Employers are more often than not faced with compliance orders or arbitration awards, which they have to comply with and furnish proof of compliance.
What can an Employer do when they receive a compliance order relating to an underpayment of an employee who has, for example, not been employed by the Employer for over three (3) years?
Does the Prescription Act apply to Labour Law as well?
First, a compliance order is an order, which the Department of Employment and Labour issue and serve on the employer because of an allegation/s that an employer is not compliant with statutory provisions of the Basic Conditions of Employment Act or cannot comply with the requirements of the National Minimum Wage Act.
The Prescription Act applies to Labour Law as well, as it states that claims for simple debt prescribe three years from the date it became due.
Section 16(1) states that it applies to all debts arising after the commencement of the Act, except if such provisions are inconsistent with any Act of Parliament, which specifies time frames for when claims can be made.
The Employer will, however, still bear the burden of proof to show that he has not employed the employee for the said of time, and no application was bought, or payment was made to interrupt the running of prescription.
When dealing with Compliance Orders, one needs to look at the limitations of Compliance Orders as set out in Section 70 of the Basic Conditions of Employment Act together with the provisions of the Prescription Act to formulate a defence and grounds for objection.
In Mazibbuko v Concor Plant Cellucity (Pty) Ltd v Communication Workers Union on behalf of Peters (2016) 37 ILJ 413 (LAC), the Labour Appeal Court found that arbitration awards are also subject to the Prescription Act.
Therefore, the Prescription Act is applicable in Labour Law.
Need assistance with a Compliance Order or default arbitration award? Contact your nearest SEESA Labour Legal Advisor. Alternatively, leave your contact details on our website, and a SEESA representative will contact you.
About The Author:
Azel Ferreira started her career at SEESA in March 2020. She is currently a BEE, Labour and CAT Legal Advisor at the SEESA Upington branch. She obtained her LLB degree at the University of the Free State.
Resources:
- Prescription Act 68 of 1969;
- https://ceosa.org.za/what-to-do-when-you-receive-a-compliance-order-for-the-national-minimum-wage/#:~:text=A%20compliance%20order%20is%20an,the%20very%20least%2C%20minimum%20wage;
- https://www.derebus.org.za/employment-law-update-prescription-the-constitutional-court-prescribes-the-way-forward/;
- National Minimum Wage Act;
- Basic Conditions of Employment Act 75 of 1997;
- Mazibbuko v Concor Plant Cellucity (Pty) Ltd v Communication Workers Union on behalf of Peters (2016) 37 ILJ 413 (LAC).