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[2014] ZALCJHB 73
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City of Johannesburg v South African Municipal Workers Union obo Motaung and Others (J618/14) [2014] ZALCJHB 73 (19 March 2014)
REPUBLIC
OF SOUTH AFRICA
IN
THE LABOUR COURT OF SOUTH AFRICA
HELD
IN JOHANNESBURG
Reportable
CASE
NO: J618/14
In
the matter between:
THE
CITY OF JOHANNESBURG
Applicant
and
SOUTH
AFRICAN MUNICIPAL
WORKERS
First
Respondent
UNION
obo P M MOTAUNG
THE
SHERIFF OF THE HIGH COURT
NO
Second
Respondent
(DISTRICT
OF JOHANNESBURG NORTH)
THE
COMMISSION FOR
CONCILIATION,
Third
Respondent
MEDIATION
AND ARBITRATION
THEMBA
HLATSHWAYO NO
Fourth
Respondent
Heard:
18 March
2014
Judgment:
19 March 2014
Summary:
Test for
granting of stay of execution of arbitration award concerning payment
of money. Although interests of justice not decisive,
an applicant is
required to show genuine and bona fide grounds for attacking
arbitration award. In
casu
, stay application refused because
there is no challenge to the arbitration award and no reasonable
explanation why review application
has not been brought.
JUDGMENT
NGCUKAITOBI
AJ
INTRODUCTION
1. The
applicant
seeks an order stay
ing and suspending
the
execution of a
writ of execution
obtained
against the applicant in enforcement of an arbitration award
of the South African Local Government Bargaining Council
(“the
SALGBC”).
The applicant has not
brought any challenge to the arbitration award, whose enforcement it
seeks to stay. In the notice of motion,
an order has been sought in
terms of which I have been asked to direct the institution of a
review application by a specific date.
The employee, Ms PM Motaung is
represented by the South African Municipal Workers Union. For the
sake of convenience, I will refer
to the employee as the first
respondent.
2. Because the writ of
execution is concerned with the payment of money by the applicant to
the first respondent
, I enquired from
counsel for the first respondent whether Ms Motaung would be prepared
to give an undertaking to be recorded in
my judgment that in the
event of a successful review application
which may
be
brought by the applicant, the money paid to her pursuant to
the arbitration award would be re
paid to the
applicant
. That undertaking was given
. I
revert to this later in this judgment.
MATERIAL FACTS
3.
The
first respondent
is employed by the applicant in its
Metropolitan Police Department. Prior to the events which form
the subject matter of
the dispute between the parties, she was
employed as a Metro
politan
P
olice
O
fficer. She currently occupies the
position of
A
dministrative
O
fficer,
following the decision of the applicant to demote her.
4.
Sometime
during 2011,
certain allegations
of
misconduct
were
levelled
against
the
first respondent,
which included the allegation that she
attempted to defeat the ends of justice by interfering with the
execution of duties by members
of the Metropolitan Police
Department. The result of those allegations was that
the
first respondent
was charged
with
misconduct
in an internal disciplinary enquiry
.
She was
found guilty of misconduct. The sanction imposed
was a demotion
to the position of Administrative
Officer. This demotion
included a reduction in salary.
5.
The
first respondent
challenged the decision of
the
applicant
to find her guilty of misconduct and to impose the
sanction of demotion
in arbitration proceedings
which were held at the SALGBC. The SALGBC
delivered its award
on
2
September 2013. It found
that
:-
5.1
the conduct of the applicant in demoting
the first respondent constituted unfair labour practice within the
meaning of
section 186(2)(b)
of the
Labour Relations Act 66 of 1995
(“the LRA”);
5.2
the applicant was ordered to reinstate the
first respondent to the position as Metropolitan Police Officer;
5.3
the order of reinstatement was made
retrospective to the date of demotion, being 1 September 2011; and
5.4
the applicant was ordered to pay Ms Motaung
the amount of R62 604, 24 being arrear back-pay for the salary she
lost during the period
of her demotion, which was between 1 September
2011 to 1 September 2013.
6. At the arbitration
proceedings
before the SALGBC,
the
applicant was represented by Mr G W Leith, described in the
founding
affidavit
as “
an official of the NEASA
”.
Although the papers do not give any further description of the NEASA,
I presume that this
refers to
an employer’s
association with right
s
of appearance at
the
SALGBC
.
7.The award
was
transmitted by telefax to the applicant on 4 September 2013.
The applicant did not
implement the arbitration
award. Nor did it institute any challenge to the award, in the form
of review proceedings.
8. On 29 October 2013
the
first respondent
applied to have the award certified in terms
of
s
ection 143
(3)
read with
s
ection 51(8) of the LRA
as
if it were an order of this Court
and to obtain a writ of
execution
to recover the money due and owing under
the award
.
9. On the same date, 29
October 2013, the regional secretary of the
SALGBC
wrote a letter to
the applicant. In that
letter the applicant
was invited to make representations to
the director of the C
ommission for
C
onciliation
M
ediation and
A
rbitration
(“CCMA”)
on whether the arbitration award should
be certified as if it were an order of
this
Court. The letter also mentioned that any filing of the review
application in terms of
s
ection 145 of the
LRA will not stay the
enforcement
of the
award. The applicant was afforded a period of fourteen days to
make
its written
representations. No
representations were made by the applicant
as
requested by the SALGBC
.
10.
On
5 November 2013 the CCMA certified the award in terms of
section
143(3)
of the LRA
.
That meant that the
award could be enforced as if it were an order of this Court.
Notwithstanding the certification of the award,
the applicant failed to implement the order.
11. On 5 December 2013 a
writ of execution was issued by the applicant directing the Sheriff
to attach and take into execution moveable
goods of the applicant
to
satisfy
the amount of R62 604,24, being the amount due and
owing under the arbitration award.
12. On 10 January 2014
the writ of execution was executed against the applicant. In
terms of the return of service
of the Sheriff,
which is included in the papers,
the writ of execution was
served on Mr M Magagula, being
a
legal
advisor of the applicant
. It appears that during
the service of the writ of execution, an inventory was compiled,
comprising disposable property to satisfy the debt specified in the
arbitration award.
13.
This
step of executing the warrant of execution and compilation of the
inventory also did not result in any compliance with the
arbitration
award or any challenge to the award.
14. On 5 March 2014 the
present attorneys of the applicant wrote a letter to the Sheriff
informing h
er
that they had been instructed
to bring an application for the stay of the execution of the writ of
execution. They requested
confirmation
that the writ would be stayed. The letter
from
the applicant’s attorneys
also stated that the
application for the stay of the writ of execution would be brought
“
early next week
”,
this
being
the week commencing 10 March 2014.
15. The application for
the stay of the enforcement of the arbitration award and writ of
execution was brought on 13 March 2014.
As noted
above
,
it has been opposed by the first respondent.
16.
In the founding affidavit the deponent on
behalf of the applicant says that the applicant does not deny that
the applicant was aware
of the arbitration award. Nor does the
applicant deny that it knew of the fact that an application had been
made to the CCMA for
the certification of the award. It is said that
the applicant “
was unaware that
there had been a certification of the award”
.
The reason given in the founding affidavit for the applicant being
unaware that the award had been certified is two-fold. First,
it is
stated that the applicant instructed its representatives, NEASA to
make representations to the director of the CCMA that
the award
should not be certified. Although this clearly did not happen, the
deponent says that the applicant believed that this
would happen. (It
is not clear from the founding affidavit when this instruction to
NEASA was given.)
Second, the
deponent says that a decision was taken to take the award on review.
It is not clear when this decision was taken and
if it was conveyed
to the representatives of the applicant, NEASA. However, it is stated
that the applicant was “
under the
impression”
that “
ultimately
[the award] was in the process of being reviewed.”
17.
The
applicant says that it was only when the Sheriff attended at the
premises of the applicant on 25 February 2014 that it came
to the
attention of the applicant that the matter had not been taken on
review.
18.
The
explanation tendered by the applicant was challenged as being vague
in the answering affidavit of the first respondent. This
resulted in
a further explanation being provided in the replying affidavit. The
replying affidavit stated that on receipt of the
notice in terms of
section 143
of the LRA, the “
[n]otice
is forwarded to our Insurer, namely Camargue (Pty) Ltd in order to
assess the merits of making representations and reviewing
the order”.
Upon such assessment “
the
insurer subsequently refers the matter to NEASA to execute the
representations on behalf of the City.”
19.
It
is not stated in the replying affidavit whether the process described
therein was in fact followed by the applicant. It is, however,
averred that the matter was handed over to NEASA, in particular to Ms
Helen Strydom and Mr Simon Miyambo, who are representatives
of NEASA.
There is no confirmatory affidavit from Ms Strydom. The confirmatory
affidavit filed by Mr Miyambo is the standard confirmatory
affidavit
simply recording that he read the replying affidavit and agrees with
its contents. Importantly, he gives no independent
narrative of the
facts described in the replying affidavit. The most important facts,
for instance, pertain to whether he received
the instruction to make
representations to the director of the CCMA on the certification of
the award. It must be recalled that
the applicant was informed of the
section 143(3)
application on or about 29 October 2013. In addition,
it is not explained if the instructions to challenge the award were
conveyed
and if so, what steps were taken to give effect to those
instructions. For its part, the applicant provides no explanation in
regard
to any steps it took to ensure the implementation of its
instructions.
20.
The
applicant says that until 25 February 2014, it had been unaware that
the award had been certified or that the review application
had not
been instituted. It contended that it would be prejudiced by the
enforcement of the award because it would be difficult
to recover the
money once it is paid to the first respondent. It also contended that
it could not furnish security to the satisfaction
of the amount in
the award because it is a public entity and cannot “
place
State money as security”
for all
cases where it is a litigant, unless ordered to do so by a court.
APPLICABLE
PRINCIPLES
21.
Applications to stay the
execution of arbitration awards are common
-
place
in this court.
As
a result
the relevant
principles are well established.
H
owever,
in view
of the differing approaches adopted by counsel before me
,
it is useful to restate and clarify these principles.
22.
The
decision in
Gois
t
/
a
Shakespeare’s Pub v van Zyl & Others
[1]
was the first
time
where the Labour Court attempted a comprehensive elucidation of the
principles applicable in a stay application in respect of CCMA
awards
which ha
ve
been certified by
in
terms of s
ection
143 of the LRA. In that case a dismissed employee obtained a
default arbitration award which he then tried to enforce
against
his
employer. The employer, wh
ich
claimed to have been “
totally
unaware
”
of the entire proceedings until the Sheriff arrived at the premises
and tried to execute the award, then approached the
Labour Court
seeking an order for the stay of the enforcement of the arbitration
award. As soon as the employer became aware
of the award, it
filed an application for the rescission of the default award.
The rescission application was refused
by
the CCMA
for
lack of jurisdiction.
23.
Waglay J (as he then was)
distilled the principles relevant in stay applications as follows:-
23.1
This
court will favourably consider granting the stay of execution when
“
real
and substantial justice requires such a stay or, put differently,
where injustice would otherwise result
”;
[2]
23.2
In
exercising its discretion to grant a stay of execution a court is not
required to take the merits of the underlying attack on
the
causa
of the writ into account. It is sufficient that there must be a
possibility that the
causa
underlying the writ may ultimately be removed. An applicant is
accordingly not required to satisfy the court of the existence
of
prospects of success in the principal dispute;
[3]
and
23.3
An
application for a rescission, review or variation of an award
qualifies as an attack on the
causa
underlying
the award. “
Where
an application for a rescission or review or variation of an award is
pending, there is a possibility that the causa underlying
the writ
may ultimately be removed
”.
[4]
24
.
On
the facts of that case the court noted that an application for the
rescission of the award had been placed before the CCMA “
which
require
[d]
the [CCMA’s] consideration.
”
[5]
25.
The judgment of Todd AJ in
Robor
(Pty) Ltd. (Tube Division) v Joubert NO & Others
[6]
confirmed that the discretion of this court to entertain a stay
application is a wide one
.
In
that case an arbitration award had been made in favour of the
employee directing the payment of a certain amount as severance
pay.
The employer challenged the award on review, which application was
brought timeously. However, the employer failed to prosecute
the
review for a period of four years. When the employee took steps to
execute the award the employer sought an order staying the
enforcement of the award, until the outcome of the review
application. An interim order for the stay of the award was granted.
The matter came before Todd AJ on the return day. He dismissed the
application to stay the enforcement of the award.
26.
In
his reasoning for the order refusing the application for stay, Todd
AJ held that the discretion of the Court to stay the enforcement
of
arbitration awards arises from the power of the Court
to
control its own process.
The
overarching consideration is interests of justice. There is no closed
list of factors to be taken into account when deciding
what is in the
interests of justice. Each case must turn on its facts.
One of the factors to be taken into account is whether the attack on
the underlying
causa
was brought in time and whether its prospects of success are strong.
The justification for this view is to prevent injustice
and to serve
the goals of the LRA of expedition and finality in disputes.
[7]
27.
Thus
,
according to the
ratio
in
Robor (Pty) Ltd. v
Joubert NO & Others
,
the interests of justice
are
paramount
. One
of the reasons why
it
was against
the
interests of justice
to
grant the stay application
in
the
Robor
decision
was the
unexplained
delay in the
prosecution of the review application.
Todd
AJ also noted that it is not unusual for employers to argue before
this Court that arbitration awards must not enforced because
doing so
would be prejudicial. While this is a factor to be taken into
account, in appropriate circumstances, such prejudice as
may exist,
must yield to the overall interests of justice. The interests of the
employee, who had been waiting for a lengthy period
for the payment
of monies under the award were also a weighty consideration.
28.
Although
the approaches in
Gois
and
Robor
might
appear to be at odds with each other on the issue of the relevance of
prospects of success in the underlying challenge to
the
causa
of a writ, I do not read them as necessarily being irreconcilable.
The principle permeating both decisions is the need to take
into
account the interests of justice. Thus understood, it is clear that
the two judgments are compatible with each other. The
power of this
Court to grant stay applications ultimately derives from
section
151(2)
of the LRA, which establishes this court as a “
superior
court that has authority, inherent powers and standing”
in
relation to matters within its jurisdiction equal to that of the High
Court. The decision to grant a stay application is of a
discretionary
nature, which is informed by the facts of each case.
29.
The
last decision
which
I must consider is that of
Cape
Clothing Association v De Kock NO & Others.
[8]
In that case Steenkamp J followed the approach taken by
Robor
in
relation to the issue of the overall test – being one of
interests of justice where a basket of factors is taken into account
.
30.
But
Steenkamp
J
also
introduced a vital codicil which went beyond the interests of justice
standard. He addressed the argument raised
[9]
(but not addressed) in
Robor,
that
employers usually argue that they will suffer irreparable harm if
execution takes place. He held
:-
“
The
case before me, as I stated in the introductory remarks, is an
unusual one. The workers have not been dismissed.
They
are still in the employ of the CCA’s members. Should the
CCA’s members pay the workers the two days wages
in accordance
with the arbitration award, and should the CCA be successful on
review, its members would be able to deduct those
amounts from their
employees’ wages. They would be within their rights to do
so in terms of Section 34(1)(b) of the
Basic Conditions of Employment
Act.
Any
harm that the employers will suffer at this stage by giving effect to
the arbitration award is not irreparable. Even if
the CCA were
to be successful on review, its members are in the unusual position
that they can recover the money that they have
paid to the employees
without much further ado. It is obvious that the CCA and its
members therefore also have an alternative
remedy in due course,
should the application for review be successful.
”
[10]
31.
In
this
case as I have stated
,
I enquired from counsel for the first respondent
whether
she would be prepared to undertake to repay any monies paid to her in
the event of a successful review application.
I was informed that she would undertake to repay any monies paid over
to her
under
the arbitration award, should it be reviewed and set aside. I
have also taken into account that
the
first respondent
is
in the full time employ of the applicant. The applicant would,
in these circumstance
s
and in the event of the failure of
the
first respondent
to
re
pay
the money be entitled to effect deductions in accordance with Section
34 of the Basic Conditions of Employment Act
75
of
1997.
APPLICATION
TO THE FACTS
32.
Based on the judgment of
Gois
,
the applicant submitted that I should grant the stay because it
disputes the arbitration award and intends instituting review
proceedings in due course. Furthermore, it was submitted that I
need not concern myself with the merits of the review application
to
be brought by the applicant.
33.
The
submission made by counsel for the applicant – that the merits
of a review application are not decisive in a stay application
–
is correct.
However,
I must take into account the fact that in this case the applicant has
not brought any review application. Therefore, the
underlying
causa
of the warrant of execution is not under any attack. It is true that
the applicant says that it intends to launch a challenge to
the
award. The fact of the matter, however, is that it has not done so
yet.
34.
Moreover,
the
ratio
of
the
Gois
decision
must
be understood in the light of its facts where a rescission
application had been brought against an award obtained in default
.
Those
facts are distinguishable from a situation, such as the present,
where the applicant was present at the arbitration and has
been aware
of the adverse arbitration award.
Waglay J made it clear that the underlying
causa
must be under attack. A
mere disagreement with an arbitration award does not constitute an
attack to the underlying
causa
of the writ. An
attack to the underlying
causa
of the writ would be a
rescission application or a review application.
35.
The applicant suggested that
I should make an order putting it in terms to file a review
application within a specific period of
time. This would be
inappropriate because a court cannot create an attack on the
underlying
causa
,
where the applicant has elected not to do so.
Although
it is
so
that the merits of
any attack on the arbitration award are not decisive,
I
do not read the
Gois
decision as saying that any challenge to the award, regardless of its
circumstances, would warrant the granting of a stay of execution.
By
its nature, a stay of execution is a discretionary remedy. It is
intended to prevent injustice from being perpetrated against
a party.
A stay application cannot be founded on spurious grounds. An
applicant for a stay application must demonstrate that the
underlying
causa
is being attacked on genuine and
bona
fide
grounds. In
Gois
Waglay
J was clearly satisfied on the facts that the challenge to the
default arbitration award, being the rescission application,
which
had to be addressed by the CCMA.
36.
There is no proper
explanation given why the review application has not been brought to
date. The arbitration award was made
on 2 September 2013.
A copy
of
the award
was given
to the applicant on 4 September 2013. The application to
certify the award in terms of Section 143 of the LRA was
granted in
October 2013. The applicant was aware of the application for
the certification of the arbitration award.
37.
The applicant was also aware
of the steps taken subsequent to certification of the arbitration
award. In particular, the Sheriff
attended at the premises of
the applicant on 10 January 2014 and served the writ of execution
to
one of the legal advisors of the applicant. The founding
affidavit records that the applicant became aware of the writ on
25
February 2014. Although this is somewhat at odds with the
objective facts in this matter, the point is that even if one
took
into account 25 February 2014 as the date when the applicant became
aware of the writ of execution,
the
explanation remains inadequate.
If
it
is
correct that instructions were given to
officials
of NEASA,
then it
would
have been expected that there would be a
follow
up
on the
steps being taken to prosecute the review application. F
or
a period of approximately five months
,
this did not occur
.
Furthermore, there is still no explanation why, after 25 February
2014, no review application was brought. As we sit
today, 18
March 2014, it is approximately a month since the applicant, on its
pleaded version, became aware of the writ of execution.
Yet, it
has not taken any steps to attack the underlying
causa
giving rise to the writ
of execution. In the absence of any attack to the underlying
causa
I cannot find that the prerequisites for the granting of the stay as
set out in the
Gois
decision have been met
by the applicant. On this ground I must refuse the stay
application.
38.
Given
this conclusion, it is not necessary to make conclusive remarks about
the strength of the applicant’s review application,
which has
not been instituted, save for what I have stated above concerning the
general approach.
39.
I was
also asked to take into account the prejudice that would be suffered
by the applicant in the event of a refusal of this application
.
I do not believe that the balance of convenience necessarily favours
the applicant. Nor do I believe that the applicant
would
necessarily suffer irreparable harm if I refuse the application. The
first respondent has made an undertaking, which is recorded
in this
judgment, that the money would be repaid to the applicant in
the event of a successful review application.
Furthermore, the
applicant, being the employer of the first respondent, is in a
position to deduct the monies outstanding from
her salary in terms of
Section 34 of the BCEA
.
This approach was indeed endorsed by this Court
in
Cape Clothing Association
v De Kock NO & Others
.
40
.
On the
other hand, I must take into account the prejudice suffered by the
first respondent. A reduction in salary and rank will
inherently
bring prejudice to any employee. From the arbitration award, it is
clear that the salary earned by the first respondent
before the
demotion was R12 340.71 per month, which was reduced to
R9 732.20 as a result of the demotion. The difference
in pay,
which is being executed in terms of the writ of execution is R2608.51
per month. In the greater scheme of things, these
sums may appear
trifling. But I have no doubt that they are hugely significant to the
first respondent. Todd AJ reminded us in
the
Robor
decision to pay attention to the financial strengths of the
respective parties when dealing with stay applications to awards
involving
payment of money. He said that one of the factors to take
into account is:
“
[t]he
risk of injustice being done to the less powerful party to the
dispute. The stronger financial position of most employers
enables
them to mount attacks on the underlying cause of action which the
employee party is frequently powerless to oppose or to
expedite. This
may lead to an outright abuse of the dispute resolution system.”
[11]
41.
I am not satisfied that the
balance of convenience favours the granting of the application and I
do not believe that a proper case
is made out for irreparable harm
on
the part of the applicant
.
It is not
in the interests of justice to grant the stay application.
CONCLUSION
AND COSTS
42.
Counsel
for the first respondent asked for a punitive costs order in the
event of a dismissal of the application. The main submission
was that
the applicant had given a false explanation about when it became
aware of the writ of execution. The falsity, it was submitted,
is in
the fact that the writ of execution was served on 10 January 2014,
but the founding affidavit says it was received on 25
February 2014.
Counsel for the applicant countered this and submitted that the
deponent was merely conveying the date when he became
aware of the
writ of execution, not when it was served on the applicant.
43.
Counsel
for the applicant is indeed correct in her submission. In paragraph
25 of its founding affidavit the applicant stated the
following:-
“
Only
upon the Sheriff of the High Court, Johannesburg North attending at
the applicants (sic) premises on or about 25 February 2014,
did it
come to the applicant’s attention that the writ had been
issued, and that the matter had not been taken on review,
as they had
instructed their representatives to do.”
44.
This
allegation was disputed in the answering affidavit and it was stated
that the return of service shows that the writ was served
on 10
January 2014. In the replying affidavit, the applicant explained that
he personally became aware of the writ, when it was
brought to him on
25 February 2014.
45.
It
is clear from the return of service that service was made to an
official other than the deponent. There is accordingly no basis
to
find that the explanation is false or misleading as suggested in
argument. I do not propose awarding punitive costs in the matter.
46.
I do not
see why costs must not follow the result. The application is
dismissed with costs.
______________________
TEMBEKA
NGCUKAITOBI
ACTING
JUDGE OF
THE
LABOUR COURT OF SOUTH AFRICA
Appearances
For the applicant:
Advocate Samantha Jackson
Instructed
by Barbosa Gouws Attorneys
For the respondent: Mr
Reynaud Daniels
(Attorney
at Cheadle Thompson & Haysom Attorneys)
[1]
(2003) 24
ILJ
2302 (LC).
[2]
Gois
at
para 32.
[3]
Gois
at paras 34-35.
[4]
Gois
at para 36.
[5]
Gois
at para 40.
[6]
(2009) 30
ILJ
2779 (LC).
[7]
Robor
v Joubert
at para 16.
[8]
(2013) 34
ILJ
1957 (LC).
[9]
Robor
v Joubert
at
para 15.
[10]
Cape
Clothing Association v De Kock & Others
at paras 25-26.
[11]
Robor
v Joubert
at
para 16.4.