A REFERRAL INTERRUPTS PRESCRIPTION

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The Prescription Act 68 of 1969 provides that if a debt is not claimed in a period of three years it prescribes. It further provides that prescription is interrupted when the debt is claimed.
The question whether a claim for unfair dismissal was a “debt” and when the running of such prescription is interrupted, has resulted in numerous conflicting judgments in the Labour Courts.

When the amended Labour Relations Act took effect on 1 January 2015, section 145(9) provided that a review application interrupts the running of prescription in terms of the Prescription Act. Despite the certainty that this section brought, there were still many unanswered questions.

When the matter finally made it to the Constitutional Court, it turned essentially on two main issues:

• Does an employee’s claim for relief constitute a debt to which prescription applies?

• Does a referral to the CCMA or a Bargaining Council interrupt prescription?

On 20 March 2018 the Constitutional Court handed down a landmark judgment which speaks directly to the issue of prescription in respect of any employee’s unfair dismissal or unfair labour practice claim.

The judgment in the matter of Food and Allied Workers Union obo Gaoshubelwe v Pieman’s Pantry (Pty) Limited (CCT236/16) [2018] ZACC 7 has finally ended the uncertainty.

It goes without saying that when an employee refers an alleged unfair dismissal dispute, he does so because he seeks some form of relief. If the arbitrator finds in his favour, the arbitrator will direct the employer to retrospectively reinstate the employee; or to re-employ him; or to pay him compensation.

The Constitutional Court found that any of these three remedies constitutes a debt.

Given that any of these three remedies constitutes a debt for the purposes of the Prescription Act, the next question which had to be answered, was: what act would interrupt the running of the three-year prescription period?

It is trite that the referral document invariably states what relief the dismissed employee seeks. FAWU obo Gaoshubelwe (the applicant) accordingly argued that a referral to the CCMA or a Bargaining Council interrupted prescription.

In evaluating this submission, the Constitutional Court had to ask whether a referral document initiates legal proceedings. In practical terms the question was whether the referral document fell within the requirements of section 15(6) of the Prescription Act, that is, whether it fell within the provision that refers to “a petition, a notice of motion, a rule nisi, a pleading in reconvention, a third-party notice referred to in any rule of court and any document whereby legal proceedings are commenced”.
The Constitutional Court concluded that the referral document fell within those requirements.

Having reached this conclusion, the Constitutional Court found that a referral to the CCMA or a Bargaining Council constitutes a document commencing legal proceedings, and that, in turn, interrupted the running of prescription.
Once the matter is set down for conciliation, the proceedings for the recovery of the debt arising from the dismissal or the unfair labour practice, commences.