REPUBLIC OF SOUTH AFRICA
IN THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
JUDGMENT
Not Reportable
Case no: J 2536/12
In the matter between:
MOKGAETJI BERNICE KEKANA
Applicant
and
DEPARTMENT OF HEALTH AND
WELFARE: LIMPOPO
Respondent
Heard on: 17 April 2014
Delivered: 22 August 2014
Summary: Application to make arbitration award order of Court.
Prescription point raised. Application of Prescription Act to labour
matter.
JUDGMENT
______________________________________________________________
MOLAHLEHI J
2
Introduction
[1]
This is an opposed application to make the arbitration award issued on
10 March 2001 under the auspices of Public Health and Welfare
Sectoral Bargaining Council (the bargaining council) an order of Court.
[2]
There is in general no time limit within which an application under
section 158(1) (c) of the Labour Relations Act of 1995 (the LRA) has to
be brought. It follows from that that the application has, in line with the
spirit of the LRA, to be made within a reasonable time.
[3]
The application as indicated is opposed by the respondent. The
respondent has raised a preliminary point concerning prescription. The
issue in this matter turns mainly on whether the provisions of the
Prescription Act 68 of 1969 apply to an arbitration award concerning
the reinstatement and not compensation.
Background facts
[4]
The applicant was prior to the termination of the employment contract
employed as a nurse by the respondent. The applicant referred an
alleged unfair dismissal dispute to the bargaining council, the outcome
of which was an arbitration award made in favour of the applicant, and
in particular ordering that she be reinstated.
[5]
The respondent had opposed the unfair dismissal claim on the basis
that the applicant was not dismissed but that her employment contract
was terminated by the operation of the law in terms of section 17 (5) of
the Public Service Act 38 of 1994.
Evaluation
[6]
It was conceded in argument that the filing of the review application does
not interrupt prescription. In responding to the prescription point raised
by the respondent, the applicant contends that:
3
a.
The arbitration award is not a "debt" as envisaged in the
Act.
b.
[7]
Prescription does not apply to matters under the LRA.
The issue of the applicability of prescription to labour matters, in
particular arbitration awards, has received attention in a number of
cases which had found that an arbitration award was a debt and
accordingly the three year period under the Prescription Act applies.
This approach was adopted in the Mpanzama v Fidelity Guards
Holdings (Pty) Ltd1, where it was held that the Prescription Act applies
to labour disputes because the LRA did not expressly exclude the
operation of the Prescription Act to labour disputes. It was for that
reason that the Court found that the Prescription Act applied to both the
provisions of sections 143 and 158(1) (c) of the LRA.
[8]
The approach in the Mpanzama’s matter is similar to that which was
adopted by the Supreme Court of Appeal (SCA) in Uitenhage
Municipality v Malloy,2 where the provisions of the Prescription Act was
applied to a matter involving the Basic Conditions of Employment Act of
1993.
[9]
It is now well established that in terms of section 10(1) (ii) (d) and 12(1)
of the Prescription Act, an arbitration award which is regarded as a
debt is extinguished by prescription after the lapse of three years from
the date it was issued.3
[10]
In SATAWU obo Hani v Fidelity Cash Management Services (Pty) Ltd4,
the Court held that:
‘It is trite that prescription starts to run when the “debt” becomes due.
On the facts in casu prescription would have commenced to run when
the award was issued to the parties on 24 April 2007 or, more
correctly, on 2 May 2007 when the applicant’s right to be reinstated
1
[2000] 12 BLLR 1455 (LC)
[1998] 19 ILJ 757 (SCA)
3 Secttion 11 of the Prescription Act 68 of 1969
4 [2012] 33 ILJ 2452 (LC)
2
4
came into effect. The parties are in agreement that the award created
a new debt (although the applicant relies primarily on the unfair
dismissal as having been the dispute subjected to arbitration in the
context of section 13 (1) (f). This approach is consistent with that
taken by Friedman JP in Primavera Construction SA v Government,
North – West Province and Another5. Where the Court held:
The effect of a valid award by an arbitrator will usually be to create
new rights and obligations between the parties, and it will either
dissolve existing rights or bring an end to a dispute as to whether
certain rights existed or not. It is clear that the absence of voluntary
compliance, the award can be enforced only with the approval of the
Court. The party therefore wishing to enforce award will issue on the
award and not on the original contract from which the dispute arose. It
is clear that the judgement debt lapses from the prescription after 30
years, an arbitrator’s award will acquire the status of the judgement
debt only once it has been made an order of Court. … I reiterate that
whilst the award has been made an order of Court, it becomes a
judgement debt which prescribes after 30 years. See s 11 (a) (ii) of the
Act. Until it is made an order of Court, it appears that a party’s right to
enforce the award ordinarily prescribed with three years from the date
of publication of the award.’
[11]
The above approach was followed in Popcru obo Sifuba v
Commissioner of the South African Police Service 6, where Musi AJ, as
he then was had the following to say:
‘The debt in issue in this matter is that debt that flows from the
arbitration award. A valid arbitration award, like a court judgment in
certain circumstances, is regarded as a novation of the former debt on
which the award was granted and the arbitration award itself
constitutes the new debt. The former debt is converted into a new debt
that is due by virtue of the valid arbitration award. New rights, duties
and obligations are created by a valid arbitration award’.
5
6
[2003] (3) SA 579 (B) at 604
[2009] 12 BLLR 1236 (LC)
5
[12]
The authorities that say prescription is applicable to labour matter does
so on the basis that the LRA does not expressly exclude the application
of the Prescription Act from its operation and that the principles of the
prescription are consistent with timeous enforcement of debts under
the LRA. In this respect, the LAC in National Union of Public Service
and Allied Workers v The Public Servants Union,7 per Waglay DJP, as
he then was had the following to say:
“Turning firstly to the issue of prescription. This is a statutory provision,
governed by the Prescription Act and is intended to bring finality to
disputes. The Prescription Act provides inter alia that a person or legal
entity must Institute legal proceedings within 3 years from the date on
which a debt was due to it by a person or entity known to it, or whose
identity it could have ascertained by the exercise of reasonable care.
For the purpose of prescription the word "debt" has a wide meaning
and includes things other than money. Once a date for payment is
fixed that the debt becomes due from the fixed date and that is the
date from which prescription commences to run. The act also provides
for instances when prescription ceases to run or is interrupted or
suspended….”
[13]
The above approach has recently been questioned by a number of
Labour Court judgments. The two which the applicant relied on are
Cellucity (Pty) Ltd v CWU obo Peters,
8
and Coetzee and 48 Others v
The Members of the Executive Council of the Provincial Government
and Others.9
[14]
In Coetzee & 48 others v The Member of the Executive Council of the
Provincial Government of the Western Cape10 case no: C751/2008, the
Court per Rabkin- Naiker J held that:
‘[15]
First respondent’s case in respect of prescription relies on the
submission that ‘all claims under the LRA fall under the
7
[2010] 31 ILJ 2347 (LAC)
[2014] 2 BLLR 172 (LC)
9 (2013) 34 ILJ 2865 (LC)The other cases that have adopted a different approach is NUMSA
obo Welcome Masipa v Go Suspension and Axels (Pty) ltd case number JR 3349 and Circuit
Breakers Industries Ltd v NUMSA obo Hadebe case number JR 1958 -08 where the Court
held that an arbitration award does not constitute a debt.
10 (2013) 34 ILJ 2865 (LC)
8
6
Prescription Act’. In my judgment the LRA, in its design, is
inconsistent with such a submission. Instead of any reference
to prescription or the inclusion of a prescription clause, the
LRA includes specific time periods for the referral of claims and
underscores the use of the tool of condonation by this court
when such periods are exceeded in the text of the statute,
rather than in the court’s rules.
[16]
Further, if the Prescription Act did apply, there should be no
distinction as regards its application between the different
routes required by the LRA i.e. those that go to conciliation
and then to arbitration, and/or those which are adjudicated in
the Labour Court after conciliation. This lack of distinction
would accord with our constitutional values, particularly the
right to equality and of access to justice. The LRA does not
proscribe a hierarchy of dismissal claims litigants may bring’.
[15]
The reasons for saying that prescription does not apply in labour
matters, by my sister Rabkin-Naiker J can be summarised as follows:
a.
the Prescription Act is incompatible with the LRA.
b.
public policy considerations do not support the application of
prescription to labour disputes.
c.
the application of the Prescription Act to labour claims creates
inequalities between litigants using different routes for their
disputes and;
d.
the application of the Prescription Act is
unworkable where
disputes move between dispute resolution bodies and Court.
[16] It would appear in essence that the reasoning of my sister, Rabkin–
Naiker J is based on equity consideration. The issue of equity
consideration relating to prescription in labour matters received attention
in the matter of Sifuba, where it was held that equity considerations do
not come into play when a plea of prescription has been successfully
established. The Court held in this respect that:
7
‘It was submitted that as a Court of equity, the Prescription Act should
not be applied to oust the jurisdiction of the court and thereby deny the
applicant's claim.
Equity must be applied even-handedly to both employer and
employees. The employee had three years in which to prosecute his
claim. The Respondent had persistently denied liability for the debt.
The respondent did not obstruct the applicant in instituting
proceedings.
In the circumstances, the Court cannot come to the assistance of a
sloppy litigant. It would be inequitable to the respondent if the
applicant is allowed to profit from his own inaction.’
[17]
This Court has in previous judgments when dealing with the same
issue supported and upheld the approach that says that the
Prescription Act applies to arbitration awards.
[18]
The facts in the present matter are similar to those in the unpublished
case of Mangenegene Mbaleki France v PCC Cement (Pty) Ltd and
Others case number JR 698/12, where the employee amongst other
prayers sought to have the arbitration award that ordered that he be
reinstated made an order of Court. The Court in that case firstly held
that the provisions of the Prescription Act are applicable to the LRA
disputes. And secondly that an arbitration award is a debt as envisaged
in the Prescription Act.
[19]
The conclusion that the Prescription Act is applicable to the arbitration
award which the applicant seeks to make an order of Court in terms of
s 158 (1) (c) of the LRA after the expiry of the prescription period of
three years, renders the inapplicable principle of unreasonable delay. It
follows that there is therefore no need to consider the issue of the
unreasonable delay in this matter.
[20]
It is common cause that the applicant brought the application to have
the arbitration award which was made in her favour made an order of
Court after the prescription period of three years lapsed. In the
circumstances the prescription point raised by the respondent is
8
upheld. It will however not be proper in the circumstances of this to
allow costs to follow the result.
Order
[21]
In the premises, the following order is made:
21.1
The prescription point raised by the respondent is upheld.
21.2
The arbitration award made on 10 March 2001 under case
number PSHS1415, in favour of the applicant has prescribed
and accordingly the application to make it an order of court is
dismissed.
21.3
There is no order as to costs.
________
E Molahlehi
Judge of the Labour Court of South Africa
9
APPEARANCES:
For the Applicant:
D W de Villiers of Riki Anderson Attorneys
For the Respondent: Adv. M Zulu
Instructed by:
State Attorney Johannesburg