Interrupting prescription: Is an award a debt?

[5] All of these matters involve arbitration awards made before 1 January 2015 and are to be decided on the LRA as it stood before the amendment of section 145 of that Act [ by the Labour Relations Amendment Act No. 6 of 2014] and in particular, before the insertion of section 145(9) into that section which only applies to arbitration awards made after 1 January 2015. I shall deal in due course with the facts particular to each of the appeals.

Myathaza v Johannesburg Metropolitan Bus Service (Soc) Limited t/a Metrobus; Mazibuko v Concor Plant; Cellucity (Pty) Ltd v CWU obo Peters (JA122/14) [2015] ZALAC 45; [2016] 1 BLLR 24 (LAC) (6 November 2015) per Coppin JA [CJ Musi JA and Makgoka AJA concurring].

LRA s145. Review of arbitration awards.

(1) Any party to a dispute who alleges a defect in any arbitration proceedings under the auspices of the Commission may apply to the Labour Court for an order setting aside the arbitration award—

(a) within six weeks of the date that the award was served on the applicant, unless the alleged defect involves the commission of an offence referred to in Part 1 to 4, or section 17, 20 or 21 (in so far as it relates to the aforementioned offences) of Chapter 2 of the Prevention and Combating of Corrupt Activities Act, 2004; or

(b) if the alleged defect involves an offence referred to in paragraph (a), within six weeks of the date that the applicant discovers such offence.

(1A) The Labour Court may on good cause shown condone the late filing of an application in terms of subsection (1).

(2) A defect referred to in subsection (1), means—

(a) that the commissioner—

(i) committed misconduct in relation to the duties of the commissioner as an arbitrator;

(ii) committed a gross irregularity in the conduct of the arbitration proceedings; or

(iii) exceeded the commissioner’s powers; or

(b) that an award has been improperly obtained.

(3) The Labour Court may stay the enforcement of the award pending its decision.

(4) If the award is set aside, the Labour Court may—

(a) determine the dispute in the manner it considers appropriate; or

(b) make any order it considers appropriate about the procedures to be followed to determine the dispute.

(5) Subject to the rules of the Labour Court, a party who brings an application under subsection (1) must apply for a date for the matter to be heard within six months of delivery of the application, and the Labour Court may, on good cause shown, condone a late application for a date for the matter to be heard.

(6) Judgment in an application brought under subsection (1) must be handed down as soon as reasonably possible.

(7) 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).

(8) 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.

(9) An application to set aside an arbitration award in terms of this section interrupts the running of prescription in terms of the Prescription Act, 1969 (Act No. 68 of 1969), in respect of that award.

(10) Subsections (5) to (8) apply to an application brought after the date of commencement of the Labour Relations Amendment Act, 2014 and subsection (9) applies to an arbitration award issued after such commencement date.

3 Comments

GilesFiles on January 11, 2016 at 11:02 am

Now reported: [2016] 1 BLLR 24 (LAC)
Headnote:
Prescription – Enforcement of statutory arbitration awards – Debts embodied in arbitration awards issued prior to 1 January 2015 prescribe after three years, and prescription not interrupted by launching of review action.

GilesFiles on February 8, 2016 at 11:10 am

Reported:
(2016) 37 ILJ 413 (LAC)

GilesFiles on May 14, 2016 at 10:21 am

Prof Darcy du Toit’s Weekly Comment in IR Network published by LexisNexis [subscription required]

“Debt” redefined: What does it mean for labour law?

Excerpts

The Labour Appeal Court recently decided that an arbitration award ordering an employee’s reinstatement is a “debt” in terms of section 10 of the Prescription Act, which prescribes after three years even where the employer prevents enforcement by taking the award on review, IR Network Weekly Comment 13 November 2015. 1 The court did so in light of its interpretation of the public policy considerations applicable to prescription. What it did not do, however, was to consider the constitutional context. But in Makate v Vodacom (Pty) Ltd [2016] ZACC 13 (26 April 2016) the Constitutional Court did this and came to a different conclusion – which, it is suggested, calls for a reassessment of the prescription of reinstatement orders.
. . . . .
Its reasoning was brief. The view that “every obligation irrespective of whether it is positive or negative, constitutes a debt”, it found, was questionable even in the context of pre-Constitutional case law and unsustainable in light of section 39(2) of the Constitution (above).
The Prescription Act limits the right of access to court and, as such, must be narrowly interpreted – or, as the Constitutional Court has put it, “when legislative provisions limit or intrude upon those rights they should be interpreted in a manner least restrictive of the right if the text is reasonably capable of bearing that meaning” (para 91).
This alone puts paid to the High Court’s assumption that “debt” must be given a wide meaning, and also disposed of the Labour Appeal Court’s reliance in Myathaza [2016] 25 LAC 1.26.2 also reported at [2016] 1 BLLR 24 (LAC)on the common law principle of “legal certainty” in understanding the scope of prescription. What is essentially an issue of convenience cannot prevail over the protection of a basic right.

. . . . .
The judgment concludes:
“There is nothing … that remotely suggests that “debt” includes every obligation to do something or refrain from doing something apart from payment or delivery. It follows that the trial Court attached an incorrect meaning to the word “debt”. A debt contemplated in section 10 of the Prescription Act does not cover the present claim. Therefore, the section does not apply to the present claim, which did not prescribe” (para 93).
Applying the same reasoning to an arbitration award ordering the reinstatement of an employee, it can also be said that this does not involve “an obligation to pay money, deliver goods, or render services”. If so, the last word in the Myathaza dispute, or others like it, may yet remain to be spoken.

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Interrupting prescription: Is an award a debt?

LRA s145. Review of arbitration awards.

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