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[2017] ZALCJHB 261
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Rustenburg Local Municipality v South African Local Government Bargaining Council and Others (J779/2017) [2017] ZALCJHB 261; (2017) 38 ILJ 2596 (LC); [2017] 11 BLLR 1161 (LC) (30 June 2017)
THE
LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
JUDGMENT
Reportable
Case no: J 779 / 2017
In the matter between:
RUSTENBURG LOCAL
MUNICIPALITY
Applicant
and
SOUTH AFRICAN LOCAL GOVERNMENT
BARGAINNIG
COUNCIL
First
Respondent
T M GRAHAM
N.O.
Second
Respondent
EDNA KELEBOGILE
NGAKE
Third
Respondent
SHERIFF OF
RUSTENBURG
Fourth
Respondent
Heard: 28 June 2017
Delivered: 30 June 2017
Summary:
Suspension of arbitration award – objectives considered –
provisions of Sections 145(3), (7) and (8) considered
Sections
145(7) and (8) – Court has discretion where it comes to
furnishing security – considerations set out
Section
145(7) – no employer exempt from providing security in order to
suspend award pending a review – Court must
always exercise a
discretion in this regard
Suspension
of arbitration award – proper case made out for suspension –
no case made out for waiving of security –
award suspended
provided that security is set
JUDGMENT
SNYMAN, AJ
Introduction
[1]
In
this matter, I have been called upon to decide the still somewhat
controversial issue of when, and on what terms, the execution
of
arbitration awards issued in terms of the dispute resolution
processes under the Labour Relations Act (‘LRA’)
[1]
can be suspended or stayed, especially considering the recent
amendments to Section 145 the LRA.
[2]
[2]
The
current application by the applicant is an application brought on 3
April 2017 to stay an arbitration award and writ of execution
issued
in terms thereof, pending the finalization of a review application.
The applicant has also applied that it be absolved from
providing
security in terms of Sections 145(7) and (8) of the LRA (this issue
will be dealt with in detail hereunder). The
application was
brought as an urgent application, set down on 7 April 2017. It
came before Steenkamp J, who on 7 April 2017
struck the application
from the roll for want of urgency.
[3]
The
applicant then prosecuted the application to finality in the normal
course, in terms of the Labour Court Rules, which application
is now
before me for determination on the merits thereof. I will
commence deciding this application by setting out the relevant
background.
Relevant
background
[4]
The
current application arose from an arbitration award handed down by
arbitrator T M Graham (the second respondent) against the
applicant,
and in favour of the third respondent, on 26 October 2016, and under
case number NWD 111509 (referred to in this judgment
as ‘the
award’). In terms of the award, the dismissal of the
third respondent by the applicant was found to have
been
substantively unfair, and the third respondent was reinstated with
retrospective effect to the date of his dismissal. In a
variation of
the award dated 20 January 2017, the second respondent quantified the
back pay due to the third respondent in terms
of his reinstatement
award, to the date of his dismissal, in the amount of R271 684.27,
being an amount equivalent to 13 months’
salary.
[5]
The
applicant was dissatisfied with the award. It brought an application
to the Labour Court, in terms of Section 145 of the LRA,
to review
and set aside the award. This application was brought on 11 November
2016 under case number JR 2441 / 16. The review
application was
properly brought, and brought well within the 6(six) weeks’
time limit as contemplated by Section 145 of
the LRA. The
evidence shows that this review application is being properly
prosecuted in the normal course by the applicant.
[6]
Despite
the pending review application, the CCMA on 7 March 2017 certified
the award in terms of Section 143(3) of the LRA for the
purposes of
execution thereof. The CCMA then also issued, on the same date, a
writ of enforcement of the award in the sum of R271 684.27,
being the back pay component of the award. It is of course
competent for the CCMA to issue such a writ of enforcement, following
the amendments to the LRA.
[3]
[7]
On 31
March 2017, the Sheriff (‘fifth respondent’) attended at
the premises of the applicant to execute the writ of
enforcement
referred to above. This then gave rise to the current application, in
which the applicant has applied for the stay
of this execution.
[8]
Also
in its application, and as touched on above, the applicant has
applied to be absolved from providing security in order for
the award
to be suspended. The applicant’s case in support of
seeking this relief is a simple one. The applicant contends
that it
is subject to the provisions of the Local Government: Municipal
Finance Management Act (‘MFMA’)
[4]
.
According to the applicant, Section 29 of the MFMA places an
impediment upon access to funding in respect of issues not budgeted
for or approved in terms of the financial systems in place. The
applicant then concludes that because the payment of security
is not
budgeted for, it would not be possible to provide it. In
effect, the applicant is saying that because of it being
subject to
the MFMA, it should be exonerated from furnishing security under the
LRA, where it comes to review applications brought
by it.
[9]
I may
add that since the application was brought, further developments have
taken place where it comes to the prosecution of the
review
application under case number JR 2441 / 16. The missing parts of the
record have been reconstructed, and the record was
filed in terms of
Rule 7A(6) on 27 June 2017. The applicant has also given notice
under Rule 7A(8) on 27 June 2017 that it
stands by its founding
affidavit. All that remains is for the filing of an answering
affidavit and replying affidavit, in terms
of Rules 7A(9) and (10),
and then the indexing and pagination of the Court file in terms of
the Practice Manual. At this
point in time, the review
application is still well within the time limit as contemplated by
clause 11.2.7 of the Practice Manual.
[5]
[10]
As
regards to the merits of the review application, the case of the
applicant on review is that the second respondent did not have
jurisdiction to entertain the matter as it involved a dismissal based
on discrimination, which kind of dismissal dispute needs
to be
adjudicated by the Labour Court. The applicant has also raised
a number of instances of misconduct on the part of the
arbitrator. If
substantiated by the arbitration record, issues of misconduct are
clearly issues that will deserve the attention
of this Court and
could lead to the award being vitiated.
[6]
In particular also, an issue of jurisdiction requires this Court to
determine, for itself and
de
novo
,
whether the award of the second respondent is right or wrong.
[7]
There thus appears to be a proper review case for determination.
[11]
I
will now turn to deciding whether the applicant is entitled to the
relief it seeks, based on the background as set out above.
Analysis
[12]
From
the outset, an arbitration award issued under the dispute resolution
processes under the LRA is final and binding.
[8]
It is now trite that the filing of a review application to challenge
such an award, does not stay or suspend the operation
of an
arbitration award. The arbitration award remains executable, despite
the pending review.
[13]
It is
in this context that the enforcement provisions in Section 143 of the
LRA have been adopted. It enables the beneficiary under
an
arbitration award to nonetheless, and despite the arbitration award
being the subject of challenge, to still execute and enforce
compliance with it.
[14]
The
above being the default position, the duty is then squarely upon the
applicant for review to seek relief, in terms of what is
specifically
provided for in Section 145, to stay or suspend the execution of the
arbitration award pending the conclusion of the
applicant’s
review application. In other words, the review applicant must go out
and secure the stay or suspension of the
award, failing which the
arbitration award will always remain executable and enforceable.
[15]
The
design of Section 145 of the LRA is specific. It provides that
a stay or suspension of execution or enforcement can either
be in
effect purchased by way of security, or obtained by leave of this
Court.
[16]
The
purchasing of suspension of execution or enforcement of the award,
for the want of a better description, is done in terms of
Section
145(7) of the LRA. The Section provides as follows:
‘
The
institution of review proceedings does not suspend the operation of
an arbitration award, unless the applicant furnishes security
to the
satisfaction of the Court in accordance with subsection (8).
’
In
turn Section 145(8) provides:
‘
Unless
the Labour Court directs otherwise, the security furnished as
contemplated in subsection (7) must-
(a)
in
the case of an order of reinstatement or re-employment, be equivalent
to 24 months' remuneration; or
(b)
in
the case of an order of compensation, be equivalent to the amount of
compensation awarded.
’
[17]
Section
145(7) however does not prescribe how or in what form this security
must be provided.It simply provides that this security
must be to the
satisfaction of the Court. One must therefore consider what would be
security that is satisfactory to the Court.
In
Moqhaka
Local Municipality v Motloung and Others
[9]
The Court held:
‘
On
a plain reading of the phrase ‘unless the applicant furnishes
security to the satisfaction of the Court’ in s 145(7),
the
reference to ‘the Court’ is obviously a reference to the
‘Labour Court’ in s 145 (8) which is entrusted
with
deciding whether or not the amount of security stipulated in s 145
(8)(a) and (b) needs to be provided. Moreover, the form
which the
security provided under either of those subsections must take is not
prescribed by the LRA. Although the furnishing of
a bond of security
may be the typical and most convenient form of security, other forms
of security might also be considered satisfactory,
such as depositing
funds with the sheriff.
’
[18]
Accordingly,
security can be provided in the form of a payment into Court or the
Sheriff’s trust account. Further, the issuing
of a security
bond by a legal practitioner or a registered banking institution
would also qualify as the requisite providing of
security.
[10]
The reason for this is that such bonds are normally issued against
actual funds dedicated or set aside for that very purpose, and
for
the specific sum of money recorded in the bond document itself.
Further, the person or entity that issued the bond can be held
accountable himself, herself or itself, directly, in terms of it.
The common denominator of all these forms of security is
that they
sound in a specified and secured cash amount. In my view, the
reference to ‘
security
to the satisfaction of the Court
’
in
Section 145(7) relates to the form in which the security is provided,
which must satisfy the Court. On this basis, I conclude
that any of
these forms of security sounding in a specified and secured cash
amount, as summarized above, would as a matter of
general application
be considered to be ‘satisfactory’ as contemplated by
Section 145(7).
[19]
Other
forms of security can however also be provided, but in these cases
the Court would have to be satisfied on an individual case
by case
basis that it is satisfactory. An example of this would be if a
movable or immovable asset is put up as security.
In such
a case, the value would have to be determined so as to ascertain
whether it would satisfy the amount specified in Section
145(8).
So if an applicant for example puts up its stamp collection as
security, it must be decided if it covers the amount
required and how
this asset must be secured so as to serve as security. In
Emfuleni
Local Municipality v SAMWU obo Mokoena and Others; In re: Emfuleni
Local Municipality v South African Local Government
Bargaining
Council ('SALGBC') and Others
[11]
the Court considered whether the security provided in the form of a
resolution of a municipal council under section 48(2)(h) of
the MFMA
constituted security to the satisfaction of the Court in terms of
Section 145(7), and held:
‘…
The
real question is whether the resolution of the Council and the
declaration by the financial officers is sufficient. In my view,
as
long as the amount is contained as a line item in the applicant’s
current annual budget and until such time as the review
application
is determined, together with the resolution (provided it is not
revoked), ought to be sufficient guarantee of payment.
’
[20]
Once
such satisfactory security has been provided, the next question to be
answered is what must be done in order to give practical
effect to
the suspension of execution or enforcement of the award. The
difficulty in this respect was recognized by Lagrange
J in
Moqhaka
Local Municipality
[12]
where the learned Judge said:
‘
Typically,
security is often only provided when the applicant is compelled to
bring an urgent application to stay the execution
of a writ and the
security tendered is then placed before a judge in court when the
urgent application is considered. The facts
of this case are somewhat
unusual in that normally if a party has lodged security in the form
of a security bond issued by the
applicant’s attorney of
record, as in this case, the employee party seeking to enforce the
award will not take any further
steps to do so, in the realisation
that in all probability the court will accept the form of security
provided. The difficulty
for an applicant on review is that until the
court has made a ruling under s 145(7) to the effect that it is
satisfied that the
security provided meets the requirements of s
145(8), in the absence of an undertaking from the employee party that
no further
steps will be taken to enforce the award in the light of
the security provided, the applicant has no guarantee that it will
not
be surprised by a sheriff arriving at its premises to execute the
deemed writ. Unless an alternative procedure is developed, an
applicant who cannot secure the agreement of the employee party not
to attempt to enforce the award once security has been lodged,
will
have little option but to approach the court as the applicant did in
this case …
’
[21]
Whilst
I agree with most of what is said by Lagrange J,
supra
,
it is however my view that it is not contemplated by the phrase ‘to
the satisfaction of the Court’ that the Labour
Court must on
each and every individual occasion decide what provision of security
is satisfactory and declare it as such.
This would in my view
defeat one of the important objectives of introducing Sections 145(7)
and (8), which is to limit the excessive
amount of stay applications
this Court is inundated with. The simple point is that if a security
bond by an attorney, for example,
is provided for the exact
prescribed amount in Section 145(8)(a), then why should it be
necessary for this Court to declare it
to be satisfactory,
considering, as Lagrange J himself points out, that a stay order
should normally be granted on this basis alone.
If the Labour Court
still needs to be approached every time a review applicant applies
Sections 145(7) and (8) as they stand, then
there would be no need
for Section 145(3). In my view, the idea / principle behind the
introduction of Section 145(7) and (8) was
to secure an automatic
suspension of the enforcement or execution of an arbitration award,
on the proviso that the actual specified
security, in acceptable
form, is provided.
This
is the only interpretation that makes logical sense.
[13]
In
Qubekela
Properties CC v Mokoena and Another
[14]
the Court held:
‘
It
followed therefore that once the issue of security was attended to in
view of the pending review application, the writ of execution
had to
be stayed in accordance with the provisions of section 145 (7) of the
LRA. Thus any benefit arising from the award remained
suspended. It
therefore served no purpose for the First Respondent to have pursued
the execution of the writ in the manner he had.’
[22]
What
then remains is really an issue of practical process. Lagrange
J records that an alternative procedure needs to be developed
in this
respect. I cannot agree more. But I do not think that this
means that it is an imperative that some or other formal
rule or
legislative change be adopted. After all, it is the function of this
Court to interpret and apply the LRA, and this then
serves as a
precedent to all parties using the LRA, on what to do. This Court can
competently, by way of judgments, decide what
forms of security would
be satisfactory, and in my view, these are of the kinds as I have set
out above. Once security in
such forms are provided, it is the
act of providing the prescribed security that effectively suspends
the execution or enforcement
of the award. In my view it not
necessary for this Court to actually make an order staying or
suspending execution, if such
security is provided.
[23]
In my
view, the application of a simple process, can give effect to the
above. This process would be the serving and filing
of a bond
document. The bond document specifies the amount and form of
the security provided, and that it is provided in
terms of Sections
145(7) and (8). This bond document must be filed in the Court file
relating to the review application. It must
be served on the other
parties to the review application, so they are made aware this has
been done. This would serve as proof
of security as contemplated by
Sections 145(7) and (8)
[15]
,
and should then avoid further steps in execution being taken by a
beneficiary in terms of the award. If a beneficiary under an
arbitration award nonetheless proceeds with execution necessitating
this Court having to be approached on the basis of urgency
to give
effect to what has in reality already happened (the suspension of
enforcement by filing the bond), then that beneficiary
should be
punished by way of an adverse costs order.
[16]
That way the right message will eventually get through to everyone
participating in the LRA dispute resolution process as
to what is the
appropriate course of action.
[24]
In
summary therefore, and where the requisite security is provided in
terms of Sections 145(7) and (8) in the actual prescribed
amount,
suspension of the award follows, and execution or enforcement of the
award is not competent for as long as the review application
persists
and remains undecided / undetermined.
[25]
This
does not leave a beneficiary in terms of the award exposed and
unprotected and at the mercy of the review applicant where it
comes
to a delay in the prosecution of the review application to finality.
If the prosecution of the review is unnecessarily delayed,
it would
be up to the beneficiary under the award to have the review disposed
of on the basis of a failure of timeous prosecution
of the same, as
specifically provided for in terms of the Labour Court Rules
[17]
and the Practice Manual
[18]
.
The beneficiary under the award can also bring an application to the
Labour Court to dismiss the review based on the maxim
'vigilantibus
non dormientibus lex subvenit'
.
[19]
Once the review is disposed of and the applicant was unsuccessful,
execution or enforcement is immediately competent and
the security
provided can in fact be claimed by the beneficiary under the award.
[26]
Where
an applicant for review does not wish to ‘purchase’
suspension of the execution or enforcement of the award, so
to speak,
then the applicant must secure a stay or suspension of execution or
enforcement of the award from this Court. This
is done by way
of an application under Section 145(3), which reads:
‘
The
Labour Court may stay the enforcement of the award pending its
decision’
The
application can be brought in the normal course, or as one of
urgency, provided the requirements for urgency have been satisfied.
[27]
The
Court’s powers under section 145(3) would extend to any kind of
enforcement of arbitration awards, and would include the
recent writs
of enforcement issued by the CCMA itself and sent to the various
Sheriffs for execution. As held in
MBS
Transport
[20]
:
‘…
Section
145(3) is clear. The enforcement of an arbitration award may be
stayed by the Labour Court. The section has no qualification
or
limitation. The enforcement of any arbitration award issued in terms
of the Act may be stayed by the Labour Court. Therefore,
the
enforcement of a certified award which is deemed to be an order of
the Labour Court in respect of which a writ was issued may
be stayed
by the Labour Court pending its decision. The Labour Court may
therefore stay the enforcement of an award pending its
decision in
the review application
.’
[28]
The
Labour Court, in an application as contemplated by Section 145(3),
exercises a discretion as to whether to grant a stay or suspension
of
execution or enforcement of the award, which discretion must be
exercised judicially on the basis that real or substantial justice
requires such stay or suspension. In
Robor
(Pty) Ltd (Tube Division) v Joubert and Others
[21]
the Court held:
‘…
The
discretion to stay execution must be exercised judicially, but
generally speaking a court will grant a stay of execution where
real
and substantial justice requires it or, put differently, where
injustice would otherwise be done.
The
discretion is a wide one. It is founded on the court’s power to
control its own process. Grounds on which a court may
choose to stay
execution include that the underlying cause of action on which the
judgment is based is under attack, and that execution
is being sought
for improper reasons. But these are not the only circumstances in
which the court will exercise the power …
’
Other
factors identified by the Court in
Robor
for consideration are whether the underlying challenge to the
arbitration award was bought in time, the parties’ interest
in
finality,
the
cost to all parties of a delay in finality or of instituting or
opposing further proceedings, and the risk of injustice being
done to
the less powerful party to the dispute.
[22]
[29]
The
Court may also impose, in exercising such discretion, whatever
conditions it may deem appropriate. The Court may even determine
that
the stay or suspension would only apply for a specified period of
time, and then lapse. This being said, the Court should
always
bear in mind the security requirements in Sections 145(7) and (8) of
the LRA, when exercising its discretion, which I will
specifically
elaborate on hereunder.
[30]
Another
consideration in the Labour Court exercising its discretion whether
or not to stay or suspend the execution or enforcement
of the award
is that of having regard, on a
prima
facie
basis, of the prospects of success of the review application on the
notice of motion and founding affidavit in the review application,
as
it stands. It is not necessary to decide whether the case advanced in
the review application has merit or not. All that
is necessary
to consider is whether this case, should it be substantiated when the
matter ultimately comes up for hearing, could
sustain a successful
review.
[23]
[31]
It is
clear, in my view, that the Labour Court, when exercising its
discretion as contemplated by Section 145(3) of the LRA, would
be
entitled to reduce the quantum of security a review applicant needs
to provide, or even dispense with it all together.
In
Free
State Gambling and Liquor Authority v Commission for Conciliation,
Mediation and Arbitration and Others; Free State Liquor
and Gambling
Authority v Motake No and Others
[24]
the Court held:
‘
Accepting
that a proper, constitutionally compliant reading of s 145(7) should
allow that the court may decide whether a litigant
is compelled to
put up security or not, the phrase 'Unless the Labour Court directs
otherwise' in s 145 (8), should be read widely
to mean that unless
the court directs an exemption from the provision of security, or
directs that security is to be paid in a
lesser amount than those
amounts set out in s 145 (8)(a) and (b).’
I
agree with these sentiments.
[32]
However,
a proper case must always be made out by the applicant, in seeking to
dispense with the requirement of providing security,
which would form
the basis upon which such a discretion might be exercised. In
simple terms, the default position must be
that the Labour Court will
require security to be provided as prescribed by Section 145(7) and
(8) as a condition for any stay
or suspension order being granted by
the Court, unless the applicant can show good and proper cause in the
application why this
should not be the case.
[25]
[33]
Good
cause in the context of motivating a departure from the security
provisions prescribed in Section 145(7) and (8) would involve
a
proper explanation why this request should be entertained, with
particular emphasis on any material prejudice the applicant may
suffer if it is not granted this relief. I will illustrate the
point by way of an example. A small manufacturing business
with 20
employees dismisses 10 employees for group misconduct. A CCMA
commissioner then reinstates all these employees. The required
security would be 24 months’ salary for each of these 10
employees, which would in effect wipe out the entire operating cash
flow of the undertaking for several months. This is the kind of
prejudice I am referring to. Simply described, the explanation
cannot
be that it will be hard to set security, but the explanation must be
that it would be unduly onerous and harmful to be required
to set the
prescribed security. By comparison, albeit in the context of dealing
with urgency, the Court in
Harley
v Bacarac Trading 39 (Pty) Ltd
[26]
said:
‘
If
an applicant is able to demonstrate detrimental consequences that may
not be capable of being addressed in due course and if
an applicant
is able to demonstrate that he or she will suffer undue hardship if
the court were to refuse to come to his or her
assistance on an
urgent basis, I fail to appreciate why this court should not be
entitled to exercise a discretion and grant urgent
relief in
appropriate circumstances. Each case must of course be assessed on
its own merits.’
[34]
This
then brings me neatly back to the judgment in
Free
State Gambling
.
This judgment was relied on by the applicant from the outset of its
intended challenge to the award. Even before bringing
its
review application, and in an e-mail dated 28 October 2016, the
applicant informed the third respondent’s attorneys that
it was
exempted from providing security based on this judgment. The
applicant contends that this judgment is supportive of
its view that
the application of the provisions of the MFMA in effect exonerated
the applicant from providing security. The Court
in
Free
State Gambling
[27]
dealt with the Public Finance Management Act (‘PFMA’)
[28]
and held:
‘…
The
applicant submits that the provision of security is contrary to the
provisions of s 66 of the PFMA, and to comply with those
provisions
and the requisite treasury regulation would mean that a notice would
have to be gazetted by the Minister of Finance
each time such a
'borrowing' is permitted. It is submitted that this is
impractical. I would add that it is also unnecessary.
In
my judgment, in applications such as these, where the applicant's
budget and financial management are governed by the PFMA and
Treasury
Regulations, and duly authorised averments are made to this effect,
the object of providing security is satisfied. The
respondent
employees in these applications are safeguarded if the awards in
question are ultimately upheld, as is an employee in
the private
sector whose private sector employer provides a security bond in an
application in terms of s 145(7 ) and (8).
’
[35]
I am
mindful of the fact that the
principle
of
stare
decisis
applies in the Labour Court, which means that I am bound by the
judgment in
Free
State Gambling
unless I am of the view that it is ‘clearly wrong’.
[29]
[36]
In my
view, and respectfully, insofar as the judgment in
Free
State Gambling
could be construed and applied as a precedent to the effect that
public service entities subject to the provisions of the PFMA
or
related legislation are exempt / exonerated from providing security
under Section 145(7) and (8), this would clearly be wrong.
I can see
no reason why all employers, whether in the public service or the
private sector, should not be subject to the same requirement
of
providing security under Sections 145(7) and (8) of the LRA. In
Pardesi
[30]
the Court declined to express a firm view on the correctness or
otherwise of the decision in
Free
State Gambling
,
but did comment as follows on the judgment:
‘…
The
applicant in the
Free
State Gambling
case
sought exemption from furnishing security on the basis that sections
145(7) and (8) were in conflict with s 66 of the PFMA.
The
Free
State Gambling
judgement is not authority for the proposition that all departments
of state or other entities subject to the PFMA do not have
to furnish
security. There are no facts before me that enable me to exercise a
discretion to order that security should not be
furnished. The
default position must therefore apply. That being so, the provisions
of s 145 (7) prevail, i.e. the institution
of review proceedings does
not suspend the operation of the arbitration award.
’
[37]
Insofar
as it can be said that the application of Sections 145(7) and (8) is
in conflict with the PFMA or the MFMA or any kind of
related
legislation, where it comes to government departments or
municipalities or similar public service entities, then the simple
answer is that in terms of Section 210
[31]
of the LRA, the LRA must prevail. In
City
Power (Pty) Ltd v Grinpal Energy Management Services (Pty) Ltd and
Others
[32]
the Court dealt with the Local Government: Municipal Systems Act
[33]
,
an Act related to the MFMA, and in particular with the contention
that it was in conflict with the LRA. The Court specifically
relied on Section 210 of the LRA and held:
[34]
‘…
What
it means in this context is that the provisions of the LRA prevail
over the Municipal Systems Act in employment matters. …
’
The
same consideration should equally apply to any conflict between the
LRA and the MFMA.
[38]
It
should also not be left out of the equation what one of the important
considerations for the introduction of Sections 145(7)
and (8) was.
In my view, and unashamedly, these provisions have as an objective to
discourage review applications that have
little prospects of
success.
[35]
This objective came about as a result of an approach that developed,
often in the case of employers in the public service,
to review
arbitration awards even if the review application had little merit,
especially considering the fairly stringent review
test that
currently prevails
[36]
,
solely for the purposes of obstruction or delay or to give effect to
a desire not to comply. This meant that the Labour Court
became
inundated with review applications which often have no merit, to the
detriment of expeditious dispute resolution.
It is envisaged
that if a review applicant has to in effect commit money to the
review application, up front, such an applicant
may think twice about
proceeding with the review, and this reconsideration could have the
potential effect of limiting review applications,
and especially
those frivolous or obstructive ones.
[39]
The
necessity of having to pay security may also serve to motivate review
applicants to prosecute their review applications with
expedition.
After all, and once the review application is disposed of and should
the review applicant succeed, it can have
its security back. It is
common sense that any applicant would want to have this happen as
soon as possible.
[40]
In my
view, the objective referred to above may very well be best applied
in the case of review applications by government departments
or
municipalities and related institutions. Often, litigation is
conducted by functionaries at lower levels, so to speak, in these
entities, without the evaluation of the matter at senior management
level. But considering the strict statutory regulation that
exists
where it comes to paying out money, the requirement of setting
security may well bring the matter to the attention of responsible
senior management, who would be compelled not to commit such funds
unless they are satisfied that the review application has prospects
of succeeding. Again, this could potentially reduce the instances of
such kind of litigation and may well service to avoid further
wasteful expenditure in litigation that has little hope of success.
[41]
In
the end, the provisions of the PFMA, MFMA and related legislation,
cannot serve as a basis to exonerate any government departments
or
municipalities or like public service entities, as employers, from
having to provide security under Sections 145(7) and (8)
of the LRA,
in order to secure a stay or suspension of the execution or
enforcement of an arbitration award, pending a review application
brought. If these kind of employers want this Court to exercise a
discretion where it comes to the issue or reducing or even dispensing
with security when deciding to grant a stay or suspension of the
execution or enforcement of an arbitration award, then a proper
case
must be made out in line with what I have set out in this judgment,
above, just like any other employer would have to do.
Conclusion
[42]
In
this instance, the applicant has elected not to ‘purchase’
suspension of the execution of the award by simply applying
Sections
145(7) and (8) of the LRA. The applicant has rather elected to
approach this Court to exercise a discretion in terms
of Section
145(3) of the LRA. In exercising this discretion, I am
satisfied that the applicant, as a matter of principle,
has made out
a case that the execution and enforcement of the award be stayed, as
prayed for in the notice of motion. There is
a proper review
application pending, timeously brought, which has been expeditiously
prosecuted, and which on face value on the
issues raised could lead
to the setting aside of the award if upheld. I am of the view that it
would be inequitable and unfair
to enforce and execute the award now,
whilst this review application has still not been determined, and
real justice demands that
the award be stayed until the review has
been decided. Any prejudice to the third respondent is ameliorated by
the requirement
of security, which I will next address.
[43]
I am
not satisfied that the applicant has made out a case justifying the
relief that the applicant be exonerated from the providing
of
security. To simply rely on the provisions of the MFMA which
makes it, according to the applicant, hard to provide security,
is
entirely insufficient. As I have also said, and insofar as the
applicant sought to rely on the
Free
State Gambling
judgment as a basis for a blanket exoneration, that judgment is in my
respectful view, wrong, in this respect. There is no
reason in
this instance why the applicant should not be required to furnish
security as stipulated in Section 145(8) of the LRA,
as a condition
for securing a stay / suspension of enforcement.
[44]
The
award was for the reinstatement of the third respondent. In terms of
Section 145(8)(a), it is stipulated that the amount of
security
required is 24 (twenty four) months’ salary. Therefore the
amount that must be provided as security is a total sum
of
R402 210.96, considering the third respondent’s monthly
salary of R16 758.79.
[45]
The
third respondent has asked for security to also include the 13
months’ salary in back pay as quantified by the second
respondent in his amendment award of 20 January 2017. I however
cannot agree that this should be case. Section 145(8)(a)
provides for prescribed security of 24 months’ salary in the
case of a reinstatement award. This would include any amount
in back
pay due, which is nothing else but a component of and part of the
reinstatement award.
[37]
Back pay in terms of a reinstatement award is also not
compensation
[38]
,
and thus the provisions of Section 145(8)(b) cannot also apply. The
applicant accordingly does not have to provide security for
this
additional amount of 13 months’ salary (amounting to
R271 684.27).
[46]
Considering
the conclusion I have come to above, the third respondent’s
counter application under case number J 864 / 17,
which is still
pending, falls to be dismissed.
[47]
This
only leaves the issue of costs. I have a wide discretion where it
comes to the issue of costs, having regard to the provisions
of
Section 162(1) of the LRA. In this instance, I believe a costs order
would not be appropriate. The applicant was after all mostly
successful in its application, which was opposed by the third
respondent on all fronts. I also believe that it was not unreasonable
for the applicant to have relied on the judgment in
Free
State Gambling
in the manner that it did The third respondent has already
received all its costs in the earlier, and abortive proceedings.
It
should also not be overlooked that this matter concerned an important
legal principle. I believe that no order as to costs is
appropriate
in this instance.
Order
[48]
For
all of the reasons as set out above, I make the following order:
1.
The
execution and/or enforcement of the arbitration award of the second
respondent dated 24 October 2016 and issued under case number
NWD
111501, as amended on 20 January 2017, is suspended / stayed pending
the finalization of the applicant’s review application
under
case number JR 2441 / 16.
2.
The
execution of the writ of enforcement dated 7 March 2017 and issued
under case number HO 881 – 17, is stayed / suspended
pending
the finalization of the applicant’s review application under
case number JR 2441 / 16.
3.
The
suspension / stay granted in terms of paragraphs 1 and 2 of this
order is conditional upon the applicant providing security
in the
amount of R402 210.96, within 30(thirty) Court days of date of
this order, failing which the order in paragraphs 1
and 2 shall
automatically lapse.
4.
The
third respondent’s counter application under case number J 864
/ 17 is dismissed.
5.
There
is no order as to costs.
_____________________
S Snyman
Acting
Judge of the Labour Court
Appearances:
For the Applicant: Adv X Mofokeng
Instructed by: Majang Attorneys
For the Third Respondent: Adv A Tema
Instructed by: De Swart Vogel Myambo
Attorneys
[1]
Act 66 of 1995.
[2]
These amendments were adopted by way
of the
Labour
Relations Amendment Act 6 of 2014
,
and became effective on 1 January 2015.
[3]
See
Commission
for Conciliation, Mediation and Arbitration v MBS Transport CC and
Others; Commission for Conciliation, Mediation and
Arbitration v
Bheka Management Services (Pty) Ltd and Others
(2016) 37
ILJ
2793 (LAC)
at
paras 29 – 30
[4]
Act 56 of 2003
[5]
The clause reads:
‘A review application is by its nature an urgent application.
An applicant in a review application is
therefore required to ensure
that all the necessary papers in the application are filed within
twelve (12) months of the date
of the launch of the application
(excluding heads of argument) and the registrar is informed in
writing that the application
is ready for allocation for hearing.
Where this time limit is not complied with, the application will be
archived and be regarded
as lapsed unless good cause is shown why
the application should not to be archived or be removed from the
archive’.
[6]
See
Baur
Research CC v Commission for Conciliation, Mediation and Arbitration
and Others
(2014)
35 ILJ 1528 (LC) at para 18;
Chabalala
v Metal and Engineering Industries Bargaining Council and Others
(2014)
35 ILJ 1546 (LC) at para 13;
Naraindath
v Commission for Conciliation, Mediation and Arbitration and Others
(2000)
21 ILJ 1151
(LC)
at para 27;
ZA
One (Pty) Ltd t/a Naartjie Clothing v Goldman No and Others
(2013)
34 ILJ 2347 (LC) at para 37. The judgment was referred to with
approval in
Satani
v Department of Education, Western Cape and Others
(2016) 37 ILJ 2298 (LAC) at paras 21 – 22. See also
Deutsch
v Pinto and Another
(1997)
18 ILJ 1008 (LC) at 1011 and 1018;
Van
Rooy v Nedcor Bank Ltd
(1998)
19 ILJ 1258 (LC) at para 17
[7]
See
SA
Rugby Players Association and Others v SA Rugby (Pty) Ltd and Others
(2008)
29
ILJ
2218
(LAC)
at paras 39 – 40;
Trio
Glass t/a The Glass Group v Molapo NO and Others
(2013)
34
ILJ
2662 (LC) at para 22;
Asara
Wine Estate and Hotel (Pty) Ltd v Van Rooyen and Others
(2012)
33
ILJ
363 (LC) at para 23;
Hickman
v Tsatsimpe NO and Others
(2012)
33
ILJ
1179 (LC) at para 10;
Protect
a Partner (Pty) Ltd v Machaba-Abiodun and Others
(2013)
34
ILJ
392 (LC) at paras 5–6;
Gubevu
Security Group (Pty) Ltd v Ruggiero NO and Others
(2012)
33
ILJ
1171 (LC) at para 14;
Workforce
Group (Pty) Ltd v CCMA and Others
(2012)
33
ILJ
738
(LC)
at para 2;
Stars
Away International Airlines (Pty) Ltd t/a Stars Away Aviation v Thee
NO and Others
(2013)
34
ILJ
1272
(LC) at para 21
[8]
See Section 143(1)
which reads: ‘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 in respect of which a writ has been issued …’
[9]
(2017) 38 ILJ 649
(LC) at para 25.
[10]
Lambons
(Pty) Ltd t/a Lambons Peugot (Pty) Ltd v Barker and Others
[2017] ZALCJHB 124 (25 April 2017) at para 4.
[11]
[2017] ZALCJHB 143
(3 May 2017) at para 14.
[12]
(
supra
)
at para 27.
[13]
See
Natal
Joint Municipal Pension Fund v Endumeni Municipality
2012
(4) SA 593
(SCA)
at
para 18;
Bothma-Batho
Transport (Edms) Bpk v S Bothma en Seun Transport (Edms) Bpk
2014
(2) SA 494
(SCA) at para 12.
[14]
[2016] ZALCJHB 422
(8 November 2016) at para 11.
[15]
See
Moqhaka
Local Municipality
(
supra
)
at para 32.
[16]
As in fact took place in
Moqhaka
Local Municipality
(
supra
)
at paras 33 and 38. See also
Qubekela
Properties
(
supra
)
at para 17.
[17]
Rule 11 can be
used for this purpose – for the most recent judgments in this
regard see
Toyota
SA Motors (Pty) Ltd v Commission for Conciliation, Mediation and
Arbitration and Others
(2016) 37 ILJ 313 (CC) at paras 25 and 46;
Mantshiyane
v Kopanong Local Municipality and Others: In re Kopanong Local
Municipality v Mantshiyane and Others
(2016) 37 ILJ 1695 (LC) at paras 9 – 10;
MJRM
Transport Services CC v Commission for Conciliation, Mediation and
Arbitration and Others
(2017) 38 ILJ 414 (LC) at para 20.
[18]
In terms of Clause
11.2.2 and 11.2.3 the review application shall be deemed to be
withdrawn if the record is not filed within
60 days after the
registrar advised the applicant that it is available. Clause
11.2.7, quoted above, provides that the
review application will be
archived and considered to have lapsed if not ready for hearing
within 12 months of having been brought.
[19]
See
3G
Mobile (Pty) Limited v Raphela NO and Others
[2014] JOL 32479
(LC) at para 38 and authorities cited there. See also
BP
Southern Africa (Pty) Ltd v National Bargaining Council for the
Chemical Industry and Others
(2010)
31 ILJ 1337 (LC) at para 10;
Karan
t/a Karan Beef Feedlot and Another v Randall
(2009)
30 ILJ 2937 (LC) at para 14.
[20]
(
supra
)
footnote 3 at para 40.
[21]
[2009] 8 BLLR 785
(LC) at para 10 – 11. See also
Chillibush
Communications (Pty) Ltd v Gericke and Others
(2010) 31 ILJ 1350
(LC) at para 18.
[22]
See
Robor
(
supra
)
at para 16;
Cape
Clothing Association v De Kock No and Others
(2013) 34 ILJ 1957
(LC) at para 9.
[23]
Robor
(
supra
)
at para 16.
[24]
(2015) 36 ILJ 2867
(LC) at para 4.4.
[25]
National Dept
of Health v Pardesi and Another
[2016] ZALCJHB 492 (12 September 2016) at para 6.
[26]
(2009)
30 ILJ 2085 (LC)
at
para 8.
[27]
(
supra
)
at paras 5 – 6.
[28]
Act 1 of 1999.
[29]
Public Servants
Association on behalf of Liebenberg v Department of Defence and
Others
(2013) 34 ILJ 1769 (LC) at para 22;
SA
Transport and Allied Workers Union and Another v Garvas and Others
(2012)
33 ILJ 1593 (CC) at para 114;
Gcaba
v Minister for Safety and Security and Others
(2009)
30 ILJ 2623 (CC) at para 58;
Chizunza
v MTN (Pty) Ltd and Others
(2008) 29 ILJ 2919 (LC) at para 7;
National
Education Health and Allied Workers Union v University of Cape Town
and Others
(2003) 24 ILJ 95 (CC) at para 26;
National
Union of Metalworkers of SA v Commission for Conciliation, Mediation
and Arbitration and Others
(2000)
21 ILJ 1634 (LC) at para 22;
Eskom
v Hiemstra NO and Others
(1999) 20 ILJ 2362 (LC) at para 17;
United
Transport and Allied Trade Union/SA Railways and Harbours Union and
Others v Autopax Passenger Services
(SOC)
Ltd and Another
(2014) 35 ILJ 1425 (LC) at para 55.
[30]
(
supra
)
footnote 25 at para 6.
[31]
The Section reads: ‘
(1)
If any conflict, relating to the matters dealt with in this Act,
arises between this Act and the provisions of any other law
save the
Constitution or any Act expressly amending this Act, the provisions
of this Act will prevail’.
[32]
(2015) 36 ILJ 1423
(CC).
[33]
Act 32 of 2000.
[34]
Id at para 30.
[35]
Emfuleni Local
Municipality
(
supra
)
at para 14.
[36]
See
Sidumo
and Another v Rustenburg Platinum Mines Ltd and Others
(2007) 28 ILJ 2405
(CC) at para110;
Herholdt
v Nedbank Ltd and Another
(2013)
34
ILJ
2795 (SCA)
at
para 25;
Gold
Fields
Mining
South Africa (Pty) Ltd (Kloof Gold Mine) v Commission for
Conciliation, Mediation and Arbitration and Others
2014)
35 ILJ 943 (LAC) at para 14. The
Gold
Fields
judgment was followed by the LAC itself in
Monare
v SA Tourism and Others
(2016) 37 ILJ 394 (LAC) at para 59;
Quest
Flexible Staffing Solutions (Pty) Ltd (A Division of Adcorp
Fulfilment Services (Pty) Ltd) v Legobate
(2015) 36 ILJ 968 (LAC) at paras 15 – 17;
National
Union of Mineworkers and Another v Commission for Conciliation,
Mediation and Arbitration and Others
(2015) 36 ILJ 2038 (LAC) at para 16.
[37]
Equity Aviation
Services (Pty) Ltd v Commission for Conciliation, Mediation and
Arbitration and Others
(2008)
29 ILJ 2507 (CC) at para 40;
De
Beer v Minister of Safety and Security and Another
(2013) 34 ILJ 3083 (LAC) at para 27;
Themba
v Mintroad Sawmills (Pty) Ltd
(2015) 36 ILJ 1355 (LC) at para 23.
[38]
See
Equity
Aviation Services
(
supra
)
at para 42;
Republican
Press (Pty) Ltd v Chemical Energy Paper Printing Wood and Allied
Workers Union and Others
(2007) 28 ILJ 2503 (SCA) at para 19;
Msikinya
v General Public Service Sectoral Bargaining Council and Others
(2016) 37 ILJ 1457 (LC) at para 12.