The institution of review proceedings does not suspend the operation of an arbitration award unless security is furnished to the satisfaction of the court in terms of s145(8) of the LRA. On what basis did the labour appeal court recently resolve the conflict between various labour court judgments interpreting the stay of enforcement of arbitration awards pending review proceedings?
In City of Johannesburg v Municipal Workers Union obo Monoreng and Another (2019) 30 SALLR 159 (LAC), the labour court ruled as follows:
- the labour court has a discretionary power under s145(3) of the LRA to stay the enforcement of an arbitration award pending its decision in the review application. It may stay the enforcement of an arbitration award pending finalisation of a review application against the award with or without conditions. It may, in terms of s145(8) of the LRA, dispense with the requirement of furnishing security. Properly construed, s145(3) read with s145(7) and s145(8) should be interpreted to mean that, where an applicant in a review application furnishes security to the labour court in accordance with s145(8) of the LRA, the operation of the arbitration award is automatically suspended pending its decision in the review application. In other words, the employer need not make an application in terms of s145(3) of the LRA to stay the enforcement of the arbitration award pending the finalisation of the review application;
- however, should the employer wish to be absolved from providing security or to provide security in an amount less than the threshold in s145(8)(a) and s145(8)(b), then it is required to make an application to the labour court, in terms of s145(3), for the stay of the enforcement of the arbitration award pending its decision in the review application. The employer must make out a proper case for the stay as well as for the provision of security in accordance with s145(8) to be dispensed with or reduced;
- the words ‘unless the labour court directs otherwise’ in s145(8) of the LRA must be construed broadly to mean that the labour court is afforded a discretion to either:
- exempt the employer from paying security on the stay of the enforcement of an arbitration award pending its decision on review; or
- reduce the quantum of security to be furnished by the employer to an amount below the threshold in s145(8)(a) and s145(8)(b) of the LRA; and
- although s145(7) of the LRA makes specific reference to ‘the applicant’, it effectively applies to only employers. It makes no provision for an employee who brings a review application to furnish security. The purpose of s145(7) and s145(8) is essentially to dissuade employers from bringing frivolous review applications with no prospects of success and ensure that they are timeously and expeditiously prosecuted.
