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REPUBLIC OF SOUTH AFRICA

THE LABOUR COURT OF SOUTH AFRICA, DURBAN

JUDGMENT

Not Reportable

Case no: D636/2009

SHOPRITE CHECKERS                                                                                             Applicant

and

ANASHRIN PILLAY NO                                                                                First Respondent

COMMISSION FOR CONCILIATION, MEDIATION AND

ARBITRATION                                                                                         Second Respondent

DESENTHRIE MOODLEY                                                                             Third respondent

Heard:             17 April 2014

Delivered:       1 August 2014                                                                                                

JUDGMENT

TLHOTLHALEMAJE, AJ

Introduction:

[1] There are several applications before the Court emanating from an initial application brought by the Applicant to review, set aside or correct an arbitration award issued by the First Respondent (Arbitrator) acting under the auspices of the Second Respondent (CCMA) dated 14 July 2009 under case number KNPM 3499-08. In terms of the award,  the Applicant was ordered to reinstate the Third Respondent with retrospective effect, and to further pay her back-pay.

[2] Linked to that application, is an application brought by the Third Respondent for condonation of the late filing of her answering affidavit to the review application. Prior to the matter being heard, the Applicant had also brought an application in terms of Rule 11 to seek a declarator to the effect that the arbitration award has since prescribed in terms of the Prescription Act 68 of 1969.

Brief background:

[3] The Third Respondent was employed as a Receiving Clerk by the Applicant in its Receiving Bay. On 23 September 2008 she was called to a disciplinary enquiry to answer to allegations of misconduct. She was dismissed on 6 October 2008 and had then referred a dispute to the CCMA. An award in her favour was issued on 14 July 2009.

[4] The Applicant had instituted review proceedings on 18 August 2009. The Third Respondent’s answering affidavit was only filed on 6 March 2012, some 30 months late. An application for condonation for the late filing of the answering affidavit was filed on 14 April 2014, some three days prior to the hearing of this application.

[5] It was further common cause that notwithstanding the review application, the Third Respondent has not approached the Court in terms of section 158 (1)(c) of the LRA, nor had she sought certification of the award in terms of section 143 of the LRA. As already indicated above, three issues are before the Court for determination. Given the circumstances of this case, if the defence of prescription is upheld, any application to review that award or any other interlocutory application concerning the review application becomes academic.

Prescription:

[6] The Third Respondent had objected to the manner with which this defence was pleaded. In this regard, it was submitted that the Applicant’s purported application for a declarator was not properly brought before the court in that it had accompanied an application for condonation for the late filing of the heads of argument. The Third Respondent had noted that she did not oppose the application for condonation in respect of the written heads of argument.

[7] The Third Respondent’s concern was that the issue of prescription needed a separate enquiry which ought to be dealt with in a different manner other than the way the Applicant had brought it up. The Third Respondent further held the view that a proper application, accompanied by an affidavit should have been brought in respect of the defence of prescription, and that the manner with which the issue was brought was opportunistic.

[8] The Applicant’s contention was that the Court has powers to determine whether an arbitration award has since prescribed under the provisions of Rule 11, and also since an interlocutory claim can dispense of the main claim and bring a matter to an end. It further submitted that the bringing of the defence was done on affidavit, and that legal arguments were sufficient for determination of the issue.

Is the issue of prescription properly before the Court?

[9] The Applicant brought its Notice of Application for condonation for the late filing of written heads of argument, and declarator on 7 April 2014. Attached to that notice was a founding affidavit in respect of the application for condonation in which the issue of prescription was also raised. In this regard, it was pointed out that the award was served on the Applicant on 21 July 2009 and had prescribed on 20 July 2012. In the affidavit, it was pointed out that after the notice of set-down was received, on 7 March 2014, a letter was addressed to SACCAWU representing the Third Respondent that the arbitration award had prescribed, and reference was made to the then recent judgment in Sampla Belting SA (Pty) Ltd v CCMA & others[1]. The matter was again discussed with a Ms. Nancy Zibi of SACCAWU on the same date who had undertaken to take instructions on the matter. On 28 March 2014 a ‘Notice of acting’ was received on behalf of the Third Respondent from her current attorneys of record, and and attorney, Mr. Philani Jafta had subsequently declined to agree to the proposal that the issue of prescription be argued on the set-down date.

[10] Section 17 of the Prescription Act provides that:

‘17. Prescription to be raised in pleadings:-

1.    A court shall not of its own motion take notice of prescription.

2.    A party to litigation who invokes prescription, shall do so in the relevant document filed of record in the proceedings: Provided that a court may allow prescription to be raised at any stage of the proceedings.’

[11] The implications of the above provisions were considered in Technikon Pretoria (now Tshwane University of Technology) v Nel NO and Others[2] in which the Honourable Molahlehi J held that a point of prescription ought to properly be raised in a special plea or opposing affidavit, although the court retains a discretion to allow such point to be raised at a later stage. In arriving at these conclusions, the Court had relied on Minister of Justice-Constitutional Development V Mathobela and Others[3], where the Court had held that:

‘Section 17 (1) forbids that a court take mero motu cognizance of the fact that a claim had prescribed. Understandably so, because there may well be certain facts which are not placed before the court that may have interrupted the running of prescription. Prescription must be invoked by the party who raises it as a defence and it must be done in the relevant document’.[4]

And

‘Though Section 17 (2) refers to “relevant document” and not specifically to “pleadings” as contained in its predecessor (Section 14 of Act 18 of 1943), I am of the view that the “relevant document” is either a plea (special plea) in trial proceedings or an opposing affidavit in motion proceedings’[5].

[12] The Court has adiscretion in terms of in terms of section 17(2) of the Prescription Act read with Rule 11(4)[6] of the Labour Court Rules, to consider such applications in a manner it deems expedient. In exercising this discretion, I have taken regard of the authorities referred to above and taken into account that in declining to consider the issue of prescription in Technikon Pretoria (now Tshwane University of Technology) v Nel NO and Others, the Court took into account that the party seeking to raise prescription had merely filed a “notice to argue point of law” raising the point of prescription for the very first time on the day before the hearing, and also in its heads and supplementary heads of argument. This according to the Court meant that the point of prescription was not properly before it, as it had not been properly pleaded and that the employer party had denied the employee the opportunity to give a full account of the delay in relation to prosecuting his application in terms of section 158(1)(c) of the LRA to finality.

[13] The Court in Minister of Justice-Constitutional Development V Mathobela and Others[7] had also declined to consider the issue of prescription for the same reasons that it was merely raised in a party’s heads of argument. The Labour Appeal Court in South African Post office Ltd v CWU obo Permanent Part-Time Employees[8] also held that a court cannot pronounce upon the issue of prescription unless it is properly raised in the pleadings. In that case, the issue of prescription was raised in argument and not pleaded as a defence to respondent’s claim. The Court had concluded that in the absence of prescription being properly raised in the pleadings and in the absence of agreement that it may nevertheless be raised before us, it cannot be determined.

[14] In this case, the issue of prescription was raised by way of notice in the course of an application accompanied by an affidavit. It is accepted that the founding affidavit in that regard was lacking in regards to the details surrounding the issue of prescription. What is material however is that the Third Respondent was informed that the issue was to be raised, and the grounds upon which it was raised. In my view, this was sufficient to enable the Third Respondent to respond, and the only response to that application was that the application for condonation in respect of the filing of the heads of argument was not opposed. Inasmuch as the Third Respondent had filed an application in respect of the late filing of the answering affidavit some few days prior to the set-down date, she had every opportunity to respond to the issue of prescription. Furthermore, I am satisfied that Adv. Madonsela on behalf of the Third Respondent appeared in Court sufficiently prepared to argue the matter, and had valiantly done so.

[15] Having had regard to the provisions of Section 17 of the Prescription Act, and those of Rule 11 (4) of the Rules of this Court, and further having had regard to the circumstances of this case and the manner with which the issue of prescription was raised, I am of the view that it is convenient for the Court to exercise its discretion and accept that the application for a declarator is properly before it. In the light of the fact that the issue was competently argued on behalf of the Third Respondent despite reservations, I am further of the view that she was not in any manner prejudiced.

The legal principles surrounding prescription:

[16] In terms of sections 10(1),(11)(d) and 12(1) of the Prescription Act 68 of 1969,  an arbitration award which is regarded as a debt is extinguished by prescription after a lapse of three years from the date it was issued. In Mpanzama v Fidelity Guards Holdings (Pty) Ltd[9] the Court held that the provisions of the Prescription Act apply to the provisions of the LRA, and arbitration awards had the status of a ‘debt’. This approach was followed in a number of cases by this Court[10].

[17] Other decisions of this Court however hold a different view, concluding that the Prescription Act finds no application in awards issued by the CCMA or Bargaining Councils[11]. The basis of that conclusion is that the Prescription Act is incompatible with the architecture of the LRA, and that there was a strong case on public policy grounds to find that prescription does not apply to unfair dismissal claims under the LRA, as its application would create inequalities between litigants using different routes for their disputes, and furthermore that it will be unworkable where disputes move between tribunal and the Court and vice versa[12].

[18] In Circuit Breakers Industries v NUMSA & other[13], the Court held the view that an award of compensation constituted a ‘debt’ for the purposes of the Prescription Act. However, when it came to the issue of an award of reinstatement, the Court held that on the basis that reinstatement is the primary remedy in the case of an unfair dismissal, it could never have been the intention of the legislature to make the remedy of reinstatement open to being up-ended by a plea of prescription[14].  Adv. Madonsela aligned himself with these views in arguing that prescription was not applicable to the arbitration award which was the subject matter of a review application. In this regard, reliance was also placed on Aon SA (Pty) Ltd v CCMA & others[15], more specifically for the proposition that a filing of a review application interrupted the running of prescription.

[19] The adverse effects of the application of the Prescription Act to arbitration awards have been eloquently addressed by this Court[16] especially by the Honourable Rabkin-Naicker J in Cellucity (Pty) (Ltd) and also in Coetzee & 48 others. It cannot be doubted that the Prescription Act is indeed incompatible with public policy, and creates unintended and iniquitous consequences for vulnerable employees in possession of favourable awards. Those awards once prescription is upheld, are not worth the paper they are written on.

[20] Inasmuch as the effects of the Prescription Act goes against the grain of equity, as a matter of law, that Act is indeed applicable to arbitration awards, on the basis that the LRA does not exclude its operation, and it is not inconsistent with the provisions of sections 143 and 158 (1) (c ) of the LRA[17]. This principle was reinforced in Police & Prison Civil Rights Union on behalf of Sifuba v Commissioner of the SA Police Service & others[18]

‘…The Prescription Act does not give the court a discretion. If the requirements for a plea of prescription have been established by the party taking the point then that party is entitled as a matter of right to have that plea upheld. Although this court is a court of equity, in my view considerations of equity do not come into play when all the requirements for a successful plea of prescription are established. Extinctive prescription renders unenforceable a right by the lapse of time. See s 10(1) of the Prescription Act.’

[21] At the same time, Courts have also warned parties in possession of favourable awards against inaction[19]. The LRA does not prescribe any time periods for which arbitration awards remain enforceable. Furthermore, it is silent in regard to the time frames relating to the enforcement of arbitration awards by means of proceedings in terms of section 158(1)(c) and certification under section 143(3) of the LRA.  To the extent that there is this lacuna in the LRA, it was left to the parties in possession of favourable awards to utilise the provisions of sections 143 and 158 (1) (c) of the LRA, even in circumstances where a review application had been launched. In Sifuba[20] it was held that:

‘Until the arbitrator’s award is made an order of Court, the applicant’s right to enforce the award therefore prescribes within three years of the publication of the award.’

What this implies therefore is that mere possession of a favourable award in the absence of a certification of that award under section 143, or that award having been made an order under section 158 (1) (c ) of the LRA is meaningless.

[22] Contrary to the view held in Aon SA, a majority of decisions from this Court further recognise that the filing of a review application does not interrupt the running of prescription, and an application for review does not automatically stay an award [21]. In Sifuba, the Court held that:

‘There is no legal provision that provides for the automatic suspension of the enforceability of an arbitration award by an application for review. Both s 145(3) of the Act and s 33(3) of the Arbitration Act provide that a court may, if it considers that the circumstances so require, stay the enforcement of the award pending its decision on the review of an award.

….The mere fact that a review application is pending is not a bar to making an award an order of court.”

[23] Applying the above principles to the facts of this case, it is taken into account that the award was issued on 14 July 2009. Up to date, the Third Respondent, ably assisted by SACCAWU and her current attorneys of record has not certified the award in terms of section 143 of the LRA, and has not in any manner sought an order in terms of section 158 (1) (c ) of the LRA. Other than this inaction, the Third Respondent’s answering affidavit to the review application was filed some 30 months out of time, and an application for condonation was only filed some few days prior to the set-down of this application. This matter represents a classic case of inaction, which the Court in Mpazama, Sifuba and others had warned against. In the light the conclusions made in respect of the applicability of the Prescription Act to arbitration award, and the fact that there is nothing to indicate that the running of prescription was interrupted in this case, I am inclined to find that the award issued on 14 July 2009 had indeed prescribed.

[24] In the light of the above conclusions, it follows that the application for condonation for the late filing of the answering affidavit and the review application becomes academic. However, for the sake of completeness, it further needs to mentioned that the Court would have been disinclined to grant condonation in respect of the Third Respondent’s late filing of the answering affidavit.

[25] The test for determining whether condonation should be granted was articulated in Melane v Santam Insurance Co. Ltd[22] in the following terms;

‘In deciding whether sufficient cause has been shown, the basic principle is that the Court has a discretion, to be exercised judicially upon a consideration of all the facts, and in essence it is a matter of fairness to both sides. Among the facts usually relevant are the degree of lateness, the explanation therefor, the prospects of success and the importance of the case. Ordinarily these facts are interrelated, they are not individually decisive, save of course that if there are no prospects of success there would be no point in granting condonation. Any attempt to formulate a rule of thumb would only serve to harden the arteries of what should be a flexible discretion. What is needed is an objective conspectus of all the facts. Thus a slight delay and a good explanation may help to compensate prospects which are not strong. Or the importance of the issue and strong prospects may tend to compensate for a long delay. And the Respondent’s interests in finality must not be overlooked”  

[26] The Third Respondent’s application falls short of the above requirements in many material respects. Firstly, the delay is about 30 months, which is excessive in the extreme. The only explanation proffered in that regard by Mr. Mphikeleli Ndlovu, the Regional Secretary of SACCAWU was that the late Mr. Mpofana, an official of SACCAWU, had deposed to an affidavit in opposition to the Applicant’s review application. It appeared ‘apparent’ to Mr. Ndlovu that the Applicant had not objected to the late filing of the opposing affidavit, and SACCAWU has not been able to establish the reasons for the lateness.

[27] It is trite that compliance with the Rules and time frames set by the Court are not up for negotiation between the parties. Even if a party does not object to the late filing of documents, it is still for the Court to satisfy itself that there has been compliance with its rules, more specifically when the extent of non-compliance as in this case is excessive in the extreme. Furthermore, a party cannot approach the court to seek condonation and not be able to explain the circumstances of the delay. It is required of a party seeking condonation to account for each period of the delay, and to satisfy the Court that it deserves its indulgence.

[28] To the extent that the delay in filing the opposing affidavit is excessive in the extrme, and further to the extent that no attempt was made to proffer any reasonable, plausible or satisfactory explanation for that delay, it follows that the Court cannot come to the assistance of the Third Respondent. Furthermore, in the light of these factors, it follows that no purpose would be served in looking at the Third Respondent’s prospects of success.

[29] In conclusion, the Applicant should be granted a declaratory order it seeks. In view of the circumstances of this case, and having had regard to considerations of law and fairness, it is also determined that a cost order would not be appropriate.

Order:

i.        The award issued on 14 July 2009 in favour of the Third Respondent, and any claims arising therefrom has prescribed in terms of the provisions of the Prescription Act 68 of 1969.

ii.        There is no order as to costs.

Tlhotlhalemaje, AJ

Acting Judge of the Labour Court of South Africa

Appearances:

For the Applicant:                              Adv. I Pillay

Instructed by:                                   Norton Rose Fulbright

For the First Respondent:                Adv. Madonsela

Instructed by:                                   Jafta Inc

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