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South Africa Judgment

Labour Court Johannesburg

Brown and Others v Bophirima and Others (J2745/18) [2019] ZALCJHB 321 (13 November 2019)

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01

Holding and result

The court found that the Third, Fourth and Fifth Respondents, as board members of the First Respondent, are responsible for the entity's failure to comply with the settlement agreement and arbitration award. Their joinder in the contempt application is justified by their control over the First Respondent and their neglect in giving effect to the court's orders. The suspended fine of R 50,000 imposed on the First Respondent is now due and payable due to continued non-compliance with the reinstatement order and payment of back-pay. The court ordered the Third, Fourth and Fifth Respondents to appear and show cause why they should not be found guilty of contempt, with the possibility of incarceration or further fines. The First Respondent is also liable for the Applicants' costs. The orders are designed to enforce compliance and penalize ongoing contempt.

Court disposition

Joinder of Third, Fourth and Fifth Respondents in contempt application granted; further contempt proceedings ordered.

Orders

  • The Third, Fourth and Fifth Respondents are to appear on 6 December 2019 at 10H00 in the Labour Court Johannesburg to show cause why they should not be found guilty of contempt of Court for failure to comply with the settlement agreement and arbitration award.
  • The Third, Fourth and Fifth Respondents may explain their conduct by affidavit filed 10 days before the appearance date; Applicants may respond five days later.
  • In the absence of satisfactory explanation or appearance, the Third, Fourth and Fifth Respondents shall be guilty of contempt of Court.
  • If found guilty, the Third, Fourth and Fifth Respondents may be incarcerated or fined as the Court deems appropriate, or another penalty may be imposed.
  • The First, Third, Fourth and Fifth Respondents must show cause why the Court should not order execution against the First Respondent's movable assets to satisfy payment of the R 50,000 fine.
  • Service of this order must be effected personally upon the Third, Fourth and Fifth Respondents as a matter of urgency.
  • The First Respondent must pay the Applicants' costs of appearance and representation at the hearing on 25 October 2019.

02

Material facts

Parties

Molapisi, Tshepo Brown

Applicant Counsel: D Morgan

Ngwako, Obakeng

Applicant Counsel: D Morgan

Motsetau, Jeremiah

Applicant Counsel: D Morgan

Keogatile, Papiso

Applicant Counsel: D Morgan

Bophirima, FM

Respondent

Morontsi, Jacob Funny

Respondent

Itumeleng, Kitso

Respondent

Modise, Motlokoi

Respondent

Pitso, Percy

Respondent

Amounts and remedies

  • Fine Imposed on First Respondent (suspended, Now Due): ZAR 50,000
  • Fine Imposed on First Respondent (paid): ZAR 5,000
  • Fine Imposed on Second Respondent (paid): ZAR 1,000
  • Amount Received by Court (assumed Payment of Fines): ZAR 6,000

03

Procedural history

  1. Posture

    Contempt Application / Joinder and Further Contempt Proceedings

04

Questions and positions

Legal issues

Party arguments

Applicant
The Applicants argued that the First Respondent failed to comply with the settlement agreement made an arbitration award, specifically by not reinstating them and failing to pay back-pay. They submitted that the Third to Fifth Respondents, as board members, are responsible for the First Respondent's actions and should be joined in the contempt proceedings. The Applicants sought enforcement of the suspended fine and further penalties for ongoing non-compliance.
Respondent
The Respondents did not appear and did not oppose the joinder application. Previously, the Second Respondent indicated a willingness to settle, but no substantive compliance followed. The Third to Fifth Respondents did not file affidavits or contest their joinder, nor did they provide explanations for non-compliance with the court's orders.

05

Court’s reasoning

  1. 01

    Labour Court practice; see also precedent in contempt applications.

    Directors and officers of a corporate entity may be joined in contempt proceedings where they control and direct the entity's activities and fail to comply with court orders.

  2. 02

    Order of Nieuwoudt AJ, 2 May 2019.

    A suspended fine becomes due and payable upon non-compliance with the conditions attached to the suspension, such as failure to reinstate employees or pay back-pay.

  3. 03

    Labour Court rules and practice.

    Personal service of contempt orders is required to ensure proper notice and opportunity to respond.

06

Ratio, limits and disposition

Ratio decidendi

The court found that the Third, Fourth and Fifth Respondents, as board members of the First Respondent, are responsible for the entity's failure to comply with the settlement agreement and arbitration award. Their joinder in the contempt application is justified by their control over the First Respondent and their neglect in giving effect to the court's orders. The suspended fine of R 50,000 imposed on the First Respondent is now due and payable due to continued non-compliance with the reinstatement order and payment of back-pay. The court ordered the Third, Fourth and Fifth Respondents to appear and show cause why they should not be found guilty of contempt, with the possibility of incarceration or further fines. The First Respondent is also liable for the Applicants' costs. The orders are designed to enforce compliance and penalize ongoing contempt.

Obiter and limits

  • The court noted that the purpose of the suspended fine was to incentivize compliance with the primary order, and its non-payment further compounds the Respondents' contempt.
  • The absence of opposition or explanation from the Third to Fifth Respondents strengthens the case for their joinder and potential liability for contempt.
  • Personal service of the order is required to ensure the Respondents are properly notified and given an opportunity to respond.

Court disposition

Joinder of Third, Fourth and Fifth Respondents in contempt application granted; further contempt proceedings ordered.

  • The Third, Fourth and Fifth Respondents are to appear on 6 December 2019 at 10H00 in the Labour Court Johannesburg to show cause why they should not be found guilty of contempt of Court for failure to comply with the settlement agreement and arbitration award.
  • The Third, Fourth and Fifth Respondents may explain their conduct by affidavit filed 10 days before the appearance date; Applicants may respond five days later.
  • In the absence of satisfactory explanation or appearance, the Third, Fourth and Fifth Respondents shall be guilty of contempt of Court.
  • If found guilty, the Third, Fourth and Fifth Respondents may be incarcerated or fined as the Court deems appropriate, or another penalty may be imposed.
  • The First, Third, Fourth and Fifth Respondents must show cause why the Court should not order execution against the First Respondent's movable assets to satisfy payment of the R 50,000 fine.
  • Service of this order must be effected personally upon the Third, Fourth and Fifth Respondents as a matter of urgency.
  • The First Respondent must pay the Applicants' costs of appearance and representation at the hearing on 25 October 2019.

Source and reliance status

Labour Court Johannesburg

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Judgment text

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Source document

Labour Court Johannesburg

Judgment

[2019] ZALCJHB 321

THE

LABOUR COURT OF SOUTH AFRICA

HELD

AT JOHANNESBURG

Not reportable

case No: J2745/18

In the matter between:

MOLAPISI,

TSHEPO BROWN

First Applicant

NGWAKO,

OBAKENG

Second Applicant

MOTSETAU,

JEREMIAH

Third Applicant

KEOGATILE, PAPISO Fourth

Applicant

and

BOPHIRIMA, FM

First respondent

MORONTSI,

JACOB FUNNY

Second respondent

itumeleng, kitso

Third Respondent

MODISE,

MOTLOKOI

Fourth Respondent

PITSO,

PERCY

Fifth Respondent

Heard: 25 October 2019

Delivered: 13 November 2019

JUDGMENT

Introduction and Background

[1] This judgment and the orders which follow all flow from a settlement agreement dated 14 August 2017, which was made an arbitration award in 20 February 2018. After the First Respondent failed to re-employ the individual applicants in terms of the settlement agreement, they launched a contempt application to enforce that part of the agreement.

[2] The first order was issued on 23 November 2018, calling upon the First and Second respondents to show cause why they should not be found guilty of contempt of court for not giving effect to the arbitration award [the main contempt application], attached hereto as Annexure “A”. The matter was set down for a hearing on 8 February 2019, at which the Second Respondent appeared. At that hearing, the Court was given the impression by the Second Respondent that the First Respondent was willing to try and settle the matter. Accordingly, following that hearing an order was issued on the same day requiring, inter alia, that the Respondents should file affidavits explaining why they should not be held in contempt by 19 February 2019, and communicate with the applicants by 20 February 2019 of the board of the First Respondent’s response on a possible settlement of the matter [attached hereto as Annexure “B”]. At that stage the applicants were unrepresented.

[3] The matter came before the honourable Acting Justice Nieuwoudt on 26 April 2019, who issued an order on 2 May 2019 [attached hereto as Annexure “C”]. The court found on that occasion that the First and Second Respondents had failed to comply with the previous orders of the Court mentioned above. Subsequently, written reasons were provided for the order.

[4] The Court found that the First and Second Respondents were guilty of contempt of Court, for not complying with the previous orders of the Court and imposed fines of R 5,000 and R1,000 on each of them respectively. Further, a suspended fine of R 50,000-00 was imposed on the First Respondent, payment of which was dependent on whether or not it complied with the settlement agreement, including the payment of remuneration due to the Applicants. The order also made provision for the incarceration of the Second Respondent for a period of ten days in the event he did not pay his fine of R1,000 within fourteen days of the Court order.

[5] The Applicants were also granted leave to file a joinder application in respect of the Third to Fifth Respondents in the main contempt application, in the event that the First Respondent did not comply with the court’s order to implement the agreement.

[6] The Third to Fifth Respondents have not opposed the joinder application which the applicants launched on 7 August 2019. On the face of the founding affidavit in the joinder application, the Third to Fifth respondents are the individuals controlling and directing the activities of the First Respondent. The failure of the First Respondent to comply with this Court’s orders, is effectively a failure on their part as the officers of the First Respondent to give effect thereto and I am satisfied that the

requirements for joinder are met.

[7] On 23 May 2019, an amount of R 6,000 was received by the Court from the First and Second Respondents, which I will assume in their favour was paid in satisfaction of the fines of R 1,000 and R 5,000. Proof of payment attached hereto at Annexure “D”.

[8] However, the Respondents did not comply with the main order of Nieuwoudt AJ, which was to comply with the award by reinstating the Applicants. Consequently, the First Respondent ought to have paid the suspended fine of R 50,000 which was payable within 28 calendar days of non-compliance with the order of reinstatement and payment of back-pay. The purpose of that fine was clearly to goad the Respondents to comply with the primary order the First Respondent has still failed to give effect to, namely to reinstate the Applicants with back-pay. That fine accordingly is now due and payable, and the failure of the Respondents to make payment of the fine, compounds their contempt of this Court’s orders.

[9] In the absence of payment of the penalty for not complying with the order of reinstatement, the First Respondent is prima facie in contempt of court on yet another ground. Accordingly, the Third, Fourth and Fifth Respondents must also show cause why they should not be held in further contempt of Nieuwoudt AJ’s order, both for not reinstating the Applicants with back-pay and for not paying the R 50,000 timeously after failing to comply with reinstatement order.

Joinder of third, fourth and fifth respondents in contempt application

[10] Mr. Kitso Itumeleng, Mr. Motoloki Modise and Mr. Percy Pitso, as members of the board of the First Respondent, are joined as the Third, Fourth and Fifth Respondents respectively in the contempt application.

Order

[1] The Third, Fourth and Fifth Respondents are to appear on 6 December 2019 at 10H00 in the Labour Court of South Africa sitting in Johannesburg, to show cause why they should not be found guilty of contempt of Court for their failure, refusal and or neglect to comply with the settlement agreement which was made an arbitration award under case number NWVB20-17 on 19 February 2018 and with paragraph [3] of this court’s order of 2 May 2019 (Annexure “C”); The Third , Fourth and Fifth Respondents may explain their conduct by way of affidavit which must be filed 10 days before the appearance date recorded above although this will not excuse them from being present in court. The Applicants may respond to the affidavit five days later.

[2] In the absence of providing an explanation to the satisfaction of the Court and, or alternatively, for failing to appear in Court despite being properly served, the Third, Fourth and Fifth Respondents shall be guilty of contempt of Court.

[3] If any of the Third, Fourth and Fifth Respondents are found guilty of contempt of Court, they may be incarcerated for such period as the Court deems appropriate, or they may be fined an amount the Court deems appropriate or another alternative penalty may be imposed;

[4] In the absence of complying with paragraph [3] of this Court’s order of 2 May 2019, the First, Third, Fourth and Fifth Respondents must also show cause, why the Court should not order the Registrar to issue a writ of execution to the Sheriff to attach and take into execution

the movable assets of the First Respondent to satisfy payment of the fine of R 50,000 imposed in the aforesaid paragraph of the order.

[5] Service of this order must be effected personally upon the Third, Fourth and Fifth Respondents as a matter of urgency.

[6] The First Respondent must pay the Applicants’ costs of appearance and representation at the hearing on 25 October 2019.

______

Robert Lagrange

Judge of the Labour Court of South Africa

REPRESENTATION

For the applicants: D Morgan of David W Morgan Inc.

For the respondents: No appearances

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Authorities

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Cases, legislation, regulations, and constitutional provisions identified in the available record.

Labour Relations Act 66 of 1995

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