Seriti Coal (Proprietary) Limited v National Union of Metalworkers obo Moyake and Others (J1425/18) [2018] ZALCJHB 178 (11 May 2018)

80 Reportability

Brief Summary

Execution — Writ of execution — Urgent application to set aside writ — Claim for back pay not covered by reinstatement order — Applicant sought to set aside a writ of execution for back pay due to an employee following a reinstatement order, arguing that the claim arose from a separate cause of action and was not part of the reinstatement. The court held that the writ was defective as the period between the award and implementation was not covered by the reinstatement order, thus setting aside the writ of execution.

Comprehensive Summary

Summary of Judgment


1. Introduction


This matter concerned an urgent application in the Labour Court to set aside a writ of execution and to stay execution flowing from an arbitration award. The applicant was Seriti Coal (Proprietary) Limited (the employer). The first respondent was the National Union of Metalworkers of South Africa (NUMSA), acting on behalf of its member, Mr Kholisile William Moyake (the employee). The remaining respondents were the Commission for Conciliation, Mediation and Arbitration (CCMA), Commissioner Smith N.O., and the Sheriff of Sasolburg.


The procedural history began with an unfair dismissal dispute arbitrated at the CCMA, resulting in an award dated 15 April 2013 ordering reinstatement without an order of back pay. The employer pursued review proceedings in the Labour Court (which were dismissed), sought leave to appeal (refused), and pursued a petition to the Labour Appeal Court (dismissed on 6 December 2017). The employee ultimately returned to work in January 2018.


The immediate dispute before the Labour Court arose after NUMSA sought to enforce payment of remuneration for the period between the date of the reinstatement award and the eventual implementation of reinstatement, and a writ of execution was issued (following certification steps) for that amount. The employer contended that such remuneration was not covered by the reinstatement award and that the writ was therefore defective.


2. Material Facts


Mr Moyake was employed by the applicant from December 2007. He was dismissed on 27 June 2012 following findings of misconduct relating to the employer’s Golden Safety Rules. At dismissal, he held the position of Engineering Assistant and earned a basic salary of R10 287.79 per month.


After the dismissal dispute was unsuccessfully conciliated, arbitration proceeded at the CCMA. On 15 April 2013, an arbitration award was issued finding the dismissal substantively unfair and ordering the employer to reinstate Mr Moyake to his former position on the same terms and conditions as prior to dismissal, without loss of benefits or years of service. The award directed that Mr Moyake should report for duty on 2 May 2013, and it expressly made no order regarding back pay.


The employer launched review proceedings on 18 June 2013, seeking to review and set aside the award. The review was dismissed on 18 May 2017. The employer’s application for leave to appeal was also dismissed, and the Labour Appeal Court dismissed the employer’s petition on 6 December 2017. It was common cause that Mr Moyake reported for duty in January 2018, which constituted the eventual implementation of reinstatement.


In correspondence dated 9 February 2018, NUMSA demanded payment of “back pay and lost remuneration” calculated over 57 months, i.e., remuneration allegedly lost due to the delay in reinstatement being implemented. The employer’s attorneys responded that remuneration for the period 2 May 2013 to January 2018 did not fall within the scope of the award and that, if any entitlement existed, it would arise from the revived employment contract rather than the award itself.


NUMSA indicated it would pursue certification of the award to obtain a writ of execution. On 13 March 2018, NUMSA applied to certify the award in terms of section 143 of the Labour Relations Act 66 of 1995. The employer opposed, maintaining that the amounts sought were not enforceable via the award. Thereafter, a writ of execution was issued by the registrar of the Labour Court on 13 April 2018 under case number GAJB20525-12, purportedly to recover the employee’s loss of income attributable to the delay in implementing reinstatement. A sheriff’s attendance (with documentation reflecting certification steps) demanded payment of R1 350 830.00 failing which execution would proceed, and the employer’s assets were listed in an inventory under attachment.


The employer asserted it would suffer irreparable harm if execution proceeded (including operational harm related to attached assets), and it contended that the employee’s remedy lay, if at all, in a separate contractual claim (including potentially under section 77 of the Basic Conditions of Employment Act 75 of 1997), rather than through execution on the arbitration award.


3. Legal Issues


The central legal question was whether a reinstatement award (without back pay) covers remuneration for the period between the date of the reinstatement award and the date when reinstatement is actually implemented, particularly where implementation was delayed due to the employer exhausting review and appeal processes.


A closely related issue was whether, if that period is not covered by reinstatement, there was any underlying causa or judgment debt capable of supporting a writ of execution issued pursuant to certification of the arbitration award, and consequently whether the writ was defective and liable to be set aside.


The dispute primarily concerned the application of legal principles to essentially common-cause facts, namely the content of the award (reinstatement without back pay) and the time period for which the employee sought enforcement via execution.


4. Court’s Reasoning


The court treated the matter as urgent and proceeded to determine whether the writ could stand in light of what the award actually ordered. The court relied on the Labour Appeal Court authority Coca-Cola Sabco (Pty) Ltd v Van Wyk [2015] 8 BLLR 774 (LAC) for the legal consequences of a reinstatement order and the limits of what may be recovered by execution on such an award.


Drawing from that authority, the court accepted the principle that money paid consequent to a retrospective reinstatement order is not “compensation” and that compensation and back pay are mutually exclusive. Crucially for this matter, the court adopted the Labour Appeal Court’s explanation that back pay ordered by a commissioner relates to the period between the date of dismissal and the date of the reinstatement order, and that the Labour Relations Act does not provide for payment, “without more,” of remuneration for the period between the date of the award and the actual date of implementation.


The court further accepted that where implementation is delayed and an employer refuses to pay money alleged to be due for the post-award/pre-implementation period, the dispute about that remuneration has not been judicially resolved by the reinstatement award itself. The consequence, as set out in the Labour Appeal Court authority, is that the employee’s remedy is a contractual claim (including potentially pursued in terms of section 77 of the Basic Conditions of Employment Act) which must be adjudicated before the employer can be regarded as a judgment debtor susceptible to execution for that specific claim.


Applying these principles to the award in issue, the court noted that the arbitrator ordered reinstatement and explicitly made no order regarding back pay. The writ that was issued sought to recover remuneration allegedly due for the period from the award date until January 2018 when reinstatement was implemented. The court characterised this as a period not covered by reinstatement for purposes of enforcement through the award.


On that basis, the court concluded that there was no underlying causa or judgment in the award that supported the writ for the sums sought. Without an enforceable adjudicated entitlement to that specific post-award remuneration, the writ could not properly issue on the award, and it was therefore defective and had to be set aside.


In addressing costs, the court applied the Labour Court approach of considering law and equity and determined that the circumstances did not warrant a costs order.


5. Outcome and Relief


The Labour Court set aside the writ of execution issued by the registrar of the Labour Court on 13 April 2018 under case number GAJB20525-12.


The court made no order as to costs.


Cases Cited


Coca-Cola Sabco (Pty) Ltd v Van Wyk [2015] 8 BLLR 774 (LAC).


Legislation Cited


Labour Relations Act 66 of 1995 (section 143).


Basic Conditions of Employment Act 75 of 1997 (section 77).


Rules of Court Cited


No rules of court were cited in the judgment.


Held


The court held that a reinstatement award (particularly one that makes no order as to back pay) does not entitle an employee, through execution on the award, to recover remuneration for the period between the award date and the date of actual implementation of reinstatement.


The court further held that, because the writ sought to enforce payment for a period not covered by the reinstatement order, there was no underlying enforceable judgment debt supporting the writ. The writ was therefore defective and was set aside, with no costs order.


LEGAL PRINCIPLES


The judgment applied the principle that reinstatement revives the contract of employment, and that any monetary entitlement consequent to reinstatement must be understood within the limits of what the award actually orders.


It applied the principle that back pay (where ordered) relates to the period between dismissal and the reinstatement order, and that the Labour Relations Act does not, by reinstatement alone, provide a mechanism to recover remuneration for the period between the award and implementation by way of execution on the award.


It applied the principle that where an employee seeks remuneration for the post-award/pre-implementation period and the employer disputes liability, the employee’s remedy is a separate contractual claim (including a claim that may be pursued under section 77 of the Basic Conditions of Employment Act), and only once adjudicated can it found execution as a judgment debt.

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[2018] ZALCJHB 178
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Seriti Coal (Proprietary) Limited v National Union of Metalworkers obo Moyake and Others (J1425/18) [2018] ZALCJHB 178 (11 May 2018)

IN
THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
Not
Reportable
C
ase
no: J 1425/18
In the matter between
SERITI COAL
(PROPRIETARY) LIMITED

Applicant
and
NATIONAL UNION OF
METALWORKERS
OBO KHOLISILE WILLIAM
MOYAKE

First Respondent
COMMISSION FOR
CONCILIATION, MEDIATION
AND
ARBITRATION

Second Respondent
COMMISSIONER SMITH
N.O
Third Respondent
SHERIFF OF
SASOLBURG

Fourth Respondent
Heard:
26 April 2018
Delivered:
11 May 2018
JUDGMENT
MAHOSI J
Introduction
[1]
This is an urgent application for an order to set aside the writ of
execution issued by the registrar of this Court on 13 April
2018
under case number GAJB20525-12 and to stay the execution thereof. The
writ of execution is for the recovery of the loss of
income resulting
from the
delay
in the implementation of the reinstatement order. The delay is
associated with the applicant’s review and appeal process.
[2]
The issue is whether the claim for a period between
the
date of the award and the actual date of implementation
is
covered by reinstatement. If not, whether the writ issued by the
registrar to recover such a claim is defective.
[3] I am of the view that
the matter ought to be dealt with as one of urgency.
Material background
facts
[4] The first
respondent’s member (Mr Moyake) was employed by the applicant
in December 2007 and was dismissed on 27 June
2012. At the time of
his dismissal, Mr Moyake occupied the position of an Engineering
Assistant, and he was earning a basic salary
of R10 287.79 per month.
Mr. Moyake was dismissed after being found guilty of charges relating
to breach of the applicant’s
Golden Safety Rules.
[5] Aggrieved by his
dismissal, Mr Moyake referred an unfair dismissal dispute to the
second respondent (CCMA). The dispute was
conciliated unsuccessfully
and it was then referred to arbitration. On 15 April 2013, the third
respondent (the arbitrator) issued
an arbitration award in terms of
which the following order was made:

25.
The dismissal was substantively unfair.
26.
The respondent, New Vaal Colliers must reinstate the applicant, Mr.
Moyake to his former
position, on the same terms and conditions that
existed prior to the dismissal, without the loss in benefits or years
of service.
27.
The applicant must report again for duty on 2
nd
May 2013. I make no order regarding back pay as the applicant’s
hands aren’t entirely clean in this instance either.’
[6] On 18 June 2013, the
applicant instituted an application before this Court under case
number JR 1263/2013 to review and set
aside the award. The review
application was dismissed on 18 May 2017 by Judge Cele. The
applicant’s application for leave
to appeal application was
also dismissed. The Labour Appeal Court also dismissed the
applicant’s petition on 6 December 2017.
It is common cause
that Mr. Moyake reported for duty in January 2018.
[7]
On 09 February 2018 the employee’s representatives (NUM) sent a
correspondence to the employer’s attorneys requesting
the
employer to pay the employee his back pay and lost remuneration for
57 months. On a letter dated 14 February 2018, the applicant’s

attorneys indicated that the loss of income for the period between 2
May 2013 and January 2018 does not fall within the scope of
the award
but instead arose out of the employment contract, which had been
revived by the reinstatement order in the award.
[8]
On 15 February 2018, NUM sent a letter to the applicant’s
attorneys indicating that unless the employer proposes alternative

amount to the NUM’s calculation of the amounts allegedly owed
to Mr Monyake, NUM will bring an application to certify the

arbitration award in order to recover the amount through a writ of
execution.
On
05 March 2018, the applicant sent a letter to NUM indicating that a
claim arising from the date of the award does not fall within
the
scope of the award but constitutes a separate civil contractual
claim.
[9] On 13 March 2018, NUM
brought an application to certify the award in terms of section 143
of the LRA, the employer opposed the
application on 23 March 2018.
The employer reiterated the current legal position that the claim
sought by NUM could not be enforced
through the award by way of a
writ as such a claim does not fall within the scope of the award.
[10] On 24 April 2016,
the deputy sheriff attended the premises of the employer with a
ruling dated 11 April 2018. It is apparent
that the writ had been
certified by the CCMA on 11 April 2018. The Deputy Sheriff requested
the applicant to pay an amount of R
1 350 830.00, failing which he
will execute the writ. The assets listed in the inventory cannot be
encumbered or sold by the applicant
as they are under judicial
attachment.
[11] The applicant
submits that he has no alternative remedy in law but to bring this
application. The sheriff indicated that the
inventory can only be
withdrawn and the execution of the writ can only be stayed if this
application is brought. The applicant
further submitted that the
removal of the assets and the sale on auction will cause irreparable
harm to the applicant and the business
as one of the assets in the
inventory is an ambulance used to transport the applicant’s
employees to hospital in an emergency.
According to the applicant,
there is no harm that will be suffered by NUM and Mr Moyake should
this application be granted as the
claim may be brought in terms of
section 77 of BCEA since the claim arises from Moyake’s
employment contract and not the
award.
[12] The applicant argued
that the writ of execution was improperly issued by the registrar as
the certification of the award was
made in error. The basis of the
applicant’s argument was that it has fully complied with the
award and that the first respondent’s
claim arises from a
separate cause of action.
[13] The first respondent
submitted that the applicant failed and refused to fully reinstate Mr
Moyake to the same terms and conditions
of employment as if he was
never dismissed. The first respondent further submitted that the
applicant must live with the risk it
took by taking the matter on
review because had it complied with the award it would not be in the
situation it finds itself. The
first respondent denied that the
applicant will suffer any irreparable harm, paying a debt or
execution of writ does not cause
harm more than to the person who is
prejudiced by the failure to comply with the order.
Applicable law and
analysis
[14]
The applicant
referred
this Court to the judgment of
Coca-Cola
Sabco (Pty) Ltd v Van Wyk
[1]
to
support its argument that reinstatement order only serves to revive
the contract of employment and that an employee who tenders
his or
her service, while the employee is exercising its review and appeal
remedies to exhaustion, does so in terms of the employment
contract.
In the said judgment, the Labour Appeal Court (LAC) held as follows:

[17]
The money paid to an unfairly dismissed employee consequent to a
retrospective reinstatement order is not compensation. Compensation

and back-pay may only be granted in the alternative and are mutually
exclusive.
T
he
back-pay ordered by the commissioner can therefore only refer to the
period between the date of dismissal and the date of the
order and
does not entitle an employee, without more, to remuneration between
the date of the award and the actual date of implementation.
The
Labour Relations Act does not cater for such relief.’
[15] The LAC further held
as follows:

[28]
When there is a delay in the implementation of the reinstatement
award and the employer refuses to
pay an employee money that may be
due between the period of the award and the implementation thereof,
the
lis
between
them has not been judicially resolved. It is only after a contractual
claim in the civil courts or under section 77
of the Basic Conditions
of Employment Act has been instituted and pronounced upon that it can
be said that the employer is a judgment
debtor against whom a writ
may be issued
.
The
order of reinstatement is not a judgment dealing with the consequent
damages for the breach of the contract.
[29]
The risk that an employer takes relating to the accumulated financial
burden, caused by delays in
the review and appeal process, has
nothing to do with the cause of action. The risk to the employer
remains and the rewards to
the employee would also be intact if the
claim is prosecuted properly and timeously.
[30]
In summary, a reinstatement award does not cover the period between
the award and its implementation.
Should an employer refuse to pay an
employee for the said period then the employee has a contractual
claim - which is a totally
different cause of action - against the
employer.’
[16]
In this case, the arbitrator ordered Mr. Moyake’s reinstatement
without back pay. It is clear that the writ is in respect
of
remuneration that is allegedly due to Mr. Moyake for a period between
the
date of the award and the actual date of implementation.
This
period is clearly not covered by reinstatement. Therefore, there is
no underlying
causa
or
judgment for the writ. It follows that the writ is defective and
should be set aside.
[17]
I have had regard to the issue of costs
taking
into account the requirements of law and equity, I believe this is a
matter in which there should be no order as to costs.
[18]
In the circumstances, I make the following order
Order
1.
The writ of execution issued by the registrar of this Court on 13
April 2018
under case number GAJB20525-12 is set aside.
2.
There is no order as to costs.
______________________
D
Mahosi
Judge
of the Labour Court of South Africa
Appearances:
For the Applicant

Advocate Van As
Instructed by Cliffe
Dekker Hofmeyer
For
the Respondent

Mr
Bongi Zwane (NUM Union Official)
[1]
[2015]
8 BLLR 774
(LAC)