Enforcement of CCMA default awards

October 1st, 2012
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By Sizwe Buthelezi

Employees armed with default awards from the Commission for Conciliation, Mediation and Arbitration (CCMA) face major challenges when it comes to the enforcement of these awards. These awards have, in essence, turned out to be legally ineffective documents and the process to obtain them is so fraught with legal and practical complications that the procedure is ultimately untenable.

This article will therefore consider the enforcement of these awards through s 65A and M of the Magistrates’ Courts Act 32 of 1944 in conjunction with the relevant rules.

Labour disputes

South African labour disputes are regulated by the Labour Relations Act 66 of 1995 (LRA), which aims to provide a well-structured and efficiently regulated labour environment, encouraging collective bargaining and settlement of labour-related disputes. The forums designed to hear and preside over labour issues include the CCMA, which is charged with mediation and arbitral functions. The commission’s functions do not, however, include the enforcement of its awards.

Enforcement

It is the applicant’s duty to ensure that an award he has obtained from the CCMA is enforced. To do so, he has to follow the procedure prescribed in the CCMA rules. The CCMA award is binding and final and may be made an order of the Labour Court. Before such award can be enforced, however, it has to be certified by the director of the CCMA. Therefore, during the enforcement stage the CCMA is not actively involved in ensuring compliance with the award: It is up to the applicant to pursue his claim and deal with a recalcitrant employer.

Once the award is certified by the director, it is ready for enforcement. Thereafter, the applicant becomes responsible for ensuring that the employer is served with a copy of the award. The employer is required to adhere to or comply with the terms of the award once served on him, depending on the nature of the award. In my experience, the employer seldom complies with the award, especially if it is a monetary one. This becomes a heavy burden to bear for an applicant appearing in person without any legal assistance. Should the employer refuse to comply with the terms of the award, the applicant is left to return to the CCMA. During this period interest accrues in respect of the award in terms of s 143(2) of the LRA, as prescribed in terms of s 2 of the Prescribed Rate Act 55 of 1975. Failure by the employer to comply with the order results in the employer being in default, and the next step is to have the award certified in terms of s 143(3) (Griekwaland Wes Korporatiet v Sheriff Hartswater and Others In re Sheriff, Hartswater and Another v Monanda Landbou Dienste [2009] JOL 23720 (LC)).

The Labour Court

After the applicant has approached the director of the CCMA for certification in terms of s 143(3), his next step is to approach the Labour Court. He must apply to the registrar of the court for a writ of execution for enforcement of the award. To do so, he must attach all relevant documents, together with the forms that were completed when initiating the proceedings at the CCMA. Once the writ has been signed and stamped, it becomes ready for service and attachment and must be sent to the sheriff with jurisdiction to execute the writ. In this context, this will be the sheriff for the area where the employer’s place of business is situated.

Execution

In terms of general practice, the sheriff will open an account for the applicant, who is expected to pay the sheriff’s costs. The sheriff will then serve the employer with the writ of execution. The sheriff will be instructed to attach movables and thereafter will compile a list of assets for possible attachment. The sheriff must be specifically instructed to remove the assets discovered. Before proceeding with the attachment, the sheriff must be given security for any claims that might ensue as a result of such attachment. If the employee is unable to furnish the sheriff with security for costs, he may not be able to continue with enforcement of the award. Instead of the award yielding financial reward for the employee, it will at this stage incur financial costs. It is possible that the employer may not cooperate with the sheriff and instead consider taking steps to have the award rescinded.

The Labour Court has the discretion to grant or reject a review application; however, it must be cautious when exercising this discretion (Chillibush Communications (Pty) Ltd v Gericke and Others [2010] JOL 24799 (LC). In doing so, it must take into account certain important factors, one being whether the interests of justice support a stay of execution pending the finalisation of the review and the risk of injustice to the less powerful party to the dispute.

In the Chillibush Communications case the respondent contended that the writ of execution could only be stayed on condition that the applicant paid into the trust account of the sheriff the compensation amount ordered in the arbitration award. Although there is no direct authority for this approach, there is authority for demanding security for costs. In the case of civil litigation, the defendant must adduce evidence that the plaintiff will not be able to pay the costs if he is unsuccessful in the action. This would mean that, in the event of a stay in execution proceedings, the applicant may be required to pay the compensation amount into the trust account of the sheriff.

The Labour Court seems to have adopted this practice, as in many instances it is inundated with rescission applications from employers who have failed to attend arbitration proceedings. Therefore, the peculiar facts of each matter must be considered and cautionary steps must be taken when considering applications for review of these awards.

Section 65A proceedings

The Labour Court enjoys the same jurisdictional status as that of the High Court and therefore has inherent powers in relation to matters within its jurisdiction. However, can a discontented employee bring an application in the magistrate’s court terms of s 65A?

In terms of this section, if a debt remains unsatisfied and the court has given judgment, the judgment creditor may issue from the court of the district in which the judgment debtor resides, carries on business or is employed (or, if the judgment debtor is a juristic person, from the court of the district in which the registered office or main place of business of the juristic person is situate) a notice calling on the judgment debtor (or a director or officer of the judgment debtor if a juristic person) to appear before court in chambers on a date specified to enable the court to inquire into the financial position of the debtor and make an order the court deems just and equitable. If the employer has failed to satisfy the award, and the sheriff has executed a writ of execution and has either compiled a nulla bona (no goods) return, indicating that there are no movable assets to be attached, or has been unable to gain entry to the employer’s premises, can the employee proceed with enforcement of the award in terms of this section?

I submit that reliance on this section provides a cost-effective solution in terms of which the employer is ordered to appear before a presiding officer to provide reasons for his failure to effect payment and a financial inquiry is conducted with the aim of establishing the judgment debtor’s financial status. Thereafter, the judgment debtor may be ordered to make monthly payments to settle the debt.

However, the transfer of civil judgments from the Labour Court to be enforced in the magistrate’s court, applying s 65A and M remains a grey area.

A positive development is that the Labour Relations Amendment Bill (B16 of 2012) provides, among others, for an amendment to s 143 of the LRA. In terms of this proposed amendment, the commission will be given powers to enforce its arbitration awards. The proposed amendment in this respect reads:

‘An arbitration award issued by a commissioner is final and binding and it may be enforced as if it were an order of the Labour Court in respect of which a writ has been issued, unless it is an advisory arbitration award.’

This differs from the current position in that the need to approach the Labour Court to have the writ issued is eradicated. The amendment further provides for the possibility of enforcing monetary awards using the rules and tariffs applicable to the magistrate’s court. This is a positive step towards a simplified and cost-effective process for those armed with these awards.

Section 65M proceedings

Relying on s 65M, which provides for enforcement of judgments of a division of the High Court, the answer to the question raised above as to whether an arbitration award can be enforced using s 65A proceedings may be in the affirmative. If a judgment has been obtained in any division of the High Court and such judgment encompasses the payment of money, the applicant or creditor in whose favour the judgment was given, may institute s 65 proceedings from the court in the district in which the judgment creditor resides, carries on business or is employed (or, if the judgment debtor is a juristic person, from the court in the district in which the registered office or main place of business of the juristic business is situated). Such application may be brought relying on a certified copy of such judgment and an affidavit or affirmation by the judgment creditor or a certificate by his attorney. This copy must specify the amount still owing in terms of the judgment and how such amount was arrived at. The effect of this is that the judgment may be taken as a judgment of such court and any proceedings may be taken in terms thereof as if it were a judgment lawfully given in such court in favour of the judgment creditor.

Conclusion

The proposed amendment in this regard is the first step towards alleviating enforcement difficulties experienced by employees in possession of these awards. However, it remains to be seen how the CCMA will be involved in the enforcement of its awards in future.

I submit that a more cost-effective method has to be devised to assist employees who incur financial costs in their bid to enforce these awards. The transfer procedure has to be clearly outlined in order for applicants to enforce awards in the magistrate’s court relying on s 65A and M proceedings. Once this procedure is properly formulated, it can yield positive results for employees facing difficulty in enforcing CCMA awards.

The employer may be forced to appear before a presiding officer to explain his non-compliance with the award and may be ordered to comply with the order and effect payment, which is an outcome difficult to reach under the current LRA.

I also submit that there must be some form of compensation for costs incurred by the employee, payable by the employer should he decide to apply for review of the award, especially once the employee has incurred financial costs as a result of the execution procedure. A moratorium on incurring costs should be afforded to employees with default awards.

Further, there should be a simplified, flexible procedure in place to enforce uncontested arbitration awards. The CCMA should play a more proactive role in assisting employees to enforce these awards, and stringent punitive costs should be imposed for non-compliance and late filing of rescission applications by employers in order to avert flagrant abuse of the procedure. These proposals will go some way in alleviating the burden some employees face in enforcing these awards.

Sizwe Buthelezi LLB (University of Zululand) is an attorney at Legal Aid South Africa in Johannesburg.

 This article was first published in De Rebus in 2012 (Oct) DR 34.

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