Author: Jean Ewang – Director
After years of contradictory judgments on the matter, the Labour Appeal court has now finally settled the law in relation to the prescription of arbitration awards issued in terms of the Labour Relations Act, 1995.
In relation to arbitration awards issued prior to 1 January 2015, the LAC has pronounced that generally, arbitration awards, in which compensation and/or reinstatement with or without back pay is awarded, shall constitute debts as contemplated in the Prescription Act. This means the debt is subject to a three-year prescription period.
The LAC also confirmed that an application to review and set aside an arbitration award does not interrupt the running of prescription of an award issued prior to 1 January 2015. For awards issued after 1 January 2015 the amendment to section 145 of the LRA introduces a special exception in that review applications now have the effect of interrupting the prescription of arbitration awards. This amendment is not retrospective and cannot be applied to reviews in respect of awards issued before 1 January 2015.
Historic awards may now finally no longer be enforced against former employers. The judgment is welcomed relief to employers and provides certainty to an area of law that has for too long been in a state of flux.
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