Passenger Rail Agency of South Africa SOC Ltd (PRASA) v Sheriff for the District of Goodwood and Others (C1230/2018) [2018] ZALCJHB 423 (27 December 2018)

80 Reportability

Brief Summary

Execution — Stay of execution — Application for stay of writ pending review of arbitration award — Applicant (PRASA) sought urgent relief to stay execution of an award declaring employees permanent and awarding financial compensation — Employees opposed, arguing lack of urgency and delay in application — Court found that PRASA acted promptly upon receiving the certified award, and that public interest considerations warranted a stay to prevent significant disruption to public transport services — Stay granted on grounds of potential injustice and public interest.

Comprehensive Summary

Summary of Judgment


1. Introduction


The proceedings were an urgent application in the Labour Court in which the applicant sought interim relief in the form of a rule nisi staying the execution of a writ of execution issued to enforce a certified CCMA arbitration award, pending the outcome of a pending review application. The applicant also sought the lifting of an attachment already effected by the Sheriff and an order exempting it from furnishing security under sections 145(7) and 145(8) of the Labour Relations Act 66 of 1995 (“LRA”).


The applicant was Passenger Rail Agency of South Africa SOC Ltd (PRASA). The respondents were the Sheriff for the District of Goodwood (first respondent), the Commission for Conciliation, Mediation and Arbitration (CCMA) (second respondent), Commissioner Vusimusi Landau N.O. (third respondent), and Mdluli and 164 others (fourth and further respondents), who were the employees in whose favour the arbitration award had been issued.


The procedural history, as relied upon by the court, was that the employees had pursued a dispute at the CCMA concerning their employment status and benefits under section 198B read with section 198D of the LRA. The CCMA issued an arbitration award granting relief to the employees, the award was later certified, and the Sheriff initiated enforcement steps, including compiling an inventory and attachment of PRASA’s movable assets. PRASA then launched (i) a review application (with an application for condonation for lateness) and (ii) the present urgent stay application to prevent imminent removal of attached assets.


The general subject-matter of the dispute before the Labour Court was the appropriate interim relief where an award is being executed while a review is pending, including whether the matter was urgent, whether a stay of execution should be granted, and whether PRASA should be exempted from providing security contemplated by section 145 of the LRA.


2. Material Facts


The court treated the following facts as common cause and material to the outcome. The employees referred a dispute to the CCMA in terms of section 198B read with section 198D of the LRA, seeking an order that they be regarded as deemed permanent employees and seeking financial compensation calculated from 1 April 1995 in relation to alleged salary differences, tied to the implementation of section 198B and up to the arbitration.


By the time the arbitration was heard, the employees’ employment had already been converted to permanent status in accordance with section 198B(5), with effect from 1 April 2015. On 17 July 2018, an arbitration award was issued (by Commissioner Daniel du Plessis) deeming the employees’ employment to be of indefinite duration since 1 April 2015 and granting them entitlement to membership of PRASA’s provident fund and bonuses. The award further directed PRASA to pay individual amounts reflected on a spreadsheet, totalling R35 455 140.00.


The award was certified by the CCMA on 19 September 2018. It was served for enforcement by the Sheriff on 24 October 2018. The Sheriff compiled an inventory of movable assets, including vehicles and 84 train carriages, with the inventory reflecting values used for attachment purposes.


PRASA is an organ of state as defined in section 239 of the Constitution and provides public commuter rail services, including in Cape Town. PRASA contended that it had 450 rail carriages in use and already faced a carriage shortfall due to vandalism and burning of carriages in Cape Town. PRASA relied on being subject to the Public Finance Management Act and related Treasury requirements, contending that section 66 of that framework placed restrictions on borrowing and on providing security or entering into transactions that create future financial commitments.


As to urgency, the court identified the “significant period” as between 24 October 2018 (service for enforcement) and 18 December 2018 (launch of the urgent application). PRASA’s explanation, accepted by the court, was that it attempted to obtain agreement to stay enforcement and to secure an exemption from security, that it filed and served its review application on 30 October 2018, that the employees’ attorneys ceased acting (communicated on 16 November 2018), and that there were ensuing interactions involving the CCMA and Sheriff leading to advice on 11 December 2018 that removal of attached assets was imminent. A meeting failed to materialise on 14 December 2018, and PRASA then launched the urgent application on 18 December 2018.


The employees disputed urgency and argued that PRASA delayed unduly from July to December, including that the review was late. They also contended that their instructions were to attach other movables and not the train carriages, and that PRASA’s asserted harm was essentially financial.


3. Legal Issues


The central legal questions the court was required to determine were whether PRASA had established urgency under the Labour Court rules to justify truncated time periods and immediate relief, and whether the court should grant a stay of execution of the writ pending finalisation of the review application, including the lifting of the attachment already effected.


A further central issue was whether PRASA should be exempted from furnishing security under sections 145(7) and 145(8) of the LRA despite seeking a stay pending review, and if so, on what basis and with what safeguards. This raised questions about the court’s discretion under the LRA and the proper approach where the applicant is an organ of state subject to the PFMA and Treasury prescripts, in the context of potentially competing approaches reflected in earlier Labour Court authority.


The dispute largely concerned the application of legal principles to facts, together with an evaluative component involving the court’s discretionary judgment in relation to interim relief, the interests of justice, the balance of convenience, and whether “good cause” existed to depart from the default security regime in section 145.


4. Court’s Reasoning


On urgency, the court approached the matter through the requirements of Rule 8 of the Labour Court Rules, which require an applicant to set out reasons for urgency, why urgent relief is necessary, and why ordinary time periods were not complied with. Although the award had been issued earlier and certified in September, the court accepted that PRASA was materially “jolted into action” when it was served for enforcement on 24 October 2018, and that the relevant delay assessment lay primarily between late October and mid-December. The court accepted PRASA’s explanation that it attempted to secure agreement and had to navigate shifting representation of the employees and the CCMA’s role in assisting employees with enforcement. Against the imminent removal threatened by the Sheriff, the court concluded the urgency was not self-created and condoned non-compliance with ordinary forms and service.


In addressing the stay of execution, the court applied the principles set out in Gois t/a Shakespeare’s Pub v van Zyl & Others 2011 (1) SA 148 (LC). The court treated those principles as requiring a focus on whether real and substantial justice demands a stay, whether injustice would otherwise result, and whether the underlying causa is in dispute, rather than a determination of the merits of the underlying dispute. The court accepted that a pending review application constitutes an attack on the underlying cause supporting the writ, and that the court’s enquiry is not directed at prospects of success on review. The court therefore held that it was sufficient that there was a possibility that the underlying causa might ultimately be removed by the review.


On harm and the balance of convenience, the court accepted that the case was not limited to financial prejudice. The attachment and threatened removal of operational rolling stock would, on PRASA’s version, affect public commuter services in Cape Town. The court reasoned that even if alternative assets could theoretically be attached, this did not address the broader problem because the enforcement steps implicated critical public transport assets and thus risked significant inconvenience to members of the public who rely on rail services for daily commuting. The court framed the analysis as turning materially on the interests of justice and public interest, and concluded that these considerations, together with the balance of convenience, favoured granting the stay pending the review.


The court also found that PRASA had demonstrated a well-grounded apprehension of execution at the instance of the employees, particularly given the Sheriff’s communication on 11 December 2018 that removal was imminent. The court accepted that the harm was substantially financial but held that it was necessary to consider the broader repercussions for commuters and public transport reliability.


The court then dealt at length with the contested question of security under section 145(7) and section 145(8) of the LRA. It recognised that this issue had received attention in prior Labour Court decisions, including differing emphases regarding whether public entities subject to the PFMA should be treated differently. The court cited Free State Gambling and Liquor Authority v Commission for Conciliation, Mediation and Arbitration and Others; In re: Free State Liquor and Gambling Authority v Motake N.O and Others (2015) 36 ILJ 2867 (LC) for the proposition that sections 145(7) and (8) should be read as conferring a discretion on the Labour Court to direct otherwise, including exemption or reduction of security.


The court further referred to Rustenburg Local Municipality v South African Local Government Bargaining Council and Others (2017) 38 ILJ 2596 (LC); [2017] 11 BLLR 1161 (LC), which accepted the existence of such discretion but stressed that the default position is that security should be required unless the applicant demonstrates good and proper cause for departure. Rustenburg also cautioned against treating PFMA constraints as a blanket basis for exemption and referred to section 210 of the LRA in respect of conflicts between the LRA and other legislation (including, as discussed there, reliance on City Power (Pty) Ltd v Grinpal Energy Management Services (Pty) Ltd and Others, cited without a full citation in the present judgment). The court in this matter addressed the tension between these approaches by explaining that Free State Gambling should be understood as an instance of the court’s discretion being exercised based on the specific facts and practical realities, rather than as a blanket exemption for state entities.


On the facts before it, the court accepted PRASA’s evidence that the compensation amount was not budgeted for, that its liquidity was used as working capital, and that compliance with security requirements implicated the practical constraints of section 66(3)(b) of the PFMA as described in the affidavits, including the process of seeking approvals and publication. The court reasoned that expecting PRASA to borrow or otherwise raise funds to provide security raised further practical problems, including repayment expectations tied to Treasury Regulation considerations identified in the judgment, while review proceedings could extend beyond the financial year and could be followed by appeal steps.


The court also considered prejudice to the employees. It noted that the employees remained employed by PRASA and receiving salaries, and it was not persuaded that they would suffer prejudice sufficient to outweigh PRASA’s operational interests and the public interest in uninterrupted commuter services. The court expressly weighed the employees’ desire for execution (absent security) against the broader public impact of removing train carriages from circulation and concluded that the employees’ interests could not trump those wider considerations on the facts presented.


At the same time, the court acknowledged the concerns identified in Rustenburg Local Municipality about exempting parties from security and the risk of review applications not being prosecuted diligently. The court addressed this by referring to the Labour Court Practice Manual provisions that treat review applications as urgent by nature and prescribe time limits for the filing of records and readiness for hearing, with potential consequences for non-compliance. The court further held that exemptions from security need not be unconditional and that the court can impose strict conditions to ensure reviews are prosecuted expeditiously. It adopted that approach in its order by creating an automatic lapse mechanism linked to compliance with specified procedural steps and obtaining a set-down date.


On costs, the court considered law and fairness and concluded that a costs order was not warranted.


5. Outcome and Relief


The Labour Court granted urgent relief. It ordered that the matter be heard as urgent under Rule 8 and condoned PRASA’s non-compliance with ordinary forms, service, and time periods.


The court stayed the writ of execution issued for enforcement of the arbitration award (under the CCMA case numbers WECT2826-18 and WECT271-18) pending finalisation of PRASA’s review application (under Labour Court case number C1037/18). It also ordered that the attachment of PRASA’s property listed in the Sheriff’s inventory be lifted.


The court further ordered that PRASA was exempt from providing security in terms of section 145(7) read with section 145(8) of the LRA.


The stay, lifting of attachment, and exemption from security were made conditional: those orders would automatically lapse on 1 April 2019 unless PRASA could satisfy the court that, by that date, it had complied with Rules 7A(6), 7A(8)(a), and where applicable Rule 10 in the review application and had obtained a set-down date from the Registrar.


No order as to costs was made.


Cases Cited


Gois t/a Shakespeare’s Pub v van Zyl & Others 2011 (1) SA 148 (LC)


Free State Gambling and Liquor Authority v Commission for Conciliation, Mediation and Arbitration and Others; In re: Free State Liquor and Gambling Authority v Motake N.O and Others (2015) 36 ILJ 2867 (LC)


Rustenburg Local Municipality v South African Local Government Bargaining Council and Others (2017) 38 ILJ 2596 (LC); [2017] 11 BLLR 1161 (LC)


Gauteng Province Driving School Assocation & others v Amaryllis Investments (Pty) Ltd & another (006/2011) [2011] ZASCA 237; [2012] 1 All SA 290 (SCA) (1 December 2011)


Ex Parte Minister of Safety and Security: In Re S v Walters [2002] ZACC 6; 2002 (4) SA (CC)


Camps Bay Ratepayers Association v Harrison 2011 (4) 42 (CC)


City Power (Pty) Ltd v Grinpal Energy Management Services (Pty) Ltd and Others (citation not provided in the judgment text)


Pardesi (citation not provided in the judgment text)


Legislation Cited


Labour Relations Act 66 of 1995 (as amended), including sections 145(7), 145(8), 198B, 198B(5), and 198D


Constitution of the Republic of South Africa, 1996, section 239


Public Finance Management Act (PFMA), including section 66 and section 66(3)(b) as referenced in the judgment


Rules of Court Cited


Rule 8 of the Rules for the Conduct of Proceedings in the Labour Court


Rule 7 of the Rules for the Conduct of Proceedings in the Labour Court


Rule 7A(6) of the Rules for the Conduct of Proceedings in the Labour Court


Rule 7A(8)(a) of the Rules for the Conduct of Proceedings in the Labour Court


Rule 10 of the Rules for the Conduct of Proceedings in the Labour Court (where applicable)


Practice Manual of the Labour Court, paragraph 11.2.7 (as referenced in the judgment)


Held


The court held that PRASA established urgency under Rule 8 on the basis of the imminent execution steps following service of the certified award and threatened removal of attached assets, and that the urgency was not self-created given PRASA’s efforts to engage the employees and the enforcement actors.


It held that a stay of execution was justified because there was a pending review application attacking the underlying causa of the writ, and that the stay turned on the interests of justice and balance of convenience rather than an assessment of the merits of the review. The court accepted that the potential harm extended beyond financial prejudice to significant operational and public interest consequences affecting commuter rail services.


It further held that the Labour Court has a discretion under sections 145(7) and 145(8) of the LRA to direct otherwise regarding security, and that PRASA made out a sufficient case—grounded in the practical constraints described in its evidence and the absence of demonstrated prejudice to employees still in employment—to justify exemption from providing security, subject to strict conditions designed to ensure expeditious prosecution of the review.


LEGAL PRINCIPLES


The judgment applied the principle that a stay of execution will be granted where real and substantial justice requires it or where injustice would otherwise result, and that the stay enquiry focuses on whether the underlying causa is in dispute, rather than determining the merits of the underlying dispute where the causa is attacked in pending proceedings.


It applied the approach that where a review application is pending, the court may treat that as a sufficient basis to conclude that the causa underlying a writ may ultimately be removed, and the court need not decide prospects of success in the review when determining whether interim protection against execution should be granted.


The judgment applied the interpretation that the Labour Court retains a discretion under sections 145(7) and 145(8) of the LRA to “direct otherwise” regarding the provision of security, including reducing security or exempting a party from furnishing it, provided that a proper case is made out on the facts.


It further applied the principle that even where exemption from security is granted, the court may impose conditions to prevent abuse and to ensure that review proceedings are prosecuted with expedition, including by linking continued interim protection to compliance with procedural steps under the Labour Court rules and the obtaining of a set-down date.

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[2018] ZALCJHB 423
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Passenger Rail Agency of South Africa SOC Ltd (PRASA) v Sheriff for the District of Goodwood and Others (C1230/2018) [2018] ZALCJHB 423 (27 December 2018)

IN
THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG/CAPE TOWN
Of Interest to Other Judges
Case No: C1230/2018
In the matter between:
PASSENGER RAIL AGENCY
OF SOUTH AFRICA
SOC LTD
(PRASA)                                                                                                Applicant
and
THE SHERIFF FOR THE
DISTRICT OF GOODWOOD                           First

Respondent
THE COMMISSION FOR
CONCILIATION, MEDIATION
AND
ARBITRATION                                                                            Second

Respondent
COMMISSIONER VUSIMUSI
LANDAU N.O                                          Third

Respondent
MDLULI AND 164
OTHERS                                               Fourth

– Further Respondents
Heard: 21 December 2018
Delivered: 27 December 2018
JUDGMENT
TLHOTLHALEMAJE,
J
[1]
The applicant (PRASA)
approached this Court on an urgent basis to seek a
Rule
Nisi
staying the writ of
execution in respect of an arbitration award issued by the Commission
for Conciliation Mediation and Arbitration
(CCMA) under case number
WECT2826-18 and WECT271-18, pending the outcome of an application for
review. PRASA also seeks that the
attachment of its property as
listed in the inventory complied by the first respondent (Sheriff)
and attached to the Notice of
Motion be lifted, and further that it
be exempted from providing security in terms of section 145(7) as
read with section 145(8)
of the Labour Relations Act (LRA).
[1]
The application was fully opposed with three sets of papers being
before the Court. The matter was heard
via
teleconferencing over the recess period.
[2]
The background common cause facts are as follows;
2.1 The fourth to further respondents
(Employees) had referred a dispute to the CCMA in terms of the
provisions of section 198B
read with those  of section 198D of
the LRA. The Employees sought an order declaring them to be deemed
permanent employees
and to further be awarded financial compensation
calculated from 1 April 1995 related to salary differences from the
date of the
implementation of the provisions of section 195B to the
date of arbitration.
2.2 As at the time of the arbitration
proceedings, the Employees’ employment had been converted into
permanent status in accordance
with the provisions of section 198B(5)
of the LRA since 1 April 2015.
2.3 On 17 July 2018,
Commissioner Daniel du Plessis issued an award in terms of which the
Employees’ employment
was deemed to be of indefinite duration
since 1 April 2015, entitling them to membership of the
applicant’s provident
fund and bonuses. The Commissioner
further ordered PRASA to pay to each of the Employees, the amounts
indicated on a spreadsheet
in terms of what they had contended was
due to them.  The total amount due and payable to the individual
Employees collectively
came to R35 455 140.00.
2.4 The award was certified by the
CCMA on 19 September 2018, and was served on PRASA for
enforcement by the Sheriff on
24 October 2018. The Sheriff
compiled an inventory of movable assets in the amount of
R2 040 000.00 including
vehicles and 84 train carriages
valued at R10 000.00 each.
2.5 PRASA is an organ of state as
defined in section 239 of the Constitution. It is a public carrier
providing public transport
rail services throughout the Republic
including routes in Cape Town. This application in particular affects
PRASA’s operations
in Cape Town.
2.6 PRASA contends that it has 450
rail carriages in use, and already has a shortfall as a consequence
of the well-publicised vandalism
and burning of its rail carriages in
Cape Town. It is subject to the prescripts of the Public Finance
Management Act (The PFMA)
as well as relevant Treasury Regulations.
In this regard, it contends that the provisions of section 66 of the
PMFA places restrictions
on its borrowing, and/or provision of
security, guarantees and other financial commitments.
[3]
The application is brought on the basis of ‘extreme urgency’
as according to PRASA, the Sheriff having attached
the said assets,
has also indicated that their removal is imminent. It is contended
that in the light of the shortfalls already
in regards to carriages,
a further loss of 84 carriages or 20% of its operating stock would
impact negatively on its operations
and disable it  from relying
on ticket sales from commuters to generate cash flow.
[4]
PRASA further averred that there is an aspect of public interest
related to the matter, in that effective functioning of the
Cape Town
economy and surrounding areas depend heavily on its ability to
transport commuters to and from work. The implications
thereof if
interim relief was not granted was that 20% of the daily workforce
that uses PRASA’s services would have to find
alternative
transport.
[5]
The Employees in opposing the application disputed that the
application was urgent. They  contend that the award having
been
certified on 17 July 2018, it took PRASA five months to
approach the Court for relief, and further that the attack
on the
underlying cause of action being the review application was not
brought on time. In this case, it was also pointed out that
the
review application was brought more than two months out of time.
[6]
The Employees further pointed out that since the attachment by the
Sheriff occurred on 24 October 2018, the urgent
application
was only brought on 18 December 2018 with less than two
days notice, when PRASA had ample opportunity between
July and
November 2018 to engage with them, and in the absence of an
agreement, to launch this application.
[7]
It was contended that in regards to the public interest in the
matter, what the Employees had instructed the Sheriff to attach
were
other movabables and to leave the train carriages out of the
equation; that PRASA’s complaints about the impact on its

income stream and cash flow as a result of the impending removal of
the trains from circulation is mere financial prejudice, which
was
not a ground of urgency. Ultimately, the Employees’ contention
is that the application ought to be struck off the roll
on account of
lack of urgency.
[8]
The
application having been brought on the basis of ‘extreme
urgency’, PRASA needs to satisfy the requirements set out
in
Rule 8 of the Rules for the Conduct of Proceedings in the Labour
Court
[2]
.
Thus, a party seeking relief on an urgent basis has to set out in the
founding affidavit the reasons for urgency, why the
relief is sought
on an urgent basis and why the Rules of the Court were not complied
with.
[9]
I accept that in this case, the significant period is between
24 October 2018 when  the certified award was served

on PRASA for enforcement by the Sheriff, and 18 December 2018
when this application was launched before this Court. PRASA’s

explanation is that correspondence was sent to the Employees’
erstwhile attorneys on 30 October 2018 to request
an
agreement that the award not be enforced, and further that it be
exempted from furnishing security. In the meanwhile it had
only filed
and served the review application on 30 October 2018. PRASA
further contends that the erstwhile attorneys
only advised its
attorneys of record on 16 November 2018 that they no longer
acted for the Employees.
[10]
A meeting was then arranged with  the third respondent
(Commissioner) for 30 November 2018. Further correspondence

followed between PRASA’s attorneys of record and the CCMA, as
the latter had the responsibility of assisting the Employees
and
acting on their behalf in liaising with and instructing the Sheriff
in regards to the enforcement of the award. In between
liaising with
the CCMA, which in turn had to liaise with the Sheriff, the latter
then on 11 December 2018 advised PRASA
that his
instructions were to remove the attached assets. When a meeting
arranged with the CCMA, PRASA’s attorneys of record
and the
Employees failed to materialise on 14 December 2018, it was
only on 18 December 2018 that the application
was launched.
[11]
I accept in this case that PRASA endeavoured to obtain an agreement
from the Employees to have the writ of execution stayed
prior to
approaching the Court. I further accept that even though the award
was issued  as early as July 2018 and certified
on
19 September 2018, PRASA was jolted into action only upon
being served with the certified award on 24 October 2018.

The facts of this case and the steps taken by PRASA upon being served
with the certified award can hardly be said to be dilatory
given the
implications of the enforcement of the award as already stated
elsewhere in this judgment, and I accept that there is
no basis for a
conclusion to be reached that the extreme urgency claimed by PRASA is
self-created.
[12]
The principles
applicable to and the
general
approach to adopt when determining whether the writ of execution
should be stayed were enunciated in
Gois
t/a Shakespeare’s Pub v van Zyl & Others
[3]
as
follows;

(a)
A court will grant a stay of execution where real and substantial
justice requires it or where injustice would otherwise result.
(b)
The court will be guided by considering the factors usually
applicable to interim interdicts, except where the applicant is
not
asserting a right, but attempting to avert injustice.
(c)
The court
must be satisfied that:
i.
the
applicant has a well-grounded apprehension that the execution is
taking place at the instance of the respondent(s); and
ii.
irreparable
harm will result if execution is not stayed and the applicant
ultimately succeeds in establishing a clear right.
(d)
Irreparable harm will invariably result if there is a possibility
that the underlying
causa
may ultimately be removed,
i.e.
where the underlying
causa
is the subject-matter of an ongoing
dispute between the parties.
(e)
The court is
not concerned with the merits of the underlying dispute-the sole
enquiry is simply whether the
causa
is in dispute.”
[13]
In this case, it was common cause that there is a review application
pending before the Court. An application for condonation
for the late
filing of the review application has also been filed. The prospects
of condonation being granted or the review application
being
successful are matters that this Court should not concern itself, as
on the reasoning in
Gois t/a Shakespear’s Pub
, it is
sufficient that there was a possibility that the
causa
underlying the writ could ultimately be removed. Accordingly, PRASA
in this case is not required to satisfy the Court of the existence
of
prospects of success in the principal dispute, as the very fact of a
review application qualifies as an attack on the
causa
underlying
the award.
[14]
Given the nature of the writ sought to be executed
and the consequences of the attachment and removal that may follow,
specifically
in regards to the crucial assets identified by PRASA, it
cannot be doubted that indeed the complaint is not simply confined to
financial prejudice to PRASA. More is at stake than mere financial
considerations, as it is the ordinary members of the public,
who will
be severely inconvenienced should the attachment and removal of the
rail carriages be effected. In my view, to argue that
other PRASA’s
assets can be attached that will not inconvenience the public is not
a solution. It can therefore hardly be
argued that not only PRASA,
but ordinary members of the Cape Town community who rely on rail
services for daily commute would suffer
an injustice should the stay
not be granted. In the end, and in this case in particular, it is
more the considerations of the interests
of justice, and the public
interests that ought to determine whether a stay should be granted or
not. In my view, and in the light
of the circumstances of this case,
the interests of justice and the balance of convenience dictates that
the stay be granted pending
the determination of the review
application.
[15]
There can further be no dispute that following the
service of the certified award and subsequent attachment, PRASA has a
well-grounded
apprehension that the execution is going taking place
at the instance of the fourth – further respondents. This is
even so
based on the message conveyed to PRASA by the Sheriff on
11 December 2018, that such a removal was imminent. It is
appreciated
that irreparable harm to PRASA which will result if
execution is not stayed, is to a large extent financial in nature. At
the same
time however, it would be remiss of this Court not to be
considerate of other repercussions of the attachment or removals,
especially
to the members of the public who rely on PRASA’s
services.
[16]
Central to the
opposition of this urgent application however is whether PRASA is
entitled to be exempted from payment of security
in accordance with
the provisions of sections 145 (7)
[4]
and 145 (8)(b)
[5]
of the LRA in the light of the review application. I accept that in
determining whether there is an underlying cause which is sought
to
be attacked in seeking a stay, a fundamental consideration in the
light of the provisions in question is whether security has
been
furnished.
[17]
This
issue, insofar as it concerns organs of the state and similar
entities, has received attention in this Court, with various

approaches as to whether such entities, which are subject to the
PFMA, the MFMA and other Treasury prescripts, should enjoy blanket

exemption from providing security. In
Free
State Gambling Liquor Authority
[6]
,
it
was accepted that upon an interpretation of
sections
145(7) and (8) of the LRA, a Court should have discretion as to
whether security is to be put up or not. The Court stated
that;

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).’
[7]
[18]
The Court in
Rustenburg
Local Municipality v South African Local Government Bargaining
Council and Others
[8]
seems to have accepted the above interpretation to the effect that
this 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
[9]
.
The Court in
Rustenburg
Local Municipality
had
however added that;

[32]
…that 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…” (Citations
omitted)
[19]
The difference in approach however appears
to be whether it was suggested in
Free State Gambling
that
public entities are automatically entitled to enjoy a free ride out
of the provisions of section 145(7) and 145(8) of the LRA
by virtue
of being hamstrung by the provisions of the PFMA, the MFMA, other
Treasury Regulations or similar prescripts. In this
regard, the Court
in
Rustenburg Local Municipality
appears to take issue with the conclusions reached in
Free
State Gambling,
where it was stated that;

Given
the interpretation accorded to the provisions above, it is only
necessary for me to decide whether the court should order
the
applicant, which is recognized by the National Treasury Department,
as a Provincial Government Enterprise and is partly funded
from
..government grants" as its financial statements reflect, to pay
security in these applications.
The
applicant is a regulator of the gambling and liquor industries and is
accountable to the responsible MEC of the Province. The
applicant
submits that the provision of security is contrary to the provisions
of section 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
6
. It is submitted
that this is impractical. I would add that it is also unnecessary.
In
my judgement, in applications such as these, where the applicant's
budget and financial management is governed by the PFMA and
Treasury
Regulations, and duly authorized 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 section 145(7) and (8)”
[10]
[20]
In response to the above, the Court in
Rustenburg Local Municipality
stated
that;

[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
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 of the LRA, the LRA must
prevail. In
City Power (Pty) Ltd v Grinpal Energy Management
Services (Pty) Ltd and Others
the Court dealt with the Local
Government: Municipal Systems Act, 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:
‘…
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.”
[11]
And,

[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.”
And,

[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.”
[21]
In my view, the approach in
Free State Gambling
needs to be
understood within the context of the discretion enjoyed by the Court
under the provisions of section 145(7) and (8)
of the LRA. This is to
the extent that there is consensus on the general interpretation of
those provisions. The
proviso
obviously is that 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.
[22]
I did not therefore understand the approach in
Free State Gambling
to be that state entities are automatically exempt from furnishing
security on the grounds of treasury prescripts and regulations,
or
that they were absolved from the requirement of making out a proper
case where the regulations or prescripts were relied upon.
This
therefore means that organs of the state are not absolved from
setting out a proper case where the request for exemption is
grounded
in the restrictions and limitations imposed by section 66(3)(b) of
the PFMA or some other National or Provincial Treasury
prescripts or
Regulations.
[23]
The approach in
Free State Gambling
in my view further needs
to be understood within the context of the facts of that particular
case, which as in this case, involved
restrictions imposed by the
regulations and prescripts, the associated practicalities in
obtaining the necessary security under
those provisions, and the
exercise of a court’s discretion.
[24]
In this case, PRASA’s contention was that the amount of
compensation in this case was not budgeted for. This can hardly
be a
surprise given the amount of compensation granted by the
Commissioner. Furthermore, PRASA’s principal contentions were

that its available liquidity was consumed as working capital; that it
had no surplus in its current financial budget to meet the
unforeseen
and extraordinary expense [occasioned by the arbitration award]; that
it being an organ of state, it was constrained
by the provisions of
section 66(3) (b) of the PFMA, which required publication in the
Government Gazette by the Minister for the
borrowing of
inter alia
that security, or entering into any other transaction that binds or
may bind it to any future financial commitment. These were
to be
preceded by a request to the Minister of Transport, who must first
approve the request, which would thereafter be submitted
to the
Minister of Finance for approval.
[25]
The above contentions can
hardly be contested, and the practical difficulties identified are
indeed real. It would therefore be
remiss of  this Court to
simply ignore those realities when applying its discretion. As I
understood the decision in
Free
State Gambling,
those were
the practical realities that the Court took into account in the
exercise of its discretion
[12]
.
[26]
I am equally
mindful
of the fact that the principle of
stare
decisis
applies in this Court
[13]
.
I however struggle to
find any reason why on the particular facts and set of circumstances
in
Free State Gambling
,
the approach of the Court which involved an exercise of a discretion
as contemplated in  section 145(3), (7) and (8) of the
LRA, can
strenuously be deemed to be
wrong,
as suggested in
Rustenburg
Local Municipality
. An
attack on a judgment or decision arrived at by this Court as a result
of an exercise of judicial discretion, can only imply
that the
discretion in that case was not exercised judicially, or that it had
been influenced by wrong principles or a misdirection
on the facts,
or that the Court had reached a decision which in the result could
not reasonably have been made by a Court properly
directing itself to
all the relevant facts and principles. However, whether that may be
the case or not is in any event, a matter
for the Labour Appeal Court
or any higher court to pronounce on.
[27]
In this case, if for example PRASA were to secure funding for the
purposes of payment of security, the issue is what are the
prospects
that such a debt would be repaid within 30 days of the end of this
financial year as contemplated in Treasury Regulation
32.1.1(a)?
Given the nature of review proceedings in this Court, there are no
guarantees for instance, that the pending review
might be finalised
within the financial year. Besides, the prospects of any aggrieved
party seeking leave to appeal if the review
does not go its way
cannot be discounted. It would thus not only be unrealistic for PRASA
to be expected to make such a commitment
to make the repayments, but
also impractical for it to do so.
[28]
The facts of this case are further such that the Employees are still
in the employ of PRASA, and I fail to appreciate any prejudice
they
would suffer if PRASA is exempted from furnishing security. Any
prejudice claimed in this case by the Employees ought to be
weighed
against not only the interests of PRASA to carry its business as a
state entity and service provider, but the overall public
interests
and prejudice to ordinary members of Cape Town, who depend on train
services for their daily commute. The interests of
the Employees, who
are currently employed and receiving a salary, to have the security
paid failing which the award would be executed
cannot by all
accounts, trump over the overall interests of other members of the
community, who are entitled to use rail services
for their daily
commute.
[29]
In my view, in exercising its discretion as to whether a party that
is an organ of state or similar entity ought to be exempted
from
these factors and considerations, the Court ought further to be
reminded of  the basic principle in the staying of writs
of
execution, which as in this case, involves a consideration of whether
there is an attack on the underlying causa, and whether
real
and substantial justice requires that the stay be granted or whether
injustice would otherwise result. In this case, and in
the light of
the factors considered herein, there is a review application pending
before the Court, and  real and substantial
justice not only
requires that an exemption from payment of security be granted, but
also that the enforcement of the award be
stayed.
[30]
The concerns raised in
Rustenburg
Local Municipality
[14]
in regards to state departments or other organs of the state or
similar entities being granted exemption have merit. These concerns

can equally be extended to private entities. If it can be argued that
the organs of state or similar entities may be granted an
exemption
and thereafter do nothing to prosecute reviews for whatever reason,
it is equally not uncommon in this Court to find
instances in review
applications, where negligible amounts of compensation are awarded at
arbitration, and only for such awards
to be  taken on review.
The reviewing party, and in most instances, the employer, would
gleefully furnished such an
amount as security, and basically do
nothing to timeously prosecute the review. Equally so, it is not
uncommon for private parties
to take matters on review, no matter how
meritless and frivolous the applications may be, furnish the required
security because
they or their legal representatives can afford it,
and thereafter do nothing. So, the problems or dangers of reviewing
parties
being dilatory upon furnishing of security or being exempted
at all are not confined to state organs.
[31]
In my view however, the above concerns are not necessarily
insurmountable. The mere fact that a state entity or organ, or even

private entity for that matter has been absolved from furnishing
security in review proceedings should not be the end of the matter.

In other words, the objectives of the provisions of section 145(7)
and (8) of the LRA and the mischief they sought to target ought
not
be circumvented by reviewing parties, who might simply obtain an
exemption and fold their arms in regard to the review application.

This Court must therefore be vigilant in this regard, and guard
against the abuse of its indulgence.
[32]
In accordance with the
provisions of this Court’s Practice Manual, review applications
are deemed to be urgent by nature
[15]
,
and an applicant  is required to ensure that all the necessary
papers in the application are filed within 12 months of the
date of
the launch of the application, and that the registrar of this court
is informed in writing that the application is ready
for allocation
for hearing. There are further consequences provided for in paragraph
11.2.3 and  the same 11.2.7, in that
failure to comply with the
time limits may result in a review application being deemed withdrawn
or having lapsed. Furthermore,
nothing prevents a reviewing party
from approaching the Registrar of this Court to secure an expedited
date in respect of a review
application.
[33]
If the above provisions do not suffice as a deterrent,  in
considering whether to absolve a state entity from furnishing

security, there is further nothing that prevents this Court when
exercising its discretion, to further do so with strict conditions,

in order to ensure that review applications are timeously prosecuted
and finalised.  Given the circumstances of this case,
I intend
to adopt that approach.
[34]
I have further had regard to the question of costs and the
requirements of law and fairness in that regard. I am of the firm

view that a cost order is not warranted in this case.
[35]
In the circumstances, the following order is made;
Order:
1. The application is heard as one of
urgency in accordance with the provisions of Rule 8 of the Rules of
this Court, and the Applicant’s
failure to comply with the
normal time periods, forms and services as contained in Rule 7 is
condoned.
2. The Writ of Execution issued by the
First Respondent, in conjunction with the Second Respondent, in
respect of the arbitration
award under case number WECT2826-18 and
WECT271-18 is stayed pending the finalisation of the review
application brought by the
applicant under case number C1037/18.
3. The attachment of the Applicant’s
property as listed in the inventory compiled by the First Respondent
and annexed to the
Applicant’s Draft Order is lifted.
4. The Applicant is exempt from
providing security in terms of section 145 (7) as read with
section
145
(8) of the
Labour Relations Act 66 of 1995
.
5. Orders 2, 3 and 4 as above shall
automatically lapse on 1 April 2019, unless the Applicant
can satisfy the Court that
on that date, it had complied with
Rules
7A
(6);
7A
(8)(a), and where applicable
Rule 10
of the Rules of
this Court in respect of the review application under Case number
C1037/18,  and further that a set-down
date was obtained from
the Registrar of this Court.
6. There is no order as to costs.
___________________
Edwin
Tlhotlhalemaje
Judge
of the Labour Court of South Africa
APPEARANCES:
For
the Applicant: LW Ackerman
Instructed
by: Maserumule Attorneys
For
the 4
th

Further Respondents: CS Hendricks of Marais Müller Hendricks
Attorneys
[1]
Act 66 of 1995 (as amended)
[2]
Which provides;

(1) A party
that applies for urgent relief must file an application that
complies with the requirements of rules 7(1), 7(2), 7(3)
and, if
applicable, 7(7).
(2) The affidavit in support of the
application must also contain-
(a) the reasons for urgency and why
urgent relief is necessary;
(b) the reasons why the requirements
of the rules were not complied with, if that is the case; and
(c) if a party
brings an application in a shorter period than that provided for in
terms of section 68(2) of the Act, the party
must provide reasons
why a shorter period of notice should be permitted”.
[3]
2011 (1) SA 148
(LC)
At
para 37
[4]
Which provides:

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).’
[5]
Which 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.’
[6]
Free State Gambling and
Liquor Authority v Commission for Conciliation, Mediation and
Arbitration and Others; In re: Free State
Liquor and Gambling
Authority v Motake N.O and Others
(2015) 36 ILJ 2867 (LC)
[7]
At para 4.4
[8]
(2017) 38 ILJ 2596 (LC); [2017] 11 BLLR 1161 (LC)
[9]
At para
[31]
[10]
At para 5 -
6
[11]
At para 36
- 37
[12]
At para [5]
[13]
See
Gauteng
Province Driving School Assocation & others v Amaryllis
Investments (Pty) Ltd & another
(006/2011)
[2011] ZASCA 237
;
[2012] 1 All SA 290
(SCA) (1 December
2011) at para 16, where it was held that;

In my view
counsel’s reliance on the doctrine of
stare
decisis
is misplaced. In
Ex
Parte Minister of Safety and Security: In Re S v Walters
[2002]
ZACC 6
; 2002 (4) SA (CC) para 57 Kriegler J explained:
'The words are an abbreviation of a
Latin maxim,
stare decisis et non quieta movere
, which
means that one stands by decisions and does not disturb settled
points. It is widely recognised in developed legal systems.
Hahlo
and Kahn
[Hahlo and Kahn
The South African Legal
System and its Background
(1968)] describe this deference
of the law for precedent as a manifestation of the general human
tendency to have respect
for experience. They explain why the
doctrine of
stare decisis
is so important, saying:
"In the legal system the calls
of justice are paramount. The maintenance of the certainty of the
law and of equality before
it, the satisfaction of legitimate
expectations, entails a general duty of Judges to follow the legal
rulings in previous judicial
decisions. The individual litigant
would feel himself unjustly treated if a past ruling applicable to
his case were not followed
where the material facts were the same.
This authority given to past judgments is called the doctrine of
precedent."'
More recently in
Camps Bay
Ratepayers Association v Harrison
2011 (4) 42 (CC) paras
28-30 (footnotes omitted) Brand AJ stated:
'This argument raises issues
concerning the principle that finds application in the Latin maxim
of
stare decisis
(to stand by decisions previously
taken) or the doctrine of precedent. ... What it boils down to ...
is: "certainty,
predictability, reliability, equality,
uniformity, convenience: these are the principal advantages to be
gained by a legal system
from the principle of
stare
decisis
." Observance of the doctrine has been insisted
upon, both by this Court and by the Supreme Court of Appeal. And I
believe
rightly so. The doctrine of precedent not only binds lower
courts but also binds courts of final jurisdiction to their own
decisions.
These courts can depart from a previous decision of their
own only when satisfied that that decision is clearly wrong.
Stare
decisis
is therefore not simply a matter of respect for
courts of higher authority. It is a manifestation of the rule of law
itself,
which in turn is a founding value of our Constitution. To
deviate from this rule is to invite legal chaos.'”
[14]
At
paras [39] - [40] where it was held that:

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.
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.”
[15]
Paragraph
11.2.7 of the Practice Manual