FAWU obo Gaoshubelwe and Others v Piemans Pantry (Pty) Ltd (JS243/05) [2014] ZALCJHB 319 (15 August 2014)

REPUBLIC OF SOUTH AFRICA

IN THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG

JUDGMENT

Reportable

Case no: JS 243/05

In the matter between -

FAWU obo JOB GAOSHUBELWE AND OTHERS Applicant

And

PIEMANS PANTRY (PTY) LTD

Respondent

Heard: 28 May 2014

Delivered: 15 August 2014

Summary: Applicants’ statement of case filed more than three years after the issuance of the certificate of outcome of the conciliation. Respondent raised prescription as a point in limine. Prescription Act applicable to labour matters. The claim arose from the date that the certificate of outcome of conciliation was issued. Prescription ran from the date of the certificate of outcome of conciliation. Interruption of prescription. Referral of the dispute to conciliation not a process that would interrupt prescription in terms of s15 of the Prescription Act.

MOLAHLEHI J

[1] On 22 June 2008 this Court made an order which reads as follows:

‘1. That the Applicants’ late delivery of the statement of claim is condoned.

2. That the plea of prescription is dismissed.

3. That there is no order as costs.’

[2] The above order was varied on 24 June 2009 by agreement between the parties. The variation order reads as follows:

‘1. By agreement the order made by the court in the judgment under case no J 243/05 dated 4 March 2008 is varied, there being an obvious error in the inclusion of paragraph 2 in the order.

2. Paragraph 2 of the order is deleted.

3. The issue in paragraph 2 of the order remains for determination when the matter proceeds to trial.

4. Leave to appeal to the appeal court is dismissed with costs.’

Background facts

[3] The applicants were dismissed for allegedly participating in an unprotected strike on 1 August 2001. Subsequent to their dismissal the applicants referred a dispute concerning the alleged unfair dismissal to the CCMA. The conciliation failed to resolve the dispute and accordingly the certificate of outcome was issued.

[4] Following the unsuccessful conciliation, the applicants referred the dispute to arbitration. The arbitrator upheld the point in limine raised by the respondent that the CCMA did not have jurisdiction to entertain the dispute because it concerned dismissal for participation in the unprotected industrial action. The arbitration award upholding the point in limine that the CCMA did not have jurisdiction to entertain the dispute was issued on 15 March 2002.

[5] The applicants being unhappy with the decision of the Commissioner that the CCMA did not have jurisdiction took the arbitration award on review. The Court dismissed the review application on 9 December 2003. On 16 March 2005, the applicants filed their statement of case seeking an order that their dismissal was unfair and that for that reason they should be reinstated.

[6] In their pre-trial minutes the parties have agreed that the issue of prescription should be determined before the matter can be set down for trial.

The legal principles governing prescription

[7] There are two views as to the application of the Prescription Act to labour matters. The one view that has been followed for quite some time is that in Mpanzama v Fidelity Guards Holding (Pty) Ltd,[1] where it was held that the Prescription Act applies to labour matters. It was held in that case that the Prescription Act applies

to labour matters for the following reasons:

‘Given that the Labour Relations Act does not expressly exclude the operation of the Prescription Act, it will therefore not be inconsistent to apply the provisions of the Prescription Act to section 143 read with section 158(1)(c) of the Labour Relations Act.

Whatever the rationale may be for the doctrine of prescription or the limitation of actions, the Labour Relations Act compels the effective resolution of disputes (section 1(d) (iv) of the Labour Relations Act).

This implies that labour disputes must be resolved or finalised expeditiously. For this reason too, it would not be inconsistent to apply the Prescription Act to sections 143 and 158 (1) (c) of the Labour Relations Act.” [2]

[8] The correctness of the above view was brought into question in the two recent cases of Cellucity (Pty) Ltd v CWU obo Peters[3] and Coetzee & 48 others v MEC of the Provincial Government of the Western Cape & Others.[4] It has been held in both cases that the Prescription Act was incompatible with the architecture of the LRA. This view is based on two grounds, namely that:

1. public policy consideration does not support the application of prescription to unfair dismissal claims under the LRA and,

ii. the application of the Prescription Act to LRA claims would create inequalities between litigants because of the different routes for their disputes and also that it would be unworkable because labour disputes tend to move between various dispute resolution bodies and the court.

[9] In the recent unpublished judgment of Job Creations v Alpheus Meko and Others Case no: J 989/14,[5] the Court expressed a sympathetic view to the approach in Cellucity and Coetzee. It did not however follow that approach but rather followed the approach adopted in Mpanzama. It disagreed with the view expressed in both Cellucity and Coetzee and accepted the view that says that the Prescription Act applies to labour matters. The view in Cellucity and Coetzee was not followed in the recent unpublished case of 24/7 Security v The Commission for Conciliation, Mediation and Arbitration, case number JR 2645/10 delivered on 20 June 2014. In that case the Court upheld the view that says the Prescription Act applies to labour matters. In that case Lagrange J in dealing with this issue had the following to say:

‘If the LRA stipulated its own prescription procedures which were at odds with the Prescription Act, no doubt the same principle would apply. However the LRA does not provide alternative prescription periods and I do not think in the absence of any provisions dealing with prescription, it can be assumed that the legislature did not intend the Prescription Act to apply.’

[10] I align myself with the view expressed in those cases that followed the ratio in Mpanzama. In other words, I do not agree that the Prescription Act does not apply to labour matters.

[11] In terms of s10 (1) of the Prescription Act No 68 of 1969 (the Act), a debt is extinguished in general after the lapse of a period

determined in the law. The general period of prescription is three years from the time that the debt becomes due.

[12] It has been held that in determining what constitutes a “debt” for the purpose of prescription the word must be considered in the broader sense and should include the word “claim.” In Drannan Maud and Partners v Penniton Town Board[6], the Court held that:

“In short, the word "debt" does not refer to the "cause of action", but more generally to the "claim". There is in my view no reason to give the word another meaning in s 12(3). The effect of this finding of Thirion J on his reasoning was that he sought to determine whether the appellant had established that the Town Board had knowledge of all the facts underlying its cause of action as pleaded. Such an onus was not cast upon the appellant by s 12(3).”

The Court further held that:

“In deciding whether a "debt" has become prescribed, one has to identify the "debt", or, put differently, what the "claim" was in the broad sense of the meaning of that word.”

[13] The question as to when does prescription begin to run is dealt with under s12 (1) of the Act. It is provided in s12 (1) of the Act that prescription begins to run as soon as the debt is due. In Road Accident Fund and Another v Mdeyide,[7] the Court held that:

“11 Generally under the Prescription Act, prescription applies to a debt. For the purposes of this Act, the term ‘debt’ has been given a broad meaning to refer to an obligation to do something, be it payment or delivery of goods or to abstain from doing something. Although it may on occasion be doubtful whether an obligation is indeed a debt in terms of the Act, there is no doubt that a claim under the RAF Act constitutes a debt. However, the RAF Act regulates the prescription of claims under it and some of the differences between the two statutes have been placed at the core of this matter.

12 The period of prescription is important. Section 11 of the Prescription Act provides for generic prescription periods. Generally, the prescription period is three years. Section 23 (1) of the RAF Act provides for the same period in regard to claims against the RAF.

13. When does prescription begin to run? This question is central to the present enquiry. Section 12(1) of the Prescription Act stipulates that it begins as soon as the debt is due. A debt is due when it is “immediately claimable or recoverable”.

[14] In answering the same question the Court in Solidarity and Others v Eskom Holdings Ltd,[8] held that:

“[25] The meaning of what the term ‘debt is due’ denotes in terms of section 12 (1) of the Act, has received the attention of the courts in many judicial pronouncements. It has authoritatively been determined to mean that “there has to be a debt immediately claimable by the debtor [sc creditor] or stated in another way, that there has to be a debt in respect of which the debtor is under an obligation to perform immediately”.

[26] A debt is due in this sense, when the creditor acquires a complete cause of action for the recovery of the debt, that is when the entire set of facts which the creditor must prove in order to succeed with his or her claim against the debtor is in place or in other words when everything has happened which would entitle the creditor to institute action and to pursue his or her claim.”

[15] The cause of action which determines as to when the debt is due is explained in Umgeni Water and Others v Mshengu[9] in the following terms:

“[6] A debt can only be said to be claimable immediately if a creditor has the right to institute an action for its recovery. In order to be able to institute an action for the recovery of a debt a creditor must have a complete cause of action in respect of it. The expression ‘cause of action’ has been held to mean: ‘every fact which it would be necessary for the plaintiff to prove,… in order to support his right to judgment of the Court. It does not comprise every piece of evidence which is necessary to prove each fact, but every fact which is necessary to be proved’; or slightly differently stated ‘the entire set of facts which give rise to an enforceable claim and includes every fact which is material to be proved to entitle a plaintiff to succeed in his claim. It includes all that a plaintiff must set out in his declaration in order to disclose a cause of action. Such cause of action does not “arise” or “accrue” until the occurrence of the last of such facts and consequently the last of such facts is sometimes loosely spoken of as the cause of action.’

A plaintiff must thus have a complete cause of action at the stage when summons is issued or at any rate when the summons is served.

Did the referral of the dispute to CCMA interrupt prescription?

[16] It is trite that the running of prescription can in terms of s15 (1) of the Prescription Act be interrupted by the service on the debtor of any process whereby the creditor claims payment of the debt. The word “process” is defined in s15 (6) of the Act to mean:

“. . . a petition, a notice of motion, a rule nisi, a pleading in reconvention a third party notice referred to any rule of the court, and any document whereby legal proceedings are commenced.”

[17] Mr Nalane, for the applicants contended that prescription was interrupted in terms of s15 of the Act when the dispute was referred

to conciliation. That according to him, continued up to when the statement of case was filed with the Court. He also contended that the process continued up to when the review of the arbitration ruling was issued. Put in another way, the contention is that prescription was interrupted by the referral of the dispute to conciliation. This is in line with the view expressed by this Court in the judgment in this matter wherein it made the order dismissing the prescription point. As indicated earlier that order was rescinded. The Court in dismissing the prescription point based its decision on the following finding:

‘The running of the prescription from 1st August 2001 was however interrupted by the referral of the dispute in terms s191 (1) of the Labour Relations Act 66 of 1995 (the LRA) to the CCMA by the applicants.’

Evaluation

[18] The key issue for determination in this matter is whether or not prescription in terms of the Prescription Act,[10] has been interrupted by the referral of the dispute for conciliation to the CCMA.

[19] The view that says that prescription is interrupted when the dispute is referred to conciliation in terms of s191 (5) of the LRA and in relation to a matter that needs to be adjudicated by the Court, is incorrect because at that stage the dispute cannot be finally determined. At that stage the applicant would not have acquired the right to pursue the matter through adjudication. It was correctly pointed out on behalf of the respondent that the applicants acquired the right to pursue the matter through adjudication after the certificate by the CCMA confirming failure to resolve the dispute through conciliation. This principle is set out by the Labour Appeal Court in Premier of Gauteng v Ramabulane No and Others,[11] in the following terms:

‘[11] What the provision of sec 191(5) of the Act means is that two eventualities are provided for when the CCMA or a bargaining council has received the referral of a dismissal dispute within the prescribed period for conciliation. Either there will be attempts to conciliate or there will be no attempts at conciliation within the prescribed period. It seems to me that there will be no attempts where none can be made because the one party is not present at the conciliation meeting or both are not present at the conciliation meeting and can simply not be contacted during that period. In such a case no attempts can be made. The other is where attempts can be made. Where they have been made and they have been unsuccessful, the conciliator can or must issue a certificate that the dispute remains unresolved.

[12] Where no attempts could be made or were made – may be because one of the parties was out of reach or could not for some or other reason be reached, no certificate is made that the dispute remains unresolved but, once a period of 30 days from the date when the CCMA or the bargaining council received the referral has lapsed, the consequence is the same. It is that the employee acquires the right to have his dispute either arbitrated if he so requests or to have it adjudicated by the Labour Court if he refers it to that Court for adjudication.

[13] Whether the dispute goes to arbitration or adjudication depends on whether the case falls within the ambit of either sec 191(5) (a) or (b) of the Act. This means that a failure by the employee to attend a conciliation meeting convened pursuant to his referral of his dispute to the CCMA or a bargaining council for conciliation does not take away, and, cannot possibly to take away, from him the right which sec 191(5)(a) or (b) gives him to have his dispute arbitrated if he so requests or adjudicated if he refers it to the Labour Court for adjudication.’

[20] In terms of the principle set out in Premier of Gauteng’s case the applicants in the present matter acquired the cause of action to adjudicate the dispute in the Labour Court after the

certificate confirming the failure of conciliation was issued on 3 September 2001. It is common cause that the applicants filed their statement of case on 16 March 2005. The statement of case was accordingly filed three years, six months and two weeks after the certificate confirming failure to resolve the dispute through conciliation was issued. It follows that the applicants’ claim of the alleged unfair dismissal has prescribed.

[21] In light of the above, the respondent’s point in limine stands to succeed. I do not however believe it would be appropriate to allow the costs to follow the results.

Order

[22] In the premises, the following order is made:

1. The prescription point raised by the respondent is upheld.

2. The applicants’ unfair dismissal claim has prescribed.

3. There is no order as to costs.

__________________________

E Molahlehi

Judge of the labour Court of South Africa

APPEARANCES:

For the Applicant: Advocate Nalane

Instructed by: Cheadle Thompson Haysom

For the Respondent: Mr Sean Snyman of Snyman Attorneys

[1] [2000] 12 BLLR 1459 (LC) at para 8-11

[2] See also Uitenhage Municipality v Malloy 1998 (19) ILJ 757 (SCA), where the Supreme Court of Appeal applied the Prescription Act in the matter involving the Basic Conditions of Employment Act of 1983. The SCA held in that case that: ‘The remedy lies in the employee's own hands. Such an employee cannot profit by his or her own inaction.”

[3] 2014] 2 BLLR 172 (LC)

[4] (2013) 34 ILJ 2865 (LC)

[5] In sympathising with the view of Rabkin-Naiker J in Cellucity and Coetzee, Tlhotlhalemaje AJ had the following to say: . . In as much as I agree with my sister Rabkin-Naicker J in the decisions referred to above, more pertinently regarding the incompatible nature of the Prescription Act with public policy, and the unintended iniquitous consequences it creates, the difficulty always arises on the basis that once it is established that the Act applies to our labour law as a matter of interpretation and operation of that Act, then this Court has no discretion in the matter.

[6] [1998] ZASCA 29; 1998 (3) SA 200 (SCA) (at 212G).

[7] 2011 (2) SA 26 (CC) at paragraph 11

[8] (2008) 29 ILJ 1450 (LAC) at paragraph 25 to 26

[9] (2010) 31 ILJ 88 (SCA) at paragraph 6

[10] No 68 of 1969.

[11] (2008) 29 ILJ 1099 (LAC)