FAWU obo Gaoshubelwe v Pieman’s Pantry (Pty) Ltd [2018] 6 BBLR 531 (CC)

Is the Prescription Act 68 of 1969 (“PA”) compatible with the Labour Relations Act 66 of 1995 (“LRA”) and how does such (in)compatibility affect the prescription of arbitration awards?

In the abovementioned matter Appellant, represented by the union, was dismissed for participating in an unprotected strike during August 2001. A dispute was referred to the Commission for Conciliation, Mediation and Arbitration (“CCMA”) and in March 2002 the commissioner ruled the CCMA lacked jurisdiction to arbitrate the matter.  Appellant took the CCMA ruling on review to the Labour Court (“LC”). During December 2003 the review was dismissed. Prescription was interrupted at this stage.

In March 2005, Appellant referred an unfair dismissal dispute directly to the LC. Respondents entered a special plea, at the LC, claiming prescription applied. The LC upheld the Respondent’s special plea and the unfair dismissal dispute was dismissed. The matter went on appeal and the Labour Appeal Court (“LAC”) agreed with the LC’s decision and upheld that the PA and LRA were compatible. While both Acts place limitations on time periods within in which a party may initiate a claim for the recovery of a possible debt, the Acts deal with these limitations during different stages in the litigation process. For example, prescription cannot be condoned under the PA but can be condoned under the LRA.

The matter eventually made its way to the CC. In essence, the CC held that the term “debt”, as set out in the PA, must be narrowly interpreted. A initiation of a claim for unfair dismissal only activates the recovery process of a potential debt but is not a judgment or award which entitles a party to recover the debt. The ordinary meaning of the word “debt” is a liability or obligation to pay or something owed or due. This liability or obligation is enforced through a successful claim resulting in a judgment or arbitration award.  

The prescription of a claim in the PA is three years whereas prescription of a claim in the LRA is thirty days. In essence, the PA sets an outer time limit while the LRA sets an inner time limit to the initiation of recovery of a claim. The LRA bars while the PA extinguishes.

The CC held while prescription for the unfair dismissal claim began to run in August 2001, prescription was interrupted by the unfair dismissal dispute referral directly to the LC. Therefore, when the matter was referred to the LC the claim had not prescribed. In this specific case, the CC held that the PA and LRA could not be read together as only the LRA applied to litigation of this nature. It is on this basis that the Respondent’s special plea, regarding prescription of the Appellant’s claim, was set aside by the CC.

It is important to distinguish between the debtor’s right to initiate a claim (which prescribes after three years) and the debtor’s right to recover a debt which is already confirmed/awarded in a judgment or arbitration award (which prescribes after thirty years).

Where an employee has a judgment or arbitration award in his/her favour, the prescription of the individual’s right to claim on the basis of the judgment or arbitration award would be in terms of section 11 (a)(ii) of the PA. In this context, there could be no reason as to why an arbitration award would not have the same standing as a court issued judgment debt. It is on this basis that we submit the PA and LRA are compatible.

While there may be been conflicting decisions on this point, in relation to the specific circumstances of each matter, we propose the above is the most practical way in which to address such issues.