) which is prescribed by the LRA for a successful party to
enforce an award when the award is for the payment of money.
This
was also the view of the Labour Court in
National
Union of Metalworkers of SA & another v Espach Engineering
20
supports the above contention:
“
Section 15(1)
of
Prescription Act 68 of 1969
- Application to enforce arbitration
award in terms of
s 143
or
s 158(1)(c)
of LRA 1995 is process
envisaged by
s 15(6)
of
Prescription Act which
interrupts
prescription - Filing of review application not automatically staying
enforcement of arbitration award - Running of
prescription not
interrupted by filing of review application.”
21
……
“
[10] In terms of the
Labour
Relations Act, once
an award has been issued the successful employee
party may enforce it either in terms
s 143
of the
Labour Relations
Act 66 of 1995
, by having it made as if it were an order of the court
or made an order of the court in terms
s 158(1)(c)
of the
Labour
Relations Act. These
processes which in my view are part of those
envisaged in
s 15(6)
of the
Prescription Act, are
available to the
successful employee party despite the fact that the employer party
may have filed an application to have the arbitration
award
reviewed.”
22
The respondents argued that the
applicant’s claim has prescribed in terms of
section 10(1)
read with
section 10(d)
of the
Prescription Act in
sofar as more than
three years have lapsed since the award
in casu
was made.
Although the award was certified on 21 June 2006 – which meant
that prescription was interrupted on that day
– more than
three years had already lapsed at the time of launching this
application in terms of
section 143(3)
which was on 1 July 2009.
On this point I am in agreement with
the respondents’ submission namely that the “
debt
”
as envisaged by the
Prescription Act and
which was interrupted on 21
June 2006, has prescribed at the time of launching this application.
Consequently, although it is
competent to approach the Labour Court
with an application for contempt by virtue of non-compliance with an
arbitration award
duly certified in terms of
section 143(3)
of the
LRA, the award in this particular matter has become prescribed.
Accordingly the respondents’ special plea of prescription
is
upheld.
There is one last issue to consider.
In the present case Ghekko filed a review application against the
award. On 3 September 2008
the Labour Court dismissed the review
application with costs. What is the effect of a dismissal of a
review application? Does
it have the effect of making the
arbitration award now an order of the Labour Court in the absence of
an order of the court making
the award an order of court? If the
Labour Court merely dismisses a review without making the award an
order of court it remains,
in my view, an arbitration award which
must be enforced either through the mechanisms provided for in
section 143
of the LRA (certification) or by approaching this court
for an order in terms of
section 158(1)(c)
of the LRA. The award
remains an award. I have already pointed out that the award has
prescribed.
In the event the application is
dismissed. Despite the fact that the respondents have been
successful, I have decided to make
no order as to costs.
……………………………
..
AC BASSON, J
Date of hearing:
20
October 2010
Date of judgment:
9 February 2011
23
For the applicant:
Mr. MM Baloyi of MM Baloi Attorneys.
For
the respondents:
Adv.
LM Malan. Instructed by AC Shcmidt Attorneys.
1
In
terms of the
Labour Relations Amendment Act 12 of 2002
.
2
[2003]
5 BLLR 471
(LC).
3
[2003]
9 BLLR 853
(LC).
4
(2003)
24 ILJ 2302 (LC).
5
Court’s
emphasis.
6
The
court’s emphasis.
7
(1989)
10 ILJ 499 (LC).
8
(1994)
15 ILJ 857 (LC).
9
(1993)
14 ILJ 617 (LC)
10
(1993)
14 ILJ 617 (D).
11
A
claim for monetary compensation may be enforced through the
mechanisms provided for in
section 143(1)
– (3) of the LRA.
12
Where
a party claims performance of an act, such as reinstatement or
re-employment and not the payment of an amount of money.
13
(2007)
28
ILJ
2600 (LC).
14
Court’s
emphasis.
15
1981
(1) SA 906
(N).
16
At
909A-B.
17
See:
Deloitte Haskins & Sells Consultants (Pty) Ltd v Bowthorpe
Hellerman Deutsch (Pty) Ltd
1991 (1) SA 525 (A): “
Section
12(1)
of the
Prescription Act 68 of 1969
provides that prescription
shall commence to run as soon as the debt is due. This means that
there has to be a debt immediately
claimable by the debtor or,
stated in another way, that there has to be a debt in respect of
which the debtor is under an obligation
to perform immediately
.’
18
In
Solidarity v Eskom Holdings (Pty)Ltd
2008
ILJ
4150
(LAC
)
the Labour Appeal Court held as follows: “
A
debt is due in this sense, when the creditor acquires a complete
cause of action for the recovery of the debt, that is when
the
entire set of facts which the creditor must prove in order to
succeed with his or her claim against the debtor is in place
or in
other words when everything has happened which would entitle the
creditor to institute action and to pursue his or
her claim.”
See also
Truter v Deysel
[2006] ZASCA 16
;
2006 (4) SA 168
(SCA
)
where the Supreme Court of Appeals defined “debt” as
follows: “
The term 'debt due' means a debt, including a
delictual debt, which is owing and payable. A debt is due in this
sense when the
creditor acquires a complete cause of action for the
recovery of the debt, that is, when the entire set of facts which
the creditor
must prove in order to succeed with his or her claim
against the debtor is in place or, in other words, when everything
has happened
which would entitle the creditor to institute action
and to pursue his or her claim.”
19
[2000]
12 BLLR 1459
(LC).
20
(2010)
31
ILJ
987 (LC).
21
Quoted
from
the
flynote
.
22
Court’s
emphasis.
23
Judgment
in this application has been delayed for the following reason: At
the time of hearing this application, the 1
st
Respondent
– Ghekko Services SA (Pty) Ltd has been placed in liquidation.
Although this fact was brought to the court’s
attention on the
day of argument, the court and all parties have agreed to argue the
matter but delay judgment until the liquidator
has had an
opportunity to decide whether or not to oppose this application. The
court has now been informed that the liquidator
does not intend
opposing the application and that it will abide by the court’s
decision in this matter.