SAMWU obo K Shongwe & 45 Others v Commissioner L Moloi N.O. and Others

SAMWU, representing 46 employees of the Johannesburg Metropolitan Police Department (JMPD) assigned to Corporate and Shared Services, was in dispute with the City of Johannesburg regarding entitlement to payment under a collective agreement (settlement agreement) concluded on 28 June 2008 concerning minimum salaries for Metro police officers. The City denied the settlement agreement applied to these employees. On 17 July 2013, SAMWU referred an interpretation and application dispute to the CCMA. At arbitration on 4 February 2014, the City raised a preliminary point that the claims had prescribed under the Prescription Act and the CCMA lacked jurisdiction. On 6 February 2014, the arbitrator issued a jurisdictional ruling upholding the prescription point and dismissing the application. SAMWU launched review proceedings on 25 March 2014, but experienced multiple delays in prosecuting the review due to defective records, changes in attorneys, and intervening litigation including an unsuccessful enforcement application that was dismissed on grounds of lis alibi pendens. The rule 7A(8)(b) notice was filed late, and the City brought a rule 11 application to dismiss the review for delay.

• Whether condonation should be granted for the late filing of the rule 7A(8)(b) notice and delay in prosecuting the review application
• Whether the review application should be dismissed for delay in prosecution
• Whether the arbitrator correctly ruled that the claims had prescribed under the Prescription Act
• Whether the CCMA had jurisdiction to determine the interpretation/application dispute
• What approach should be applied when dealing with delay in prosecution of reviews under the Labour Relations Act

The appeal was upheld. The Labour Court's order was set aside and substituted with an order: (1) dismissing the City's rule 11 application; (2) condoning the late filing of the condonation application; (3) condoning the late filing of the rule 7A(8)(b) notice and delay in prosecution; (4) reviewing and setting aside the arbitrator's jurisdictional ruling and substituting it with an order dismissing the prescription point in limine; (5) referring the parties back to the CCMA for resolution of the interpretation and application dispute before a different arbitrator; and (6) making no order as to costs.

The binding legal principles established are: (1) The power to dismiss a review application for delay in prosecution must be exercised with circumspection and only in exceptional circumstances, taking into account all relevant facts including the constitutional right of access to courts under section 34, prejudice to parties, prospects of success on the merits, and the overall interests of justice (applying IMATU). (2) A dispute regarding the interpretation or application of a collective agreement referred to the CCMA does not constitute a "debt" as contemplated in the Prescription Act and therefore cannot prescribe. (3) An arbitrator commits a material irregularity by ruling on the prescription of monetary claims that are not properly before the arbitrator when only an interpretation/application dispute has been referred. (4) Where periodic salary payments are claimed, prescription runs separately for each debt from when it becomes due, and a party alleging prescription must establish when each specific debt became due and when the prescription period expired. (5) Jurisdictional rulings by arbitrators are reviewed for correctness, not reasonableness, based on objective facts.

The Court noted that a party is generally not absolved from blame where its legal representative fails to comply with time periods through negligence, but an exception is made where the party has not remained passive and has taken active steps to address the non-compliance, such as terminating unsatisfactory attorneys and engaging new ones. The Court could not and did not decide the actual issue of prescription of the monetary claims as those claims were not properly before it or the Labour Court, and it would be unfair to the parties to anticipate and determine such issues. The Court observed that even if prescription applied, the third respondent had not made out a proper case for prescription as it failed to establish when each salary for each affected employee became due and when the three-year period expired for each such debt. The Court emphasized that in light of the ongoing relationship between the union and the municipality, and taking into account fairness and all other facts, no costs order was appropriate.

This case is significant for establishing important principles regarding delay in prosecution of review applications under the Labour Relations Act. It clarifies that dismissal for delay must be exercised with circumspection and only in exceptional circumstances, with courts required to balance multiple factors including the litigant's constitutional right of access to courts (section 34), prejudice to parties, merits of the case, and overall interests of justice. The case also clarifies important principles regarding prescription: (1) interpretation/application disputes referred to the CCMA are not "debts" that can prescribe under the Prescription Act; (2) an arbitrator acts irregularly by ruling on prescription of monetary claims that are not properly before them; and (3) where salary claims accrue monthly, prescription must be established separately for each debt as it becomes due. The judgment demonstrates the limits of technical defences in labour disputes and the primacy of substantive justice in resolving workplace disputes.