Public Newsletter
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Worklaw subscribers receive a monthly newsletter containing commentary on the latest labour law cases and trends. This newsletter contains an article which looks at 'The Strike Ultimatum' in the light of a recent Constitutional Court judgment dealing with this issue. We also look at three new cases: In the first case the Constitutional Court had to decide whether an agreement not to use the CCMA or the courts is valid. The second case looks at whether a Labour Court writ is necessary before a CCMA award can be enforced. The third case discussed is a recent Constitutional Court decision on garnishee orders.
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RECENT CASES
Is an agreement not to use the CCMA or courts valid?
A senior human resources executive signed a separation agreement with his employer. In the agreement, the employee unconditionally waived his right to approach the CCMA or any court for any relief against the employer in any dispute arising from his employment or from the separation agreement. This, however, did not stop him and he took the matter to the Labour Court and Labour Appeal Court. Not satisfied with the LAC judgment, the employee referred the matter to the Constitutional Court.
The Constitutional Court in Gbenga-Oluwatoye v Reckitt Benckiser South Africa (Pty) Limited and Another (CCT41/16) [2016] ZACC 33 (15 September 2016) held that when parties settle an existing dispute in full and final settlement, no one should be lightly released from an undertaking seriously and willingly embraced. This is particularly so if the agreement was, as here, for the benefit of the party seeking to escape the consequences of his own conduct (in this case the separation agreement followed allegations of misconduct). Even if the clause excluding access to courts were on its own invalid and unenforceable, the Constitutional Court said the applicant must still fail. This is because he concluded an enforceable agreement that finally settled his dispute with his employer.
The principle emerging from this case is that a clause excluding access to the CCMA or courts in a settlement agreement reached 'in full and final settlement' of a particular dispute is valid and not contrary to public policy. But it is important to note that the Constitutional Court indicated that the outcome of this case may have been different if a settlement agreement attempts to prevent access to courts for any future disputes between parties.
Is a Labour Court writ necessary before a CCMA award can be enforced?
Where an employee is successful in the CCMA but the employer refuses to pay the compensation or back-pay ordered by the Commissioner, what can the employee do?
From the time the LRA was enacted in 1995 the settled practice was that a writ of execution in respect of arbitration awards made by the CCMA had to be issued by the Registrar of the Labour Court prior to execution by the sheriff. This procedure was complex and ineffective because a party armed with an arbitration award in his/her favour still had to go to the Labour Court for the Registrar to issue a writ.
The Labour Relations Amendment Act 2014 which came into effect on 1 January 2015 amended Section 143 to provide a new simplified approach. The amended Section 143 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, unless it is an advisory arbitration award......
- An arbitration award may only be enforced in terms of subsection (1) if the director has certified that the arbitration award is an award contemplated in subsection (1).
The LAC held that the CCMA does not issue writs in the conventional way. The certified award is the equivalent of a Labour Court order in respect of which a writ has been issued. The certified award is therefore not only assumed to be an order of the Labour Court but it must also be assumed that a writ was issued in respect of that order. The certified award is therefore the writ. The LAC found that the conclusion by the Labour Court that there is no reason why writs issued by the CCMA should be stayed pending review in circumstances where they are a nullity for lack of jurisdiction, is therefore incorrect.
The practical effect of the amended section 143(1) and 143(3) of the LRA is that a certified arbitration award may be enforced without the need for a writ to be issued by any court or the CCMA. This makes it easier for a successful applicant to enforce the CCMA award.
The Constitutional Court considers garnishee orders
The individual applicants in this case were a group of low income earners living in Stellenbosch, supporting themselves and their families on salaries of between R1 200 and R8 000 per month. The group included farmworkers, cleaners and security guards. They work in low paid and vulnerable occupations and their wages are invariably their only asset and means of survival. All of them had emoluments attachment orders (EAO's - commonly referred to as 'garnishee orders') granted, authorising the attachment of the debtor's earnings, and requiring his or her employer (the garnishee) to pay out of these earnings specific instalments to the judgment creditor or attorney.
A landmark High Court judgment given on 8 July 2015 declared 15 salary attachment orders issued by a loans company to workers to be invalid and unlawful. The High Court in University of Stellenbosch Legal Aid Clinic and Others v Minister of Justice And Correctional Services and Others (16703/14) [2015] ZAWCHC 99 (8 July 2015) noted that there is no statutory limit on the amount which may be deducted from the earnings of a debtor in terms of an EAO. Nor is there a limit on the number of EAOs which may be granted against a particular debtor. Section 65A of the Magistrates' Court Act (MCA) provides that following an enquiry by a magistrate into a debtor's financial position, the Court may make such order as it deems "just and equitable". However, in respect of these applicants, the clerk of the court issued EAOs attaching their earnings without any evaluation of their ability to afford the deductions to be made from their salaries and without deciding whether or not the issuing of an EAO itself would be just and equitable. The whole process of obtaining the EAOs was driven by the creditors without any judicial oversight whatsoever.
The High Court saw that the practice of debt collection had constitutional implications. The court declared s 65J(2)(b)(i) and s 65J(2)(b)(ii) of the MCA to be constitutionally invalid to the extent that they allow for EAOs to be issued by a clerk of the court without judicial oversight.
On appeal to the Constitutional Court (University of Stellenbosch Legal Aid Clinic and Others v Minister of Justice and Correctional Services and Others; (CCT127/15) [2016] ZACC 32 (13 September 2016)), in a complicated judgment, the CC ordered the reading-in, and severance of, certain words in section 65J(2)(a) and (b) of the Magistrates' Court Act 32 of 1994 to remedy the constitutional defect. The CC did not confirm the order of constitutional invalidity made by the High Court. The effect of the CC order is that, with immediate effect, no emoluments attachment order (EAO) may be issued unless a court has authorised it, after being satisfied that it is just and equitable and that the amount is appropriate.
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Bruce Robertson
September 2016
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