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[2014] ZALCCT 5
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FAWU and Others v Cape Hospitality Services t/a Savoy Hotel (C540/08) [2014] ZALCCT 5; (2014) 35 ILJ 3394 (LC) (24 February 2014)
REPUBLIC
OF SOUTH AFRICA
THE
LABOUR OF SOUTH AFRICA, CAPE TOWN
JUDGMENT
Reportable
Of
interest to other judges
Case
No: C 540/08
In
the matter between:
FAWU First
applicant
VERONICA
CLAASEN Second
applicant
BERONICE
SETHLOW Third
applicant
APATHEA
PHATLANYANE Fourth
applicant
ROSY
TSHENYEGO Fifth
applicant
and
CAPE
HOPITALITY SERVICES T/A SAVOY
HOTEL Respondent
Heard: 30
January 2014
Delivered: 24
February 2014
Summary:
LRA
s 158(1)(c) – arbitration award made order of court. Part of
award relating to writ of execution settled but
employer did not
reinstate employees.
JUDGMENT
STEENKAMP
J
Introduction
[1] The
respondent, Savoy Hotel, was ordered to reinstate the applicants
(represented by the Food and Allied Workers
Union) in an arbitration
award. It has not done so. The applicants (FAWU and its members) seek
to have the arbitration award made
an order of court in terms of s
158(1)(c) of the Labour Relations Act.
[1]
The
respondent says the claim has been settled.
Background
facts
[2] A
CCMA commissioner made an award reinstating the applicants as long
ago as May 2008. The applicants initially
brought this application in
September 2009. In 2011, their previous attorney, Mr Adrian Horwitz
of Kimberley, engaged in correspondence
with the Hotel’s
attorney, Mr Johannes Spamer of Spamer Triebel in Bellville (who
still represents the hotel). Mr Spamer
says a compromise ensued; Mr
Ponoane denies it.
[3] Nevertheless,
this Court made the arbitration award an order of court on an
unopposed basis on 31 May 2013.
That order was rescinded on 28 August
2013 because the Hotel did not receive the notice of set-down.
[4] The
question of whether or not the dispute was settled, rests on the
events of July 2011.
[5] It
is common cause that a writ of execution in the amount of R 31 491,
60 was issued out of this Court
on 27 October 2010. That amount
comprised the backpay owing to the applicants from their date of
dismissal, 9 February 2008, to
the date of reinstatement, 9 June
2008. It is also common cause that they were not reinstated.
[6] The
sheriff only attended at the premises of the Hotel on 6 July 2011. Mr
Spamer sent a letter to the applicants’
then attorney, Mr
Horwitz, on 20 July 2011. Although it was marked “without
prejudice”, he disclosed it to the Court.
Mr Spamer made the
following offer “in full and final settlement”:
‘
Our
client will pay half of the amount of R31 491, 60 to yourselves
[
sic
]
on or before the end of July 2011;
Our
client will pay the remaining half of the amount of R31 491, 60
by the end of August 2011.’
[7] Mr
Horwitz responded in these terms on 25 July 2011:
[2]
‘
Our
clients are in principle prepared to accept your client’s offer
of settlement in two monthly instalments, one at the end
of July 2011
and one at the end of August 2011.
However,
our clients require the payment of the interest due in terms of the
writ which is 15,5% on R 31 491, 60 from 19 May
2008 (1167 days)
together with the costs of execution which we estimate at R 1000 plus
VAT.
The
full amount outstanding is therefore R48 212, 06 made up as
follows:
...
The
original award also provided for reinstatement of all the applicants
on the same terms and conditions that existed at the time
of their
dismissal.
Should
your clients pay the above amount, we will
recommend
to
our clients to drop the
legitimate
claim
they
have in this regard and for the payment of backpay from the date of
the award to the present time.’
[8] The
Hotel subsequently paid the amount of R 48 212, 06 in three
instalments. Nothing more was said about
reinstatement until the
applicants obtained the order of 31 May 2013 on an unopposed basis.
As I have noted, that order was rescinded
in August 2013 and
re-enrolled for hearing on an opposed basis on 30 January 2014, after
the respondent had delivered its opposing
papers. The applicants
replied and included an affidavit by Mr Horwitz. The respondent did
not replicate.
Evaluation/Analysis
[9] It
is so that an offer of compromise “in full and final
settlement” of a debt constitutes a compromise
and precludes
the creditor from claiming the balance of the amount owing, if that
offer is acc
epted.
[3]
But,
as Malan AJA remarked in
Be
Bop a Lula Manufacturing & Printing CC v Kingtex Marketing (Pty)
Ltd
.
[4]
‘
The
essential issue is whether an agreement of compromise was concluded:
one is concerned simply with the principles of offer and
acceptance.…
In other words, ‘the proposal,
objectively
construed,
must be intended to create binding legal relations and must have so
appeared to the offeree.’
[10] In
this case, it is quite clear from Mr Horwitz’s response that he
only accepted the offer in full and
final settlement in respect of
the writ of execution for the amount owing from 8 February 2008 to 9
June 2008, together with interest
and the Sheriff’s fees. He
reminded Mr Spamer in very specific terms of the fact that it did not
include his clients’
“legitimate claim” to
reinstatement in terms of the award. He did no more than undertake
that he would “recommend”
to his clients to drop that
claim and the further claim for backpay from 9 June 2008.
[11] In
these proceedings, Mr Horwitz went further. He stated under oath:
‘
I
may add as well, that only assisted the second to fourth applicants
to pursue their rights under the warrant of execution issued
pursuant
to the CCMA award granted under case number NC 465 – 08.
Insofar as the award directed that they should get back
pay and did
not assist them with regard to the direction by the Commissioner that
the applicants be reinstated.
I
deny that there was ever any deed of settlement entered into between
the parties to settle the issue pertaining to their reinstatement
as
per the CCMA arbitration award.
I
humbly submit that, had they been a settlement of the reinstatement
claim, the deed of settlement would have been drawn and executed.
I
deny therefore, that there was a settlement agreement reached by the
parties in relation to the reinstatement claim. The only
proposal of
the respondent that I accepted was for the payment of the monies due
in terms of the warrant of execution issued out
of the above
honourable court in
instalments
in accordance with the respondent’s ability to pay.’
[12] Mr
Spamer – who represented the respondent throughout and still
does – did not respond to these
statements under oath. Should
he have wished to replicate, he could have done so
.
[5]
[13] On
the evidence before me, I must accept the clear evidence of Mr
Horwitz – an officer of the court
– under oath that he
only accepted the offer of compromise with regard to the amount that
formed the subject of the writ
of execution, i.e. the backpay due to
his clients from 8February to 9 June 2008. He did not relinquish
their right to reinstatement.
That much is also borne out by the
contemporaneous correspondence.
[14] That
leaves the question of the appropriate relief. Mr Ponoane simply
asked that the arbitration award be
made an order of court. That
entails the retrospective reinstatement of his clients to 9 June
2008, more than five years ago. That
also implies their right to
backpay, apart from the period of 8 February to 9 June 2008.
[15] I
have great sympathy for the position of the respondent. It may well
be that, after he had made the payments
on behalf of his clients in
2011, Mr Spamer was under the impression that the applicants had
relinquished their claim for reinstatement.
There is no evidence
before me that they tendered their services at that time. It is not
clear to me why this application was only
set down – initially
on the unopposed roll, after Mr Ponoane had come on record – in
May 2013. The applicants had launched
the application in September
2009.
[16] Mr
Spamer urged me, should I find in favour of the applicants, not to
order retrospective reinstatement, in
the light of the delays
occasioned by the applicants. He relied on the authority of the
Labour Appeal Court in
NUMSA
v Fibre Flair CC t/a Kango Canopies
[6]
where
Wallis JA agreed with the court
a
quo
having
exercised its discretion not to order retrospective reinstatement in
a case of dismissal for participating in an unprotected
strike. But I
have no such discretion. That case was decided with reference to
section 193(1)(a) of the LRA. This is not a case
where the court has
original jurisdiction. It is an application to make an existing
arbitration award an order of court in terms
of section 158(1)(c).
The only discretion I have is to make it an order of court or no
t.
[7]
[17] I
am not persuaded that I should exercise the discretion not to make
the award an order of court. The award
was handed down in May 2008.
The applicants had to report for duty on 9 June 2008. They say they
did; the respondent denies it.
But in September 2009, the applicants
brought this application on the basis that they had reported for duty
and that the respondent’s
general Manager, Richard Ndlovu,
refused their tender on the basis that the Hotel was reviewing the
award. It is common cause that
it did not. The award stands. The
applicants then brought this application in September 2009. The writ
of execution was issued
a year later. The respondent says it only
came to its attention on 6 July 2011 when the sheriff attended at its
premises. The settlement
discussions ensued. The applicants did not
withdraw the application that they filed in September 2009. It is not
clear why the
application was not set down for hearing until May
2013. It may be that the applicants should have done more to pursue
it; but
they never abandoned their claim. Had I had the discretion, I
would have limited the amount of backpay due to them; but I do not
have such a discretion, and it would not be in the interests of
justice to bar them from exercising their right to reinstatement.
[18] It
is also true, as Mr Spamer argued, that there is no evidence before
the Court that the applicants remain
unemployed. I intend to address
that by specifying in the order that they must report for duty by a
certain date, failing which
they will forfeit the right to
reinstatement. The respondent has the right to finality in these
proceedings.
[19] With
regard to costs, I take into account the delays occasioned by the
applicants and the fact that, pursuant
to the applicants’
reinstatement, the parties will have to renew their relationship. An
adverse costs order will have a chilling
effect on that relationship.
In law and fairness each party should bear its own costs.
Order
[20] I
therefore make the following order:
20.1
The
arbitration award under case number NV 458-08 is made an order of
court.
20.2
The
individual applicants – Ms Claasen, Ms Sethlow, Ms Phatlanyane
and Ms Tshenyego – must report for duty on or before
1 April
2014, failing which they will be deemed to have abandoned their right
to the relief awarded in the arbitration award.
20.3
The
applicants are not entitled to backpay for the period 8 February 2008
to 9 July 2008.
20.4
There
is no order as to costs.
Steenkamp
J
APPEARANCES
For
the Applicants:
MJ
Ponyane (attorney).
For
the Respondent:
J
Spamer (attorney).
[1]
Act
66 of 1995 (the LRA).
[2]
My
underlining.
[3]
Cf
Paterson
Exhibitions CC v Knights Advertising and Marketing CC
1991
(3) SA 523
(A)
at 529 B-C;
Kei
Brick and Tile Co (Pty) Ltd v A M Construction
1996
(1) SA 150
(E)
at 159 A-C.
[4]
2008
(3) SA 327
(A)
para 10 (footnotes omitted).
[5]
MISA/SAMWU
obo Members v Madikor Drie (Pty) Ltd
[2006]
1 BLLR 12
(LC).
[6]
(JA56/99)
[2000]
ZALAC 3
(17
March 2000)
.
[7]
S
A Post Office Ltd v CWU
[2013]
12 BLLR 1203
(LAC)
para [21] – [22];
BPSA
v Maruping
(J
841/09, 26 January 2010, unreported) para [10].