Afgri Poultry (Pty) Ltd t/a Daybreak Farms v Seruwe (J1535/21) [2021] ZALCJHB 458 (17 December 2021)
The court found that the applicant's attorneys were duly authorised to institute the urgent application and review proceedings, based on board resolutions and a power of attorney. The challenge to authority was dismissed as the evidence showed the applicant was litigating and not an unauthorised person. The court...
Source-derived case information.
- Citation
- [2021] ZALCJHB 458
- Parties
- Applicant: Afgri Poultry (Pty) Ltd t/a Daybreak Farms; Respondent: Boas Seruwe
- Court
- Labour Court Johannesburg
- Jurisdiction
- South Africa
- Case Number
- J1535/21
- Procedural Posture
- Urgent Application / Application to Stay Enforcement of Arbitration Award Pending Review
- Outcome
- Application granted. Enforcement of the arbitration award is stayed pending the outcome of the review application, subject to conditions.
- Judges
- Prinsloo
- Legal Topics
- Stay of Execution, Review of Arbitration Award, Authority to Act, Security for Review, Unfair Dismissal
Source-derived case record
Summary, issues, holding and outcome
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Parties
Afgri Poultry (Pty) Ltd t/a Daybreak Farms
Applicant
Boas Seruwe
Respondent
Procedural Posture
Urgent Application / Application to Stay Enforcement of Arbitration Award Pending Review
Legal Issues
- 1 Whether the applicant's attorneys had authority to institute the urgent application and review proceedings.
- 2 Whether the stay of enforcement of the arbitration award can be granted before the review application is filed.
- 3 Whether the applicant should be exempted from furnishing security as contemplated in section 145(7) and (8) of the Labour Relations Act.
Ratio Decidendi
The court found that the applicant's attorneys were duly authorised to institute the urgent application and review proceedings, based on board resolutions and a power of attorney. The challenge to authority was dismissed as the evidence showed the applicant was litigating and not an unauthorised person. The court held that the Labour Relations Act does not require the review application to be filed before seeking a stay of enforcement, provided the intention to file is clear and the statutory period has not expired. The applicant demonstrated financial stability and a substantial asset base, ensuring the respondent would not be left unprotected if the review fails. The court exercised its...
Court Disposition
Application granted. Enforcement of the arbitration award is stayed pending the outcome of the review application, subject to conditions.
Orders
- The enforcement of the arbitration award dated 24 November 2021 under case number GATW7108-21 is stayed pending the outcome of an application by the applicant to review and set aside the arbitration award.
- The relief is granted on condition that a review application is filed within the six-week period prescribed in section 145(1)(a) of the Labour Relations Act, failing which this order will automatically lapse.
Full Case Text
Judgment text and source record
142 paragraphs
THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
Not reportable
Case no: J 1535/21
AFGRI POULTRY (PTY) LTD
t/a DAYBREAK FARMS Applicant
and
BOAS SERUWE Respondent
Heard: 9 December 2021
Delivered: 17 December 2021
(In view of the measures implemented as a result of the Covid-19 outbreak, this judgment was handed down electronically by circulation
to the parties' representatives by email. The date for hand-down is deemed to be 17 December 2021).
JUDGMENT
PRINSLOO, J
Introduction
[1] The Applicant approached this Court on an urgent basis for an order inter alia to stay the enforcement of an arbitration award, pending the outcome of a review application by the Applicant to set aside the said arbitration award.
[2] The application is opposed.
Background facts
[3] The Applicant had employed the Respondent as chief executive officer (CEO) on a five year fixed term contract, commencing on 1 June 2018 and due to terminate on 30 June 2023. On 11 May 2021 the Respondent’s employment was terminated on board approval, based on grounds of irretrievable breakdown of the employment relationship.
[4] Aggrieved with the termination of his employment, the Respondent referred an unfair dismissal dispute to the Commission for Conciliation,
Mediation and Arbitration (CCMA). The dispute was conciliated and after it remained unresolved, it was arbitrated on 5 November 2021.
[5] An arbitration award was issued on 24 November 2021 under case number GATW7108-21 and the presiding arbitrator found the Respondent’s
dismissal to be procedurally and substantively unfair. The Applicant was ordered to reinstate the Respondent retrospectively, which
reinstatement is effective from 11 December 2021 and to pay him six months’ backpay (total sum of R 2 160 000), which payment is to be made by 5 December 2021.
[6] The Applicant submitted that it intends to launch a review application to challenge the arbitration award. The Applicant’s case is that the parties signed a pre-arbitration minute and recorded that the termination of the Respondent’s employment was in dispute and that clause 17 of the Respondent’s contract of employment had to be interpreted first and that the issue was to be dealt with separately as a preliminary point. The intention was for the preliminary point to be argued and determined prior to any evidence being led by the parties on the merits of the Respondent’s contention that he was unfairly dismissed. In essence the preliminary point was a jurisdictional point as the Applicant argued that there was no dismissal.
[7] The arbitrator on 5 November 2021 refused to hear argument and determine the point in limine separately and proceeded with the merits of the case, after a postponement requested by the Applicant was refused. According to the Applicant the arbitrator’s conduct constituted a reviewable irregularity as contemplated in section 145(1) of the Labour Relations Act[1] (LRA) and a review application is in the process of being prepared and will be filed expeditiously. The 6-week period within which to file a review application will expire on 5 January 2022.
[8] It is evident from the Respondent’s answering affidavit that a material portion of his affidavit was devoted to the address the merits of his unfair dismissal dispute and to demonstrate that the Applicant has no prospect of success in the review application it intends to launch. The reality however is that the merits of the review application are irrelevant for purposes of determining the present application.
[9] On 26 November 2021 the Applicant’s attorneys, Malahlela Attorneys, addressed a letter to the Respondent’s attorneys,
Ndumiso Voyi Attorneys, wherein it was recorded that the Applicant will approach the Labour Court to review the arbitration award. The Applicant’s attorneys sought an undertaking that the Respondent would not report for duty and would not execute against the order for compensation, pending the finalisation of the review proceedings. On the same date the Respondent’s attorneys replied to the effect that the Respondent will tender his services in terms of the arbitration award. The undertakings sought by the Applicant were not furnished.
[10] The Applicant submitted that in view of the fact that the undertaking sought was not forthcoming and having regard to the fact that the Respondent intends to tender his services, it is left with no option but to approach this Court on an urgent basis to seek a stay of execution, pending the outcome of the review application.
[11] I have considered the averments made in the affidavits placed before this Court in respect of the issue of urgency. I do not intend to deal with each and every one of the contentions made in support and opposition of the issue of urgency. In my view the matter is urgent and will be dealt with as such.
The Respondent’s points in limine
[12] In opposition, the Respondent raised two points in limine, which I will deal with in turn.
Authority to act
[13] The Applicant is a juristic person whose affairs are managed by its board of directors (the Board) in accordance with the provisions of section 66 of the Companies Act[2]. As an artificial person the Applicant can only function through its agents and it can take decisions by passing resolutions, giving them authority to do certain things, such as instituting litigation.
[14] The directors of a company must authorise the institution of legal proceedings and the prosecution thereof. They may also authorise
someone to represent the company in such proceedings.
[15] The Respondent’s first point in limine is that Malahlela and Company Attorneys (the Applicant’s attorneys), who are purportedly acting on behalf of the Applicant, do not have the necessary authority to do so. More specifically, the said attorneys do not have authority to launch the present urgent application and to challenge the arbitration award on review.
[16] In Unlawful Occupiers, School Site v City of Johannesburg[3] (Unlawful Occupiers) the Supreme Court of Appeal (SCA) endorsed the approach adopted in Eskom and Ganes v Telecom Namibia Ltd[4] and held that:
‘The issue raised had been decided conclusively in the judgment of Flemming DJP in Eskom v Soweto City Council 1992 (2) SA 703 (W), which was referred to with approval by this court in Ganes and another v Telecom Namibia Ltd 2004 (3) SA 615 (SCA) 624I-625A. The import of the judgment in Eskom is that the remedy of a respondent who wishes to challenge the authority of a person allegedly acting on behalf of the purported applicant, is provided for in rule 7(1)[5].’
[17] If the respondent wants to challenge the authority to act, the correct procedure is to file a notice in terms of Rule 7 of the Uniform
Rules. The Respondent in casu indeed delivered a Rule 7(1) notice, challenging the authority of Malahlela and Company Attorneys to act on behalf of the Applicant. The Respondent requested a copy of the Board Resolution authorising the said attorneys to proceed with and launch this application and the review application as well as the minutes of the meeting where the Resolutions were adopted.
[18] The Applicant filed a response to the notice in terms of Rule 7(1) of the Uniform Rules and provided the Applicant’s ‘Special
In-Committee Board Minutes’ dated 15 January 2021, the ‘Special Board Minutes’ dated 5 May 2021, the ‘Board Resolution’ dated 15 July 2021 and the ‘Power of Attorney’ in favour of Malahlela and Company Attorneys, dated 8 October 2021.
[19] It is evident from the ‘Special In-Committee Board Minutes’ dated 15 January 2021 that the Board had resolved to mandate Mr Nage, the former chairperson of the Board and the deponent to the affidavits in this application, to source a legal firm, following a three quotation system, to sign all legal documents emanating from the dispute until the matter is finalised at the superior courts. On 20 January 2021 Mr Nage appointed Malahlela and Company Attorneys to provide ‘labour law legal advisory support’ in respect of the dispute between the Applicant and the Respondent.
[20] On 5 May 2021 the Board resolved to appoint and authorise Mr Nage to depose to affidavits in relation to all litigious and non-litigious matters that involve Daybreak and to sign the power of attorney on behalf of the Applicant for legal proceedings. On 8 October 2021 Mr Nage signed a special power of attorney, nominating the Applicant’s attorneys to inter alia have full authority to act on behalf of the Applicant in relation to the initiating of legal proceedings, to sign all documents necessary in pursuance of litigation and if necessary, to institute action in any Court having jurisdiction arising from any matter.
[21] The Respondent submitted that the documentation provided do not prove that Malahlela and Company Attorneys have the necessary authority to launch the present application and to take the arbitration award on review and absent such proof, the attorneys are acting without the necessary authority to do so.
[22] The Respondent further submitted that the blanket resolution produced does not speak to any specific legal matter and it would be unlawful for a Board of directors to abdicate their responsibility with a blanket resolution, where the Board is statutorily obliged to manage the affairs and the business of a company.
[23] The Applicant submitted that the Board Resolution of 21 January 2021 authorised not only these urgent proceedings, but granted Mr Nage the authority to source a legal firm to sign all legal documents emanating from the dispute with the Respondent, until the matter is finalised at the superior courts, which would include the Labour Court. The said Resolution suffices to give authority to institute, pursue and execute any and all legal proceedings and disputes up to and until they are finalised at the higher courts. It is an all-encompassing resolution and serves to satisfy the requirements of Rule 7(1), establishing authority to pursue and execute the urgent stay application and the subsequent review application.
[24] The Applicant submitted further that the intention to pursue legal proceedings against the Respondent is fortified by the fact that the Applicant confirmed the Resolution by appointing Malahlela and Company Attorneys to provide ‘labour law legal advisory support’ in respect of the dispute between the Applicant and the Respondent. The Applicant’s attorneys have the necessary mandate to launch this application and other proceedings concerning the Respondent, until all disputes are resolved and finalised at the superior courts. The Resolution is all-encompassing and it is not necessary for the Board to file an additional Resolution for every occasion, when the authority is to act on the Applicant’s behalf in relation to initiating any legal proceedings. The power of attorney demonstrates that Malahlela and Company Attorneys’ mandate is not limited to action proceedings, but it covers all legal proceedings.
[25] It is significant that Malahlela and Company Attorneys were appointed and acted on behalf of the Applicant from the disciplinary stage and through the CCMA proceedings and at no point during those proceedings did the Respondent raise any objection to either the Board Resolution or the appointment of the said attorneys. The Applicant submitted that the Respondent acquiesced to this arrangement and should not be allowed to raise this objection now, as it is nothing but a ruse to keep from dealing with the merits of his behaviour as former CEO.
[26] The Applicant denied that the Board and the chairperson of the Board are unaware of what Malahlela and Company Attorneys are doing, as the company secretary reported on all these issues to the Board.
Analysis
[27] The Respondent disputed the Applicant’s attorneys’ authority to have instituted this application because the Board Resolution of 15 July 2021 does not present proof of the authorisation to institute the current application and the Resolution of 5 May 2021 only authorised the deponent, Mr Nage, to institute action proceedings and not application proceedings. As the present proceedings are motion proceedings, it fall outside the ambit of the Resolution adopted on 5 May 2021.
[28] There is no merit in the submission that the Resolution of 5 May 2021 only authorised Mr Nage, to institute action proceedings and not application proceedings. The Resolution clearly authorised him to ‘depose to affidavits’ in relation to litigious matters, which clearly indicates authority in respect of applications.
[29] Rule 7(1) of the Uniform Rules of Court provides that:
1. Subject to the provisions of subrules (2) and (3) a power of attorney to act need not be filed, but the authority of anyone acting on behalf of a party may, within 10 days after it has come to the notice of a party that such person is so acting, or with the leave of the court on good cause shown at any time before judgment, be disputed, where after such person may no longer act unless he satisfied the court that he is authorised so to act, and to enable him to do so the court may
postpone the hearing of the action or application.
[30] This Court must be satisfied that Malahlela and Company Attorneys are authorised to act on behalf of the Applicant.
[31] In In Eskom v Soweto City Council [6](Eskom) the Court has held that:
‘The care displayed in the past about proof of authority was rational. It was inspired by the fear that a person may deny that he was party to litigation carried on in his name. his signature to the process, or when that does not eventuate, formal proof of authority would avoid undue risk to the opposite party, to the administration of justice and sometimes even to his own attorney.
The developed view, adopted in Court Rule 7(1), is that the risk is adequately managed on a different level. If the attorney is
authorised to bring the application on behalf of the applicant, the application necessarily is that of the applicant. There is no need that any other person, whether he be a witness or someone who becomes involved especially in the context of authority, should additionally be authorised. It is therefore sufficient to know whether or not the attorney acts with authority.
As to when and how the attorney’s authority should be proved, the Rule-maker made a policy decision. Perhaps the risk is minimal that an attorney will act for a person without authority to do so, proof is dispensed with except only if the other party challenges the authority. See Rule 7(1). Courts should honour that approach. Properly applied, that should lead to the elimination of many pages of resolutions, delegations and substitutions still attached to applications by some litigants….’
[32] In motion proceedings the best evidence would be an affidavit by an officer of the company, annexing a copy of the relevant resolution of the board, but such evidence is not necessary in every case. Each case must be considered on its own merits and the Court must decide whether enough has been placed before it to warrant the conclusion that it is the company which is litigating and not some unauthorised person on its behalf.
[33] This approach was also recorded in Eskom where the Court held that in the absence of a prescribed mode of proof of authority, it is a factual question whether a particular person holds a specific authority, which may be proved in the same way as any other fact. Adjudication involves consideration of what the credible evidence means and the extent of, quality of and sometimes the absence of contradiction or other reason to remain unconvinced.
[34] In Moila v University of the North and Others[7] the LAC held that while it was desirable for the resolution of the board of directors of a company, authorising the litigation, to be annexed to and proved by the founding affidavits, if this was not done, the existence or absence of authority had to be determined on the probabilities.
[35] In Mall (Cape) (Pty) Ltd v Merino Ko-operasie Bpk[8] authority to institute proceedings was considered and it was held that:
‘Each case must be considered on its own merits and the Court must decide whether enough has been placed before it to warrant the conclusion that it is the applicant which is litigating and not some unauthorised person on its behalf.’
[36] In Unlawful Occupiers the SCA further held that:
‘After all, there is rarely any motivation for deliberately launching an unauthorised application. In the present case, for example, the respondent's challenge resulted in the filing of pages of resolutions annexed to a supplementary affidavit followed by lengthy technical arguments on both sides. All this culminated in the following question: Is it conceivable that an application of this magnitude could have been launched on behalf of the municipality with the knowledge of but against the advice of its own director of legal services? That question can, in my view, only be answered in the negative.[9] ‘
[37] The same question arises in casu. Is it conceivable that an application, such as the present one, could have been launched without the knowledge of the Applicant and without Malahlela and Company Attorneys being properly authorised?
[38] The answer has to be no.
[39] It is evident from the documents filed in response to the Rule 7(1) notice that the Applicant’s Board had passed a number of Resolutions authorising and mandating Mr Nage to litigate all disputes involving the Applicant and to sign a power of attorney on behalf of the Applicant, for legal proceedings. In October 2021, whilst so authorised, Mr Nage signed a special power of attorney, appointing the Applicant’s attorneys to have full authority to act on behalf of the Applicant in relation to the institution of any legal proceedings, including the proceedings between the Applicant and the Respondent.
[40] Ultimately this Court must decide whether enough has been placed before it to warrant the conclusion that it is the indeed the Applicant which is litigating and not some unauthorised person on its behalf.
[41] In casu enough has been placed before this Court to accept that the institution of the proceedings was duly authorised and that it is indeed the Applicant which is litigating. There is another factual reason why I accept this to be the case and that is because the same
parties have been involved in litigation and the Respondent is aware of the fact that Malahlela and Company Attorneys have been acting on behalf of the Applicant. The Applicant’s attorneys signed the pre-arbitration minutes in the CCMA proceedings on behalf of the Applicant, briefed counsel to represent the Applicant and at no stage, prior to this application, did the Respondent suggest that the Applicant’s attorneys were not authorised to represent the Applicant.
[42] In summary: I accept that the Applicant has authorised the institution of this application and that its attorneys have been authorised to act on its behalf. There is certainly no need or requirement that there has to be a Board Resolution for every piece of litigation to be instituted in circumstances where authority was granted in respect of the litigation in the main. There is no merit in the first point in limine raised by the Respondent.
No pending application for review
[43] The Applicant seeks an order to stay the enforcement of an arbitration award, pending the outcome of a review application to set aside the arbitration award. The review application is in the process of being prepared and as at the date this application was argued, the review application was yet to be filed. The prescribed six-week period within which to file the review application will expire on 5 January 2022.
[44] The Respondent’s second point in limine is that the relief sought, to the effect that the enforcement of the arbitration award is stayed, pending the outcome of a review application, is impossible as there is no review application filed.
[45] Section 145 (1) of the LRA provides that:
(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).
[46] Section 145(3) provides that the Labour Court may stay the enforcement of the award pending its decision.
[47] Section 145 (7) and (8) provide that:
(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.
[48] The Applicant submitted that there is no jurisdictional requirement that a review application must be launched prior to or simultaneously with an application to stay the enforcement of the arbitration award. This, according to the Applicant, is clear on a proper construction of section 145 (1), (3) and (8), which must be interpreted sensibly to give effect to the intention of the legislature.
[49] It is evident from the provisions of the aforesaid sections of the LRA that the launching of a review application is not a jurisdictional requirement to stay the enforcement of an arbitration award. This is specifically so in circumstances where the Applicant has indicated a serious intention to apply for review and the six-week period within which a review application is to be filed, has not yet expired.
[50] The LRA provides for the stay of enforcement of an arbitration award, pending the outcome of a review application and the Applicant invoked this remedy after it could not manage to obtain an undertaking from the Respondent that he would not seek an enforcement of the relief awarded to him in the arbitration award.
[51] In casu the facts are such that this Court should take a sensible approach, to also safeguard the rights of the Respondent in the event that the review application is not filed within the statutory prescribed six-week period.
[52] I am inclined to grant the relief sought, subject to certain conditions. The Respondent’ second point in limine has to fail.
Security
[53] The Applicant seeks an order that it be exempted from furnishing security, as contemplated in section 145(7) and (8) of the LRA, alternatively that it be ordered to furnish security in a lesser amount.
[54] The Applicant submitted that having regard to the peculiar circumstances of this matter, the Court should exercise its discretion in favour of the Applicant and exempt it from furnishing security. The Applicant’s case is that it is one of the largest South African poultry producers. Whilst employed by the Applicant. The Respondent earned a gross salary of R 360 000 per month and if the Applicant was to furnish security in compliance with section 145(8)(a) of the LRA, it would be obliged to furnish security in the sum of R 8 640 000.
[55] The Applicant has set out its operational facilities and its healthy financial position. The Applicant generates an annual turnover of approximately R 3,5 billion and has a market share across the South African chicken product industry. The Applicant attached its bank’s letters confirming the Applicant’s balance on the bank account, which amply demonstrates that the Applicant has sufficient assets to meet any award of compensation made in favour if the Respondent. The Applicant has a nett asset base in excess of R 90 000 000 and during the financial year in question, the Applicant generated a surplus of income over expenditure in the sum of R 83 000 000.
[56] All of the aforesaid demonstrates that the Applicant will be able to meet any adverse award for compensation. The Applicant will be severely prejudiced if it is required to pay the Respondent the prescribed security when its financial position shows that there is no risk that it would be unable to compensate the Respondent if the review application fails.
[57] The Respondent denied that there was any reason for the Applicant to be exempted, but he failed to give substantial reasons for his position, nor did he disputed the facts the Applicant had placed before this Court.
[58] In City of Johannesburg v SAMWU obo Monareny and another[10] the LAC considered the interpretation and application of section 145(3), (7) and (8) of the LRA and held that:
‘The Labour Court has a discretionary power under s 145(3) of the LRA to stay the enforcement of an arbitration award pending its decision in the review application. It may stay the enforcement of an arbitration award pending finalisation of a review application against the award with or without conditions. It may in terms of s 145(8) of the LRA dispense with the requirement of furnishing security. Properly construed, s 145(3) read with s 145(7) and (8) should be interpreted to mean that where an applicant in a review application furnishes security to the Labour Court in accordance with s 145(8) of the LRA, the operation of the arbitration award is automatically suspended pending its decision in the review application. In other words, the employer need not make an application in terms of s 145(3) of the LRA to stay the enforcement of the arbitration award pending the finalisation of the review application.
However, should the employer wish to be absolved from providing security or to provide security in an amount less than the threshold in subsection (8)(a) and (b), then it is required to make an application to the Labour Court, in terms of s 145(3), for the stay of the enforcement of the arbitration award pending its decision in the review application. The employer must make out a proper case for the stay as well as for the provision of security in accordance with s 145(8) to be dispensed with or reduced.
The words ‘unless the Labour Court directs otherwise’ in s 145(8) of the LRA must be construed broadly to mean that the Labour Court is afforded a discretion to either: (a) exempt the employer from paying security on the stay of the enforcement of an arbitration award pending its decision on review or (b) reduce the quantum of security to be furnished by the employer to an amount below the threshold in s 145(8)(a) and (b)of the LRA.’
[59] The LAC further held that:
Before the Labour Court exercises its discretion under s 145(8), the employer seeking to dispense with the requirement to provide security for the suspension of the enforcement of the arbitration award, must show cause for why it should not do so.
In Rustenburg Local Municipality, the Labour Court held as follows in relation to what good cause entails:
‘Good cause in the context of motivating a departure from the security provisions prescribed in s 145(7) and (8) would involve a proper explanation why this request should be entertained, with particular emphasis on any material prejudice the applicant may suffer if it is not granted this relief. I will illustrate the point by way of an example. A small manufacturing business with 20 employees dismisses ten employees for group misconduct. A CCMA commissioner then reinstates all these employees. The required security would be 24 months’ salary for each of these ten employees, which would then wipe out the entire operating cash flow of the undertaking for several months. This is the kind of prejudice I am referring to. Simply described, the explanation cannot be that it will be hard to set security, but the explanation must be that it would be unduly onerous and harmful to be required to set the prescribed security.’
Material prejudice to the employer is but one factor that the Labour Court must give consideration to — it is by no means decisive. In exercising its discretion, the Labour Court must have regard to the particular circumstances of the case as well as considerations of equity and fairness to both the employer and the employee. A factor that the Labour Court must take into consideration is whether the employer is in possession of sufficient or adequate assets to meet an order of the review court upholding the arbitration award; the principal concern being that the dismissed employee should not be left unprotected if the Labour Court decides the review application in his or her favour.
The onus is on the employer seeking an exemption from furnishing security under s 145(8) of the LRA to establish that it has assets of a sufficient value to meet its obligations should the arbitration award be upheld.’
[60] A factor that this Court must take into consideration is whether the employer is in possession of sufficient or adequate assets to meet an order of the review court upholding the arbitration award as the principal concern being that the dismissed employee should not be left unprotected if the Labour Court decides the review application in his or her favour.
[61] In casu the facts placed before this Court, show that the Applicant is one of the largest South African poultry producers, with a substantial asset base. The Applicant demonstrated that it is financially stable and has sufficient funds available to pay the Respondent in accordance with what was awarded to him in the arbitration award, should the review ultimately fail.
[62] In short, the Applicant’s financial stability, its asset and income base demonstrate its ability to satisfy the arbitration award in the event of not succeeding on review and there is no risk that the Respondent would be left unprotected in that event, if security is not furnished at this
point. As a result, I can see no reason why the Applicant should be ordered to put up security.
[63] Costs
[64] The last issue to be decided is the issue of costs.
[65] In so far as costs are concerned, this Court has a broad discretion in terms of section 162 of the LRA to make orders for costs according to the requirements of the law and fairness. In casu the legal representatives for both parties submitted that a cost order would not be appropriate and that each party should pay its own costs. I can see no reason to disagree. The interests of justice will be best served by making no order as to costs.
Order
In the premises, I make the following order:
1. The enforcement of the arbitration award dated 24 November 2021 and issued under case number GATW7108-21 is stayed pending the outcome of an application by the Applicant to review and set aside the arbitration award;
2. The relief in paragraph 1 is granted on condition that a review application is filed within the six-week period prescribed in section 145(1)(a) of the Labour Relations Act, failing which this order will automatically lapse;
3. The Applicant is exempt from furnishing security as contemplated in section 145(7) and (8) of the Labour Relations Act;
4. There is no order as to costs.
Connie Prinsloo
Judge of the Labour Court of South Africa
Representatives:
For the Applicant: Advocate M M Antonie SC with Advocate T Manchu
Instructed by: Malahlela
and Company Attorneys
For the Respondent: Mr Voyi from Ndumiso Voyi Inc Attorneys
[1] Act 66 of 1995, as amended.
[2] Act 71 of 2008.
[3] 2005 (4) SA 199 (SCA).
[4] 2004 (3) SA 615 (SCA) at 624, (2004) 25 ILJ 995 (SCA)
[5] At para 14.
[6] 1992 (2) SA 703 (W) at 705C-J.
[7] [2005] 5 BLLR 465 (LAC)
[8] 1957 (2) SA 347 at 352 A.
[9] At para 16.
[10] (2019) 40 ILJ (LAC) at para 7 -9.