The new section 145(9) of the Labour Relations Act – unique, but welcome

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An application for the review of an arbitration award under sections 145(1) and/or 158(1)(g) of the Labour Relations Act (LRA hereafter) is intrinsically an urgent application. Unfortunately some parties, mainly employers, utilise various tactics to frustrate the other party and to extinguish any further legal action. In layman's terms one could say that employers bleed employees dry. In many cases workers cannot afford extended legal costs. This dilemma of employee creditors is the motivation for this article. A key question to be examined is what relief, if any, the amendments to section 145 provide to the employee seeking to enforce an arbitration award.

The Labour Relations Amendment Act 6 of 2014 contains a number of important changes and additions which may curb this problem, for example the addition of subsection 9 to section 145:

(9) An application to set aside an arbitration award in terms of this section interrupts the running of prescription in terms of the Prescription Act, 1969 (Act 68 of 1969), in respect of that award.

Subsection 10 makes it clear that the interruption indicated under subsection (9) applies only to an arbitration award delivered after the commencement date of the act (i.e. 1 January 2015). Alternative terms for interrupt would be suspend or pause, but in this contribution interrupt is preferred.

A similar provision could not be found in international labour law. In South Africa it is indeed welcome, because it is common practice for employers to make applications for review to stretch out the legal battle. Such an application frustrates the legitimate remedies of employees which were granted in their favour by the Commission for Conciliation, Mediation and Arbitration (CCMA) or a bargaining council. Employers hold out long enough to extend the review process so that the claim can prescribe after three years. Most employees are not even aware of the Prescription Act.

Sources on this subject are scarce. In his comprehensive article "Judicial review of arbitration awards under the new South Africa Labour Relations Act of 1995" Sharpe does not even refer to the prescription of arbitration awards. No relevant journal articles could be traced. Therefore court cases and legislation are almost exclusively the sources for study of this subject.

First, the history of law regarding the prescription of labour claims is outlined. In CEPPWAWU v Rotolabel Van Niekerk J remarked that judges of the labour court do not agree on how the Prescription Act 68 of 1969 impacts on the LRA, if at all. The difference in opinion relates to the following question: Does the Prescription Act apply to all arbitrated claims in terms of the LRA, or only to some, or to none? The decided cases can be divided into four approaches: (i) those which submit that prescription applies to all arbitration awards; (ii) those that hold that prescription applies to all arbitration awards, but the filing of an application to review interrupts the running of prescription; (iii) those that say that prescription can be applied to compensation awards only and not to reinstatement awards; (iv) and those that hold that the Prescription Act cannot be reconciled with the LRA and an arbitration award does not prescribe.

When the amended sections of the LRA became valid on 1 January 2015, some legal uncertainty remained on how the new sections should be applied in practice. This became less uncertain when Coppin JA delivered judgment in the Labour Appeal Court in the hearing of three related appeals which were grouped together, namely Myathaza v Johannesburg Metropolitan Bus Service (SOC) Ltd; Mazibuko v Concor Plant;and Cellucity (Pty) Ltd v Communication Workers Union on behalf of Peters. This judgment serves as a precedent for all future cases dealing with prescription.

Coppin JA paid special attention to the following questions, thereby addressing the key issues:

  • Does the Prescription Act apply to all, some or no arbitration awards?
  • If yes, which terms of prescription apply to such arbitration awards?
  • If yes, does an application to review and/or set aside an award interrupt the running of prescription?

The judgment concluded, among others, the following:

  • Arbitration awards do prescribe.
  • Arbitration awards create a “debt” and this also applies to awards for reinstatement.
  • The prescription term period for arbitration awards is three years.
  • A debtor’s application for review and/or to set aside an award interrupts the running of prescription for all awards made after 1 January 2015.

Legal certainty is established with regard to additional critical measures which may curb the delay of reviews, like the other amendments to section 145 of the LRA and some paragraphs in thePractice Manual of the Labour Court 2014. Guidelines are also discussed for how parties should now proceed in the light of the relevant changes to the LRA. An employer must be assured that he has good merits before filing a review application. Employees should file an application in terms of section 158(1)(c) soon after the employer has disobeyed an award to make the award an order of the Labour Court. This application in itself interrupts the running of prescription. An employer can no longer benefit from delaying a review. On the contrary, it may drastically increase the monetary remedy which the employee eventually receives when reinstated.

There are still some critical questions to be discussed, for example:

  • Should the Prescription Act really trump the LRA in the light of the emphasis on fairness in labour disputes? Are these two acts rather not unique in their own ways?
  • Is it consistent that some cases are referred directly to the labour court for adjudication after conciliation had failed (resulting in a judgment debt with a prescription period of 30 years), while others are obliged to go for arbitration at the CCMA (resulting in an award judgment debt with a prescription period of three years)?

The amendment of section 145 of the LRA is, however, very welcome. It is a big step forward to limit the prejudice to employees caused by their employers and will hopefully lead to a speedier resolution of claims in terms of an award which employees have secured as a result of due process.

Keywords: arbitration; compensation award; interruption; LRA; Labour Relations Amendment Act 2014; order; prescription; Prescription Act 1969; re-employment; reinstatement; review; running of prescription

Lees die artikel in Afrikaans: Die nuwe artikel 145(9) van die Wet op Arbeidsverhoudinge – uniek, maar welkom

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  • Ek het 'n saak teen my vorige werkgewer, hule het my geretrence die dag wat ek van verlof af kom sonder kennisgewing. Die saak is aangemeld by die barganing council in Welkom, ek het ook die saak gewen. Nou wil hule die saak uitrek - is moedeloos.

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