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Labour Court: Delay in Disciplinary Action NOT Governed by Prescription Act

  • Writer: Jonathan Goldberg
    Jonathan Goldberg
  • 14 hours ago
  • 3 min read

The employee, a chartered accountant, was appointed CFO of the PIC and reported directly to the then - CEO. In 2014, the PIC approved a R350 million revolving credit facility for VBS Mutual Bank, subject to strict conditions.


In June 2015, the employee signed a memorandum recommending the execution of agreements for the loan. Later investigations revealed that the agreements did not match the original terms approved by the fund investment panel. Key differences included the absence of the approved R200 million/R150 million funding split and the addition of clauses not authorised by the panel.


On this basis, the PIC charged the employee with misconduct in June 2020. Following a disciplinary process, she was found guilty. While the Chairperson recommended a final written warning, the PIC board opted instead to dismiss her in October 2021.


The employee challenged her dismissal at the CCMA, raising three preliminary objections: prescription (that the charges had lapsed in law due to the five-year delay), waiver, and undue delay. The arbitration, presided over by two senior Commissioners, upheld her prescription argument. They found that the misconduct had occurred in 2015 and had been prescribed by 2018 under the Prescription Act. They therefore ruled her dismissal substantively and procedurally unfair.


The CCMA ordered her reinstatement and awarded her backpay of over R6.7 million, plus costs.


The PIC applied to the Labour Court to review the arbitration award. The LC found that the Commissioners had committed a material error of law by applying the Prescription Act to an internal disciplinary process. The Court held that prescription applies to civil litigation and arbitration awards, but not to workplace disciplinary hearings, as no “debt” in law arises when an employer disciplines an employee.


The LC noted that the Commissioners strayed from their own stated approach by also considering delay and the merits of the case after finding prescription applied. This, the Court held, undermined their reasoning.


The Court reviewed and set aside the arbitration award and directed that the matter be heard de novo (from the beginning) before a new senior Commissioner at the CCMA. The record of the previous arbitration will form part of the evidence. No costs order was made.


This ruling makes clear that employers may still discipline employees years after alleged misconduct, although unreasonable delay could affect fairness. The key legal principle is that the Prescription Act does not limit the right to discipline.


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