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[2025] ZALCD 4
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Member of Executive Council Department of Education, KZN and Others v Zwane and Others (D24/25) [2025] ZALCD 4 (31 January 2025)
IN
THE LABOUR COURT OF SOUTH AFRICA
(HELD
IN DURBAN)
Case
no: D 24/25
Not
Reportable
In
the matter between:
THE
MEMBER OF THE EXECUTIVE COUNCIL
DEPARTMENT
OF EDUCATION, KZN
First Applicant
THE
HEAD OF THE DEPARTMENT
DEPARTMENT
OF EDUCATION, KZN
Second Applicant
and
MAVIS
NOMATHEMBA ZWANE
First Respondent
THE
EDUCATION LABOUR RELATIONS COUNCIL
Second Respondent
ARBITRATOR/COMMISSIONER
PROTAS CELE
Third Respondent
Heard:
28 January 2025
Judgment
delivered: 31 January 2025
JUDGMENT
WHITCHER
J
[1]
The applicants applied to this court on an urgent basis for an order
in the following terms:
(i) The enforcement
of the arbitration award issued in the [second respondent] in Case
number ELR171-23/24KZN on 1 September
2024, be stayed pending the
finalisation of the review application.
(ii) That the
applicants be absolved from furnishing security pending the
finalisation of the review.
[2]
Counsel for
the applicants contended that an application for a stay of
enforcement of an arbitration award
[1]
operates independently of the security provisions under section
145(7) and (8). In other words, the Labour Court has the discretion
to grant the stay without invoking section 145(7) and (8).
[3]
In support
of these contentions, reliance was placed on the judgment in
Emalahleni
Local Municipality v Phooko NO and Others
[2]
,
which
was followed by the same judge in
Marquis
Finance v Quinn and Another
.
[3]
[4]
The Labour
Appeal Court in
Italsafaris
CC t/a Viva Safaris v NUFBWSAWU and Others,
[4]
roundly rejected the above construction of the law.
[5]
The LAC held as follows:
Notably, the requirements
for a stay of enforcement of an award have evolved as a result of the
amendment to the LRA. Section 145,
cannot, as suggested in
Emalahleni
,
be read disjunctively as it deals with the review of arbitration
awards.
Thus,
only one application is conceivable in terms of sections 145(3), (7)
and (8) where a single enquiry is conducted. There is
no stand-alone
application to which section 145(3) applies…
As
pointed out in
City
of Johannesburg
[5]
,
in the event the employer requests to be absolved from providing
security or to provide security in an amount less than the threshold
in subsections (8)(a) and (b), section 145(3) must be triggered and
an application be made to the Labour Court for the stay of
the
enforcement of the arbitration award pending its decision in the
review application. Significantly, it was emphasised that
the
employer is enjoined “to make out a proper case for the stay as
well as for the provision of security in accordance with
section
145(8) to be dispensed with or reduced.”
[6]
The LAC further held that the construction of the law in
Emalahleni
and followed in
Quinn
also negates the purpose or the mischief
the provisions of section 145(7) and (8) were intended to cure. The
court noted that:
In
this instance, the intents of section 145(7) and (8) are plainly
articulated in the
the
memorandum
[6]
to the Labour Relations Amendment Act
[7]
as follows:
‘
This section is
amended by introducing certain measures to reduce the number of
review applications that are brought to frustrate
or delay compliance
with arbitration awards, and to speed up the finalisation of
applications brought to the Labour Court to review
arbitration
awards.
At present, a review
application does not suspend the operation of an arbitration award.
This often results in separate or interlocutory
applications to stay
enforcement of awards pending review proceedings. It is proposed that
the operation of an arbitration award
would be suspended if security
is provided by the applicant in an amount specified in the
provisions, or any lesser amount permitted
by the Labour Court.’
[7]
And that:
The provisions obviously
serve two important objectives: firstly, to dissuade employers from
launching unmeritorious review applications
aimed at hindering or
delaying compliance with arbitration awards; and secondly, to
engender prompt prosecution of review applications.
[8]
In essence, the exigent statutory prerequisites effectively require
the employer applicants to pledge money to the review application
in
advance hopefully to constrain them to carefully consider whether it
is prudent to proceed, especially if there are no prospects
of
success but the review application is pursued frivolously in order to
frustrate the respondent employees.
[8]
Accordingly,
to stay enforcement of an award
[9]
under a pending review brought under section 145, the applicants must
make out a proper case for the stay
as
well as
for the provision of security in accordance with section 145(8) to be
dispensed with or reduced. There is only one application
– a
section 145 (3) application in terms of which the court may exercise
its discretion to reduce or absolve the applicant
from furnishing
security as contemplated in section 145(8). If there is no evidence
to justify the exercise of discretion to absolve
the furnishing of
security or reduce it, the default position in terms of section
145(7) shall prevail.
[9]
The issue before me is thus whether the applicants have made out a
proper case for the stay
as well as
for the provision of
security in accordance with section 145(8) to be dispensed with or
reduced.
[10]
In my view they have not.
[11]
The Department avers that it will suffer severe prejudice if the
implementation of the award is not stayed, and it is
required to
furnish security. However, there is no explanation whatsoever as to
how and why such severe prejudice would be suffered.
This omission,
as submitted by counsel for the first respondent, is fatal to this
application.
[12]
The Department further avers that, “like any other government
department, [it] has no budget for security. Moreover,
the “courts
have held that where the budget and financial management of a party
is governed by the
Public Finance Management Act, 1999
, the object of
providing security is satisfied since the government will have
sufficient funds to pay the employees(s) in the event
of being
successful in the review application.”
[13]
I was not provided with such authority which particularly held that.
[14]
Regarding
this very issue, the LAC in
Italsafaris
endorsed the Labour Court’s decision in
National
Department of Health v
Pardesi
and another
[10]
that government departments to whom
Public Finance Management Act,
1999
is applicable, are not automatically exempted from furnishing
security. Like all employers, they must show good cause as to why
they should be absolved from furnishing security.
[15]
In
Pardesi
the Court stated:
The applicant’s
counsel submitted that the applicant was not required to furnish
security and relied
on Free State Gambling & Liquor
Authority v Commission for Conciliation, Mediation and Arbitration &
others; Free State
Liquor & Gambling Authority v Motake
(2015)
36 I LJ 2867 (LC) to contend that it was unnecessary for the
applicant to provide security for costs.
It is not necessary for
me to express a view on the correctness or otherwise of the decision
in
Free State Gambling
. What the court made clear is that
where an applicant’s budget and financial management are
governed by the PFMA and Treasury
regulations and that the object of
providing security is satisfied thereby, it remains necessary to make
what the court referred
to as ‘duly authorised’ averments
to this effect. In the present instance, the applicant makes no
averments regarding
any exemption that it might enjoy from the
obligation to provide security. 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.
[16]
In my view, other than a general reliance on the applicability of the
PFMA and outdated case law, the applicants have
not made out a case
as to why they should be exempted from furnishing security.
[17]
Finally, bearing in mind the purpose of
section 145(7)
and (8)
(
supra
), nothing was put forward to show the applicants are
serious about their review application – that it is being
prosecuted
with the urgency and time periods emphasised in the Rules.
Such information in my view was important given that the review was
filed out of time and a condonation application for same was filed
two months later.
[18]
Ultimately, there are no facts before this court that enable it to
exercise its discretion against ordering that security
should not be
furnished. Accordingly, the default position must apply and the
provision of
section 145(7)
must prevail.
[19]
Regarding costs, the court has a broad discretion in terms of
s 162
to make orders for costs according to the requirements of the law and
fairness. The first respondent has sought costs on a punitive
scale.
I wish to make some observations in this regard.
[20]
Stickly
speaking, this urgent application fell to be struck from the roll for
self-created urgency, as submitted by the first respondent.
[11]
[21]
The application, set down for 29 January 2025, was served on the
first respondent on Thursday, 23 January at 2.45 with
a directive
that if she wished to oppose it she had to file her answering
affidavit by 2pm, Monday, 27 January.
[22]
These time periods were set in circumstances where there is evidence
that as early September 2024, the first respondent
indicated a clear
intention to enforce the award.
[23]
The evidence further demonstrates that as early as 20 September 2024,
the first respondent’s attorney via written
communication
pertinently reminded the Department of the need to furnish security.
Read with due consideration, it also indirectly
warned the Department
that if they did not intend to file security, an application to
absolve it from furnishing security was needed.
No such application
was filed with the review application.
[24]
On 9 January 2025, the Department was once again reminded of the need
to furnish security or (impliedly) file the necessary
application,
but still no application was filed until 23 January 2025, and when it
was filed no reason whatsoever for the delay
was offered in the
founding affidavit.
[25]
In the circumstances, there is no reason why the first respondent who
is unemployed should be denied her costs.
Order
1.
The application is dismissed with costs.
Benita
Whitcher
Judge
of the Labour Court of South Africa
APPEARANCES:
For
the Applicants: Adv. M Mpahlwa, instructed by State Attorney,
KwaZulu-Natal
For
the First Respondent: Mr B Mgaga, from Garlicke & Bousfield
Inc
[1]
Which
ordered reinstatement.
[2]
(2021) 42 ILJ 2196 (LC).
[3]
[2023]
JOL 60127 (LC).
[4]
(2024)
45 ILJ 2004 (LAC).
[5]
City
of Johannesburg v SA Municipal Workers Union on behalf of Monareng
and another
(2019)
40 ILJ 1753 (LAC).
[6]
Memorandum of Objects, Labour Relations Amendment Bill, 2012.
[7]
Act 6 of 2014.
[8]
See:
Rustenburg
Local Municipality v SA Local Government Bargaining Council &
others
[2017] ZALCJHB 261; (2017) 38 ILJ 2596 (LC) (
Rustenburg)
at
para 38 referred to with approval in
City
of Johannesburg
at
para 21.
[9]
Which
ordered reinstatement, re-employment or compensation.
[10]
[2016] ZALCJHB 492.
[11]
But, preferred
the
matter to be decided on the merits.