Malatji v Minister of Home Affairs and Another (JA52/2017) [2018] ZALAC 23 (15 August 2018)

Principle:

Interest on any amount ordered by an arbitrator or court can only be levied and would accrue once the amount of compensation is ascertained or easily ascertainable.

Facts:

On 28 April 2005 the Dept. of Home Affairs dismissed Mr Malatji, the appellant in this matter. He referred his dismissal dispute to arbitration and on 14 August 2006 the GPSSBC issued an arbitration award in terms of which the appellant was reinstated retrospectively to his former position. The Minister and the Department were also ordered to pay him 12 months' remuneration.

During October 2006 the Minister and the Department launched an application to review and set aside the award issued by the GPSSBC.

On 2 April 2013 the Labour Court reviewed and set aside the GPSSBC's award on the grounds of procedural unfairness of the dismissal. It substituted the relief with an amount of R399 750.00, equivalent to the appellant's nine months' salary. The award was made an order of the Labour Court in terms of s 158(1)(c) of the LRA. The Labour Court made no order in respect of the payment of interest.

On 24 April 2014 the Department paid the principal amount and interest from 2 April 2013, the date of the judgment of the Labour Court. However, the appellant demanded that he be paid interest from 1 September 2006, the date pursuant to the issuing of a variation award by the GPSSBC.

After an application to the Labour Court for a declaratory order, the matter was taken on appeal to the LAC. The LAC held that interest can only be levied and would accrue once the amount of compensation is ascertained or easily ascertainable. Where the award is subject to review, it cannot be said that the quantum is readily ascertainable and that the time for performance by the debtor is fixed. This is so because there is no obligation on the debtor, under those circumstances, to pay the debt.

The court also held that interest could not have accrued from the date of the issue of the award because it was challenged by means of a review before the Labour Court. The judgment debtor would only be entitled to the payment of interest on the unliquidated claim from date of the award if the award is not challenged through the review process, or from date of the judgment on review when the Court's determined the quantum of the claim. The LAC accordingly held that the Department was only liable to pay interest from the date of the LC order, namely 2 April 2013.

Extract from the judgment:

(Phatshoane ADJP:)

[15]   Mora interest can only be levied and would accrue once the amount of compensation is ascertained or easily ascertainable. To my mind where the award is subject to review, it cannot be said that the quantum is readily ascertainable and that the time for performance by the debtor is fixed. This is so because there is no obligation on the debtor, under those circumstances, to pay the debt. Section 145(1) of the LRA affords any party to a dispute, who alleges a defect in any arbitration proceedings under the auspices of the commission, to apply to the Labour Court within six weeks of the date that the award was served for an order, inter alia, setting aside the arbitration award. If the award is set aside, the Labour Court may determine the dispute in the manner it considers appropriate or make any order it considers appropriate about the procedure to determine the dispute...

[17]   It is important to remember that the GPSSBC made an award of retrospective reinstatement in favour of the appellant. With regard to what would constitute a "debt" authorities are clear that the order of reinstatement is not an obligation to pay money or deliver goods or to render service by a judgment debtor. Interest could not have accrued from the date of the issue of the award, which was challenged by means of a review before the Labour Court. In any event, the order made by Snyman AJ, insofar as it stipulates that the respondents were liable to pay the appellant nine months' salary, substantially altered the original award of reinstatement made by the GPSSBC.

[18]   From the aforegoing analysis, it cannot be said that the Minister and the department were in mora from the date of issue of the award and/or its subsequent variation.......

[19]   In conclusion, the judgment debtor would only be entitled to the payment of interest a tempore morae on the unliquidated claim from date of the award, if the award is not challenged through the review process, or from date of the judgment on review pursuant to the Court's determination of the quantum of the claim. To the extent that the Labour Court, correctly in my view, was disinclined to make a determination on the declarator sought, the appeal should succeed. It follows that the judgment by Snyman AJ, only to the extent that he did make an order in respect of interest, ought to be substituted by fixing the date from which the interest is to be calculated.