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[2014] ZALCJHB 91
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NUMSA obo Masipa v Go Suspensions And Axles (Pty) Ltd (JR3349/09) [2014] ZALCJHB 91 (26 March 2014)
REPUBLIC
OF SOUTH AFRICA
IN
THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
JUDGMENT
Reportable
Case
no: JR 3349/09
In
the matter between:
NUMSA
obo WELCOME
MASIPA
Applicant
and
GO
SUSPENSIONS AND AXLES (PTY)
LTD First
Respondent
METAL
AND ENGINEERING
INDUSTRIES Second
Respondent
BARGAINING
COUNCIL
COMMISSIONER
BONGANI
KHUMALO Third
Respondent
Heard:
19 December 2013
Delivered:
26 March 2014
Summary:
Reinstatement is a fundamental constitutional right. An arbitration
award ordering reinstatement
should not be rendered nugatory by
prescription.
JUDGMENT
MTHOMBENI AJ
Introduction
[1]
This is an application in terms of Section 158(1)(c) of the Labour
Relations Act 66 of 1995 (“the LRA”) to make
an
arbitration award, issued by the third respondent on 9 November 2009
under the auspices of the second respondent, an order of
court. The
first respondent opposes the application on the basis that the
arbitration award has prescribed.
Background
[2]
The individual applicant (“Msipa”) was dismissed by the
first respondent on 22 June 2009 and referred a dispute
to the second
respondent, claiming unfair dismissal. The second respondent
allocated the matter to the third respondent to arbitrate.
The latter
issued an arbitration award directing the first respondent to
reinstate Msipa with effect from 22 June 2009 and pay
remuneration
due to Msipa on or before 13 November 2009.
[3]
On 11 December 2009, the first respondent initiated review
proceedings by way of an application in terms of Section 145 of the
LRA. The application was opposed by the applicant and was dismissed
with costs by Rabkin-Naicker J in a judgment handed down
ex
tempore
on 23 August 2012.
[4]
On the same day, NUMSA addressed a letter to the first respondent
seeking reinstatement of Msipa in compliance with the arbitration
award. When Msipa reported for duty, the first respondent turned him
away.
[5]
Dissatisfied with the outcome of the review application, on 4
September 2012, the first respondent brought an application for
leave
to appeal. The applicant also opposed the application which
Rabkin-Naicker J dismissed on 23 April 2013.
[6]
On the same day, the applicant’s attorneys of record addressed
a letter to the first respondent’s attorneys of record
advising
them that Msipa would report for duty on 30 April 2013.
[7]
On 29 April 2013, the first respondent’s attorneys of record
responded contenting that the arbitration award had become
prescribed. This notwithstanding, on 30 April 2013 Msipa reported for
duty, but the first respondent turned him away.
[8]
On 12 July 2013, the applicant instituted these proceedings.
The
parties’ submissions
Applicant’s
submissions
[9]
I may be called upon to determine whether this application is
tantamount to a claim of a debt in terms of the Prescription Act
68
of 1969 (“the
Prescription Act&rdquo
;).
[10]
Mr Lengane for the applicant, while making reference to
Drennan
Maud and Partners v Town Board of the Township of Pennington
[1998]
2 All SA 571 (SCA) and
Boshoff v South British Insurance Company
Limited
1951 (3) SA 487 (T)
,
contended that a debt
under the
Prescription Act refers
to a claim and not a cause of
action.
[11]
Mr Lengane submitted that the court in
Drennan
(supra) stated
that in order to constitute a claim, the relief sought must be:
‘
a
demand for something as due-an assertion of a right to something or
one’s right or title thereto’.
[12]
From this perspective, Mr Lengane contended, the applicant is neither
making a demand for something that is due, nor is the
applicant
making an assertion of a right or title to anything pursuant to the
award. While the ultimate objective is to use the
order sought in
this application to enforce the arbitration award, Mr Lengane
contended, the relief sought in this application
is not the
enforcement of the award; it is not a claim for a debt.
[13]
Mr Lengane contended further that, even if this application
constitutes a debt in terms of the
Prescription Act, Msipa
took steps
to enforce the arbitration award when he reported for duty within the
timeframe set out in the award, but the first
respondent turned him
away because it intended to or had commenced proceedings to review
the arbitration award in terms of
Section 145
of the LRA. If the
arbitration award constitutes a debt, Mr Lengane submitted, Msipa’s
attempt to report for duty should
be interpreted as tantamount to an
interruption of the prescription as contemplated in
Section 12(2)
of
the
Prescription Act. In
this regard, the first respondent’s
refusal to allow Msipa to resume his duties in terms of the
arbitration award was deliberate
and intentional in order to benefit
itself by bringing a review application in terms of
Section 145
of
the LRA. Alternatively, Mr Lengane submitted, the first respondent
requested Msipa not to enforce the arbitration award, but
to await
the outcome of the review application in terms of
Section 145
of the
LRA.
[14]
Mr Lengane submitted that the referral by Msipa of a dispute to the
second respondent concerning unfair dismissal in terms
of
Section 195
of the LRA did not constitute a claim for a debt, but to seek
determination as to whether his dismissal was fair or unfair.
Consequently,
the arbitration award issued by the third respondent in
favour of Msipa was not a debt in terms of the
Prescription Act.
Thus
, the
Prescription Act does
not find application in this
application, for the review application could not have been a
challenge to the enforceability or unenforceability
of a claim to a
debt.
[15]
In
SA Transport and Allied Workers Union obo Hani v Fidelity Cash
Management Services (Pty) Ltd
(2012) 33 ILJ 2452 (LC), Bhoola J,
as she then was, stated that it is trite that prescription starts to
run when the debt becomes
due. She continued to hold that an
arbitration award constitutes a debt and becomes due when it is made
and, accordingly, the period
of the running of prescription
concerning the debt commences on the date when the arbitration award
is made. Mr Lengane contended
that Bhoola J’s statement is
clearly incorrect and wrong in law, for the law in this regard is not
trite.
[16]
Mr Lengane made reference to
Prof AR Coetzee and 48 Others v The
Member of the Executive Council of the Provincial Government of the
Western Cape
Cas
e
No: C751/2008 (Unreported) and submitted
that in this matter, to buttress his contention that the law is
unsettled in this regard,
Rabkin-Naicker J said that the proposition
that for the purpose of the
Prescription Act prescription
only begins
to run once an arbitration award is made an order of court or is
certified, while thus far accepted as established
or even trite in
decisions of this Court, deserves further consideration.
[17]
It was submitted on behalf of the applicant that the relief sought in
this application is not to enforce a debt, but an aid
to enforce a
debt arising from the making of an arbitration award an order of
court in terms of
Section 158(1)(c)
of the LRA. It is only after
Msipa has secured such an order that the first respondent could raise
the special defence envisaged
by
Section 11
of the
Prescription Act.
>
[18]
Mr Lengane contended that this Court, as a court of equity, should
not allow the first respondent to succeed in raising the
special
defence and should be estopped from relying therefrom.
First
respondent’s submissions
[19]
Mr Botha submitted that the applicant did not take any further steps
after the receipt of the arbitration award on 17 November.
Thus, this
application is opposed on the basis that the arbitration award, which
was issued on 9 November 2009, has become prescribed.
[20]
In this respect, Mr Botha invoked
Section 15
of the Prescription
which stipulates that:
‘
(1)
The running of prescription shall, subject to the provision of
subsection (2) be interrupted
by the service on the debtor of any
process, whereby the creditor claims payment of the debt…
“
(2)
For the purpose 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.’
[21]
Mr Botha submitted that this Court held in
Solidarity and Others v
Eskom Holdings Limited
(2005) 26 ILJ 338 (LC) and
PSA obo
Khaya v CCMA and Others
(2008) 29 ILJ 1546 (CCMA) that three year
prescription period applies to arbitration awards.
[22]
Mr Botha relied on
Frans v PPC Cement (Pty) Ltd and Others
(2011) 12 BLLR 1189
(LC) and
POPCRU obo Sifuba v Commissioner of
the SA Police Services
(2009) 30 ILJ 1309 (LC) to contend that
this Court lacks jurisdiction to enforce an arbitration award after
the claim has become
prescribed in terms of the
Prescription Act and
that a review application does not interrupt the running of
prescription.
Evaluation
of submissions
[23]
In various decisions, this Court has held that, and it is regarded as
trite, that an arbitration award constitutes a debt as
contemplated
in the
Prescription Act. (See
Mangegene v Pretoria Portland Cement
and Others
(2011) 32 ILJ 2518 (LC);
NUMSA and Another v Espach
Engineering
(2010) 31 ILJ 987 (LC);
CEPPWAWU and Another v
Le-Sel Research (Pty) Ltd
(2009) 30 ILJ 1818 (LC);
PSA obo
Khaya v CCMA and Others
(2008) 29 ILJ 1546 (LC);
SATAWU obo
Phakathi v Ghekko Services SA (Pty) Ltd and Others
(2011) 32 ILJ
1728 (LC). I, with respect, differ with these decisions for the
reasons I will advance hereinbelow.
[24]
This notwithstanding, the Labour Appeal Court in
Solidarity and
Others v Eskom Holdings Limited
CA 9/05
[2007] ZALAC 19
(21
December 2007) agreed that the
Prescription Act was
applicable to the
appellant’s claim in relation to the benefits that would flow
from the early retirement agreement. However,
the court did not
determine what constituted a debt or whether reinstatement falls
within a meaning of s debt. (See
Prof AR Coetzee
(supra) at
paragraph [13]
and Circuit Breakers Industries Ltd v NUMSA obo
Hadebe
Case No: JR1958/08 at paragraph [15]).
[25]
While I disagree with the decisions that hold that an arbitration
award does constitute a debt, I am not persuaded by Mr Lengane’s
approach that the applicant is neither making a demand for something
that is due, nor is the applicant making an assertion of a
right to
anything pursuant to an award, but his ultimate objective is to use
the court order sought in this application as an aid
to enforcing the
award. In my view, this contention is not helpful as it does not
address the issues in a legally sound manner
in a way that recent
decisions of this Court do as I will set out hereinbelow.
[26]
Interruption of prescription in terms of the
Prescription Act is
in
accordance with “process” envisaged by
Section 15.
For
this reason, I am not persuaded by Mr Lengane’s contention that
Msipa’s offer to tender his duties interrupted
prescription.
His overture in this regard could be, in my view, taken into
consideration when determining whether arbitration award
ordering
reinstatement constitutes a debt as I will demonstrate hereinbelow.
This notwithstanding, my view regarding Mr Lengane’s
contention
will not influence my decision in this application.
[27]
Mr Lengane contended that this Court, as a court of equity, must not
refuse this application on the basis that the arbitration
award, as a
debt, has become expired. In this regard, in
Hadebe
(supra) at
paragraph 14, this Court stated the following:
‘
The
views expressed in
Sifuba
are similar to those expressed by Pillay J in Mpazama where the
learned judge commented that
“
It
was submitted that as a court of equity, the
Prescription Act should
not be applied to oust jurisdiction of the court and thereby deny the
applicant’s claim.
Equity must be applied
even-handedly to both employer and employees. The employee had three
years in which to prosecute the claim.
The respondent had
persistently denied liability for the debt. The respondent did not
obstruct the applicant in instituting proceedings.”’
[28]
I agree with the sentiments expressed in the above passages. In this
application, the applicant did not commence proceedings
within three
years, while the first respondent had always disputed the debt. In
this regard, I agree with Chetty AJ who stated
in
Hadebe
(supra) at paragraph 14that:
‘…
It
is a trite principle of our law of prescription that a party cannot
profit from his own inaction. On a point of law, however,
I am unable
to disagree with the views expressed in the various judgments to
which I have referred to (sic) above. Despite its
harsh consequences
and the injustice that results from a plea of prescription being
upheld it operates as a matter of law
.’
(
See
Sifuba
supra)
[29]
Despite my agreement with the above passage from a legal perspective,
I am, however, of the view that recent decisions of this
Court, as it
will be indicated hereinbelow, demonstrate that it is no longer a
general approach that an arbitration award constitutes
a debt as
contemplated in the
Prescription Act and
that such a debt becomes
prescribed if it not certified by the CCMA or respective bargaining
council within three years of it has
been issued.
[30]
Mr Kruger’s contentions are correctly predicated on this
jurisprudence. However, as I had made allusions hereinbefore
to
recent decisions of this Court in this regard, I am persuaded to
depart from the general trend.
[31]
First, I agree with Rabin-Naicker J’s dicta in
Coetzee
(supra) where she said that:
‘
[13]
In my judgment this proposition thus far as established or even trite
in decisions of this court deserves
further consideration. Is the
Prescription Act consistent
with the LRA? The LAC has found that the
Prescription Act does
apply to contractual claims. It has not dealt
with the issue in as far as unfair dismissal claims under the LRA are
concerned…
[15]
First respondent’s case in respect of prescription relies on
the submission that ‘all
claims under the LRA fall under the
Prescription Act&rsquo
;. In my judgment the LRA, in its design, is
inconsistent with such a submission. Instead of any reference to
prescription or the
inclusion of a prescription clause, the LRA
includes specific time periods for the referral of claims and
underscores the use of
the tool of condonation by this court when
such periods are exceeded in the text of the statute; rather than in
the court rules…
[16]
Further, if the
Prescription Act did
apply, there should be no
distinction as regards its application between the different routes
by the LRA i.e. those that go to
conciliation and then to
arbitration, and/or those which are adjudicated in the Labour Court
after conciliation. This lack of distinction
would accord with our
constitutional values, particularly the right to equality and of
access to justice. The LRA does not proscribe
a hierarchy of
dismissal claims litigants may claim…
[19]
Another obstacle to the proposition that the
Prescription Act applies
to all claims under the LRA is the following: a litigant who has to
go the arbitration route and gets an award in her favour will
not be
able to enforce that award after three years. Another litigant who
must go the adjudication route in terms of the LRA will
obtain a
“judgment debt “in this court which in terms of the
Prescription Act prescribes
only after 30 years after it is handed
down…
[21]
In my opinion, for at least the above reasons, I find that the
Prescription Act is
inconsistent with the LRA. Its application to LRA
claims would create inequalities between litigants using different
routes for
their disputes and furthermore will be unworkable
where disputes move between tribunal and court and
vice versa.’
[32]
Second, I am also persuaded by Chetty AJ’S dictum in
Hadebe
where, after a survey of this Court’s decisions relevant to
this application, said:
‘
[23]
The right of reinstatement, in my view, falls into a similar category
of fundamental rights contemplated
by the constitution under the
rubric of the right to fair labour practices.
This
must be distinguished from those cases where an
award of compensation has been
determined as the appropriate remedy
dismissal. In such instance, I accept
that where a party has taken no steps to make
for unfair
such award an order of court
within three years, such claim would prescribe
similarly to any other debt. An award
for reinstatement (with or without backpay)
must be seen in a different light
.
Our courts have accepted that reinstatement is the primary remedy in
the case of an unfair dismissal. It could have never been
the
intention of the legislature to make the remedy of reinstatement open
to being up-ended by a plea of prescription. For this
reason too, I
am inclined to take the view that a right of reinstatement as a
remedy granted by the CCMA does not constitute a
“debt”
for the purpose of prescription…’ (My emphasis)
[33]
From this perspective, in my view, the arbitration award of
reinstatement in favour of Msipa, who has always tendered his
services to the first respondent unsuccessfully, constitutes an
unassailable constitutional fundamental right which should be immune
from the
Prescription Act. For
this reason, I am inclined to lean
towards the views expressed by the decision of Chetty AJ.
[34]
In the result, I make the following order:
(1)
The application in terms of
Section 158(1)(c)
is granted; and
(2)
There is no order as to costs.
________________________
Mthombeni
AJ
Acting
Judge of the Labour Court
APPEARANCES:
FOR
THE APPLICANT:
Adv K Lengane
Instructed
by
Phungo Incorporated
FOR
THE FIRST RESPONDENT:
Adv J Botha
Instructed
by
MD Swanepoel Attorney