DCJ dissents again: Incompatibility Prescription Act and LRA

Note: Footnotes omitted

ZONDO DCJ: (Jafta J and Zondi AJ and Mogoeng CJ concurring)

Introduction

[77] This is yet another case that has come before this Court in which the issue we are called upon to decide is whether the Prescription Act and the prescription periods it prescribes apply to unfair dismissal claims governed by the dismissal dispute resolution system under the LRA. The applicants contend that the Prescription Act does not apply to unfair dismissal claims or disputes. The respondent disputes this and contends that the Prescription Act does apply.

[78] I have read the judgments prepared by my Colleagues, Zondi AJ (first judgment) and Kollapen AJ (third judgment). The first judgment concludes that that leave to appeal should be granted and the appeal upheld. I concur in the first judgment but write separately to bring another perspective to the matter and give additional reasons for the conclusion that the Prescription Act does not apply to unfair dismissal claims.

[79] Labour legislation, including the LRA, was a response, in part at least, to the inequity against workers inherent in the common law employment relationship. Labour legislation was intended to bring about a better dispensation which would seek to protect and promote the interests of both employers and employees. In other words, labour legislation sought to bring about a new employment regime between employers and employees that would seek to strike a balance between the interests of employers and those of employees.

[80] The right not to be unfairly dismissed is conferred by section 185 of the LRA on every employee. The enactment of the LRA marked the first time in South Africa’s history that a statute expressly conferred upon employees the right not to be unfairly dismissed. The Labour Relations Act No 28 of 1956 as amended, (the 1956 LRA), the precursor to the current LRA – made provision for an unfair labour practice the definition of which was broad enough in effect to include the right not to be unfairly dismissed but it made no express mention of a right not to be unfairly dismissed. The provisions of the 1956 LRA conferred upon the Industrial Court an extensive unfair labour practice jurisdiction which that Court used most effectively to create labour law jurisprudence on unfair dismissal some of which is reflected in the LRA.

[81] The introduction of the concept of an unfair labour practice placed the principle of fairness at the centre of our law of employment. That included making fairness a requirement for a dismissal. The termination of employment could in effect be reversed if it was found to be unfair despite the fact that it may have been lawful. Special provisions were enacted for the enforcement of this right not to be subjected to an unfair labour practice. Those special provisions encompassed a special dispute resolution system that would be based on fairness to both the employer and employee and one that would not be rigid. The dispute resolution system that applies to unfair dismissal claims under the LRA is a self-contained system of rights and obligations with specialised processes, fora and principles enforceable only under the LRA. It is one that seeks to strike a balance between the interests of employers and those of employees.

[82] The National Economic Development Labour Council Act created the National Economic Development Labour Advisory Council (NEDLAC). This body was established to enable Organised Business, Organised Labour and Government to negotiate and reach agreement on matters that affected them so as to advance economic development in the country. The idea was that all these stakeholders would reach “deals” in this body which would be good for the country. The “deals” they would reach could include “deals” on legislation that would be good for the economic development of the country. Those “deals” on legislation would then be referred to Parliament to enact. Obviously, the idea was not that Parliament would act as a rubber stamp for what had been agreed at NEDLAC. Nevertheless, it was hoped that, when dealing with a Bill that sought to capture a “deal” reached at NEDLAC, Parliament would appreciate the special and significant role of NEDLAC in the economic development of the country.

[83] In 1994 the Minister of Labour appointed a Task Team whose mandate was to draft a memorandum in the form of a Bill that would ultimately be passed as the Labour Relations Act for the new democratic state. The Task Team consisted of labour lawyers who were found acceptable to all stakeholders. That Task Team produced a document in Bill-form together with an explanatory memorandum which explained the main features of the “Bill”. The Minister of Labour referred the “Bill” and memorandum to NEDLAC to enable Organised Business, Organised Labour and Government to use it as a basis for negotiation.

[84] Extensive negotiations ensued at NEDLAC which culminated in a “deal” that was reached among all the stakeholders. That “deal” was in the form of the Labour Relations Bill. It included the unfair dismissal dispute resolution system which is reflected in the LRA. The “deal”, as agreed to at NEDLAC, was then handed over to Parliament which had its usual debates on the Bill and passed it without any substantial changes, particularly in regard to the unfair dismissal dispute resolution system. Therefore, what we see in the LRA is substantially the “package” or “deal” that was agreed to at NEDLAC among Organised Business, Organised Labour and Government. Organised Business, Organised Labour and Government each made various compromises to achieve this “deal” or “package”.

Features of the LRA “deal” or “package”

[85] The “package” included not only the right not to be unfairly dismissed that was conferred on employees – a right that did not exist before – but also the onus to prove that a dismissal is fair was put on the employer. At common law, reinstatement was not competent in an employment relationship. The new dispensation that was aimed at striking a balance between the interests of employers and those of employees came with a new rule on reinstatement. The rule on reinstatement favoured workers. Subject to certain exceptions, reinstatement was made the preferred remedy for an employee who has been dismissed substantively unfairly. However, the new system had a rule that favoured employers as well. That was the rule that reinstatement would not be competent in the case of an employee whose dismissal is found to be unfair only because no fair procedure was followed. This was one of the complaints by employers in the dispensation under the 1956 LRA. The complaint was that an employee could be reinstated by a court even if his or her dismissal was found to have been for a good reason at a substantive level as long as there had been some procedural defect. The idea was that in such cases an employee should receive compensation and not reinstatement.

[86] At NEDLAC a deal was struck that employees would get reinstatement as a preferred remedy for substantively unfair dismissals and employers would not be forced to reinstate employees in respect of whom there was fair reason for dismissal but a fair procedure had not been followed. The two rules were part of the “deal” or “package” aimed at striking a fair balance between the interests of both employers and employees. As part of the “package”, the LRA included various rules regarding compensation for an unfair dismissal in cases where reinstatement is not competent or practicable. The compensation was limited to the equivalent of 12 or 24 months’ remuneration of an employee, depending on the type of dismissal involved. If the dismissal was for operational requirements, the employer would have to pay an employee severance pay, another benefit that employees did not enjoy at common law.

[87] That the LRA seeks to strike a balance between the interests of employers and those of employees has already been acknowledged by this Court in Sidumo. In that case this Court said:

“The Constitution and the LRA seek to redress the power imbalance between employees and employers. The rights presently enjoyed by employees were hard won and followed years of intense and often grim struggle by workers and their organisations.”

[88] Since it is the LRA that confers on the employee the right not to be unfairly dismissed, it follows that it is the LRA that provides for the enforcement of that right, the times within which unfair dismissal claims are enforced and the processes and fora created by it. It cannot be that a right acquired under the LRA is lost under the Prescription Act, unless the LRA specifically so provides. The LRA makes no such provision.

[89] The dispute resolution system under the LRA stipulates the timeframes within which an unfair dismissal dispute must be referred to the relevant forum. It provides, in effect, that, if an employee fails to refer an unfair dismissal dispute to conciliation within the period, the referral will only be accepted if there is good cause for the failure to refer it within the period. Under the LRA an employee forfeits his or her unfair dismissal claim when he or she fails to refer the dismissal dispute to the correct forum within the relevant stipulated period and has no “good cause” for the failure. These provisions might not have the certainty of the common law or of the Prescription Act but they do provide the flexibility that is required in order to ensure that a balance is struck between the interests of employers and those of employees.

[90] If the drafters of the LRA and Parliament wanted a regime that included the Prescription Act, all they would have had to do to achieve that would have been to prefix the relevant provisions relating to condonation and good cause with the phrase: “subject to the Prescription Act”. They deliberately did not do so. That was a legislative choice not to add the prescription periods of the Prescription Act to the LRA. For example, section 191(1)(b) provides that the referral of a dismissal dispute to conciliation must be made within 30 days from the date of dismissal. Then section 191(2) says: “[i]f the employee shows good cause at any time, the council or the Commission may permit the employee to refer the dispute after the relevant time limit in subsection (1) has expired”.

[91] With regard to the referral of a relevant dismissal dispute to the Labour Court for adjudication, section 191(11)(a) and (b) read:

“(a) The referral, in terms of subsection (5) (b), of a dispute to the Labour Court for adjudication, must be made within 90 days after the council or (as the case may be) the commissioner has certified that the dispute remains unresolved.
(b) However, the Labour Court may condone non-observance of that timeframe on good cause shown.”

The provision of section 191(11)(b) confers upon the Court a very wide power to condone non-observance of the timeframe stipulated in section 191(11)(a). There is no indication whatsoever in section 191(11)(b) that that power conferred upon the Labour Court is limited in any way in the sense that it is subject to the Prescription Act. The approach that says that the Prescription Act applies to unfair dismissal claims under the LRA means that a provision such as section 191(11)(b) is subject to the Prescription Act and yet the phrase “subject to the Prescription Act” is conspicuous by its absence in section 191(11)(b).

[92] The provisions of the dispute resolution system of the LRA seek to do things differently from how the common law sought to do things and from the way the Prescription Act seeks to do things. The Prescription Act had long been on the statute book when the LRA was passed. The drafters of the LRA were aware of the Prescription Act and the regime for which it provides. It was constitutionally competent for Parliament, when it passed the LRA, to take the attitude that, in regard to this special category of disputes, it would put in place a regime that differed from the regime in the Prescription Act.

[93] If the drafters had intended that, notwithstanding the fact that section 191(11)(a) and (b) mean that an employee may not refer a dismissal dispute to the Labour Court after the expiry of the 90 day period stipulated therein if he or she is unable to show good cause, such a dismissal dispute is also subject to the Prescription Act, they would have included the phrase “subject to the Prescription Act”. In that case they would have formulated section 191(11)(b) in these terms:

“(b) However, subject to the Prescription Act, the Labour Court may condone non observance of that timeframe.”

They did not frame section 191(11)(b) in these terms because it was never intended that the prescription periods stipulated in the Prescription Act should have any role to play in the dismissal dispute resolution dispensation under the LRA.

[94] Section 191(2) confers upon the relevant bargaining council or the CCMA the power, “[i]f the employee shows good cause at any time” — which means even after three years —“to permit the employee to refer the dispute after the relevant time limit in subsection (1) has expired”. That means that this provision gives the CCMA or the bargaining council jurisdiction or power to permit an employee to refer an unfair dismissal dispute at any time outside the 30 day period provided the employee shows good cause. The provision does not limit the employee to showing good cause only within the three year period prescribed by the Prescription Act. In terms of the provision an employee may show good cause “at any time”. The phrase “at any time” includes at any time after the expiry of three years from the date of dismissal provided good cause is shown for the delay.

[95] The approach that says that unfair dismissal claims are subject to the Prescription Act actually is a result of reading section 191(2) and 191(11)(b) as meaning that the CCMA or a bargaining council under section 191(2), and, the Labour Court under section 191(11)(b) have no jurisdiction to condone a referral of an unfair dismissal dispute after the expiry of three years stipulated in the Prescription Act. If it was intended to limit the jurisdiction of those tribunals to condone late referrals of unfair dismissal disputes to three years, and that, after that, they could not permit or condone a late referral of an unfair dismissal dispute, there would have been a provision in the LRA that says so expressly. The ousting of the jurisdiction of a court is not to be lightly inferred.

[96] I am of the view that, even after three years, the CCMA or a bargaining council or the Labour Court does have jurisdiction to permit or condone a late referral of an unfair dismissal dispute if the employee can show good cause. There may be a temptation to think that there will be no cases where an employee fails over three years to refer an unfair dismissal dispute to the CCMA or to a bargaining council or to the Labour Court and has good cause and that, therefore, there is no problem if one adopts the approach that the Prescription Act is applicable to unfair dismissal disputes. However, there are situations where an employee may refer an unfair dismissal dispute to conciliation or arbitration or adjudication after the expiry of three years and he or she has good cause for the delay. I refer below to examples of such cases that are to be found in our law reports.

Steenkamp

[97] A good example is Steenkamp where, for years, an employee wrongly or rightly believes that he or she is entitled to pursue a claim on the basis of a cause of action other than an unfair dismissal claim and later gets a court decision that says that he or she has no claim under that cause of action and the claim he or she should have pursued is one under the LRA. By that time three years may have lapsed. In such a case that employee would be able to refer the unfair dismissal dispute to the CCMA or to the relevant bargaining council for conciliation and apply for condonation for referring the unfair dismissal dispute to conciliation or arbitration or adjudication after the lapse of such a long time e.g. three years from the date of dismissal.

[98] In Steenkamp employees who were dismissed challenged the validity and lawfulness of their dismissal in the Labour Court and sought an order that their dismissals were invalid and of no force or effect. They also sought an order of reinstatement. They did not challenge the fairness of their dismissals. Therefore, they did not refer an unfair dismissal dispute to conciliation under the LRA. There was precedent in both the Labour Court and the Labour Appeal Court upholding this approach they were taking. However, when the Labour Appeal Court dealt with their matter, it overruled its previous decision that they had been following as well as the decision of the Labour Court. When the matter came to this Court, this Court held that the approach they had followed was wrong and was not open to them and they should have followed the unfair dismissal route. It, accordingly, dismissed the appeal. By this time a period of more than three years had lapsed. This meant that, if the Prescription Act applied to unfair dismissal claims, the employer could raise prescription when they sought to refer unfair dismissal disputes to conciliation.

[99] In a case such as Steenkamp an employee would say that, until the date of this Court’s judgment in that case, he or she had bona fide believed that he or she did not have to refer an unfair dismissal dispute to a conciliation process because, based on decisions of the Labour Court and Labour Appeal Court, she or he believed that he or she could obtain from the Labour Court the relief that she or he wanted. That is an order that the dismissal was unlawful, invalid and of no force and effect and granting reinstatement. He or she would say that it was only after this Court had handed down its judgment in the matter that he or she realised that the route he or she had followed was not available to him or her in law and that he or she had to refer the dispute to a conciliation process.

[100] Provided that the employee acted without delay after the delivery of the judgment of this Court clarifying the position, there are good prospects that the CCMA or bargaining council considering his or her condonation application would find that he or she had shown good cause for the delay. In that event, it would condone the delay or permit him or her to refer the unfair dismissal dispute to conciliation even after the expiry of three years from the date of his or her dismissal. That is what can happen under the LRA and its dispute resolution dispensation. However, under the Prescription Act, once the prescription period of three years has expired, the claim has prescribed and it is “dead”, no matter how plausible the creditor’s explanation for the failure to institute the action and serve the summons within the applicable prescription period.

[101] In Steenkamp this Court was alive to the kind of situation where an employee bona fide believes for a long time that he or she does not need to refer an unfair dismissal dispute to a conciliation process until this Court delivers a judgment that shows that he or she does need to do so. After this Court had concluded in Steenkamp that the employees’ appeal had to fail, it said:

“Does this mean that this is the end of the road for the employees in this case? Not necessarily. Until the decision of this Court, the employees acted on the strength of decisions of the Labour Court and Labour Appeal Court whose effect was that in this type of case it was open to them not to use the dispute resolution mechanisms of the LRA and not to seek remedies provided for in section 189A but instead to simply seek orders declaring their dismissals invalid. It is arguably open to them to seek condonation and pursue remedies under the LRA. Obviously, Edcon would be entitled to oppose that.”

Steenkamp is not an isolated case in which an employee was required to refer a dismissal dispute to a conciliation process after the expiry of three years and possibly had good cause for referring it after the expiry of such a long time from the date of dismissal.

Chirwa

[102] Ms Chirwa was dismissed from the Transnet Pension Fund in 2002. She had initially referred her dismissal dispute to the CCMA for conciliation. Conciliation failed. From then she had 90 days within which to request that her unfair dismissal dispute be arbitrated. It would appear that that was an unfair dismissal dispute that under the LRA would have had to be arbitrated rather than adjudicated. Ms Chirwa then decided not to pursue the matter under the LRA dispute resolution system. Instead, she decided to launch a review application in the High Court under the Promotion of Administrative Justice Act (PAJA) on the basis that her dismissal constituted an administrative action. That would have ordinarily meant that her review application could be decided by the High Court. If her review application succeeded, she would, in effect, have achieved reinstatement.

[103] Ms Chirwa’s review application failed in the High Court. That Court said that it did not have jurisdiction because this was a matter which should have been pursued as an unfair dismissal claim under the LRA. She appealed to this Court. This Court held that her dismissal did not constitute an administrative action and she should have pursued her case as an unfair dismissal claim under the LRA. Ms Chirwa had been dismissed in 2002. Her case was heard by this Court in March 2007 and judgment was handed down in November 2007. That was about five years from the date of dismissal. However, since the failure of the conciliation process, the period must have been at least more than four years.

[104] This Court was alive to the fact that the time within which Ms Chirwa was required to have requested that her dispute be arbitrated under the LRA had long expired and she would need to apply for condonation. This Court did not think that her unfair dismissal claim had prescribed under the Prescription Act. Indeed, this Court thought that an unfair dismissal claim was only subject to the periods provided for in the LRA and condonation for delays could be granted when there was good cause. That is why this Court said through Skweyiya J at the end of its judgment:

“Although on her pleadings the applicant appears to be out of court, she is not left without a remedy. She must follow the route created by the LRA and exhaust all the remedies that are still available to her within that specialised framework. A condonation procedure is provided for by section 136(1) of the LRA, and thus the applicant may still pursue the route of arbitration. If she is dissatisfied with the outcome, she has the further option of pursuing the review of the arbitration award in the Labour Court, in terms of section 145 of the LRA.”

Fredericks and Gcaba

[105] Fredericks and Gcaba are cases in which employees could easily have found themselves having to refer unfair dismissal disputes to conciliation or arbitration or adjudication under the LRA dispute resolution system after the expiry of a period of three years because they had first pursued the High Court route on the basis that they sought to vindicate their constitutional rights and not their rights under the LRA. Fortunately for the employees in those cases, they did not have to deal with that situation.

Intervalve

[106] Intervalve is another case where employees may have had to refer their dismissal dispute to a conciliation process after the expiry of three years. The employees involved in Intervalve whose dismissal disputes were not referred by their union to the conciliation process may have had to refer their dismissal disputes to conciliation after the expiry of three years if they referred the disputes after the judgment of this Court. This Court thought that, even after the expiry of such a long time, the employees could still refer their dismissal disputes to conciliation and apply for condonation. This appears from what this Court said through Cameron J:

“The dissenting judgment suggests that the approach favoured here is overly restrictive and formalistic and will impede the effective resolution of labour disputes. This seems undue. A clear requirement that a union must include every employer in conciliation proceedings is likely to lead to less, not more, litigation. The dissent rightly notes that in a complex working relationship it may be difficult to determine the true employer of each employee. But the LRA offers condonation if this complexity results in missed deadlines. Indeed, condonation for the late referral involving Intervalve and BHR was available here, and it is not clear why NUMSA did not seek to review the Bargaining Council’s decision in August 2010 to deny it condonation. NUMSA may indeed still seek to review that decision on the basis that, until the decision of this Court, it believed that it was entitled to have the companies joined.

Nor is condonation the only recourse for the employees who, through no fault of their own, will be unable to join the action against Steinmüller. NUMSA failed to act promptly at various points during the litigation. That may make it possible for the employees of Intervalve and BHR to seek recompense from it on the basis of negligent mismanagement of their claim.”

CMI v September

[107] This is a case where employees and their employer were in dispute about whether the Labour Court had jurisdiction to adjudicate an alleged constructive dismissal dispute or an alleged automatically unfair dismissal dispute when it granted a default judgment against the employer, CMI Business Enterprises (CMI). This issue arose in circumstances where employees had referred to the CCMA for conciliation a dispute they described as “unfair discrimination S10 of the Employment Equity Act” but, after the conciliation process had failed, they referred to the Labour Court for adjudication a dispute concerning an alleged constructive dismissal or an automatically unfair dismissal.

[108] In seeking a rescission of the default judgment, the employer took the point that no constructive dismissal dispute or automatically unfair dismissal dispute had been referred to the CCMA for conciliation and, therefore, the Labour Court had no jurisdiction to adjudicate such a dispute. The employees contended that the Labour Court did have jurisdiction because at the conciliation meeting the true dispute, namely, constructive dismissal, had been discussed. The Labour Court upheld the employees’ contention and held that, therefore, it had had jurisdiction to grant the default judgment. It dismissed CMI’s rescission application. In a subsequent appeal to the Labour Appeal Court, that Court upheld CMI’s contention that the Labour Court had not had jurisdiction to grant the default judgment because no dismissal dispute had been referred to the conciliation process and reversed the decision of the Labour Court.

[109] The matter then came before this Court. The employees’ claim for constructive dismissal or automatically unfair dismissal was based on their allegation that they had resigned from CMI’s employ on 13 September 2011 because their continued employment had become intolerable as a result of the racist treatment to which the employer had allegedly subjected them. Had this Court decided that no dismissal dispute of any kind was referred to the CCMA for conciliation and that, therefore, the Labour Court had not had jurisdiction to grant the default judgment against the employer, the question that would have arisen for the parties would have been this: as the period of three years since the alleged resignation had lapsed, could the employees still have referred their unfair dismissal claim to the CCMA for conciliation if they could show good cause or could they not do so because, in the meantime, their unfair dismissal claim had prescribed under the Prescription Act? In my view they would still have been able to refer their dismissal dispute if they could show good cause.

[110] The cases referred to above show that there are cases in which employees’ failure over three years to refer their unfair dismissal disputes to conciliation or to arbitration or adjudication could be due to a bona fide error of law. The cases show some of the instances where employees who had failed over three years to refer their unfair dismissal disputes to conciliation could possibly show good cause as required by the LRA for the referral of their unfair dismissal disputes after the expiry of three years since dismissal. In those cases the CCMA or relevant bargaining council would be entitled to permit the employee in terms of section 191(2) to refer the dispute to conciliation after the expiry of three years if the Prescription Act did not apply to unfair dismissal disputes under the LRA and if good cause was shown. However, that employee’s claim would be “killed” if the Prescription Act applied to such claims or disputes because, under the Prescription Act, if the prescription period of three years has expired, the claim has prescribed and is “dead” and the presence or absence of good cause for the delay is irrelevant. Therefore, applying the LRA rather than the Prescription Act is the right approach.

Difficulties of interpretation

[111] The proposition that the Prescription Act applies to unfair dismissal disputes under the LRA suggests that the prescription period prescribed by the Prescription Act begins to run from the date of dismissal (i.e. that is when the debt is said to be due) and is interrupted by the service on the employer of the referral document referring the dismissal dispute to the process of conciliation. One of the difficulties with this is that, when, under the Prescription Act, it is said that a debt is due, it means that the debt or claim is enforceable and the creditor may immediately institute court proceedings to recover it. Yet, under the LRA no court proceedings may be instituted to obtain any order of reinstatement or for the payment of compensation until the conciliation process has failed. The failure of a conciliation process is proved by the issuing of a certificate by a commissioner to the effect that the dispute remains unresolved or by the expiry of 30 days (or any agreed extended period) after the receipt of the referral of the dispute to the conciliation process.

[112] In Intervalve this Court held that the referral of an unfair dismissal dispute to conciliation is a jurisdictional requirement that must be met before the Labour Court may acquire jurisdiction to adjudicate a dismissal dispute. This also applies to a dismissal that may need to be referred to arbitration after the conciliation process. This, therefore, means that at the time of the referral of a dismissal dispute to conciliation, the CCMA does not have jurisdiction to arbitrate the dispute nor does the Labour Court have jurisdiction at that stage to adjudicate the dispute if it is a dispute that could otherwise end up having to be referred to the Labour Court for adjudication.

[113] If, under the Prescription Act, a creditor instituted, within the relevant prescription period, an action in a court that does not have jurisdiction to adjudicate his or her claim, that action would not interrupt prescription. It is difficult to see why then, when it comes to unfair dismissal claims, referring a dismissal claim to the CCMA, a body that has no competence or jurisdiction to adjudicate the claim at any stage before, the position should be different. Since the CCMA cannot adjudicate the claim, lodging and serving a referral document with the CCMA cannot interrupt prescription. Prescription gets interrupted when the court process that is served relates to an action that has been instituted in a court that has jurisdiction.

[114] Another difficulty with the approach that the Prescription Act applies to unfair dismissal disputes and that the referral of a dismissal dispute to conciliation interrupts prescription is that prescription is interrupted by the referral of the dispute to conciliation but, if conciliation fails and the employee is required to refer the dispute to, for example, the Labour Court for adjudication within 90 days of the failure of conciliation but fails over three years to do so, his claim would not prescribe. In such a case the employee would forfeit his unfair dismissal claim only on the terms of the LRA. That is if he or she fails to show good cause for the failure to refer the dispute to the Labour Court within the period required by the LRA. The LRA requires an employee to refer such a dismissal dispute to the Labour Court within 90 days from the date of the issuing of the certificate that says that the dispute remains unresolved or within 90 days from the date when the CCMA or bargaining council received the referral of the dispute to conciliation.

Interference with an agreed balance

[115] Applying the Prescription Act to unfair dismissal claims under the LRA would introduce into the LRA dispute resolution dispensation a foreign rule that operates under a different statute. The result would be that this foreign rule would tamper with a specialised dispute resolution dispensation agreed to between employers and workers that seeks to strike some balance between the parties’ competing interests. That would create a system that is more advantageous to employers than to employees. The foreign rule would have the effect of taking away from employees’ rights and benefits, including the ability to pursue unfair dismissal claims beyond three years in those cases where there is good cause for failing to refer the dispute to the relevant forum within the period stipulated in the LRA. Invoking this foreign rule into the LRA tampers with or disturbs the balance struck under the LRA at NEDLAC and approved by Parliament. Invoking the Prescription Act disturbs that balance in favour of employers and to the detriment of workers.

Benefits of the LRA regime

[116] Under the LRA unfair dismissal dispensation, there are advantages for both employers and the employees. An employer may be able to make the unfair dismissal claim of an employee go away in a shorter period of time than the time provided for in the Prescription Act. In that way the LRA is able to give an employer certainty much earlier in regard to such a claim if the employee fails to refer the dispute within the stipulated period and fails to show good cause. This may be within one year. This disadvantages employees because it makes it possible for them to forfeit their unfair dismissal claims much earlier than otherwise would have been the case under the Prescription Act. However, the same provision in the LRA also makes it possible for an employee to pursue his or her unfair dismissal claim after the expiry of three years from the date of dismissal if he or she can show good cause. This is disadvantageous to employers as it takes long before they have certainty about that unfair dismissal claim. Under the Prescription Act, once the period of three years has expired, the claim is forfeited regardless of whether there is good cause or not. Under the LRA dispensation there is something for both employers and employees. This example illustrates that the LRA unfair dismissal dispensation seeks to strike a fair balance between the interests of employers and those of employees. This is part of the “deal” or “package” agreed to at NEDLAC among Organised Business, Organised Labour and Government.

[117] That the LRA dispute resolution system is a “package” or “deal” or a special dispensation has been decided by this Court. In Steenkamp this Court said:

“[105] The LRA created special rights and obligations that did not exist at common law. One right is every employee’s right not to be unfairly dismissed which is provided for in section 185. The LRA also created principles applicable to such rights, special processes and fora for the enforcement of those rights. The principles, processes, procedures and fora were specially created for the enforcement of the special rights and obligations created in the LRA. Indeed, the LRA even provides for special remedies for the enforcement of those rights and obligations. The special remedies include interdicts, reinstatement and the award of compensation in appropriate cases. These special rights, obligations, principles, processes, procedures, fora and remedies constitute a special LRA dispensation”

[118] Bringing the foreign rule into the LRA system takes away from the workers a benefit which they had been given as part of the “deal”. In Steenkamp the Court said:

“[116] [T]hrough the LRA the Legislature sought to create a dispensation that would be fair to both employers and employees, having regard to all the circumstances, including the power imbalance between them.

[117] Furthermore, the fairness required by the LRA dictates that the relief that is granted by the Labour Court or an arbitrator for an unfair dismissal must take account of all the relevant circumstances of the case and the interests of both the employer and employee. As a result of this approach, there is flexibility in the relief that may be granted in a particular case. The remedy may be reinstatement with or without retrospectivity. It may be an award of compensation. The compensation is capped at 12 months’ remuneration or 24 months’ remuneration, depending on whether it is for an automatically unfair dismissal or a substantively or procedurally unfair dismissal. If the dismissal is substantively fair but procedurally unfair, reinstatement is not competent but an award of compensation is competent.

[118] All of these enable the Court or an arbitrator to grant relief for unfair dismissal that is just and equitable to both the employer and the employee in a particular case. The common law which gives us the concept of the invalidity of a dismissal is rigid. It says that if a dismissal is unlawful and invalid, the employee is treated as never having been dismissed irrespective of whether the only problem with the dismissal was some minor procedural non-compliance. It says that in such a case the employer must pay the employee the whole backpay even if, substantively, the employer had a good and fair reason to dismiss the employee.

[119] Whereas the LRA requires a number of factors to be taken into account in deciding what the appropriate remedy is for an unfair dismissal including an automatically unfair dismissal, the common law’s remedy of an invalid dismissal takes into account one fact and one fact only. That is that the dismissal was in breach of statutory provisions. Under the LRA if the remedy that is considered fair is compensation, the Court grants compensation. The compensation is limited to 12 months’ or 24 months’ remuneration, as the case may be, in terms of section 194 of the LRA. Under the LRA if the Court thinks reinstatement would be an appropriate remedy, it will grant reinstatement. When considering the flexibility required by the LRA in the grant of a remedy for unfair dismissal, one thinks of the flexibility in regard to a remedy that section 172(1)(b) of our Constitution contemplates. Section 172(1)(b) confers on the courts the power to make “any order that is just and equitable” when dealing with constitutional matters within their powers. I make these points to show that the exclusion of the remedy of an invalid dismissal under the LRA was deliberate. It did not fit into the dispensation of the LRA which required flexibility so as to achieve fairness and equity between employer and employee in each case.”

[119] Bringing the Prescription Act into the unfair dismissal claims under the LRA gives employers two “sledgehammers” capable of “killing” an employee’s unfair dismissal claim in circumstances where the “deal” reached at NEDLAC among all the stakeholders was that the employer would have only one “sledgehammer”, namely the LRA “sledgehammer”. In other words, that an employer could “kill” an employee’s unfair dismissal claim for a delay in referring it by showing that the employee had no good cause. If an employee referred a dismissal dispute to the relevant forum outside the stipulated period but before the expiry of three years, the employer would use an LRA “sledgehammer” to try and “kill” the claim by taking the point that there was no good cause shown for the delay. If the claim was referred after the expiry of the three year period provided for in the Prescription Act, the employer could invoke the Prescription Act “sledgehammer” and take the point that the claim has prescribed and, with or without good cause, the claim is “dead”.

[120] If one takes the approach that the Prescription Act has no application to unfair dismissal claims, the employer can only rely upon the absence of good cause to “kill” an unfair dismissal claim on grounds of delay and he or she cannot rely upon the Prescription Act as well. Therefore, bringing the Prescription Act into the unfair dismissal claims unduly advantages employers to the detriment of employees, tipping the scale, once again, in favour of employers. The approach that says that the Prescription Act applies to unfair dismissal claims under the LRA allows employers to use the LRA when it suits them to “kill” employees’ unfair dismissal claims and to use the Prescription Act when using the LRA does not suit them and it suits them to use the Prescription Act. That is what I call the LRA “sledgehammer” and the Prescription Act “sledgehammer”.

[121] There is a presumption in our law that, where a statute creates new rights that did not exist before and provides remedies for the breach of those rights, those are the only remedies that can be granted in the case of the infringement of those rights. I think that it can also be said that, where a statute creates new rights and provides for a special way in which those rights can be lost, those special ways in which they can be lost are the only ways in which those rights can be lost. Where a right is created by statute A and statute A provides how that right is lost or forfeited, you cannot invoke a way of losing rights or forfeiting rights provided for in statute B to say that rights under statute A have been lost. The right not to be unfairly dismissed created by section 85 of the LRA is a special right that did not exist at common law. The LRA has provisions governing how, where and when an unfair dismissal claim may be enforced and how an employee forfeits it. There is no reason why it should be said that we should look at the Prescription Act to see how an employee forfeits an unfair dismissal claim when the LRA has a special provision on how an employee forfeits his or her unfair dismissal claim.

[122] In this case the Prescription Act is a general statute. The LRA is a specific statute dealing specifically with, among others, the right not to be unfairly dismissed and how unfair dismissal claims are enforced and lost. So, that alone should be enough to justify the conclusion that a specific statute applies to the exclusion of a general statute.

Application of Sidumo to the present case

[123] In Sidumo this Court had to decide whether it would be the LRA review regime or the PAJA review regime that would govern review applications relating to CCMA arbitration awards. It had to decide this issue within the following context. PAJA was enacted to give effect to section 33 of the Constitution which provided that everyone had a right to administrative action that is lawful, reasonable and procedurally fair. This Court decided in Sidumo that a CCMA arbitration award is administrative action. Ordinarily, this Court’s conclusion that a CCMA arbitration award was administrative action would have meant that such an award would be reviewed under PAJA. Yet, section 145 of the LRA specifically provided that a CCMA arbitration award was to be reviewed under that provision in the LRA. The grounds upon which a CCMA award could be reviewed under section 145 of the LRA and the grounds upon which administrative action could be reviewed under PAJA differed, to some extent. Also, under section 145 the period within which a review application of a CCMA award had to be brought was shorter than the period applicable under PAJA.

[124] The LRA required review applications to be lodged within six weeks of the handing down of arbitration awards. PAJA required review applications to be lodged within 180 days of the making of the administrative action or of the applicant gaining knowledge of the administrative action. So, obviously, if it was the LRA regime that would apply, then the six-week period would be applicable. If it was PAJA that would apply, then the 180 day period would be applicable. Also, the grounds of review provided for under section 145 of the LRA were not exactly the same as those applicable under PAJA even though there was much overlap. The question that faced this Court was, therefore, whether CCMA arbitration awards – which are administrative actions – had to be reviewed under section 145 of the LRA or under PAJA.

[125] Faced with this situation, this Court referred to the fact that in Bato Star it had left open the question of what the position was in respect of “causes of administrative action that did not fall within the scope of PAJA”. This Court then said:

“Does this mean that review provisions of PAJA are automatically applicable in the present context? To answer this question it is necessary to deal with the LRA and its applicable provisions in relation to PAJA. The LRA is specialised negotiated national legislation giving effect to the right to fair labour practices. . . . Section 145 was purposefully designed as was the entire dispute resolution framework of the LRA.”

[126] This Court said later in Sidumo:

“[95] The Supreme Court of Appeal was of the view that the only tension in relation to the importation of PAJA was the difference in time-scales in relation to reviews under s 145 of the LRA and PAJA. This difference is but one symptom of a lack of cohesion between provisions of the LRA and PAJA.

[96] Section 157(1) of the LRA provides that, subject to the Constitution and except where the LRA provides otherwise, the Labour Court has exclusive jurisdiction. Section 157(2) provides that the Labour Court has concurrent jurisdiction with the High Court in respect of any alleged or threatened infringement of any right in the Constitution and arising, inter alia, from employment and labour relations. High courts will of course always have jurisdiction where a fundamental right is pertinently implicated in the labour relations field, as, for example, when a union might seek to interdict an employment practice that is obviously racist. This, of course, does not mean that in the ordinary course of reviewing decisions of CCMA commissioners concerning unfair labour practices, the Labour Court does not enjoy exclusive jurisdiction.
[97] If PAJA were to apply, s 6 thereof would not allow for such exclusivity and would enable the High Court to review CCMA arbitrations. This would mean that the High Court would have concurrent jurisdiction with the Labour Court. This negates the intended exclusive jurisdiction of the Labour Court and provides a platform for forum shopping.

[98] The powers of the Labour Court set out in s 158 of the LRA differ significantly from the powers of a court set out in s 8 of PAJA. The powers of the Labour Court are directed at remedying a wrong and, in the spirit of the LRA, at providing finality speedily. If an application in the normal course for the review of administrative action succeeds, an applicant is usually entitled to no more than the setting aside of the impugned decision and its remittal to the decision-maker to apply his or her mind afresh. Section 8(1)(c)(ii) of PAJA provides that only in exceptional cases may a court substitute the administrative decision or correct a defect resulting from the administrative action. This is a significant difference between the LRA and PAJA.

[99] All of this explains why s 210 of the LRA was enacted and why it was not amended or repealed by PAJA. Section 210 of the LRA provides as follows:

‘If any conflict, relating to the matters dealt with in this Act, arises between this Act and the provisions of any other law save the Constitution or any Act expressly amending this Act, the provisions of this Act will prevail.’
[100] The State in both its executive and legislative arms was involved in finalising the LRA together with persons representing business, labour and community interests. Section 210 is unsurprising. The main protagonists in industrial relations, having negotiated the terms of the legislation, were not likely to countenance any non-agreed intrusions. This is particularly so in relation to the method and manner of determining disputes.
[101] For more than a century courts have applied the principle that general legislation, unless specifically indicated does not derogate from special legislation.
Lord Hobhouse, delivering the judgment of the Privy Council in Barker v Edger and Others, stated the following:

‘When the Legislature has given its attention to a separate subject, and made provision for it, the presumption is that a subsequent general enactment is not intended to interfere with the special provision unless it manifests that intention very clearly. Each enactment must be construed in that respect according to its own subject-matter and its own terms. . . . It would require a very clear expression of the mind of the Legislature before we should impute to it the intention of destroying the foundation of the work which it had initiated some four years before, and to which the Court has ever since been assiduously addressing itself.’

[102] In R v Gwantshu, after citing Barker with approval, the court quoted the following passage from Maxwell on the Interpretation of Statutes:

‘Where general words in a later Act are capable of reasonable and sensible application without extending to subjects specially dealt with by earlier legislation, that earlier and special legislation is not to be held indirectly . . . altered . . . merely by force of such general words, without any indication or particular intention to do so.’

[103] The legislature had knowledge of s 210 of the LRA and deliberately decided not to repeal that section or s 145 of the LRA. Moreover, it resulted from intense negotiations that led to the enactment of the LRA. This is an appropriate case for the application of the principle that specialised provisions trump general provisions.

[104] For the reasons set out above the Supreme Court of Appeal erred in holding that PAJA applied to arbitration awards in terms of the LRA.”

[127] It seems to me that, in relation to whether the Prescription Act applies to unfair dismissal claims under the LRA, we must adopt the same approach that this Court adopted when it had to decide whether PAJA would apply to the review of CCMA arbitration awards.

That approach was to say that the LRA is specialised national legislation enacted to give effect to the right to fair labour practices whose dispute resolution framework was purposefully designed and it contains specialised provisions whereas the Prescription Act contains general provisions. As this Court did in Sidumo in relation to PAJA, we must then invoke the principle “that specialised provisions trump general provisions”.

If we invoke this principle, the result will be that the provisions of the LRA that say that a dismissal dispute may be referred to conciliation or adjudication outside the stipulated timeframe if the employee shows good cause will prevail even beyond three years from the date of dismissal and the provisions of the Prescription Act relating to the three year prescription period will have no application to unfair dismissal claims under the LRA.

Non-agreed intrusion

[128] Furthermore, in Sidumo this Court referred to bringing into the LRA “non agreed intrusions”. It put it in these terms:

“[100] The State in both its executive and legislative arms was involved in finalising the LRA together with persons representing business, labour and community interests. Section 210 is unsurprising. The main protagonists in industrial relations, having negotiated the terms of the legislation, were not likely to countenance any non-agreed intrusions. This is particularly so in relation to the method and manner of determining disputes.”

What this Court meant here was that, if it held that CCMA arbitration awards could be reviewed under PAJA, that would bring into the LRA dispensation a non-agreed intrusion whereas, if it said that such awards had to be reviewed under section 145 of the LRA, that would be in line with the “deal” reached among the stakeholders.

[129] The context in which this Court said this in relation to PAJA applies to the present case in relation to the question whether the Prescription Act applies to unfair dismissal claims under the LRA. In the present case it seems to me that bringing the three year prescription rule into the dispute resolution system under the LRA concerning unfair dismissal claims when the LRA has got its own provisions on when an employee forfeits his or her unfair dismissal claim is to bring into the LRA a “non agreed intrusion”. It should be rejected here as this Court rejected such a non agreed intrusion in Sidumo in regard to PAJA.

[130] The LRA tells us when a person acquires the right not to be unfairly dismissed. It says that happens when you are an employee. The LRA also tells us how or when that right gets infringed. It says that that happens when an employer dismisses an employee without following a fair procedure and/or when there is no fair reason to dismiss. It also tells us that that right is infringed if the reason for the dismissal is listed in section 187 of the LRA. That is a provision for automatically unfair dismissals. The LRA also tells us what processes are to be employed by an employee who seeks a remedy for an alleged infringement of that right. Those processes are conciliation and, thereafter, either arbitration or adjudication, depending on the alleged reasons for the dismissal.

[131] The LRA also tells us what remedies are available for the vindication of the right not to be unfairly dismissed or for the enforcement of that right. Those remedies are reinstatement, re-employment and compensation. It also tells us which fora an employee must go to in order to obtain a remedy for the infringement of that right. It says that these are the CCMA, bargaining councils, Labour Court and even a private arbitration forum where this is agreed to between the parties. Most importantly for present purposes, the LRA tells us when an employee forfeits his or her unfair dismissal claims. It says an employee forfeits an unfair dismissal claim if he or she fails to refer the unfair dismissal dispute or claim to the relevant forum within the stipulated period and has no good cause for that failure.

[132] The LRA obliges an employee to refer an unfair dismissal claim to the relevant forum within a period stipulated in the LRA and provides what the consequences are of a failure to refer that dispute within such stipulated period. Unlike the Prescription Act, the LRA’s approach is that failure to refer a dismissal dispute to the relevant forum within the period stipulated in the LRA does not ipso facto result in the forfeiture of that claim by the employee. The LRA requires more than the failure to refer the dismissal dispute within the stipulated period. It requires that, in addition, there must be no good cause for the failure to refer the dispute within that time. It was competent for the Legislature to make the legislative choice that for this special category of claims or disputes, how the right not to be unfairly dismissed is acquired, how it will be infringed, how it will be enforced and how it is forfeited would be governed by the LRA, rather than another piece of legislation such as the Prescription Act.

[133] The above is the LRA “package” that has worked very well without reliance on any rules falling outside of the LRA. There is no warrant to change it or to in effect amend it by invoking a rule of the Prescription Act.

[134] In regard to those debts to which the Prescription Act applies, the Prescription Act confers benefits on debtors and creditors. With regard to creditors, it gives a creditor – in the case of a debt which would prescribe after the expiry of three years since the debt became due – the right to sit back and do nothing to recover the debt for close to three years. The creditor only needs to start acting i.e. instituting action and serving papers on the debtor, a short while before the expiry of the three year period. Under the LRA an employee who has an unfair dismissal claim against his or her employer has no such benefit in the form of a right to sit back and do nothing for close to three years. An employee has a duty under the LRA to refer an unfair dismissal dispute to conciliation within 30 days unless he or she has good cause for any delay.

[135] The benefits that the Prescription Act gives to debtors in regard to those debts to which that Act applies is the certainty that, once the prescription period applicable to a particular debt has expired, the debt is “dead” and cannot be revived. In that way he or she no longer owes the creditor. The LRA dispensation is different. It does not give the creditor i.e. the employee such a long time to sit back and do nothing about the unfair dismissal claim or dispute nor does it give the debtor i.e. the employer any certainty that the unfair dismissal claim is “dead” after the expiry of 30 days from the date of dismissal of the employee. The LRA dispensation does not give the employer any certainty because, even after months or even more than a year (since the expiry of the period), the employee may still refer the dismissal dispute to conciliation if he or she is able to show good cause.

[136] The view that the Prescription Act applies to unfair dismissal claims or disputes imposes on employees a burden or disadvantage without giving them any benefit such as that Act gives to creditors and debtors to whose debts the Prescription Act applies. There is no justification for a view with such implications. The result of the other construction is, therefore, to bring about a system that is more oppressive to workers than was agreed to by employers and trade unions at NEDLAC. I think it is unwarranted and fails to appreciate the world of equity and fairness that the LRA strives for in regulating the interests of employers and employees.

Conclusion

[137] In the light of the above, it is precisely because the Prescription Act is not meant to be applied to unfair dismissal claims under the LRA that one experiences all sorts of difficulties when one tries to apply it to unfair dismissal claims. For example, the Prescription Act provides that the mechanism or instrument to be used to interrupt the running of prescription is the “service on the debtor of any process” whereby legal proceedings are commenced (section 15(1) read with the definition of “process” in section 15(6)). If one reads section 15(1) and (6) together with subsections (2), (3), (4) and section 16(1), one sees in those subsections references to “judgment”, “court” and “action” that the proceedings envisaged in section 15(1) read with subsection (6) are legal proceedings in a court of law that may result in the court giving a judgment on the debt. To say that the referral of an unfair dismissal dispute to the CCMA for conciliation is a process commencing legal proceedings is to do violence to the language of the statute.

In the result, I would uphold the appeal.