According to court documents filed on ejustice (https://ejustice.jud.na/ejustice/f/caseinfo/publicsearch+), in particular the LC 21 referral document, the respondent employee (Benice Uaaka) indicated the nature of her labour dispute to be unfair labour practice and severance package (page 5 of the record). In her summary of dispute, on page 6 of the record, asks:
‘… Gibeon Village Council to pay me backdated salaries from May 2014 – July 2017, and my leave gratuity as of July 2017.’ (Emphasis added).
The appellant (Gibeon Town Council) raised preliminary points of prescription and non-compliance with statutory notice (page 18 of the record). The respondent employee opposed the preliminary points stating among others that the dispute arose when she was notified that her monthly salary was suspended (pages 22 and 26 of record).
The ruling on the preliminary issues on 28 July 2020. In that ruling, the arbitrator set out to determine whether or not the matter of prescribed. The factual matrix set out by the arbitrator included:
‘8.3 On 19 February 20214, she was suspended by way of a suspension letter…
8.4 On 21 March 2014, she received a letter stating that her salary was suspended.
8.5 [On] 25 July 2017, she resigned from the Gibeon Village Council.
8.6 On 02 April 2019, she referred a dispute of “unfair labour practice” and “severance pay” to the Labour Commissioner requesting the Labour Commissioner to pay her “backdated salaries from May 2014 to July 2017 and her leave gratuity at July 2027.’ (Emphasis added).
The arbitrator dealt with the preliminary points on the papers and on the question of prescription, ruled that evidence had to be led to determine the date on which the cause of action arose. In respect of non-compliance with statutory notice, the arbitrator allowed the matter to be heard despite the non-compliance. Lastly, the arbitrator made, among others, the following order (page 66 of record):
’67.1 … I, therefore, throw out the application of Gibeon Town Council with both hands.
67.2 … the dispute pertaining to when the cause of action of Bernice Uaaka’s referral should be heard, and evidence should be led and tested to that effect.
It is that order which Gibeon Town Council appealed against to the Labour Court on several grounds which led to the judgment at the centre of the severance payment debate. In essence, Gibeon Village Council was of the view that the arbitrator reached conclusions and findings that no reasonable arbitrator could reach.
Gibeon Village Council v Uaaka (HC-MD-LAB-APP-AAA-2020-00044) [2021] NALCMD 3 (4 February 2021)
Facts
The appellant, the Village Council of Gibeon (‘the Council’), appealed against the entire arbitration award made on 28 July 2020 by the arbitrator. The appellant’s grounds of appeal morphed into one, which was essentially that when the respondent referred the dispute to conciliation or arbitration by lodging Form LC21 (Referral of dispute to conciliation or arbitration document) with the Labour Commissioner, as required by the Labour Act 11 of 2007 (‘the Labour Act’), the matter had prescribed in terms of section 86 (2) (b) of the Labour Act. On that basis alone, the appellant argued that the dispute had prescribed; and so, the arbitrator misdirected himself when he or she dealt with the matter. Moreover, according to the appellant, the matter had prescribed in terms of the Legal Proceedings (Provincial and Local Authorities) Act 94 of 1970, and the Prescription Act 68 of 1969.
Issue for determination
In relation to severance pay, the issue was crafted as follows:
[14] ….I pass to consider the ‘dispute’ of ‘severance package’ to see whether the respondent referred a dispute over ‘severance package’ to the Labour Commissioner within one year after such dispute arose.
Discussion
In relation to prescription, the court found that the Prescription Act 68 of 1969 and the Limitation of Legal Proceedings (Provincial and Local Authorities) Act 94 of 1970 did not apply. The applicable provisions are those in section 86 (2) of the Labour Act 11 of 2007. Having been misled by counsel in their submissions about when the cause of action arose the arbitrator undertook, quite unnecessarily, the interpretation of ‘when the cause of action arose’ and applied Act 68 of 1968.
The court found that the arbitrator misdirected himself leading him to come to a wrong decision. Consequently, the court upheld the appeal but on different grounds and set aside the arbitrator’s order in the award replacing it.
In relation to the issue of severance pay, the High Court stated the following:
‘Severance package
[15] The payment of severance pay is governed by s 35 of the Labour Act. In these proceedings it is not disputed that the third respondent resigned as an employee of the appellant Council on 25 July 2017; and so, in the normal run of things she is entitled to severance pay in terms of s 35 of the Labour
Act. There is not one iota of evidence that the third respondent asked for payment of severance pay and the council refused to make due payment, and the refusal aggrieved the third respondent. Therefore, as a matter of the law of the Labour Act, it cannot be said that there existed a dispute as to the third respondent’s entitlement to severance pay.
There is no evidence apparent on the record indicating any such disagreement. The fact that the third respondent says in LC 21 that there is a dispute regarding what she characterised as ‘severance package’ does not lead to the conclusion in law that there was, indeed, such a dispute. If there was no dispute; then it cannot be argued that the dispute prescribed in terms of s 86 (2) (b) of the Labour Act.
And s 35 of the Labour Act which governs the payment of severance pay does not prescribe when payment should be demanded by a deserving separating employee and when the requested employer should make payment. Of course, in the interest of fairness, it ought to be paid within a reasonable time after payment becomes due or is demanded.
Conclusion
[16] Keeping these facts and the law in my mental spectacle, I should say this. It has been over three years since the third respondent resigned from the council, as aforesaid. Labour matters ought to be disposed of expeditiously and justly (see National Housing Enterprise v Hinda Mbazira 2013 (1) NR 19 (LC)). All the facts to make a decision concerning the respondent’s entitlement to severance pay are before the court; and so, this court is in a good position as the arbitrator to make an order about the payment of severance pay to the third respondent. It serves no useful purpose to order simply that the demand for severance pay has not prescribed and that the third respondent should be paid what is due to her, and then remit the matter back to the Labour Commissioner to appoint an arbitrator to arbitrate such uncontroversial issue on which the law is clear (see s 35 of the Labour Act).
I have discussed in great detail that the arbitrator, with respect, misdirected himself on the law leading him to decide wrongly, as I have concluded previously. The order in paras 67.2 and 67.3 of the award is, with the greatest deference to the arbitrator, wrong and, indeed, meaningless, as a matter of law, as I have demonstrated. The arbitrator’s award cannot be allowed to stand. It is wrong, but, of course, for different reasons that are discussed above.’
Court order
Based on these reasons, the following order was made:
‘1. The appeal succeeds.
2. The arbitrator’s order is set aside and replaced with the following:
(a) Appellant must on or before 26 February 2021 pay to the third respondent, Benice Bronhulda Uaaka, a severance pay that is due to her in terms of s 35 of the Labour Act 11 of 2007; and the amount payable shall attract interest at the rate of 20 per cent per annum, calculated from the date of this judgment to the date of full and final payment.
(b) There is no order as to costs.
(c) The matter is finalised and is removed from the roll.’
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