ELRC514-22/23EC

Case Number: ELRC514-22/23EC
Commissioner: Jonathan Gruss
Date of Ruling: 18 April 2023

In the matter between
PN Mkrozwana & 63 Others
(Applicant)

And

Department of Education: Eastern Cape
(Respondent)

DETAILS OF HEARING AND REPRESENTATION
1. This matter were set down for arbitration in terms of Section 191(5)(a) of the Labour Relations Act, No 66 of 1995 as amended (the “LRA”). The applicants, PN Mkrozwana & 63 Others were represented by Mr Ntshabe an attorney. The respondent, Department of Education: Eastern Cape was represented by Adv Mayekiso instructed by the State Attorneys. The matter was heard on 27 March 2023 and 28 March 2023, at the respondent’s premises situated in Sterling, East London. The parties at the conclusion of the proceedings presented oral and written closing arguments. However, on 3 April 2023 the applicant’s representative filed a supplementary heads of argument. I requested the ELRC to provide the respondent with a copy of the applicant’s supplementary heads of argument and enquire whether they wish to respond to the applicant’s supplementary arguments. No supplementary arguments were filed by the respondent.
BACKGROUND TO THE ISSUE
2. The dispute referred concerns an alleged unfair labour practice dispute relating to benefits concern the respondent’s allegedly not paying and terminating the applicants’ rural allowances.
3. The parties on my instruction concluded a pre-arbitration minute that reflects the following:
Facts agreed to between the parties / common cause facts
3.1 The educator incentive was introduced by the National Department of Education through Government Notice No.30678 dated 18 January 2008.
3.2 That the implementation of the policy was decentralised to the Provincial Department of Education.
3.3 That the Educator Incentives were suspended by the Eastern Cape Department during April 2019 through a circular / memorandum issued by the then Superintendent-General , Mr T Kojana dated 25 April 2019 with the exception of those who were receiving it.
3.4 All affect educators became aware and were notified about the suspension during April 2019.
3.5 This Incentive policy has been terminated by the National Department of Education during 2022.
3.6 The applicants have lodged a dispute with the ELRC and the referral forms were served upon the Department as employer on 1 September 2022 and consequently lodged with the Council on 6 September 2022, so says the respondent.
3.7 The applicants’ contents that the grievance forms were served on the respondent on 31 March 2022 and the internal hearing was held on 1 September 2022.
3.8 The applicants had received their rural incentive allowance from 2015 until July 2019.
4. Issues for determination and facts that are in dispute:
4.1 The arbitrator is called upon to determine whether the unfair labour practice claim or dispute by the applicants is not hit by prescription as envisaged by the Prescription Act 68 of 1969. As this is the point of law it is envisaged that it will be prioritised before the matter proceeds to be heard on the issue of merits.
4.2 The arbitrator will also be called upon to determine whether the suspension of the incentive was justifiable.
4.3 The arbitrator will further be called upon to decide whether the applicants are entitled to relief they are seeking in the instant proceedings.
5 Relief sought and Computation of claim
5.1 The applicants are claiming payment of the rural incentive from date of suspension to date of award. They also claiming reinstatement of the rural incentive for educators.

Respondent’s claim / special plea regarding prescription.
6. The debt or cause of action as enunciated in the referral forms of the applicants came into being and was due as from 25 April 2019. The applicant became aware of the debt or cause of action as early as 25 April 2019 or at least latest 1 May 2019.
7. The applicants serve the duly completed grievance form upon the employer on 1 September 2022 and the referral form with the ELRC on 6 September 2022. The grievance forms was received by the employer representative on 1 September 2022 and signatures and dates indicate receipt by the employer have been appended in said referral forms. The referral forms were sent to the ELRC on 6 September 2022.
8. The period prescription started running on 25 April 2019 and or at the latest 1 May 2019 and was never interrupted until the expiry of the three-year period on 25 April 2022 or latest on 1 May 2022.
9. The Prescription Act, at Section 12(1) thereof, provides that prescription “shall commence to run as soon as a debt is due”. In view of the foregoing, the unfair labour practice claim of the applicants have prescribed within the meaning of section 11(d) of the Prescription Act read in conjunction with the LRA.
10. The respondent therefore seeks a dismissal of the applicants claim with costs on the basis that this point in law as the said claim had prescribed before initiation of the “process”.
11. The respondent has invoked and filed a point of law or prescription in view of this fatal and incurable defect.
12. A sequel to whether the applicants claim is not hit by prescription, will be whether the lodgement of an internal grievance as contended by the applicants can be classified or qualified to be regarded as judicial proceedings for purposes of interrupting the running of prescription.
13. Section 15(6) of the Prescription Act provides that for purposes of this section “process” includes a petition, a notice of motion, a rule nisi, a pleading in reconvention, third party notice referred to in any Rule of Court in any document whereby legal proceedings are commenced. The above definition of “process” totally excludes the internal grievance procedures qualify to be referred as a legal proceedings as the said process lacks any resemblance of a court or tribunal which is endowed with an independent and impartial adjudicator. A grievance procedure is just a talk shop and nothing more and is not even sanctioned by Section 191 of the LRA as being a necessary or compulsory step before referring the dispute to the CCMA or Bargaining Council. There is absolutely no legal authority or case law which elevates grievance procedures to the status of judicial proceedings which can interrupt the running of prescription.

Applicant’s Replication and Heads of Argument
Ad Res Judicata

14. The applicant filed a referral form on the ELRC on 6 September 2022, the application by the applicants were heard by the ELRC on 20 October 2022. The matter was not resolved at conciliation on 20 September 2022 and a certificate of outcome of dispute referred to conciliation was issued by panellist Thandeka Mtolo. Of particular interest having regard to the referral form reference to paragraph 4 time frames the box yes was ticked that, which means there was no issue relating to prescription and non-compliance at all. In the ruling the commissioner ruled that there was no need for condonation at the time frames have been complied with. If the respondent were or are not happy with the ruling that condonation was not applicable, the respondent should have applied for a review of the commissioner’s / arbitrator’s ruling dated 20 October 2022. Thus, the matter is res judicata. Accordingly, the applicants contend that the issue of timeframes and prescription have been ruled upon and to visit it again would be contrary to law and requesting the current arbitrator to change the ruling of the previous arbitrator, and this is not a forum for that.
15. In the event that the arbitrator finds against the applicants as referred to in paragraph (14), the applicants replicates as follows to the respondent’s claim of prescription.
15.1 The applicants contend that the Prescription Act, 1969 as amended is applicable to labour related disputes as enunciated in the case found in the respondent’s bundle. The applicant denied the claim for compensation has prescribed in that the grievance procedures is a formal process, which cannot be interrupted until it has come to its logical conclusion; should the employees elect to make use of the respondent grievance processes. The applicants lodged and filed their grievance on 31 March 2022 as it can be seen in the affidavit of Mr Zuma along with annexes thereat. The respondent had a responsibility to acknowledge receipt of the grievance so that the process can be validated, hence the grievance form has the “acknowledgement” based on the grievance form. The respondent put its stamp thereon, and by this process any prescription has been interrupted.
15.2 After the acknowledgement, the respondent employer will call the employee/applicant’s to the meeting which is a stage of determine whether the grievance process will resolve the issue or not. In this case the grievance was not resolved on 1 September 2022, and the applicant was issued with a (grievance) certificate of non-resolution. The applicant must take the certificate of resolution to the next forum which is the Bargaining Council. Prescription is also interrupted by the certificate of non-resolution as well.
15.3 The Bargaining forum had its first meeting, and it issued its own certificate of non-resolution, on 20 October 22. Again, the matter has not prescribed.
15.4 At the time of lodgement of the grievance forms, the claim if it would have prescribed on 20 August 2022 to which by 31 March 2022 the claim for compensation by the applicants had not prescribed. The lodgement of the grievance forms after 20 August 2022, the respondent would and may be entitled to raise an issue prescription. Thus a formal process of lodgement of the grievance form is entitled the applicants to wait until ruling was made thereof, as to interject and interfere the process would render the matter lis pendes, because exhaustion of local remedies is an allowed process in terms of the Labour Relations. The respondent delay in calling the hearing meeting (grievance meeting) which was finally called on 1 September 2022 and it was resolved that the dispute could not be resolved. This meant that the matter was ready for litigation, and accordingly the cause of action started at this point. Alternatively, the cause of action started with a certificate of non-resolution was issued which was on 20 October 2022.
15.5 It is common cause that the applicants had been receiving the rural allowance since 2015 and were shocked when they did not receive it on 20 August 2019; on 25 April 2019 they were informed that they will not be affected by the suspension as they have been receiving the allowance. The applicants became aware of their demise, and not cause of action on 20 August 2019 and they, according to law initiated the grievance procedure which was heard on 1 September 2022

16. Applicants Supplementary Heads of Argument
16.1 At all material times, the respondent raised and relied on prescription in terms of the Prescription Act, 1969, as amended. The applicant responded extensively on this aspect and went on to indicate that Prescription has been interrupted by inter-alia, by the lodging of the grievance form and it would then start to run on or upon the day the grievance certificate was issued or any other certificate thereafter. There was an issue as to whether the lodge of the grievance form interrupts prescription and as to whether the grievance form can be regarded as a process of proceedings which can be regarded as being valid in terms of the law and the LRA.
16.2 In the case of Mackay v ABSA Group [1999] 12 BLLR 1317 (LC) it was held that the lodging of the grievance forms as a formal procedure and nothing can be done until the process has been completed. It was further held that “on a purposive interpretation of the Act, lodging of a grievance in terms of grievance procedures was treated as if they were proceedings in terms of the Act, and therefore protected in terms of section 5(3).
16.3 Doctrine of estoppel: In the heads of arguments of the respondent came with the issue of the LRA, 1995 for lodgement of grievance which indicates 90 days. In the pre-arbitration minute there was no issue of 90 days and the applicants did not address this at all. The respondent relied on the Prescription Act in their points of law. It is submitted on behalf of the applicants that the respondent are estopped from raising the issue of 90 days as the respondent went ahead to solve the grievance on 1 September 2022 and they did not raise the issue of 90 days at all. As for clarity on the meaning thereof, estoppel refers to “a legal principle that prevents someone from arguing something were asserting a right that contradicts what they previous said were agreed to by law”.
ANALYSIS OF ARGUMENT
17. The legal point raised is founded on the Prescription Act, 1969 as amended. Section 10(1) of the Prescription Act, as amended provides that subject to the provisions of this chapter and of chapter IV, a debt shall be extinguished by prescription after the lapse. Which in terms of relevant law applies in respect of prescription of a debt. Section 11(d) of the Prescription Act as amended provides that the period of prescription of a debt shall be save where an Act of Parliament provides otherwise, three years in respect of any other debt. Section 12(1) further provides that prescription shall commence to run as soon as a debt is due. Section 14 regulates the interruption of prescription by acknowledgement of liability and subsection (1) and (2) provides the running of prescription shall be interrupted by an express or tacit acknowledgement of liability by the debtor. If the running of prescription is interrupted as contemplated in subsection (1), prescription shall commence to run a fresh from day in which the interruption take place or if at the time of interruption or at any time thereafter the parties postpone the due date of the debt, from the date upon which the debt again becomes due. Section 15 deals with the traditional interruption of prescription. Subsection (1) provides that the running of prescription shall, subject to the provision of subsection (2), be interrupted by the service on the debtor of any process whereby the creditor claims payment of the debt. Subsection (2) provides that unless the debtor acknowledges liability, the interruption of prescription in terms of subsection (1) so lapse, and the running of prescription shall not be deemed to have been interrupted, if the creditor does not successfully prosecutes claim under the process in question to final judgement or if he does so prosecutes his claim but abandons the judgement or the judgement is set aside. Subsection (6) provides that for purposes of this section, “process” includes a petition, a notice of motion, rule nisi, a pleading in reconvention, a 30 days’ notice referred to in any Rules of Court, and any document whereby legal proceedings are commenced.
18. Section 17 of the Prescription Act as amended provides that prescription be raised in pleadings. Subsection (1) and (2) provides that the Court shall not on its own motion take notice of prescription. A party to litigation who invokes prescription, shall do so in the relevant documents filed of record in the proceedings: provided that the court may allow proceedings to be raised at any stage of the proceedings.
19. It appears that the applicants of the view that prescription cannot be raised due to res judicata in that at the conciliation the commissioners seized with the matter rule that there was no need for condonation at the time frames had been complied with. My understanding is that the respondent has not taken issue with time frames as envisaged in terms of section 191 of the LRA. The claim of prescription is founded in terms of the Prescription Act.
20. In Fredericks v Grobler NO and Others [2010] 6 BLLR 644 (LC) Molahlehi J held at (22), (23) and (25):
“22. It is now well established that extinctive prescription as envisaged Prescription Act applies to employment issues. See in this regard Mpanzama v Fidelity Guards Holding (Pty) Ltd [2000] 12 BLLR 1459 (LC), Cape Town Municipality v Allie NO 1981 (2) SA 1 (C) and Uitenhage Municipality v Mooley 1998 (19) ILJ 757 (SCA). A “debt” would in the context of the present case mean that the respondent had an obligation not to unfairly dismiss the applicant.
23. Sections 10(1), 11(d) and 12(1) of the Act provide that a debt shall be extinguished by prescription after the lapse of a period of three years from the date upon which the debt becomes due. Section 15(1) provides that the running of prescription shall be interrupted by the service of any process whereby the creditor claims payment of the debt. …………………..
25. In Truter v Deysel [2006] ZASCA 16; 2006 (4) SA 168 (SCA), the court had the following to say in respect of s 12(1) of the Prescription Act:
“The term 'debt due' means a debt, including a delictual debt, which is owing and payable. A debt is due in this sense when the creditor acquires a complete cause of action for the recovery of the debt, that is, when the entire set of facts which the creditor must prove in order to succeed with his or her claim against the debtor is in place or, in other words, when everything has happened which would entitle the creditor to institute action and to pursue his or her claim.” “

21. In the matter of POPCRU obo Sifuba v Commissioner of SAPS & Others (2009) 30 ILJ 1309 (LC) at [44] the Labour Court held: “The Prescription Act does not give the court a discretion. If the requirements for a plea prescription have been established by a party taking a point then the party is entitled as a matter of right to have that plea upheld. Although the court is a court of equity, in my view considerations of equity do not come into play when all the requirements for a successful plea prescription are established. Extinctive prescription renders unenforceable a right by lapse of time.”
22. According to Food & Allied Workers Union on behalf of Gaoshubelwe v Pieman’s Pantry (Pty) Ltd (2018) 39 ILJ 1213 (CC ), The Constitutional Court dealt with the question whether the referral of a dispute to conciliation interrupted prescription . To answer this question it had to determine whether a referral to conciliation constituted a ‘document whereby legal proceedings are commenced’ as provided for in the definition of ‘process’ in s 15(6) of the Prescription Act. The court adopted a broad interpretation of the term ‘any document’, finding that the scheme of the LRA made a referral to conciliation a mandatory first step in the process that might ultimately lead to adjudication. It noted that, while conciliation might not be adjudicative in nature, it was a necessary and mandatory part of the dispute-resolution process that the LRA created and it occurred within the operations of the CCMA, which was an independent and impartial forum of the kind contemplated in s 34 of the Constitution. The court believed that it would do an injustice to the architecture of the LRA and the CCMA to characterise conciliation as anything other than the commencement of legal proceedings in an independent and impartial forum. It therefore concluded that the referral of disputes to the CCMA for conciliation constituted the service of a process commencing legal proceedings.
23. The applicants in the supplementary heads of arguments has raised estoppel dealing with the time periods an aggrieved employee has to lodge a grievance. This issue was raised or discussed. Item G3.2 of PAM provides that a formal written grievance must be lodged with the employer within 90 days from the date on which the educator became aware of the act or omission which adversely affects him/her. The fact that the applicants lodged grievances outside the 90 day time period for purposes in determining whether the claim has prescribed, the time periods in which an aggrieved employee has to lodge a formal grievance with his employer is irrelevant for purposes of the point of law raised. In the same breath, I must conclude as I understand whether the referral of the applicants’ dispute is late as contemplated in terms of Section 191 of the LRA, this issue is also irrelevant in that I’m not called upon to decide whether the referral was late.
24. The only one issue that needs to be decided is whether lodging of a grievance as regulated by clause G3.2 of PAM is a process as contemplated in terms of section 15 (1) and (6) of the Prescription Act, 1969 as amended is a process whereby the creditor claims payment of the debt. Process includes a petition, a notice of motion, a rule nisi, a pleading in reconvention, the 30 day notice referred to in any rules of court, and any document whereby legal proceedings are commenced. The proverbial question is whether the lodging of the grievance is a document whereby legal proceedings are commenced?
25. As it relates to labour disputes as envisaged in terms of the LRA, case law tells us that a referral of a dispute to conciliation is a process commencing legal proceedings. I therefore conclude that lodging of internal grievance is not a process whereby legal proceedings commences.
26 As confirmed by the pre-arbitration minute, the applicant’s rural allowance was suspended by the respondent during April 2019 and that all effect the educators became aware and were notified about the suspension during April 2019. The incentive policy was terminated by the National Department of Education during 2022. The referral commencing proceedings was served on the ELRC on 6 September 2022. However, according to the grievances filed as per Mr Zuma’s statement, the applicants claim that they became aware of the official act or omission on 25 April 2019. This is also confirmed by the applicants’ grievances as contained in the applicant’s bundle. As it relates to resolution proposed by the grievant, they seek reinstatement of the rural allowance with affect from 1 May 2019. It appears that some of the applicant’s allowances were stopped at the end of April 2019 and some of the applicants last allowanced were paid to them in July 2019. However as indicated in the applicants it is common cause that the applicants received rural allowances since 2015, and they were shocked when they did not receive their rural allowance on 20 August 2019. Therefore, as at 20 August 2022, those whose who were last paid in July 2019, their claims had prescribed considering that their disputes were referred to the ELRC for conciliation on 6 September 2022.
27. Accordingly, the applicants in terms of law have no claim against the respondent for the payment of the rural incentive allowance. The fact that the National Department of Basic Education terminated the incentive policy sometime during 2022, this act has no relevance on the applicants in that the payment of their rural incentive allowances were stopped in 2019.
28. The respondent seeks legal costs against the applicants, considering that there is an employment relationship in place between the parties, the awarding of costs in my view would be inappropriate.
29. I therefore make the following award.
AWARD
30. The applicants claim concerning a benefit relating to the non-payment of their rural incentive allowance has prescribed.
31. The applicants’ referral to the ELRC is therefore dismissed.
31. I make no order as to costs.

Name: Jonathan Gruss
(ELRC) Panelist