Time-bar prescription: Periods not the same

2 Comments

1. 

   GilesFiles on February 8, 2017 at 2:28 pm

   Reported
   2017 3 BLLR 213; (2017) ILJ 527 (CC)
   BLLR headnote

   Prescription – Application to LRA disputes – Three-year prescription period set by Prescription Act, 1969 not applying because Act conflicting with LRA – Plea of prescription to block employee’s claim to enforce award after three years not permissible.

2. 

   GilesFiles on March 3, 2017 at 8:29 am

   Reinstatement award still valid after 9 years

   The employee was dismissed for an invalid reason on 26 November 2007. The employer ‘convicted’ her of a purported ‘assault’. But the employer failed to prove the ‘charge’ and she was reinstated with effect from 2 June 2008 with some back pay. The labour court (Basson J) reviewed the award and upheld it on 22 June 2012. In effect it was found that the employer had failed to prove the validity, let alone the fairness, of the reason for dismissal. The reason was unrelated to any conduct on the part of the employee. Without any hearing the Constitutional Court unanimously allowed her direct access and declared that the reinstatement award had not prescribed and ordered the employer to pay all the legal costs.

   Mogaila v Coca Cola Fortune (Pty) Ltd (CCT76/16) [2017] ZACC 6 (2 March 2017) per the Court (Mogoeng CJ, Nkabinde ADCJ, Cameron J, Froneman J, Jafta J, Khampepe J, Madlanga J, Mhlantla J, Mojapelo AJ, Pretorius AJ and Zondo J concurring):

   Excerpts without footnotes

   Myathaza
   [14] Metrobus employed Mr Myathaza as a bus driver. Aggrieved by a dismissal, he referred a dispute to the relevant bargaining council, which appointed an arbitrator to adjudicate. The arbitrator found that the dismissal was unfair and ordered reinstatement with retrospective effect. Metrobus was also ordered to pay Mr Myathaza back pay. But Metrobus failed to do so.

   [15] When Mr Myathaza reported for work, Metrobus told him it intended to have the arbitration award reviewed. Mr Myathaza opposed the review proceedings. Those proceedings, at the time this Court heard oral argument, were still pending before the Labour Court. Mr Myathaza then applied to have the arbitration award made an order of court. Metrobus opposed the application on two grounds. First, it contended that the arbitration award could not be made an order of court whilst the review application was pending. Second, the arbitration award had, it said, in any event prescribed.

   [16] The Labour Court held that the arbitration award constituted a “debt” for the purposes of the Prescription Act. On this basis, the award had prescribed and the application was dismissed. On appeal, the Labour Appeal Court upheld the Labour Court’s findings. That Court held that—

   “any arbitration award that creates an obligation to pay or render to another, or to do something, or to refrain from doing something, does meet the definitional criteria of a ‘debt’ as contemplated in the Prescription Act.”

   Since an arbitration award constituted a “debt” in terms of the Prescription Act, the Labour Appeal Court found that the award prescribed three years from the date it was issued. Mr Myathaza’s award had thus prescribed, and his appeal was dismissed.

   [17] Mr Myathaza sought leave to appeal from this Court. His appeal succeeded. Three judgments were delivered. The first, penned by Jafta J, with Nkabinde ADCJ, Khampepe J and Zondo J concurring, held that the Prescription Act was incompatible with the provisions of the LRA. In interpreting section 16 of the Prescription Act, the first judgment found that in the context of the Constitution, “inconsistency” was to be afforded a meaning wider than contradiction or conflict. Relying on this Court’s decision in Mdeyide, the first judgment held that “[i]t is enough if there are material differences between [the two pieces of legislation]”.

   [18] Based on the fundamental differences between the LRA and the Prescription Act, the first judgment concluded that the latter did not apply to the LRA. The result was that Mr Myathaza’s arbitration award had not prescribed. In a statement that was additional to the judgment’s basis of decision (obiter), the first judgment further held that, even if the Prescription Act were to apply, Mr Myathaza’s reinstatement award could not prescribe because it did not constitute a “debt” for the purposes of the Prescription Act. This was because the order of reinstatement was “not an obligation to pay money or deliver goods or render services by Metrobus to the applicant”.

   [19] In a judgment concurring with the approach of Jafta J, Zondo J wrote separately to underscore why the Labour Court and the Labour Appeal Court were mistaken in their approach (third judgment). The third judgment buttressed the first judgment’s finding that the Prescription Act was not applicable to LRA matters. It disagreed that a referral of a dismissal dispute to the CCMA interrupted prescription since that could occur only by the service on the debtor of the process contemplated in section 15(1) read with subsection (6) of the Prescription Act.

   [20] The third judgment in addition concluded that an arbitration award did not constitute a “debt” for the purposes of the Prescription Act.

   [21] The second judgment in Myathaza was penned by Froneman J, with Madlanga J, Mbha AJ and Mhlantla J concurring. The second judgment held that the Prescription Act was not inconsistent with the LRA, but complementary to it. It found that the provisions of the two statutes are capable of complementing each other in a way that best protects the fundamental right of access to justice, whilst at the same time preserving the speedy resolution of disputes under the LRA.

   [22] After finding the two statutes consistent, the second judgment examined the meaning of “process” and “debt” in section 15 of the Prescription Act. It held that commencing proceedings before the CCMA interrupted prescription in accordance with section 15(1) of the Prescription Act.

   [23] In determining whether a claim for unfair dismissal under the LRA constitutes a “debt”, the second judgment held that “only a claim for the enforcement of legal obligations should qualify as a ‘debt’ under the Prescription Act”. An unfair dismissal claim sought to enforce three possible kinds of legal obligations, namely reinstatement, re-employment and compensation. This meant it was a “debt”, because each of those obligations “enjoins the employer to do something positive”:

   “In the case of reinstatement, as was claimed and ordered here, it means the resuscitation of the employment agreement with all the attendant reciprocal rights and obligations. The employer must provide employment and pay remuneration. Both fall within the meaning of a ‘debt’ under the Prescription Act, however narrowly interpreted.”

   [24] Since the service of process initiating the CCMA dispute resolution process interrupted prescription, prescription remained interrupted until any review proceedings seeking to nullify the CCMA outcome were finalised:

   “The restriction to review only provides a cogent and compelling reason for re-interpreting the Prescription Act to include statutory reviews under section 145 of the LRA as included in the judicial process that interrupts prescription until finality is reached under section 15 of that Act. The restriction infringes the right of access to courts more severely than where a right of appeal is allowed. An interpretation that best protects the right of access should be preferred. That can be achieved by allowing the right of review to play the same role of finality as the right of appeal does in ordinary matters.”

   [25] The referral of the dispute to the CCMA interrupted prescription, which remained interrupted until the finalisation of the review proceedings. Hence the second judgment found that Mr Myathaza’s arbitration award had not prescribed and, like the first and third judgments, that the appeal should succeed.

   [26] The order the Court in Myathaza unanimously granted read thus:

   “1. Leave to appeal is granted.
   2. The appeal is upheld.
   3. The orders of the Labour Court and the Labour Appeal Court are set aside and that of the Labour Court is replaced with the following:
   ‘The arbitration award issued on 17 September 2009 in favour of Mr Sizwe Myathaza is made an order of the Labour Court.’
   4. Johannesburg Metropolitan Bus Services (SOC) Ltd t/a Metrobus is ordered to pay costs in the Labour Court, Labour Appeal Court and this Court, including costs of two counsel where applicable.”

   Analysis
   [27] Because of the parity of votes in Myathaza, in which none of the judgments secured a majority, no binding basis of decision (ratio) emerges from the Court’s decision. But, on either approach, that of Jafta J and Zondo J, or that of Froneman J, Ms Mogaila is entitled to an order declaring that the arbitration award ordering her reinstatement has not prescribed. She is entitled to secure its certification under section 143(3) of the LRA, and its enforcement under section 143(1).

   [28] Whether the arbitration award in her favour could not have prescribed because the Prescription Act does not apply at all to LRA matters, as the first and third judgments held (or because, even if that statute were applicable, the reinstatement order was “not an obligation to pay money, deliver goods or render services”), or because, as the second judgment held, the CCMA referral interrupted prescription, persisting until the finalisation of the review proceedings in October 2013, Ms Mogaila must succeed.

   [29] On the second judgment’s approach, the arbitration award would have prescribed only in October 2016. Ms Mogaila filed her application in this Court timeously, in April 2016. Prescription was therefore interrupted, again, pending the finalisation of these proceedings. On either approach, Ms Mogaila is entitled now to proceed with the certification of the award under section 143 of the LRA.