Payment of Security and Rule 11 Applications in the Labour Court

 

Rule 11 of the Labour Court Rules states:

(1)    The following applications must be brought on notice, supported by affidavit:

(a) Interlocutory applications;

(b) other applications incidental to, or pending, proceedings referred to in these

rules that are not specifically provided for in the rules; and

(c) any other applications for directions that may be sought from the court.

 

 

(2) The requirement in subrule (1) that affidavits must be filed does not apply to applications that deal only with procedural aspects. 

(3) If a situation for which these rules do not provide arises in proceedings or contemplated proceedings, the court may adopt any procedure that it deems appropriate

in the circumstances.

(4) In the exercise of its powers and in the performance of its functions, or in any incidental matter, the court may act in a manner that it considers expedient in the

circumstances to achieve the objects of the Act.

A Rule 11 Application is in ‘layman’s terms’ an Application for anything not specifically addressed in the Labour Court Rules.

We have a Client who was, prior to instructing us, successfully awarded 12 months’ compensation at the CCMA in her unfair dismissal dispute. The Employer followed no process whatsoever and they never proved their allegations against her from a substantive point of view. After the Employer called our Client in and told her about her alleged misconduct, our Client asked questions about being entitled to a charge sheet, time to prepare and a disciplinary hearing to state her case but the Employer simply informed her she is dismissed and then escorted her off the premises.

In short, the Arbitration Award stated that our Client challenged the fairness of the dismissal, both procedurally and substantively and sought compensation. The Employer was adamant that the dismissal was procedurally and substantively fair. S192 of the Labour Relations Act, as amended (LRA) explains that the Applicant in a dispute must prove that there was in fact a dismissal. Once proven, the onus moves to the Employer to prove that the dismissal was fair both procedurally and substantively. In our Client’s case there was no contention that there had in fact been a dismissal and so the Employer carried the onus to prove its fairness.

The Arbitrator found that our Client’s dismissal was both procedurally and substantively unfair and factored in that our Client had worked for the Employer for six years and had a clean disciplinary record. She also found that the Employer had treated her in an unprofessional and inhumane manner. Based on this, the Arbitrating Commissioner awarded our Client 12 months’ compensation – the maximum for an unfair dismissal dispute. The Employer was ordered to pay the Award by 25 October 2018.

Instead, the Employer took the matter on review to the Labour Court in October 2018 and we opposed it on our Client’s instruction. Our Client is now considering a Rule 11 Application to have the Employer’s case dismissed for a failure to prosecute the matter as they have taken no further steps in its Review proceedings since January 2019 when we received the Record of the proceedings at the CCMA and the transcription of the Record alternatively to simply enforce the Writ.

S145(5) of the LRA states:

Subject to the rules of the Labour Court, a party who brings an application under subsection (1) must apply for a date for the matter to be heard within six months of delivery of the application, and the Labour Court may, on good cause shown, condone a late application for a date for the matter to be heard.  

The Employer has failed to comply with this section of the LRA as the matter is yet to be set down because the necessary remaining processes in Review proceedings have not been done. These processes include the Employer filing a Notice to Standby their Founding Affidavit alternatively a Supplementary Founding Affidavit based on having had sight of the transcript and Record from the CCMA in the matter. Our Client has thus been unable to file an Opposing Affidavit or receive a possible Replying Affidavit from the Employer where-after a date for hearing of the Review Application could be applied for. Our Client is thus being deprived of her right to receive what is legally due to her in terms of the Arbitration Award.

In a slightly confusing manner, section 11.2.7 of the Practice Manual of the Labour Court explains that:

A review application is by its nature an urgent application. An applicant in a review application is therefore required to ensure that all the necessary papers in the application are filed within twelve (12) months of the date of the launch of the application (excluding Heads of Arguments) and the registrar is informed in writing that the application is ready for allocation for hearing. Where this time limit is not complied with, the application will be archived and be regarded as lapsed unless good cause is shown why the application should not to be archived or be removed from the archive.

Thus, on the one hand there is a six month time frame and on the other hand there is a 12 month time frame within which the Applicant is expected to act.

In our Client’s case, the Employer appears to have lost interest in pursuing the matter as it has failed to comply with the six month rule and they are heading towards the twelve month mark. This is, understandably, very troubling for our Client, because in terms of S145(8) of the LRA, the party taking the matter on Review has to lodge security which means that the full 12 months’ compensation Award amount has been sitting in the Employer’s Attorneys’ Trust Account since the start of the Review proceedings. Important to note is the fact 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.

S145(8) states:

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. 

The money in the Trust Account is in fact due and payable to our Client, but for the Review Application. Because the matter is now before Court, our Client cannot simply execute on the Enforcement Award she had issued by the CCMA when she received her Arbitration Award as there is a risk that the Employer could apply to the Labour Court to stay the execution of the Award and possibly succeed in obtaining a costs order against our Client, as a result. However, new case law indicates this may indeed be possible, as explained below.

An Enforcement Award is similar to a Warrant of Execution issued in civil proceedings in that the Sheriff serves a copy on the Employer and the debtor either pays the amount stated in the Enforcement Award immediately, failing which the Sheriff will have been instructed to attach and remove movable assets belonging to the Employer so as to sell on auction to satisfy the Award and pay the Employee what is due to him/her, including legal and Sheriff’s costs. This route also saves costs.

In O R Tambo District Municipality v SA Municipal Workers Union on behalf of Mzamane & Others (2019) 40 ILJ 597(LC) the Court held that just because an Applicant (Employer) pays security when lodging its Review Application, does not mean that the Court does not have the discretion, after taking into account relevant factors, to order that the enforcement of the Arbitration Award be allowed, pending the outcome of the Review Application. Said differently, the fact that the Applicant has paid security does not mean automatic and absolute protection as the Court can order that the Respondent (Employee) be allowed to execute on his/her Enforcement Award, during the Review proceedings. Upon Counsel's advice, the Employee can even attach the bank account within which the security money is being held.

It must be borne in mind though, that if the Employee executes of his/her Writ, the Employer could bring an Application to Stay the Execution of the Writ and if successful, there is a risk of a costs order against the Employee, however this is not a certainty and should not necessarily deter the Employee from executing on his/her Writ.

It appears from case law that in the event that the Applicant fails to prosecute its matter according to the prescripts of the law, the Respondent is best advised to bring a Rule 11 Application to have the Review Application archived for failure to prosecute after the 12 month period has lapsed.

In terms of Macsteel Trading Wadeville v Van der Merwe NO & others (2019) 40 ILJ 798 (LAC) the Labour Appeal Court stated that:

‘Neither the rules nor the Labour Relations Act 66 of 1995 (LRA/Act) makes provision for the dismissal of a review application on the grounds of undue delay in prosecuting the application. However, rule 11(3) provides that if a situation for which the rules do not provide arises in proceedings or contemplated proceedings, the court may adopt any procedure that it deems appropriate in the circumstances. The Labour Court declined to deal with the issue raised by Macsteel because it did not bring a rule 11 application.’ The Labour Appeal Court found that Macsteel should have been granted an opportunity to file a Rule 11 Application to explain why the matter should be dismissed for undue delay.’

In National Education Health and Allied Workers Union v University of Cape Town (2003) 24 ILJ 95 (CC) at para 31, Ngcobo J said:

‘By their very nature labour disputes must be resolved expeditiously and be brought to finality so that the parties can organize their affairs accordingly. They affect our economy and labour peace. It is in the public interest that labour disputes be resolved speedily …’

This is further confirmation by our Courts that Applicants should not be allowed to frustrate our legal system by filing a Review Application but never see it through to finality.

In Melane v Santam Insurance Co Ltd 1962(4) SA 531(A) at 532(C-D) the Judge stated:

‘(T)here is a further principle which is applied and that is that without a reasonable and acceptable explanation for the delay, the prospects of success are immaterial, and without good prospects of success, no matter how good the explanation for the delay, an application for condonation should be refused.’

In our Client’s case, the Employer has little to no prospects of success and so the Application to have the Review dismissed should be successful for our Client.

If the Respondent has not already attempted to execute on his/her Enforcement Award in terms of O R Tambo District Municipality v SA Municipal Workers Union on behalf of Mzamane & Others, the Employee can then execute on his/her Enforcement Award after their Rule 11 Application to Archive succeeds.

We will provide an update towards the end of this year on how the matter further unfolded. We are hopeful that our Client will be successful in receiving what is her lawfully hers in the form of her twelve month compensation Award.

 

 

Kylan Le Roux

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