Doctrine of Peremption

Does it work or not, in the context of Labour Court review applications?

What happens to an employer who is confronted with a CCMA compensation award, complies and duly effects payment of the amount stipulated in the award, but at the same time the successful employee takes the arbitration award on review?

The purpose of this article is to examine this question with reference to what is referred to as the Doctrine of Peremption. Simply explained, the Doctrine of Peremption is based on the application of the principle that no person can be allowed to take up two positions inconsistent with one another. In this regard, no person can be allowed to blow hot and cold, or to approbate and reprobate. 

The Doctrine of Peremption applies where there is a clear intention not to assail a judgment. In the case of Balasana v the Motor Bargaining Council and Others [2011] 2 BLLR 161 (LC), it was held that it is imperative that acceptance of the award must be unequivocal. The court is therefore enjoined to look at all of the facts and circumstances and in light thereof, make a determination based on the facts of the particular case. Peremption is therefore fact specific.

According to the case of Venture Otto SA (Pty) Ltd v Metal & Engineering Industries Bargaining Council & Others, it was held that the threshold required to be satisfied before the Doctrine of Peremption might be successfully invoked is high. In NUMSA & Others v Fast Freeze (1992) 13 ILJ 963 (LAC), the court held that voluntary payment or acceptance of payment in terms of a judgment will usually be sufficient to satisfy a court that the party has acquiesced in the judgment.

In a recent judgment, involving a banking client, the Labour Court held that the client had successfully raised the defence of peremption against a dismissed employee. In this case, the employee reviewed the arbitration award subsequent to the employer effecting payment of the money owed into his bank account. 

The employee tendered, albeit at a very late stage, that is, a few days before the hearing of the review, to pay back the compensation he had received from the employer. 

Ultimately, his review application was dismissed with costs by the Labour Court on 10 March 2016. 

In the interesting Labour Court decision of Ellerines Furnishers (Pty) Ltd v Commission for Conciliation, Mediation and Arbitration & Others (2015) 36 ILJ 215 (LC), an employee challenged the fairness of his retrenchment of which the Commissioner found that the dismissal was substantively fair, but procedurally unfair. 

The employee was awarded five months’ compensation, which amounted to ZAR125 000. The employer duly complied with the award and paid the ZAR125 000 to the employee. However, it later transpired that the award for compensation was based on the employee's net remuneration. The compensation was accordingly recalculated based on the employee's gross remuneration.

In a subsequent variation ruling, the compensation payable was increased to ZAR214 028.65. Displeased with the additional amount it had to pay, the employer took the arbitration award, together with the variation ruling, on review. The employee responded with a counter-review, arguing that, in making the compensation payment, the employer was perempted from seeking a review of the entire award.

The Labour Court held that "once it can be said that a right of review exists, such right cannot be circumscribed by the peremption of a portion of that right or that only certain grounds of review may be raised but not others… what this essentially means is that once the variation ruling was issued it became open to Ellerines to challenge the entire arbitration award… on any of the recognised grounds of review, despite an earlier possible peremption of such right of review on the part of the affected party".

The employer was accordingly entitled to review the whole arbitration award as a result of the variation ruling and the peremption principle was consequently not applicable.

In the Labour Appeal Court decision of Doorgesh Harrinarain v Commission for Conciliation, Mediation and Arbitration & Others [CA4/2014], the court held that the employer (SABS) failed to discharge the onus that the employee had waived his right to challenge the CCMA award after having received payment, which had been transferred into his bank account. 

The court held that there was no evidence as to when the money was paid to the appellant, the money was paid into the employee's bank account, and the employee did not acknowledge receipt of the payment as full and final settlement of the issue between him and the employer. 

It was in light of these facts that the court held that the Doctrine of Peremption was not applicable and that the appellant had not acquiesced the arbitration award.

In light of the above case law, employers should ensure that upon effecting payment of the money, in compliance with the arbitration award, a settlement agreement is reached in full and final settlement with the employee, in order to guarantee that the employee has indeed unequivocally accepted the arbitration award. Furthermore, in light of the above case involving the banking client, it can be said that unless the employee has tendered to pay the money received back to the employer, he/she cannot persist with the review application. 

In conclusion, we advise that it will be prudent to confirm in writing with the (dismissed) employee, at an early stage, that they have received the compensation payment in full and final settlement of all claims/disputes. This will prevent the employee, once they have confirmed acceptance, to later change their mind about the award. 

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