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[2014] ZALCCT 69
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CEPPWAWU obo Le Fleur v Rotolabel A Division of Bidpaper Plus (Pty) Ltd (C 214/14) [2014] ZALCCT 69; [2015] 2 BLLR 147 (LC); (2015) 36 ILJ 700 (LC) (17 October 2014)
REPUBLIC OF SOUTH
AFRICA
THE LABOUR COURT OF
SOUTH AFRICA, CAPE TOWN
JUDGMENT
CASE NO C 214/14
DATE: 17 OCTOBER 2014
Reportable
In the matter between:
CEPPWAWU Obo CYRIL LE
FLEUR
............................................................................
APPLICANT
And
ROTOLABEL, A DIVISION OF BIDPAPER
PLUS (PTY)
LTD
............................................................................................................
RESPONDENT
Application argued: 11 September
2014
Judgment delivered: 17 October 2014
JUDGMENT
VAN NIEKERK J
Introduction
[1 ] This is an application in terms of
s 158 (1) (c) of the Labour Relations Act to have an arbitration
award issued under the
auspices of a statutory council made an order
of court. That label suggests a sense of the ordinary to these
proceedings, but the
nature of the opposition to the application
raises the vexed question of the application (if any) of the
Prescription Act to arbitration
awards issued in terms of the Labour
Relations Act (LRA).
Material facts
[2] The material facts are not in
dispute. The individual applicant, Le Fleur, was employed by the
respondent. On 23 April 2010,
he was dismissed for misconduct. He
disputed the fairness of his dismissal and referred the matter to
arbitration under the auspices
of the statutory council for the
printing, newspaper and packing industries. The arbitrator’s
found that Le Fleur’s
dismissal was unfair. In terms of his
award, Le Fleur was reinstated into the respondent’s employ,
but without any back pay.
[3] The arbitration award was issued on
18 September 2010. On 23 November 2010, within the statutory six-week
period, the respondent
filed an application in terms of s 145 of the
LRA to review and set aside the award. The Rule 7 A requires an
applicant to file
the record of the proceedings under review. Between
late 2010 and mid-2012 attempts were made to obtain a complete
record, with
limited success. On 12 November 2013, the respondent’s
attorneys advised the application (the union) that reconstruction of
the record was not possible and that in any event, the award had
prescribed by virtue of s 11 of the Prescription Act. For these
reasons, the respondent regarded the matter as ‘finalised’.
The union disputed this contention and on 28 March 2014,
filed the
present application.
The applicable principles
[3] Chapter III of the
Prescription
Act, 68 of 1969
, regulates the prescription of debts.
Section 16
of
the
Prescription Act provides
: 16 Application of this Chapter
(1) Subject to the provisions of
subsection (2) (b), the provisions of this chapter shall, save in so
far as they are inconsistent
with the provisions of any Act of
Parliament which prescribes a specified period within which a claim
is to be made or an action
is to be instituted in respect of a debt
or imposes conditions on the institution of an action for the
recovery of a debt, apply
to any debt arising after the commencement
of this Act.
(2) The provisions of any law-
(a) which immediately before the
commencement of this Act applied to the prescription of a debt which
arose before such commencement;
or
(b) which, if this Act had not come
into operation, would have applied to the prescription of a debt
which arose or arises out of
an advance or loan of money by an
insurer to any person in respect of an insurance policy issued by
such insurer before 1 January
1974,shall continue to apply to the
prescription of the debt in question in all respects as if this Act
had not come into operation.’
[4] The period of prescription of debts
is regulated by
s 11.
It is not disputed, on the assumption that the
Prescription Act applies
to arbitration awards issued under the LRA,
that none of the circumstances referred to in
s 11
(a) to (c) are
present and that only the provisions of paragraph (d) are relevant.
That provision establishes a period of prescription
of three years.
[5] There are four different approaches
that have been adopted by this court to the prescription of
arbitration awards. In the course
of argument, Mr. Whyte,
representing the union, proposed a fifth.
[6] The first approach, supported by
the weight of authority, is to regard the
Prescription Act as
applicable to all awards made by arbitrators, irrespective of whether
the relief granted sounds in money or in an order for reinstatement.
On this approach, an arbitration award is regarded as a ‘debt’
for the purpose of the
Prescription Act and
on the application of
s
11
(d), an award prescribes three years after publication.
[7] The second approach is to regard
the
Prescription Act as
applicable to arbitration awards, but to
regard the filing of an application for review by the debtor (the
unsuccessful employer
in the arbitration proceedings) as interrupting
the running of prescription (see Aon SA (Pty) Ltd v CCMA & others
(2012) 33
ILJ 1124 (LC)).
[8] The third approach is to regard the
Prescription Act as
applicable to arbitration awards but to regard
any remedy of reinstatement as an order more akin to specific
performance and therefore
something other than a ‘debt’.
On this basis, the
Prescription Act does
not apply to such awards of
reinstatement (see, for example, Circuit Breakers Industries Ltd v
NUMSA obo Hadebe & others (2014)
35 ILJ 1261 (LC)).
[9] The fourth approach is a more
principled approach and regards the
Prescription Act as
incompatible
with the purposes of the Labour Relations Act and therefore
inapplicable to arbitration awards made under the LRA.
(See Coetzee &
others v Member of the Executive Council of the Provincial Government
of the Western Cape & others (2013)
34 ILJ 2865 (LC); Cellucity
(Pty) Ltd v CWU obo Peters (2014) 35 ILJ 1237 (LC).)
[10] The respondent’s case is
based squarely on the first approach outlined above. The respondent
contends that the
Prescription Act applies
to all arbitration awards
(whether they are for reinstatement, re-employment or compensation)
and that the award in the present
instance is subject to a
prescription period of three years. Further, the respondent contends
that the delivery of the review application
did not interrupt
prescription and the award therefore prescribed, at best for Le
Fleur, on 13 October 2013. Mr Ellis, on behalf
of the respondent,
accordingly submitted that there is no basis for the award to be made
an order of court and that the application
should be dismissed.
[11] The union contended for the last
of the above approaches (i.e. that the
Prescription Act does
not
apply to arbitration awards. In the alternative, Mr Whyte advanced
the proposition that the provisions of the
Prescription Act do
not
apply to arbitration awards issued in terms of the LRA because they
constitute administrative action. While this form of administrative
action is not regulated by the
Promotion of Administrative Justice
Act, 3 of 2000
, it is subject to the constitutional right to fair
administrative action (see Sidumo & another v Rustenburg Platinum
Mines
& others
[2007] 12 BLLR 1097
(CC) at paragraph 94).
Analysis
[12] I deal first with the proposition
that the
Prescription Act does
not apply to arbitration awards, an
approach which, as I have indicated, enjoys the support of at least
two judgments of this court.
The two objections to the application of
the
Prescription Act that
can be identified in these judgments (see,
for example, the Cellucity judgment {supra) at paragraphs 15 and 16)
are that the LRA
includes specific time periods for the referral of
claims and provides for the condonation by this court (and the CCMA
presumably)
where those periods are exceeded; the second objection is
one based on an equality argument. In resepct of the first objection,
reference is made to the structure or design of the LRA; in the case
of the second, it is contended that litigants should have
the same
rules apply to them whether they are compelled to have their disputes
arbitrated in the CCMA or adjudicated by this court.
In other words,
a party that is required to refer a dispute to this court and obtains
a judgment in his or her favour is 27 years
better off than a
litigant in receipt of an arbitration award.
[13] The obvious answer to the first
objection is that while the LRA contains a number of time-limitation
clauses, these all apply
in the pre-arbitration or pre-adjudication
phase. Those provisions are intended to give effect to the
legislative policy of expeditious
dispute resolution. In the present
instance, the situation is different - the issue is one of the
enforcement of arbitration awards
and judgments once the dispute
resolution process has run its course. Here, a cogent argument can be
made for the value of the
application of the
Prescription Act and
its
consistency with the desired statutory objective of expeditious
dispute resolution (at least in the sense that successful litigants
are required to enforce their rights timeously) and with the values
of certainty and finality. In this sense, and contrary to the
reasoning of the Cellucity judgment, the LRA, in its design, is not
inconsistent with the application of the
Prescription Act. On
the
contrary, there is a relationship of compatibility between the two
statutes.
[14] The answer to the equality
objection is that a litigant who is required to have his or her
dispute determined by arbitration
(as opposed to adjudication) has a
remedy to address any difference that might result -
s 158
(1) (c) of
the LRA is a mechanism especially intended to facilitate the
enforcement of an arbitration award as an order of this
court. An
application in terms of
s 158
(1) (c) constitutes ‘process
whereby the creditor claims payment of the debt’ for the
purposes of
s 15
(1) and (6) of the
Prescription Act. If
an
application in terms of
s 158
is filed before the expiry of the
prescription period, the running of prescription will be interrupted.
There is thus no discrimination
inherent in the bifurcation
established by the statutory dispute resolution process or in the
establishment of the different processes
of arbitration and
adjudication. The advantage to the recipient of an order made by this
court of a 30-year prescription period
is available to recipients of
a CCMA award by way of an admittedly additional but expeditious and
inexpensive process of enforcement.
(In Johannesburg at least, the
vast majority of applications in terms of
s 158
(1) (c) are decided
in Chambers.)
[15] There are two further fundamental
difficulties with the Cellucity approach. The first is at least one
judgment of the Labour
Appeal Court (see SA Post Office Ltd v
Communication Workers Union on behalf of Permanent Part-time
Employees (2014) 35 ILJ 455
(LAC)) where the court impliedly
acknowledged the application of the
Prescription Act (if
only by
dismissing a claim of prescription proffered during argument because
it had not been pleaded, something required by
s 17
(2) of the
Prescription Act). Further
,
the LRA does not exclude the application of the
Prescription Act. The
provisions of the 2014 Labour Relations Amendment Act, assented to
but not yet in force, stipulate that an application to review
and set
aside an arbitration award interrupts the running of prescription in
terms of the
Prescription Act in
respect of that award. The clear
implication is that the
Prescription Act applies
to arbitration
awards - if the
Prescription Act did
not apply to arbitration awards
issued under the LRA, the legislature would not have enacted this
provision. The amendment makes
clear that legislative policy is to
the effect that the
Prescription Act applies
to arbitration awards
issued under the auspices of the CCMA and bargaining councils.
[16] In so far as it might be suggested
that the real incompatibility is between the equity based
jurisdiction established byteh
LRA and the inflexibility of the
Prescription Act, In
Police & Prison Civil Rights Union obo
Sifuba (2009) 30 ILJ 1309 (LC) rejected a submission that
considerations of equity ought
to be brought into account to
determine the application of prescription. The court stated:
‘[44] ...The
Prescription Act
does
not give the court a discretion. If the requirements for a plea
of prescription have been established by the party taking the point
then that party is entitled as a matter of right to have that plea
upheld. Although this court is a court of equity, in my view
considerations of equity do not come into play when all the
requirements for a successful plea of prescription are established.
Extinctive prescription renders unenforceable a right by the lapse of
time. See
s 10(1)
of the
Prescription Act.’
[17
] For these reasons, I am not
persuaded that the approach adopted in Cellucity is correct. There is
no policy-related reason or
reason in principle that serves to
exclude the application of the
Prescription Act to
arbitration awards
issued in terms of the LRA.
[18] Next, it seems logical to consider
whether an arbitration award constitutes a ‘debt’ for the
purposes of the
Prescription Act, and
whether the nature of the
remedy granted by an arbitrator is relevant. As I have indicated, the
Prescription
Act does
not define the word ‘debt’.
There is a weight of authority which adopts a broad approach, and
which cautions against
confusing debts and causes of action.
[19] In Electricity Supply Commission v
Stuarts and Lloyds of SA Pty) Ltd 1991 (3 ) SA 340 (A) what was then
the Appellate Division
of the Supreme Court held that a ‘debt’
comprised ‘that which is owed all due; anything (as money,
goods or services)
which one person is under an obligation to pay
will render to another’. In Oertel & others NNO v Director
of Local Government
and others
[1981] 4 All SA 608
(T), what was then
the Supreme Court approved of this formulation and added:
This is a definition in wide terms.
That it is not confined to obligations sounding in money was also
decided in HMBMP properties
(Pty) Ltd v King
1981 (1) SA 906
(N) at
909 A-B.
[20] Loubser, In Extinctive
Prescription, (at 100 et seq), notes that a ‘debt’ is
used primarily to describe the ‘correlative
of a right or claim
to some performance, in other words, as the duty side of an
obligation .. .produced by contract, delict, unjust
enrichment,
statute or other source.’ Saner, in Prescription in South
African Law, comes to a similar conclusion (at 3-45).
[21] The weight of authority in this
court is to the effect that an arbitration award issued under the LRA
constitutes a ‘debt’
for the purposes of the LRA. (See,
for example, Mpanzama v Fidelity Guards Holdings (Pty) Ltd
[2000] 12
BLLR 1455
(LC) at paras 6-7; Police & Prison Civil Rights Union
obo Sifuba v Commissioner of the SA Police Service & others
(supra)
at para 34; Fredericks v Grobler NO & others
[2010] 6
BLLR 644
(LC) at paras 22-23; Magengenene v PPC Cement (Pty) Ltd &
others (2011) 32 ILJ 2518 (LC) at para 6; S/A Transport & Allied
Workers Union obo Hani v Fidelity Cash Management Services (Pty) Ltd
(2012) 33 ILJ 2452 (LC) at para 22; and Sampla Belting SA
(Pty) Ltd v
Commission for Conciliation, Mediation & Arbitration & others
(2012) 33 ILJ 2465 (LC) at para 14.)
[22] Similarly, the weight of
authority, both in the High Court and in this court, is that an
award, whether it obliges an employer
to reinstate an employee or to
pay compensation constitutes an obligation to restore the employment
relationship and therefore
a ‘debt’ for the purposes of
the
Prescription Act. (See
Mpanzama v Fidelity Guards Holdings (Pty)
Ltd
[2000] 12 BLLR 1459
(LC) and NUMSA v Espach Engineering (2010) 31
ILJ 987 (LC), at paragraphs 15 to 19.)
[24] As I have indicated, there is at
least one decision by this court to be effective that the filing of
an application to review
and set aside the award interrupts
prescription for the purposes of the
Prescription Act (See
Aon SA
(Pty) Ltd v CCMA & others). In Hani’s case (supra) the
court observed that the ‘predominant approach’
in the
Labour Court is that prescription is not interrupted by a review. In
POPCRU obo Sifuba, the court stated the following:
There is no legal provision that
provides for the automatic suspension of the enforceability of an
arbitration award by an application
for review. ... The court may, if
it considers that the circumstances so required, stay the enforcement
of the award-winning its
decision on the review of an award. The mere
fact that the review application is pending is not a bar to making
the award an order
of court.’
[25] In summary: An arbitration award
issued by a CCMA commissioner or a bargaining council arbitrator
constitutes a debt for the
purposes of the
Prescription Act and
prescribes three years after publication, whether or not the award is
one of reinstatement or compensation. Until the Labour Relations
Amendment Act 2014 is brought into operation, an application to
review and set aside the award does not interrupt the running of
prescription. I am not persuaded that I should follow a different
approach.
[26] This brings me to the submission
made by Mr Whyte to the effect that an arbitration award does not
prescribe since it constitutes
administrative action. The
constitutional court, as a vindicated above, is clearly held that an
arbitration award issued under
the auspices of the CCMA and
bargaining councils constitutes administrative action that is not
subject to PAJA.
[27] The submission made by Mr. Whyte
is foreshadowed in the judgment of Chetty AJ in Circuit Breakers
Industries Ltd v National
Union of Metalworkers of SA obo Hadebe and
others (supra). In that case, the court appeared to find that while a
‘debt’
for the purposes of the
Prescription Act was
to be
accorded a wide meaning, but that where a debt arises from a
fundamental right (in this instance, an award of reinstatement)
the
legislature did not intend that it could be up-ended by a plea of
prescription. In coming to this decision, the court relied
on Njongi
v Member of the Executive Council, Department of Welfare, Western
Cape
2008
(4) SA 257
(CC), and in particular a
passage from paragraph [41] of the judgment:
‘It was contended in this Court
that grant arrears could not be a debt because the Provincial
Government had failed to perform
an obligation imposed on it by the
Constitution Therefore, however broadly the term might be defined, it
is not a debt for the
purposes of the
Prescription Act. The
argument
was that an obligation of this kind can never prescribe. Debts
arriving from fundamental rights are of a genre different
to that
envisage by prescription legislation which was in any event
pre-constitutional.
The court took a different view of an
award of compensation, which it considered to be a ‘debt’
and liable to prescription
after three years.
[28] The authority on which Chetty AJ
relied raised but expressly did not decide whether prescription ran
in favour of a provincial
government against a person entitled to
claim arrear disability grant payments for a period during which an
unlawful administrative
decision that the grant should not be paid
had effect. The paragraph quoted and relied on for the proposition
that forms the basis
of the court’s conclusion in Circuit
Breakers is nothing more than a recordal of a submission made by
counsel. (The first
sentence that appears in the above quote and
which makes clear that the passage was no more than a record of
submission, omitted
in the judgment by Chetty AJ.).
[29] While it is correct that the
Constitutional Court expressed its doubts as to whether prescription
would apply in the circumstances,
given that what was at stake was a
fundamental right, as I have indicated, the issue was expressly left
open. (See paragraph 42
of the judgment, where Yacoob J says ‘Despite
constitutional concerns, I reluctantly conclude that this important
issue should
not be decided in this judgment.) The Njongi judgment is
therefore not authority for the proposition that an administrative
act
does not give rise to a debt for the purposes of the
Prescription
Act. Even
less is it authority for any assertion that only an order
for reinstatement (as opposed to an award of compensation) concerns a
fundamental right and is therefore immune from the running of
prescription.
[30] The definition of the word ‘debt’
and the interpretations of that term to which I have referred above
indicate
that what is significant is the existence of an obligation,
not its source. What matters is whether an obligation has been
created,
by whatever means. The fact that an obligation was created
in the present instance in terms of an administrative act serves only
to illustrate the public law/private law interface at work when
reinstatement is granted and a contract of employment restored.
It
does not in itself serve to exclude the application of the
Prescription Act.
[31
] For these reasons, I am not
persuaded that the administrative law origins of an award of
reinstatement exclude the application
of the
Prescription Act. In
my
view, the arbitration award that is the subject of these proceedings
has prescribed and there is accordingly no basis to make
the award an
order of court.
Costs
[32] Finally, in relation to costs,
this court has traditionally been disinclined to make orders for
costs in the dispute between
parties to a collective-bargaining
relationship. Given this consideration and the novelty of the point
raised by the applicant,
the requirements of law and fairness do not
demand an order for costs.
For the above reasons, I make the
following order:
1. The application is dismissed.
ANDRE VAN NIEKERK JUDGE OF THE
LABOUR COURT
REPRESENTATION
For the applicant: Mr. J Whyte,
Cheadle Thompson and Haysom Inc
For the respondent: Mr. Ellis, ENS
Inc.