Umgeni Water v Mshengu

The respondent, Mr Bonginkosi Vincent Mshengu, was employed by Umgeni Water and was a compulsory member of its retirement fund. In 2002 he applied unsuccessfully for a new post following restructuring and was subjected to a disciplinary enquiry. Before a sanction was imposed, he elected to take early retirement with effect from 1 April 2003. However, on 27 November 2002 he was dismissed for misconduct. Because of the dismissal, Umgeni Water instructed the retirement fund to pay only his withdrawal benefit, excluding the employer’s contribution that would have been payable on early retirement. The dismissal was later found by the CCMA, and ultimately the Labour Court, to be substantively unfair. In June 2007, after the Labour Court decision, Mshengu instituted action in the High Court claiming payment of the employer’s retirement contribution. Umgeni Water raised a special plea that the claim had prescribed.

The appeal was dismissed with costs, including the costs reserved in the High Court.

The case clarifies when a cause of action accrues for purposes of prescription, particularly in employment-related benefit claims. It confirms that prescription does not run while a legal impediment prevents a claimant from enforcing a right, and it reinforces the principle that a complete cause of action is required before a debt can be regarded as due.