LABOUR LAW – WHETHER THE PRESCRIPTION ACT APPLIES TO A CLAIM SOUNDING IN MONEY BASED ON A SETTLEMENT AGREEMENT MADE AFTER A REFERRAL OF A DISPUTE UNDER THE LABOUR ACT

LABOUR LAW – WHETHER THE PRESCRIPTION ACT APPLIES TO A CLAIM SOUNDING IN MONEY BASED ON A SETTLEMENT AGREEMENT MADE AFTER A REFERRAL OF A DISPUTE UNDER THE LABOUR ACT

LEGISLATION – SECTION 15(1) OF THE PRESCRIPTION ACT – EXTINCTIVE PRESCRIPTION

The Applicant had instituted two applications for the enforcement of the same debt, a claim for the payment of housing allowances plus interest against the first respondent. The first was by way of a counter-application to an application in which the first respondent sought the setting aside of the registration of the underlying ‘settlement agreement/award’ as an Order of the Labour Court in terms of section 87(1)(b)(i) of the Labour Act 2007 under case Namdeb Diamond Corporation (Pty) Limited v Mineworkers Union of Namibia (HC-MD-LAB-MOT-GEN-2019/00056) [2019] NALCMD 37 (04 November 2019). The applicant’s counterclaim delivered in that case for the payment of housing allowances and interest was however dismissed on 4 November 2019 and the dismissal was never taken on appeal and thus became final.

The current application, HC-MD-LAB-MOT-GEN-2020/00227, which was instituted in September 2020 was instituted on essentially the same cause of action – and on substantially similar facts – and essentially for the same relief as the said counter-application. The applicant was thus attempting to claim payment of the original – and substantially the same debt – through the institution of the said two applications.

Section 15(1) of the Prescription Act 68 of 1969 provides that prescription will be interrupted by the service on the debtor of any process whereby the creditor claims payment of the debt –  if a creditor fails in his claim, i.e., if he does not successfully prosecute his claim under the process in question to final judgment or the judgment is abandoned or set aside, the provisions of section 15(2) come into play in that the interruption of prescription which has occurred in terms of subsection (1) shall lapse, and the running of prescription shall not be deemed to have been interrupted.

GEIER J held that:

1. As the applicant’s cause of action was actually based in contract – and not on any award it seemingly was irrelevant how the relied upon agreement came about, i.e., whether the dispute which led to the conclusion of the agreement was labour-related and was initially pursued in terms of the applicable labour legislation or had any other commercial cause and was pursued in terms of the applicable commercial law. Fact of the matter was that a seemingly valid agreement was concluded and that valid agreements – generally – can become enforceable and that the courts – inclusive of the Labour Court – are empowered to enforce them, if appropriate. Such claims are also generally liable to prescription particularly if such claims sound in money and clearly constituted a ‘debt’.
2. The relevant process in question, i.e., the counter-application instituted under case HC-MD-LAB-MOT-GEN-2019/00056, had a final outcome i.e., that reflected in the court order on 4 November 2019, which was one of dismissal.

This result determined the question of whether or not the applicant was able to prosecute its claims successfully to a final executable judgment, as required by section 15(2).

This outcome was clearly not successful, so much was signified by the dismissal of the counter-application.

3) Held that it had to follow in such circumstances – that the interruption of prescription – achieved through the service of the counter-application under case HC-MD-LAB-MOT-GEN-2019/00056 on 4 April 2019 – lapsed once the counter-application was dismissed on 4 November 2019.

In such circumstances the deeming provisions contained in section 15(2) of the Prescription Act 1969 came into play, with the result that the interruption of prescription, which had occurred on 4 April 2019 – July 2004 was deemed not to have occurred, thus, in turn, resulting in the situation that the applicant’s claim, against the first respondent, had already become prescribed during or about July 2020, the applicant’s cause of action having arisen on 1 July 2017 or during or about July 2017 or even earlier and the current proceedings – which were only instituted on 29 September 2020 – were thus instituted more than three years after the applicant’s claim/cause of action had arisen. The applicant’s claim for the payment of housing allowances and interest had thus prescribed in terms of section 11(d) of the Prescription Act 1969 as read with section 12(1).

As a result, the special plea of prescription was upheld.

Mineworkers Union of Namibia v Namdeb Diamond Corporation (Pty) Ltd NALCMD (8 June 2022)