CONSTITUTIONAL COURT OF SOUTH AFRICA. Food and Allied Workers Union obo J Gaoshubelwe v Pieman s Pantry (Pty) Limited MEDIA SUMMARY

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1 CONSTITUTIONAL COURT OF SOUTH AFRICA Food and Allied Workers Union obo J Gaoshubelwe v Pieman s Pantry (Pty) Limited 1 CCT 236/16 Date of hearing: 3 August 2017 Date of judgment: 20 March 2018 MEDIA SUMMARY The following explanatory note is provided to assist the media in reporting this case and is not binding on the Constitutional Court or any member of the Court. On 20 March 2018, the Constitutional Court handed down a judgment in an appeal against the judgment and order of the Labour Appeal Court (LAC) granted against Food and Allied Workers Union (FAWU) to the effect that its claim for unfair dismissal against Pieman s Pantry (Pty) Ltd (Pieman s) had prescribed. In reaching this decision, the LAC concluded that the Prescription Act 68 of 1969 (Prescription Act) applies to claims for unfair dismissal under section 191 of the Labour Relations Act 66 of 1995 (LRA), and that referral of a dispute to conciliation does not interrupt prescription. During June 2001, FAWU and Pieman s were engaged in wage negotiations which resulted in what Pieman s alleges was an unprotected strike by its employees and members of FAWU. On 1 August 2001, FAWU s members were dismissed for their alleged participation in the unprotected strike, after a disciplinary hearing was convened. Upon the dismissal of its members, FAWU referred an unfair dismissal dispute to the Commission for Conciliation, Mediation and Arbitration (CCMA), in terms of section 191(1) of the LRA, for conciliation on 7 August On 3 September 2001, the CCMA certified that the dispute remained unresolved. Thereafter, FAWU referred the matter to the CCMA for arbitration. On 15 March 2002, the CCMA ruled that it did not have jurisdiction to arbitrate the dispute because the alleged reason for the dismissal related to participation in a strike that did not comply with the provisions of Chapter IV of the LRA. FAWU subsequently launched a review application which was dismissed by the Labour Court (LC) on 9 December On 16 March 2005, FAWU referred the claim to the Labour Court for adjudication in terms of section 191(5)(b) of the LRA. In response, Pieman s pleaded that the claim had prescribed and contended that the statement of claim

2 had been delivered late without a proper application for condonation. The LC subsequently granted FAWU s application for condonation of the late filing of its statement of claim on 22 June 2008 and dismissed Pieman s plea of prescription. On 24 June 2009, the parties agreed to vary the LC s order of 22 June 2008 dismissing the prescription plea and that Pieman s prescription point be adjudicated separately. In the LC, FAWU challenged the dismissal of its members on the basis that the dismissal was substantially and procedurally unfair. Pieman s objected to FAWU s claims by contending, amongst other things, that FAWU s claim had prescribed in terms of the Prescription Act. The LC upheld the plea of prescription on 15 August 2014 holding that the Prescription Act applies to labour disputes; particularly unfair dismissal claims. The LC further rejected FAWU s suggestion that the referral of a dispute for conciliation to the CCMA interrupted the running of prescription and, as a result, held that FAWU s claim had indeed prescribed. FAWU then appealed to the LAC against the LC s judgment upholding the plea of prescription. The LAC dealt with four points of contention which were raised by FAWU. First, the LAC considered FAWU s argument that in the light of the fact that the interpretation of statues must be driven by section 39(2) of the Constitution, which obliges a court to harmonise existing law with constitutional values, the LAC s decision in Myathaza v Johannesburg Metropolitan Bus Service (Soc) Limited t/a Metrobus (Myathaza) was wrong insofar as it failed to comply with this obligation. The LAC rejected FAWU s contention on the ground that there was no support for it to come to the conclusion that the decision in Myathaza was wrong. As a result, the LAC concluded that it was bound by its earlier decision in Myathaza. Second, the LAC considered FAWU s argument that to apply the Prescription Act to labour disputes would undermine the objectives of labour peace aimed to be fulfilled through the LRA s specific remedies and procedures. The LAC agreed that the LRA scheme has created a set of rights which are uncommon and unknown to our common law. But it rejected the argument that public interest considerations which seek to promote the advancement of labour peace imply that the extinction of a labour dispute by prescription is contrary to the aims and purposes of the LRA. The LAC concluded that, without a constitutional challenge to the prescription, the policy considerations raised by FAWU were irrelevant to determining whether the Prescription Act applied. Third, the LAC considered FAWU s argument that the litigation regime under the LRA is inconsistent with the Prescription Act, as contemplated in section 16(1) of the Prescription Act (which provides for the exclusion of the operation of the Prescription Act if its provisions are inconsistent with another Act that prescribes a specific prescription period in a given context). The LAC held that the crucial question is whether the provisions of the LRA and the Prescription Act give rise to a functional inconsistency. If the two are capable of being reconciled, there is no inconsistency. Unlike the Prescription Act, section 191 does not extinguish a claim but rather regulates the process whereby proceedings are instituted. Accordingly, the LAC held that the two Acts are compatible and therefore reconcilable. 2

3 Fourth, the LAC dealt with FAWU s contention that a claim for unfair dismissal does not constitute a debt for the purposes of the Prescription Act. The LAC concluded that the debt in this instance could be described as the workers claim of right, namely that their employment was terminated unfairly and that the unfairness should be remedied. As a result, the LAC concluded that the Prescription Act applied to all litigation proceedings under the LRA, specifically unfair dismissal referrals. In deciding whether FAWU s claim had prescribed, the LAC upheld FAWU s contention that the debt, which is the right not to be unfairly dismissed, arose upon dismissal and as such prescription began to run upon the dismissal of the employees. However the LAC rejected the contention that the referral of the dispute to the CCMA is a process which interrupts prescription. The LAC held that a referral to the CCMA is merely a functional requirement and is a condition precedent to approaching the LC. The LAC concluded that FAWU s claim had indeed prescribed as prescription began running from the date of dismissal. In the Constitutional Court, FAWU made four main submissions: (1) that the Prescription Act does not apply to unfair dismissal disputes in terms of section 191 of the LRA; (2) that prescription was interrupted by the referral of the dispute to the CCMA; (3) that a purposive interpretation of the relevant provisions, read with section 39(2) of the Constitution, requires that the Prescription Act not apply to claims under section 191 of the LRA; and (4) that this Court s decisions in Myathaza and Mogaila v Coca Fortune (Pty) Ltd mean that the appeal must succeed. Pieman s, in turn, made three principal submissions: (1) that a claim for unfair dismissal under the LRA is a debt for the purposes of the Prescription Act; (2) that there is no inconsistency between the Prescription Act and the LRA dispute resolution procedures; and (3) that the claim in this case has prescribed as the referral to conciliation did not interrupt prescription. The Constitutional Court considered two primary issues. First, whether the Prescription Act applies to litigation under the LRA, and second, whether the unfair dismissal dispute referred by FAWU to the LC on behalf the employees of Pieman s had prescribed. The first judgment, written by Zondi AJ (Mogoeng CJ, Zondo DCJ and Jafta J concurring), finds that, on a holistic assessment of the LRA and the Prescription Act, the provisions of the Prescription Act are inconsistent with section 191 of the LRA, to the extent that there are material differences between the two statutes. One material difference, states Zondi AJ, is the differently stipulated time periods in which to institute litigation under the two statutes. Under section 191 of the LRA a dispute about an unfair dismissal must be referred to a bargaining council or the CCMA within 30 days of the date of dismissal. In the event that the bargaining council or CCMA has certified that the dispute remains unresolved or if 30 days has passed since the referral, and the dispute remains unresolved, the dispute may be referred, within 90 days, to a bargaining council or the CCMA for arbitration, or the LC for adjudication. Subject to good cause being shown section 191 empowers the CCMA to condone late referrals to conciliation, and authorises the LC to condone delays in referring conciliated disputes to it. Zondi AJ holds that the need to apply the Prescription 3

4 Act does not arise when there has been compliance with the above time frames, and neither does it apply when condonation has been refused by the CCMA, as this would signal the end of the matter, because without conciliation the LC has no jurisdiction to adjudicate the dispute. As the delay in question may extend beyond the three year prescription period contemplated in the Prescription Act, Zondi AJ states that the provision for condonation in the LRA is alien to the concept and scheme of the Prescription Act. He further states that if the Prescription Act applies to litigation under the LRA, it will limit the CCMA s and LC s power to permit late referral of disputes, and it will deprive employees of their right to refer disputes to these fora. In light of this inconsistency between the two statutes, Zondi AJ concludes that the Prescription Act does not apply to litigation under section 191 of the LRA. In a separate judgment concurring in the first judgment, Zondo DCJ held that the Prescription Act does not apply to unfair dismissal disputes or claims under the LRA and such disputes or claims are only subject to the periods provided for in the dispute resolution system of the LRA. Zondo DCJ pointed out that this was so because the dispute resolution system created by the LRA is a self-standing system that was carefully crafted with a view to striking a fair balance between the interests of workers and those of employers. Zondo DCJ stated that interpreting the LRA so as to bring the Prescription Act into the LRA dispute resolution system undermines this purpose and unduly tilts the balance in favour of employers to the detriment of workers. Zondo DCJ took the view that applying the Prescription Act to unfair dismissal disputes under the LRA enables employers to use both the LRA and the Prescription Act to avoid liability for unfair dismissal claims whereas, if the LRA is interpreted so as to exclude the Prescription Act, both workers and employers are confined to the LRA in dealing with unfair dismissal disputes. On this approach common law disputes of wrongful dismissals would remain subject to prescription periods under the Prescription Act but unfair dismissal disputes or claims would not be subject to the Prescription Act and its prescription period but subject only to the periods specified in the LRA. Zondo DCJ also stated that there is a conflict between the requirements that workers are obliged to satisfy under the LRA if they want to avoid forfeiting their unfair dismissal claims and those they would be required to satisfy if the Prescription Act applied to unfair dismissal claims and they sought to avoid forfeiting their claims under the Prescription Act and section 210 of the LRA provides that, when there is a conflict between the LRA and any other Act of Parliament, the provisions of the LRA prevail. Zondo DCJ would have for these reasons upheld the union s appeal. In the third judgment written by Kollapen AJ (Cameron J, Froneman J, Kathree-Setiloane AJ, Madlanga J, Mhlantla J and Theron J concurring) Kollapen AJ held that the provisions of the Prescription Act and those of the LRA are consistent and compatible with one another. In reaching this conclusion, he observed that what must first be established is whether, what is being asserted is a debt in terms of section 16(1) of the Prescription Act. In this respect, the Kollapen AJ held that a claim for unfair dismissal constitutes a debt as contemplated in section 16(1). 4

5 Kollapen AJ noted that once it is established that a claim for unfair dismissal constitutes a debt; the next leg of the enquiry is to determine whether a consistency between the two Acts exists. He agreed with the reasoning of the LAC judgment, that the mere fact that the Prescription Act and the LRA deal with time periods or impose conditions, does not demonstrate an inconsistency, it merely triggers the risk of inconsistency. He held that for an inconsistency to arise, a further enquiry into whether the two Acts are inconsistent with section 16(1) of the Prescription Act is required. He then concluded that the provisions of the Prescription Act and the LRA are consistent with each other, in so far as they relate to time periods and that the time periods in section 191 of the LRA which deal with when a litigant is expected to take the necessary steps to resolve a dispute, cannot be found to be inconsistent with those in the Prescription Act which provide a cut-off point when those steps can no longer be taken, because both time periods seek to achieve different objectives. Kollapen AJ held that had the LRA provided for prescription periods, as the Prescription Act does, then the inconsistency envisaged in section 16(1) of the Prescription Act would have been clear. He found that the time periods in the LRA and the Prescription Act are not only reconcilable but can exist in harmony alongside each other. Further, Kollapen AJ addressed the meaning of good cause at any time as contemplated in terms of section 191(2) of the LRA. He held that interpreting the phrase at any time to mean that a party may refer a dispute to conciliation at any time notwithstanding the 30 and 90 days in section 191(2) would be inconsistent with the very objectives of the LRA, which seek to advance expeditious resolution of disputes. He concluded that the phrase at any time does not extend the time frames of 30 and 90 days in section 191(2) of the LRA and thus do not provide a basis for an inconsistency argument with the Prescription Act. Finally, Kollapen AJ dealt with whether a referral of a matter to conciliation interrupted prescription and in answering this question; he had to determine whether a referral to conciliation constituted a document which commences legal proceedings in terms of section 15(6) of the Prescription Act. He held that the referral of disputes to the CCMA for conciliation constitutes the service of a process commencing legal proceedings. He concluded that although the debt became due on 1 August 2001, it was interrupted by the referral to conciliation on 7 August 2001 and continued to be interrupted until the review proceedings on 9 December He further concluded that when the dispute was referred to the Labour Court on 16 March 2005, it had not prescribed and for these reasons the he upheld the appeal. In conclusion, the third judgment concurred with the order of the first judgment. 5