It is well known amongst the general population that certain debts prescribe or become void after a period of three (3) years. Yet several employers are still in the dark when it comes to arbitration awards and/or referrals to the CCMA, and the specific time limits which they are bound to. Recent case law has fortunately shed some light on this issue.
The Precription Act 68 of 1969:
Section 11 of the Prescription Act stipulates that:
“The periods of prescription of debts shall be the following:
(a) thirty years in respect of-
(i) any debt secured by mortgage bond;
(ii) any judgment debt;
(iii) any debt in respect of any taxation imposed or levied by or under any law;
(iv) any debt owed to the State in respect of any share of the profits, royalties or any similar consideration payable in respect of the right to mine minerals or other substances;
(b) fifteen years in respect of any debt owed to the State and arising out of an advance or loan of money or a sale or lease of land by the State to the debtor, unless a longer period applies in respect of the debt in question in terms of paragraph (a);
(c) six years in respect of a debt arising from a bill of exchange or other negotiable instrument or from a notarial contract, unless a longer period applies in respect of the debt in question in terms of paragraph (a) or (b);
(d) save where an Act of Parliament provides otherwise, three years in respect of any other debt.”
The Case Law concerning referrals and arbitration awards:
Referrals to the CCMA:
In Fawu obo Gaoshubelwe and Others v Pieman’s Pantry (Pty) Ltd (2017) 38 ILJ 132 (LAC) it was concluded that the Prescription Act does indeed apply to all litigations under the Labour Relations Act as amended 66 of 1995, not least of all litigations prosecuted in terms of Section 191 of the LRA.
Therefore, potential claims or allegations which relates to an employee’s alleged unfair dismissal against an employer, will for all practical and legal purposes prescribe after a three (3) year period in terms Section 11(d) of the Prescription Act 68 of 1969. Even though the LRA requires employees to refer unfair dismissal claims within a 30-day period, it does not necessarily mean that their “claim” has prescribed.
However, the above mentioned principles and law ought not to be confused with a similar judgment by the name of Myathaza v Johannesburg Metropolitan Bus Services (SOC) Limited t/a Metrobus and Others (CCT232/15)  ZACC 49; (2017) 38 ILJ 527 (CC);  3 BLLR 213 (CC); 2017 (4) BCLR 473 (CC) whereby it was ruled that the Prescription Act does not apply to arbitration awards.
It is important to note that the decision in Myathaza is not authority for the stance that litigation under the LRA, prior to the rendering of an award is subject to the Prescription Act. The facts as contained in Myathaza are different in its entirety, as the main dispute of the matter was confined to the question of the prescription of awards. Employers who have arbitration awards against them cannot avoid complying with the awards by relying on the Prescription Act.
Article by: Noel Strating
CEO Dispute Resolution Official – Bloemfontein