Emfuleni Local Municipality v Namane and Others (J 462/2024) [2024] ZALCJHB 234 (18 June 2024)

IN THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG

Not reportable

Case No: J 462/2024

In the matter between:

EMFULENI LOCAL MUNICIPALITY

Applicant

and

NAMANE & 71 OTHERS

First Respondents

SHERIFF, VANDERBIJLPARK

Second Respondent

Heard: 07 May 2024

Delivered: This judgment was handed down electronically by circulation to the parties' legal representatives by email and publication on the Labour Court’s website. The date for hand-down is deemed to be on 18 June 2024

JUDGMENT

TLHOTLHALEMAJE, J

Introduction and background:

[1] In this opposed urgent application, the Applicant seeks an order staying the writ of execution by the First Respondents (Employees), pending an application to review and set aside an arbitration award issued on 13 March 2023.

[2] The background to this application to the extent that it is not disputed is summarised as follows;

2.1 The Employees are currently in the employ of the applicant as Traffic Law Enforcement and Warrant Enforcement Officers. They currently occupy Job Level 9.

2.2 They had referred a dispute to the Commission for Conciliation, Mediation and Arbitration (CCMA) in terms of section 6(4) of the Employment Equity Act (EEA)[1], alleging unfair discrimination to the extent that they alleged that they were not remunerated the same despite performing the same or similar work or work of equal value to that of their comparators.

2.3 Commissioner Xulu of the CCMA in his award issued on 13 March 2023, concluded inter alia that the Employees were unfairly discriminated against on the basis of ‘political favour’, and ordered the applicant to pay to each of them an amount of R477 888.00, and to further place all of them on Job Level 6.

2.4 On 24 April 2024, the Employees had the award certified by the CCMA in terms of section 143 of the Labour Relations Act[2] (LRA). On or about 25 April 2023, the applicant launched an application under case number JR 661/23, to review and set aside the

arbitration award.

2.5 On 29 April 2024, the second respondent (Sheriff), was instructed to attend to the applicant’s premises to enforce the writ and attach its assets. The enforcement award had authorised the Employees to attach and realise by public auction, the assets of the applicant with a sum of R34 407 936.00. An inventory of items attached by the Sheriff on 30 April 2024 however reflects a total value of assets that were attached to be R1 778 190.00.

2.6 The applicant contends that the review application was plagued by delays in delivering the transcribed record of proceedings. It contended that despite the record having been received from the transcribers on 26 April 2024, further extensions for its filing had to be requested on the basis that the voluminous record had to be perused before the supplementary affidavit could be delivered.

2.7 As at the hearing of this matter, the applicant had still not delivered the record of arbitration proceedings, despite it being contended that it was available. The Employees contend that as a result of the applicant’s tardiness in attending to the filing of the record, it had refused the requests for further extensions by the applicant, and that consequently, the review application is deemed withdrawn by virtue of clause 11.2.3 of the Practice Manual of this Court.

2.8 This urgent application was launched on 30 April 2024 and filed on 2 May 2024. As already indicated, the Employees have opposed it.

[3] After the matter and its merits were fully ventilated in Court, and to the extent that amongst other grounds of opposition to the application by the Employees was that the provisions of section 145(7) and (8) of the LRA were not complied with in the review application, the Court had issued an order in the following terms;

‘1. The handing down of a judgement is held in abeyance until 16 May 24 in order to enable the applicant’s attorneys to obtain instructions on the issue of security in terms of section 145(7), (8) of the LRA

2. The applicant tenders wasted costs for today, 07 May 2024.

3. The parties are to jointly advise the court on no later than 17th May 2024 as to whether to proceed with the preparation of delivery of the judgement’

[4] The Court was taken aback when on 17 May 2024, it had received from the applicant’s attorneys of record what purports to be an Amended Notice of Motion in the main urgent application. This is extraordinary given the fact that the merits of the application were dispensed with on 7 May 2024, and all that remained was for the parties to revert to the Court as per its order as above. The Employees’ attorney of record were compelled to file an answer to this purported Notice. This had in turn compelled the Court to issue a directive indicating that the Notice was not in line with the order issued and would thus not be entertained.

[5] The applicant’s conduct is not only prejudicial to the first respondent but is equally a highly irregular step. The Employees correctly pointed out that the applicant clearly seeks a second bite at the cherry in respect of the disposed merits of the urgent application. This conduct clearly cannot be countenanced. An appropriate punitive costs order is indeed warranted in these circumstances, as shall further be dealt with below.

Urgency:

[6] Rule 8 of the Rules of this Court[3] governs the bringing of urgent applications in this Court. An applicant instituting urgent proceedings must justify the necessity

to circumvent the ordinary time periods set out in the Rules of this Court, and is therefore required to set out explicitly the

circumstances and objective facts which it contends renders the matter urgent. Of equal importance is that an applicant must further

explain and demonstrate why it is said that it cannot obtain substantial redress at a hearing in due course. Further considerations as to whether a matter should be accorded any urgency is whether the urgency claimed is not self-created, considering the expedition exercised when approaching the Court.

[7] I have already outlined the timeline since the award was issued. I agree with the submissions made on behalf of the Employees that the applicant has been extremely tardy in prosecuting the review application, and that it was almost a year since it was launched

without it getting anywhere near being ready for enrolment.

[8] The applicant is incorrect in contending that the urgency in this matter only arose on 29 April 2024 when the Sheriff attached its assets. Notwithstanding the delays in the prosecution of the review application, the urgency effectively arose on 13 April 2024 when the Employees had the award certified by the CCMA in terms of section 143 of the LRA. The events of 29 April 2024 were merely a culmination of those of 13 April 2024 upon the award having been certified.

[9] Inasmuch as the applicant does not explain the delay between 13 April 2024 when the award was certified, and 30 April 2024 when this application was launched, this matter ordinarily deserves the urgent attention of the Court, and there is no basis for a conclusion to be reached that the urgency claimed is self-created . This is so in the light of the implications of the attachment already effected at the applicant, and the amounts claimed in full by the Employees in accordance with the award. In the light of the importance of the matter to both parties, I deem it to be in interests of justice that the matter be accorded urgency, and for its merits to be disposed of. For these reasons, I do not deem it necessary to dwell into other requirements of urgency.

The merits:

[10] A party seeking interim relief must satisfy the requirements being, (a) a clear right which is the subject-matter of the main application and which the applicant seeks to protect by means of interim relief or, if not clear, is prima facie established though open to some doubt; (b) if such case is only prima facie established, there is a well-grounded apprehension of irreparable harm to the applicant if the interim interdict is not granted and the applicant ultimately succeeds in establishing his or her right; (c) there is no other satisfactory remedy; and (d) the balance of convenience favours the granting of interim relief.[4]

[11] In Eriksen Motors (Welkom) Ltd v Protea Motors, Warrenton and Another[5], it was held that the granting of interim relief pending an action is an extraordinary remedy within the discretion of the Court, and that the discretion would be exercised with due regard to the requirements to be met and the facts of the case.

[12] The Constitutional Court in ‘OUTA’[6] further added that when a court considers whether to grant an interim interdict it must do so in a way that promotes the objects, spirit and purport of the Constitution[7]. Similarly, when this Court considers granting interim relief, it must do so in a manner that promotes the objects and purpose of the Labour Relations Act (LRA)[8] as set out in its section 1[9].

[13] In Chillibush Communications (Pty) Ltd v Michelle Gericke & others[10], the approach of this Court in dealing with applications to stay a writ of execution pending a review or rescission application was summarised as follows;

‘In terms of section 145(3) of the LRA, the Court has the discretion to stay the enforcement of the arbitration award pending the outcome of the review application. This discretion which is very wide has to be exercised judicially taking account certain factors. The most important consideration in the exercise of the discretion is whether there is a pending underlying cause of action arising from the arbitration award or in certain instances arising from the Court order. There is a wide range of factors which the Court will take into account in considering whether or not to order a stay of the execution of an arbitration award, the most important of which is whether the interest of justice supports the stay of execution pending the finalization of the review or rescission

application.’[11]

[14] The Court in Chillibush further added that other considerations to be taken into account include; whether the stay of the writ based on the underlying causa was properly before a court; the existence of prospects of success in the review or rescission application; the interest of all parties in securing finality; the costs of the delay in finalising the matter to all the parties; the cost to all parties of instituting or opposing further proceedings, and the risk of injustice being done to the less powerful party to the dispute.[12] In Gois t/a Shakespeare’s Pub v van Zyl & Others[13], it was held that this Court will favourably consider granting the stay of execution when “real and substantial justice requires such a stay or, put differently, where injustice would otherwise result”.

[15] For any clear or prima facie right to be established in this case, the applicant is required to demonstrate at the most, that there was a proper review application

before the Court. This is so in that such an application, will form the basis of a pending underlying causa,[14] which underpins a determination of whether a stay of execution should be granted or not.

[16] It was common cause that there is a pending review application before the Court. The disputes however in regards to that review application pertains to whether it has since been deemed withdrawn in accordance with the provisions of paragraph 11.2.3 of the Practice Manual of the Court, or ‘lapsed’, as contended by the Employees.

[17] The contention that the review application has lapsed or is deemed withdrawn came about as a result of numerous extensions requested by the applicant in filing the transcribed record after it had complained that the record as received from the CCMA was incomplete. The Employees however contend that the record was complete when furnished by the CCMA in terms of Rule 7A(3) of the Rules of this Court in July 2023, and that the applicant however failed to timeously attend to it claiming that it was incomplete. It was against these repeated requests for an extension that the Employees had in the end refused to accede to, that it was contended that the review was deemed lapsed.

[18] It is my view that given the main urgent application and further in the light of the disputed facts surrounding whether the review application is deemed withdrawn or not, the Court should be disinclined to make any definitive finding in that regard. This is for the simple reason that if it is indeed so that the review application is deemed withdrawn, in the absence of an application to reinstate it, the Court would be compelled to find that effectively there is no review application before it, and thus no underlying

cause necessitating a stay of execution. Where however the Court were to find that the review application remains live, this will equally deprive the Employees of their right to properly ventilate that preliminary issue in the review application. I am of the view therefore that the parties should be afforded an opportunity to pursue any of their rights under the Rules of this Court to the extent that there is a dispute whether the review application is live or not. The approach of the Court is premised on the Order it proposes to make below.

[19] The second dispute, which is central to this urgent application surrounds the common cause fact that the applicant has not in its review application, complied with the provisions of section 145(7) and (8) of the LRA[15]. In its Notice of Motion in the review application, the applicant had sought an order exempting it from furnishing security. Inasmuch as under section 145(3) of the LRA the Court may stay the enforcement of the award pending the determination of a review application, under section 145(7) of the LRA, it is provided that 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).

[20] In interpreting these provisions, the Labour Appeal Court (LAC) in City of Johannesburg v Samwu obo Monareng and another[16] (‘Monareng’), held that;

‘[7] The Labour Court has a discretionary power under section 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 section 145(8) of the LRA dispense with the requirement of furnishing security. Properly construed, section 145(3) read with section 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 section 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 section 145(3) of the LRA to stay the enforcement of the arbitration award pending the finalisation of the review application.

[8] However, should the employer wish to be absolved from providing security or to provide security in an amount less than the threshold in subsections (8) (a) and (b), then it is required to make an application to the Labour Court, in terms of section 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 section 145(8) to be dispensed with or reduced.

[9] The words “unless the Labour Court directs otherwise” in section 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 sections 145(8)(a) and (b) of the LRA’

[21] To the extent that the applicant essentially seeks to be absolved from payment of security, the issue that remains is whether it had made out a proper case for exemption. What this implies arising from Monareng[17] is that the applicant being a public entity, must make the necessary averments before the Court could exercise its discretion in its favour. It must establish on the facts, why it should be exempt from furnishing security. Thus, where no facts are placed before the Court to enable it to exercise its discretion against ordering that security should not be furnished, the default position will apply and the provisions of section 145(7) should prevail.

[22] In Monareng[18], the LAC had reiterated that in the exercise of its discretion, the Court would take into account the prejudice to both parties, the particular circumstances of the case as well as considerations of equity and fairness to both the employer and the employee. The LAC further added that one of the considerations is whether the employer is in possession of sufficient or adequate assets to meet an order of the review court upholding the arbitration award, and that the onus was on the employer seeking an exemption from furnishing security under section 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 by this Court on review.

[23] In the founding affidavit, and under the rubric of ‘Irreparable Harm’, the applicant averred that it had placed all relevant facts that render the award incapable of being satisfied or stayed by payment of a security bond in terms of section 145(7) and (8) of the LRA in its review application, and further contended that it stood by its submissions in the review. It had further contended that payment of the security in the amount of R34 407 936.00 would have a detrimental effect on its fiscus, and that it would commit unauthorised expenditure if it had to pay such an amount as security. Effectively, it contends that it is incapable of furnishing such an amount.

[24] The submissions made on behalf of the Employees on the other hand were that they would equally be prejudiced where no form of security was furnished in the event that the review application is unsuccessful. It was further submitted that the applicant was involved in countless litigation pertaining to other employees, and had complied with arbitration awards or reached settlement agreements in those instances. The Employees further submitted that in the light of mismanagement at the applicant, the only way that their rights in terms of the award could be protected is that in the light of the value of the assets attached, there was no reason why they should not remain attached as the applicant would not suffer any harm.

[25] In seeking an exemption, the applicant simply contended that as a consequence of the award, it would be required to pay the Employees a total of R34 407 936.00 and an additional R1 187 352.00 in terms of increases in salaries as a result of their upgrading to job level 6 from level 9. It further contended that its budget was severely constrained, and that the payments to be made far exceeded the 20% of the total projections for its Employee Related Costs as approved in the Medium-Term Expenditure and Revenue Framework.

[26] The applicant’s submissions from both the urgent and review applications do not say much. Nothing is said about whether it is in possession of sufficient or adequate assets to meet an order of the review court upholding the arbitration award. From its averments, it is not known whether its budget reveals that it is financially sound, or that at least its asset and income base demonstrates that it is financially stable to meet the award. There is effectively no guarantee from these averments that in the event that the review application fails, the terms of the arbitration award would be fully complied with.

[27] In fact, when the matter was finalised on 7 May 2024 and the applicant was afforded an opportunity to consider any means of providing some form of security to protect the Employees’ rights under the award, it is apparent that no such attempt was made. All that the applicant sought to obtain with this application was a mere blanket exemption as if the award did not exist.

[28] It is accordingly not sufficient for the applicant to simply aver that it would commit unauthorised expenditure if it had to pay such an amount as security, when it is not indicated as to how this would be the case. It is equally not sufficient for the applicant to simply contend that it is incapable of furnishing the amount of security without furnishing any reason in that regard. In the end, the applicant has not it placed sufficient facts before the Court indicative of a proper case being made out for the provision of security in accordance with section 145(8) to be dispensed with. Inasmuch as the applicant is a public entity whose finances are regulated by legislative provisions, no necessary averments were made before the Court to enable it to exercise its discretion in its favour and conclude that even if a stay of execution is granted, the Employees’ rights in terms of the award were it to be upheld, will be protected.

[29] Against the above conclusions the Court further needs to take into account an appropriate order that would promote the objects, spirit and purport of the Constitution. This is particularly so in the light of the applicant’s constitutional mandate and obligations towards communities under its jurisdiction, and the enquiry in this regard is whether the requirement to furnish security in full as required in terms of the award would not likely have a detrimental impact upon the applicant’s ability to provide social services and service delivery in its area of jurisdiction. Equally so, the Court must take account the objects and purpose of the LRA)[19], the overall interests of justice; the interests of the parties and in particular of the Employees who are in possession of a favourable

award.

[30] Against the above considerations, the Court may in the exercise of its discretion reduce the quantum of security to be furnished to an amount below the threshold in sections 145(8)(a) and (b) of the LRA, or stay the enforcement of an arbitration award pending finalisation of a review application against the award with or without conditions. Bearing in mind that the applicant has not placed sufficient material before it to justify an exemption, the Court takes into account that the assets of the applicant worth R1 778 190.00 are currently under attachment by the Sheriff, and it has not been demonstrated that the applicant’s financial position is such that the arbitration award can be complied with should the review application fail. Against these considerations, I agree with the submissions made on behalf of the Employees that the most equitable order to in an effort to protect the interests of the Employees, is for those assets to remain under attachment, subject to conditions as shall be illustrated below in my Order.

Costs:

[31] I have further had regard to the requirements of law and fairness in regards to costs. Given the facts and the circumstances and the order I propose to make below, I am of the view that given the applicant’s conduct in delaying the finalisation of the review application, this had clearly caused the Employees as they are entitled to, to seek an enforcement of their favourable award, and to further oppose this urgent application in order to protect their rights in terms of that award. In this regard, the applicant should be burdened with the costs of this application, which costs include those already tendered on 7 May2024.

[32] I have already alluded to the unacceptable conduct of the applicant through their attorneys of record in seeking to file further affidavits in circumstances where the merits of the application were already dealt with, and when all that was needed from the party was whether any arrangements could be made in regard to the payment of security. The applicant’s conduct and clearly irregular step unduly burdened the Employees with having to file an objection and response to the applicant’s Amended Notice of Motion. In this regard, it is my view that the requirements of law and fairness dictates that the applicant be mulcted with a punitive costs order. In the absence of any justification necessitating the filing of the Amended Notice by the applicant’s attorneys of record, I am further of the view that they (attorneys) cannot benefit from this irregular step.

[33] Accordingly, the following order is made;

Order:

1. The forms and service provided for in Rule 8 of the Rules of this Court are dispensed with and the application is dealt with as one of urgency.

2. The Writ of Execution issued under Case Number: GAVL2253-20 is stayed pending the final determination of the review application under Case Number: JR 661/23 subject to the following conditions;

2.1 The assets of the Applicant listed in an Inventory marked ‘MN3’ as annexed to the First Respondents’ Answering Affidavit marked ‘MN3’ and their total value of R1 778 190.00, shall serve as security for the purposes of section 145(7) and (8)(b) of the LRA.

2.2 Whilst the assets under attachment and care of the Second Respondent (Sheriff), the applicant may utilise them solely for the purposes intended for under the provisions of Local Government, Municipal Systems Act 32 of 2000 or any other legislative provisions.

2.3 The applicant is however prohibited from ceding, alienating, transferring, letting or disposing any of the assets under attachment for any reason whatsoever.

2.4 The Applicant is ordered to submit a monthly report to the Second Respondent, on the status, condition and depreciation or increase in value of any of the assets attached.

3. The Applicant is ordered to pay the costs of the application, including the costs already tendered by the Applicant on 7 May 2024.

4. The Applicant is ordered to pay the costs of its ‘Amended Notice of Motion’ delivered on 17 May 2024, on attorney and own client scale.

5. The Applicant’s Attorneys of Record are to forfeit their fees in respect of the delivery of the ‘Amended Notice of Motion’.

Edwin Tlhotlhalemaje

Judge of the Labour Court of South Africa

APPEARANCES:

For the Applicant: Mr. P.L. Sebako of Leepile Attorneys.

For the First Respondents: Ms. M. Vermeulen of Magda Vermeulen Attorneys

[1]Act 55 of 1998.

[2] Act 66 of 1995, as amended.

[3] 8 Urgent relief (1) A party that applies for urgent relief must file an application that complies with the requirements of rules 7(1), 7(2), 7(3) and, if applicable, 7(7). (2) The affidavit in support of the application must also contain- (a) the reasons for urgency and why urgent relief is necessary; (b) the reasons why the requirements of the rules were not complied with, if that is the case; and (c) if a party brings an application in a shorter period than that provided for in terms of section 68(2) of the Act, the party must provide reasons why a shorter period of notice should be permitted.

[3] 8 Urgent relief

(1) A party that applies for urgent relief must file an application that complies with the requirements of rules 7(1), 7(2), 7(3) and, if applicable, 7(7).

(2) The affidavit in support of the application must also contain-

(a) the reasons for urgency and why urgent relief is necessary;

(b) the reasons why the requirements of the rules were not complied with, if that is the case; and

(c) if a party brings an application in a shorter period than that provided for in terms of section 68(2) of the Act, the party must provide reasons why a shorter period of notice should be permitted.

[4] See National Treasury and Others v Opposition to Urban Tolling Alliance and Others [2012] ZACC 18; 2012 (6) SA 223 (CC); 2012 (11) BCLR 1148 (CC) at para 41 (‘OUTA’).

[5] 1973 (3) SA 685 (A) at 691C – G.

[6] Supra.

[7] At para 45.

[8] Act 66 of 1995, as amended.

[9] ‘1. Purpose of this Act The purpose of this Act is to advance economic development, social justice, labour peace and the democratisation of the workplace by fulfilling the primary objects of this Act, which are- (a) to give effect to and regulate the fundamental rights conferred by section 23 of the Constitution of the Republic of South Africa, 1996. (b) to give effect to obligations incurred by the Republic as a member state of the International Labour Organisation; (c) to provide a framework within which employees and their trade unions, employers and employers' organisations can- (i) collectively bargain to determine wages, terms and conditions of employment and other matters of mutual interest; and (ii)formulate industrial policy; and (d) To promote- (i) orderly collective bargaining; (ii) collective bargaining at sectoral level; (iii) employee participation in decision-making in the workplace; and (iv) the effective resolution of labour disputes.’

[9] ‘1. Purpose of this Act

The purpose of this Act is to advance economic development, social justice, labour peace and the democratisation of the workplace by fulfilling the primary objects of this Act, which are-

(a) to give effect to and regulate the fundamental rights conferred by section 23 of the Constitution of the Republic of South Africa, 1996.

(b) to give effect to obligations incurred by the Republic as a member state of the International Labour Organisation;

(c) to provide a framework within which employees and their trade unions, employers and employers' organisations can-

(i) collectively bargain to determine wages, terms and conditions of employment and other matters of mutual interest; and

(ii)formulate industrial policy; and

(d) To promote-

(i) orderly collective bargaining;

(ii) collective bargaining at sectoral level;

(iii) employee participation in decision-making in the workplace; and

(iv) the effective resolution of labour disputes.’

[10] (2010) 31 ILJ 1350 (LC).

[11] At para 18.

[12] In reference to Robor (Pty) Ltd (Tube Division) v Joubert and Others (2009) 30 ILJ 2779 (LC) at para 16.

[13] (2003) 24 ILJ 2302 (LC) at paragraphs 32 – 36.

[14] See Transport and Allied Workers Union of South Africa v Algoa Bus Company (Pty) Ltd and Others [2015] 7 BLLR 738 (LC); (2015) 36 ILJ 2148 (LC) at paragraphs 25 – 27.

[15] Section 145(7) and (8) of the LRA provide: (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.’

[15] Section 145(7) and (8) of the LRA provide:

(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.’

[16] [2019] ZALAC 54; (2019) 40 ILJ 1753 (LAC).

[17] At para 16.

[18] At paras 19 – 20.

[19] See fn 9