Summary of Judgment

1. Introduction

This judgment concerns an application for rescission of a prior Labour Court order that had been granted by default, together with an associated application for condonation for the late filing of the rescission application.

The applicant was Luvhomba Group (Pty) Ltd t/a Luvhomba Group. The respondent was Solidarity on behalf of Ms Tshili S (referred to in parts of the judgment as “Ms Tsili”).

The dispute arose from an earlier proceeding initiated by the respondent through a statement of claim filed in the Labour Court on behalf of Ms Tshili. When the applicant did not file its statement of response timeously, the respondent pursued default judgment, which was ultimately granted on 31 July 2015 by Voyi AJ. That default order found the dismissal to be automatically unfair and awarded compensation. The applicant later brought the present rescission application, which was filed significantly out of time, necessitating the condonation application.

The general subject-matter of the dispute, as reflected in the relief granted in the default order, was an automatically unfair dismissal claim and the resulting compensatory remedy, but the present judgment is directed to the procedural question whether the default order ought to be rescinded and whether condonation should be granted for the late rescission application.

2. Material Facts

The respondent served and filed a statement of claim on 27 February 2015. The applicant’s statement of response was due on 13 March 2015. It is recorded that the applicant did not file its opposing papers by that date.

After the deadline passed, the respondent extended an indulgence by correspondence, granting the applicant until 18 March 2015 to file its opposing papers. The applicant still did not file the response.

In the continued absence of opposing papers, the respondent filed an application for default judgment on 23 March 2015. On 30 March 2015, the applicant’s then attorneys filed a notice of intention to oppose and requested that the default judgment application be withdrawn. The respondent replied on 1 April 2015 indicating that the default judgment application would not be withdrawn unless the applicant filed both a statement of response and a condonation application. The applicant only filed an opposing affidavit to the default judgment application during November 2015.

A default order was granted on 31 July 2015 by Voyi AJ. The judgment records that the respondent informed the applicant of the existence of that default judgment by correspondence dated 11 November 2015. The order found that Ms Tshili’s dismissal was automatically unfair and directed the applicant to pay compensation equivalent to 12 months’ salary, quantified as R72 000.00.

The present rescission application was only filed on 21 June 2016, more than six months after the order had been brought to the applicant’s attention on 11 November 2015. Although the notice of motion sought condonation for lateness, the court recorded that no submissions were made in the supporting affidavit explaining the lateness.

As to what was disputed and undisputed, the court treated it as clear from the correspondence that the statement of claim was indeed served on the applicant. The applicant nonetheless relied primarily on an asserted irregularity related to the circumstances under which the default order was granted, particularly given that a notice of intention to oppose had been filed.

3. Legal Issues

The court was required to determine, first, whether condonation should be granted for the late filing of the rescission application, given the lengthy delay and the absence of an explanation advanced on affidavit. This issue primarily entailed the application of legal standards for condonation to the procedural facts of delay and explanation, together with an evaluative assessment framed by the “interests of justice” approach referenced in the authorities cited.

Second, the court had to decide whether the applicant had established a basis for rescission of the default order. In this respect, the applicant relied on two preliminary points, one of which was not pursued because it was found to be unsupported in law, and the other of which raised the central question whether the default judgment was erroneously granted (particularly in circumstances where a notice of intention to oppose had been filed and the matter was dealt with in chambers).

These issues involved a combination of (a) factual evaluation of the procedural history (including service and filing steps), (b) application of procedural rescission principles, and (c) a value judgment concerning the appropriate exercise of discretion on condonation and costs.

4. Court’s Reasoning

On condonation, the court restated the established approach drawn from the Labour Appeal Court’s formulation of the test as being whether granting condonation is in the interests of justice, a determination made with reference to all relevant factors. The court highlighted that where delay is unacceptably excessive and there is no explanation, it may be unnecessary to consider prospects of success; conversely, where prospects are reasonable they may weigh in favour of condonation, although even then condonation may be refused if delay is excessive, explanation non-existent, and prejudice arises.

Applying those principles, the court noted that the delay was over six months and that there was no explanation advanced for the late filing of the rescission application. Despite this, the court considered it to be in the interests of justice to evaluate the applicant’s prospects of success in the rescission application, signalling that the condonation enquiry should not be determined solely by the absence of an explanation in the particular circumstances of this case.

On rescission, the applicant advanced two points in limine. The first was that the applicant was wrongly cited and could not have employed, nor had a relationship with, Ms Tshili. The court rejected this point on the basis that there was no legal basis to support it, and it was not taken further.

The second point concerned the alleged irregularity underlying rescission, framed as whether the statement of claim was properly served and, more materially for the outcome, whether the default order was procedurally erroneous given the filing of a notice of intention to oppose. Although the respondent opposed rescission on the basis that service had been proper and that there was no acceptable reason for failing to file the statement of response timeously, the court’s reasoning proceeded from the view, supported by the record of correspondence, that service of the statement of claim had indeed occurred.

The decisive consideration for the court was that, notwithstanding service, it appeared that the default order was issued in chambers despite the applicant having filed a notice of intention to defend. The court aligned itself with principles drawn from prior Labour Court authority addressing rescission in circumstances where an order is erroneously granted in the absence of an affected party, and in circumstances where the procedural position (such as an intention to oppose) would have precluded the granting of default judgment had it been appreciated at the time.

In adopting that approach, the court treated the matter as one in which, once it is established that an order was erroneously granted in the relevant sense, rescission follows without further enquiry into “good cause” as would otherwise be required in some rescission contexts. The court also accepted, consistently with the cited approach, that a judgment is “erroneously granted” where there existed, at the time of issue, a fact unknown to the judge which would have precluded the granting of the judgment and which would have induced the judge not to grant it if known. The court’s evaluative conclusion was that the applicant had been denied a hearing in a manner inconsistent with those principles.

Having reached the conclusion that the rescission application should succeed, the court then considered costs. It referred to the Labour Court’s broad discretion under section 162 of the Labour Relations Act 66 of 1995, and to Constitutional Court authority emphasising that costs in labour matters should be made in accordance with the requirements of law and fairness. Applying that standard, the court concluded that the requirements of law and fairness favoured no costs order.

5. Outcome and Relief

The court granted condonation for the late filing of the rescission application.

The court rescinded the order granted by Voyi AJ under case number JS 103/15 dated 31 July 2015, which had found the dismissal automatically unfair and awarded compensation of R72 000.00.

The court made no order as to costs.

Cases Cited

Bloem Water Board v Abraham Nthako NO and Others (2017) 38 ILJ 2470 (LAC); [2017] 11 BLLR 1073 (LAC).

NUM obo Magagula v CCMA and Others, unreported, case number JR555/14 (Labour Court), judgment handed down on 26 August 2016.

Zungu v Premier of the Province of Kwa-Zulu Natal and Others (2018) 39 ILJ 523 (CC).

Legislation Cited

Labour Relations Act 66 of 1995 (as amended), section 162.

Rules of Court Cited

Rule 16A(1)(b) (Labour Court Rules), as referenced in the discussion of rescission where a judgment was granted in the absence of an affected party.

Rule 42(1)(a) of the Uniform Rules of Court, as referenced for the principle that an order erroneously granted in the absence of an affected party should be rescinded without further enquiry.

Held

The court held that, notwithstanding a significant delay and the absence of an explanation for lateness, it was in the interests of justice to consider the prospects of success in the rescission application and to grant condonation.

On the merits of rescission, the court held that the default order was susceptible to rescission because it appeared to have been granted in circumstances that were procedurally irregular, particularly where the applicant had filed a notice of intention to oppose yet the order was issued in chambers without the affected party having been afforded the procedural protections associated with that posture. The court therefore rescinded the default order.

The court held that the requirements of law and fairness justified making no order as to costs.

LEGAL PRINCIPLES

Condonation in the Labour Court is assessed with reference to the interests of justice, which requires consideration of relevant factors including the length of delay, the explanation for the delay, prospects of success, and potential prejudice. The court accepted that, in some circumstances, an excessive delay coupled with no explanation may justify refusing condonation without reaching prospects; however, it also recognised that interests-of-justice considerations may warrant engaging with prospects even where the explanation is absent.

For rescission, the judgment applied the principle that where an order was erroneously granted in the absence of a party affected by it, rescission should ordinarily follow without further enquiry into good cause. The notion of “erroneously granted” was treated as encompassing situations where a material procedural fact existed at the time of granting the order, unknown to the judge, which would have precluded the granting of the order had it been known.

In relation to costs, the judgment applied the principle that the Labour Court enjoys a broad discretion under section 162 of the Labour Relations Act 66 of 1995, and that costs orders in labour matters should be made in accordance with the requirements of law and fairness, supporting a cautious approach to adverse costs orders where fairness does not justify them.