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[2017] ZALCJHB 306
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Twilight Clothing Manufacturing (Pty) Ltd and Others v Sheriff of the Higher and Lower Courts for Qwa Free State and Others (J1779/17) [2017] ZALCJHB 306 (28 August 2017)
THE
LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
Not
reportable
Case
no: J1779/17
In
the matter between:
TWILIGHT
CLOTHING MANUFACTURING (PTY) LTD AND
26 OTHERS
Applicants
and
SHERIFF OF THE
HIGHER AND LOWER COURTS FOR
QWA FREE STATE
First Respondent
CCMA
Second Respondent
NATIONAL BARGAINING
COUNCIL FOR THE CLOTHING
MANUFACTURING
INDUSTRY NORTHERN CHAMBERS
Third Respondent
Heard:
24
August 2017
Delivered:
28
August 2017
Summary:
Urgent
application to stay writs of execution pending outcome of review
application – relief refused
JUDGMENT
MYBURGH,
AJ
Introduction
[1]
This is an
urgent application to stay the enforcement of writs of execution
pending the outcome of an application to review an arbitration
award.
[2]
The
essential background is this.
a)
The 27
applicants are employers within the clothing manufacturing sector in
Qwa Qwa. They fall within the jurisdiction of the third
respondent
(the bargaining council), and are members of the Maluti Clothing
Manufacturers’ Association.
b)
During
2016, and further to what appears to have been a single arbitration,
separate (compliance) arbitration awards were issued
against each of
the applicants in terms of which they were found to be in breach of a
clause in a collective agreement concluded
in the bargaining council
relating to the payment of an annual bonus, and ordered to make the
relevant payments. The awards vary
from between R10 000 and
R470 000 per applicant, with 17 of them being for less than
R50 000.
c)
In November
2016, separate review applications were launched in respect of 24 of
the applicants under the same case number –
JR2513/16. A review
application was not launched in respect of the 25
th
,
26
th
and 27
th
applicants. Only the review application relating to the first
applicant is part of the application papers, although it is assumed
that the papers in respect of the balance of the relevant applicants
are the same. It is claimed that the applicants have “excellent”
prospects of success on review. But on the face of it, the prospects
of success are not good, as the main complaint appears to
be no more
than that the applicants could not afford to pay the bonuses, which
seems irrelevant to the review. Furthermore, the
review application
was brought late (although not by long).
d)
To date,
the record of the arbitration proceedings under review has also not
been filed. Further to the exchange of correspondence
between the
parties after the hearing on 11 August 2017 (see below), the
bargaining council has given the applicants until early
September
2017 to identify the exact contents of the record that should be
filed.
e)
Apparently,
all the awards were certified by the CCMA and writs of execution
thereupon issued.
f)
On 21 July
2017, the first respondent (the sheriff) sought to serve and execute
the writ at the first applicant, with it thereupon
coming to light
that he is apparently in possession of similar writs in relation to
each of the other applicants.
g)
It was in
these circumstances that, on 1 August 2017, an urgent application to
stay the execution of the writs was launched, with
the matter being
enrolled for hearing on 11 August 2017. The founding affidavit is
deposed to by a director of the first applicant,
with supporting
affidavits having been filed in respect of 20 of the 26 other
applicants – no supporting affidavits have
been delivered by
the 8
th
,
13
th
,
14
th
,
15
th
,
20
th
and 23
rd
applicants. The founding affidavit says only this about the issue of
security in terms of section 145(7) of the LRA: “The
applicants
are not in a position to file any security or pay these amounts as
listed in the arbitration awards as they simply cannot
afford to pay
them.”
h)
On 11
August 2017, I postponed the matter to 24 August 2017, so as to
enable the bargaining council to file an answering affidavit
and the
applicants a replying affidavit.
i)
In its
answering affidavit, the bargaining council stressed that the
applicants have not furnished security. In their replying affidavits,
the applicants contend that section 145(7) does not apply in the
circumstances of this case, and that, insofar as it does, security
should be waived by this court because the furnishing of security
“will financially ruin the applicants”. There are
replying affidavits from the first applicant (who owes R138 000), the
seventh applicant (who owes R315 000) and the Maluti
Clothing
Manufacturers’ Association.
Relevant legal
principles
[3]
In terms of
section 145(3) of the LRA, this court may stay the enforcement of an
award pending a review. This court’s powers
under section
145(3) extend to any kind of enforcement of awards, and includes
writs issued by this court and writs of enforcement
issued by the
CCMA and sent to the sheriff for execution.
[1]
[4]
It is trite
law that that this court 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 a stay
or suspension, or put
differently that an injustice will otherwise be done.
[2]
[5]
Amongst the
factors to be considered in the exercise of this discretion are
whether the review application has
prima
facie
prospects of success, and whether it has been timeously
prosecuted.
[3]
[6]
Another key
factor in the exercise of this discretion are the security
requirements of sections 145(7) and (8).
[4]
As this court put it in
Rustenburg
Local Municipality
:
[5]
“
[32] … 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.
[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 unduly onerous and harmful to be
required
to set the prescribed security.”
Evaluation and
analysis
[7]
As a point
of departure, the application must fail in relation to: (i) the 8
th
,
13
th
,
14
th
,
15
th
,
20
th
,
and 23
rd
applicants, who have failed to deliver affidavits in support of the
application; and (ii) the 25
th
,
26
th
and 27
th
applicants who have failed to deliver a review application.
[8]
In relation
to the balance of the applicants, the method followed by the
applicants (other than the first applicant) of filing what
are
pro
forma
affidavits – which lack any real substantive content – in
support of the first applicant’s founding affidavit,
renders it
more than questionable whether each applicant has made out anything
of a case for relief. This is particularly so given
that the relief
sought in the notice of motion appears to properly relate only to the
first applicant – certainly the date
of the writ of execution
set out in the notice of motion relates only to it. Furthermore, and
this relates to all the aforesaid
applicants as well as the first
applicant, I do not believe that
prima
facie
prospects of success on review have been established. It is not
enough to baldly allege, as the applicants do, that they have
“excellent” prospects of success, without in any way
substantiating the allegation. There is then also the issue that
the
review was brought late (albeit not unduly) and that the record has
not been delivered to date – this eight months after
the review
was launched (albeit that there seems to be some issue between the
parties as to the composition of the record). For
these reasons
alone, I am disinclined to grant the application.
[9]
Over and
above this, the absence of security is an issue. To my mind, section
145(8) does not stand to be interpreted as meaning
that security only
needs to be furnished in dismissal cases. The word “compensation”
in section 145(8)(b) clearly does
not relate only to compensation for
an unfair dismissal, as contended for on behalf of the applicants in
argument. Read together
with section 145(7), which generally provides
for the furnishing of security, the term “compensation”
should, in my
view, be given a wide interpretation so as to include
any monetary award; otherwise the purpose of sections 145(7) and (8)
will
be defeated. Significantly, the arbitration in this matter was
conducted in terms of section 33A of the LRA, which regulates the
enforcement of collective agreements by bargaining councils.
Sub-section (12) thereof provides that the launching of a review by
an employer automatically suspends the obligation to pay any fine
imposed on it under sub-section (8), but nothing similar is said
in
relation to monetary compliance awards.
[10]
To my mind,
security must thus be furnished in this case in order to secure the
suspension of the operation of the award –
subject to the court
exercising its discretion to forego the requirement on good cause
shown. As appears from the passages from
Rustenburg
Local Municipality
quoted
above, in the absence of an applicant having furnished security in
terms of sections 147(7) and (8), or otherwise having
convinced this
court that there is good cause to waive the requirement, this court
will typically be disinclined to stay a writ
of execution.
[11]
Turning to
the affidavits filed of record, to my mind, the bald – and
completely unsubstantiated – allegation in the
first
applicant’s founding affidavit (repeated in the replying
affidavits) that security is unaffordable in respect of all
the
applicants is insufficient to secure the waiver of security by this
court. No financial statements – which the replying
affidavits
recorded would be handed up to court in respect of all the applicants
– were produced at the hearing. Furthermore,
many of the
amounts are not particularly substantial (17 being below R50 000).
In short, a proper case to forego security
has not been made out,
with this being an additional basis not to grant a stay of the writs
of execution in relation to all the
applicants.
[12]
The
position in relation to the seventh applicant is different. Although
a proper case was not made out on its behalf in the founding
papers,
it delivered a replying affidavit, in which it seeks to substantiate
why it cannot afford to put up security, and attaches
financial
statements in an attempt to support this contention. However, on
first principle, it is impermissible to make out a case
in reply. In
any event, the fact that the seventh respondent suffered a loss of
R125 000 as at the end of the 2017 financial
year (28 February
2017) does not, in itself, establish that it cannot now afford to put
up the required security.
[13]
At the
hearing of the matter, I invited Mr Ramdaw (who appeared for the
applicants) to reconsider whether the applicants are prepared
to
furnish security – this on the basis that it might well be a
material consideration in my determination of the application.
In
response, he stood by the pleaded position.
[14]
In the
premises, the application is dismissed with costs, which shall
include the cost of 11 August 2017.
________________________________
Myburgh, AJ
Acting
Judge of the Labour Court of South Africa
Appearances
For the applicants: A
Ramdaw of Roy Ramdaw & Associates Inc
For the third respondent:
J Apfel of Joshua Apfel Attorneys
[1]
Rustenburg Local Municipality v
South African Local Government Bargaining Council and Others
(J779/2017) [2017] ZALCJHB 261 (30 June 2017) at para 27.
[2]
Ibid
at
para 28.
[3]
Ibid
at para 30.
[4]
Ibid
at para 29.
[5]
Fn 1
supra
.