The Prescription Act may intersect with the Labour Relations Act 66 of 1995 (LRA), particularly whilst scrutinising when a labour dispute arose and when the dispute was referred. Section 16(1) of the Prescription Act provides for prescription periods applicable “to any debt”, whilst Section 191(1)(b) of the LRA provides that an unfair dismissal dispute must be referred to the CCMA or relevant Bargaining Council within thirty (30) days of the dispute arising. An unfair labour practice dispute must be referred to the CCMA or relevant Bargaining Council within ninety (90) days of the dispute arising. The confusion stems from the applicability of the Prescription Act, which supersedes the provisions of the LRA; however, guidance can be drawn from Section 210 of the LRA in this regard. The LRA provides that if there are any conflicts between Acts relating to the matters dealt with in the LRA and the LRA is against any provisions of another law, except for our Constitution. The provisions of the LRA will prevail.

In the case of Fredericks v Grobler NO (2010) 6 BLLR 644 (LC) an employee (“the Applicant”) had referred a dispute to the Bargaining Council ten (10) years after the Applicant learnt that he had been recommended for promotion and nothing had been done by his employer (“the Respondent”). The Applicant’s condonation application was unsuccessful at the CCMA, which led to a review application being lodged at the Labour Court (LC). At the LC, the Respondent argued that the debt, which was due to the Applicant, had become prescribed by the prescription running as soon as the Applicant acquired the right to institute proceedings against the Respondent in terms of Section 191(1) of the LRA. The Court considered the provisions of the LRA and the Prescription Act and found that the Applicant knew he had a claim but failed to institute it within the prescribed period; therefore, the Court ordered the claim to have prescribed.

In the case of Public Investment Corporation v More & Others JR 2121/2022, the Court had to make findings on whether the Employee’s misconduct fell within the definition of ”debt” as envisaged in Section 16(1) of the Prescription Act. In this case, the employee was employed as the Chief Financial Officer (“the CFO”) of the employer. In June 2015, the employee approved a credit facility agreement at the instruction of the CEO of the company. Five (5) years later, the CFO was subjected to a disciplinary hearing and consequently dismissed for misconduct relating to her approval of the revolving credit facility agreement. The employee had a duty to ensure that the terms of the agreement complied with the terms the company and its client had agreed upon, before providing confirmation and recommending that the agreement be signed.

The matter was referred to the CCMA, and during the arbitration proceedings, the CFO raised a special defence regarding prescription. The employee stated that the claim raised against her employer had prescribed. The CCMA, in its award, ruled on the issue of prescription, and the Commissioner concluded that the CFO’s contract of employment obligated her to render services to her employer; therefore, she owed her employer the debt of service delivery. The employee became a debtor, and once the debt had arisen, her employer had three (3) years to address the misconduct. Furthermore, the Commissioner found that because her employer only instituted disciplinary action against her in June 2020, her debt had prescribed. This rendered the charges brought against the CFO in June 2020 to be declared incompetent. Consequently, the dismissal was unfair. The CFO was awarded retrospective reinstatement.

However, this was not the end of the matter as the employer applied for review in the LC, which delivered its judgment on the 16th of April 2025. The legal question that needed to be addressed by the Court was whether the alleged breach of contract by the CFO constituted a debt and whether the employer’s right to discipline the employee amounted to a claim for a debt. The Court stated that a disciplinary hearing is the enforcement of a statutory right to terminate an employment relationship on the grounds recognised by the LRA. There exists no debt to be claimed by an employer that subjects an employee to a disciplinary enquiry. The Court ultimately found that the Commissioner had erred in upholding the special defence as an employee’s alleged misconduct cannot constitute a debt as provided for in the Prescription Act. The review application was successful, and the arbitration award was set aside. The matter was ordered to be remitted to the CCMA for an arbitration de novo.

A notable dispute which seems to fall in a vacuum on the referral timelines provisioned for by Section 191 of the LRA are disputes referred in terms of Section 73A of the Basic Conditions of the Employment Act 75 of 1997 (BCEA). The general rule in practice is that such disputes must be lodged within a reasonable time, but the determination of the reasonableness may be subject to the Commissioner’s discretion. However, the reasonableness is also not for an infinite period, as the Prescription Act may have a more significant role to play in such disputes. Section 11(d) of the Prescription Act provides that the prescription period for “any other debt” is three (3) years. Therefore, this may be a jurisdictional issue raised in disputes adjudicated by the CCMA in terms of Section 73A of the BCEA, should it be determined that the claimed monies were due at a period longer than three (3) years prior.

In conclusion, the Courts have clarified that while the Prescription Act have a role in labour disputes involving enforceable rights such as arbitration awards or claims for compensation, internal disciplinary processes do not necessarily constitute ‘debts’. It is therefore essential for all parties to act swiftly, seek legal advice when necessary, and remain informed about the prescriptive periods that govern claims, to ensure that access to justice is not lost through the mere passage of time.

Article by Riyaadh Vally

Dispute Resolution Official at Consolidated Employers Organisation (CEO SA)