Employment law update – Reinstatement – a judgment debt for future earnings

July 1st, 2018

Moksha Naidoo BA (Wits) LLB (UKZN) is an advocate at the Johannesburg Bar.

Seriti Coal (Pty) Ltd v National Union of Mineworkers obo Moyake and Others (LC) (unreported case no J1425/18, 11-5-2018) (Mashosi J).

In a situation where an employee is awarded reinstatement or retrospective reinstatement and the employer unsuccessfully challenges the award on review, whereafter the employer complies with the award and allows the employee to return to work; can the employee argue that by virtue of the reinstatement or retrospective reinstatement awarded, they are entitled to the renumeration they would have received from date of award to the date they returned to work?

On 27 June 2012 the first respondent’s member (the employee) was dismissed. An unfair dismissal dispute was referred to the Commission for Conciliation, Mediation and Arbitration (CCMA) and, in terms of an award dated 15 April 2013, the employee’s dismissal was found to be substantively unfair and as a result thereof, he was awarded reinstatement effective 2 May 2013. Although not material to the dispute that arose, the employee was not awarded retrospective reinstatement as the arbitrator found the employee’s ‘hands [were not] entirely clean’.

On 18 June 2013, the applicant (the employer) launched an application at the Labour Court (LC) to review and set aside the award. Its application was dismissed on 18 May 2017, so was its application for leave to appeal and its petition to the Labour Appeal Court (LAC) (the order by the LAC was dated 6 December 2017).

In January 2018 the employee commenced his employ with the employer as per the April 2013 arbitration award. In February 2018, the first respondent union, wrote a letter to the employer demanding the remuneration the employee would have received from 2 May 2013 (being the date the arbitrator directed the employee to resume duties) to January 2018 (being the date the employee was allowed to resume his duties).

The employer denied it owed the employee any remuneration over this period, which prompted the union to approach the CCMA with an application to certify the arbitration award in terms of s 143 of the Labour Relations Act 66 of 1995 (LRA).

Although the employer opposed this application, it was met by the Deputy Sheriff on 24 April 2018, who handed it a certified award dated 11 April 2018. It is worth mentioning that once an award is certified in terms of s 143 of the LRA, it has the same status as a writ issued by the Registrar of a court.

On the strength of the certified award, the Deputy Sheriff demanded payment in the amount of R 1 350 830 and in addition placed the employer’s assets under ‘judicial attachment’.  The Deputy Sheriff explained to the employer that should it fail to make the necessary payment; its goods would be sold in execution to satisfy the debt owing.

The employer approached the LC on an urgent basis to set aside the writ and to stay the enforcement thereof.

The issue before the court was whether or not the remedy of reinstatement or retrospective reinstatement obliges an employer to remunerate an employee for the period between the date of the award and the date the employee returns to work in compliance with the award.

The employer argued that once it reinstated the employee, it fully complied with the award and thus the award was certified in error. The employer further submitted that the monetary claim made by the union on behalf of its member was not covered by the award and is a separate issue, which should be dealt with in a contractual claim.

The union argued that the employer must live with the risk it took when reviewing the award. Had the employer initially complied with the award, so said the union, it would not be in the situation it currently finds itself in.

In support of its argument the employer referred the court to the LAC judgment of Coca Cola Sabco (Pty) Ltd v Van Wyk [2015] 8 BLLR 774 (LAC). In that matter the LAC set out the following principles:

  • An award of retrospective reinstatement only refers to the period between the date of dismissal to the date of the order and does not include or entitle the employee to remuneration between the date of the order and the date of the actual implementation of the order.
  • When there is a dispute about the remuneration for the period between the date of the order and the date of implementation thereof, such a dispute between the parties has not yet been judiciously resolved. It is open for the party claiming the remuneration for that period, to institute a contractual claim at the High Court or LC. Only if the court adjudicating such a claim finds in the employee’s favour, does the employer become a judgment debtor against which a writ can be issued: ‘The order of reinstatement is not a judgment dealing with the consequential damages for the breach of the contract’.
  • The financial risk the employer takes pursuant to any review or appeal process has nothing to do with the unfair dismissal dispute against which the order of reinstatement was granted. Should the employee succeed in a contractual claim for their remuneration for the period in question, the employer’s financial risk in taking the award on review and/or appeal, would be realised.

Following the findings of the LAC, the court in casu held:

‘In this case, the arbitrator ordered [the employee’s] reinstatement without back pay. It is clear that the writ is in respect of remuneration that is allegedly due to [the employee] for a period between the date of the award and the actual date of implementation. This period is clearly not covered by reinstatement. Therefore, there is no underlying causa or judgment for the writ. It follows that the writ is defective and should be set aside.’

The writ of execution was set aside with no order as to costs.

This article was first published in De Rebus in 2018 (July) DR 49.

De Rebus