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. Prescription does not apply to matters under the LRA. [7] 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) Ltd 1, 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) Ltd 4, 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) 2 [1998] 19 ILJ 757 (SCA) 3 Secttion 11 of the Prescription Act 68 of 1969 4 [2012] 33 ILJ 2452 (LC)
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 Another 5. 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 [2003] (3) SA 579 (B) at 604 6 [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 Cape 10 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) 8 [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)
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
upheld. It will however not be proper in the circumstances of this to allow costs to follow the result. 8 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