A MIX MASALO: WHEN LABOUR RELATION ACT, INSOLVENCY ACT AND COMPANIES ACT INTERSECT LIKE INTERSECTION-

The Context: A Behind-the-Scenes Look

You must have noticed by now that before we get into the nitty-gritty of things, I like to provide context—a sort of "behind the scenes" look at how the writing actually came about.

We are reading this today because on the 30th of January 2026, I came home from work and immediately started having problems with the internet connection in my bedroom. I was about to start my work process, but I got stifled by the lack of a connection. Yes, in hindsight, I recognize that it was just an excuse on my part to avoid doing actual work. SHAMELESS! I know. Anyway, I didn’t work; I think I just spent my time scrolling on my phone.

"Ball" was scheduled for 21:00, so I just hung out until 19:30, doing a whole lot of nothing. Once the 19:30 mark hit, I grabbed my ball-playing tekkies and my special socks (S/O the rainbow!), and off I went. I listened to the new J. Cole freestyles on my way there—it was perfect. When I arrived, we played with aboBrazo. S/O to Mpumi, Thabang, and all the mandem in the cut.

The session ended around 23:30. For the first time in a long time, I was on the winning side! I did some step-overs, made some saves, and initiated some crucial plays. Whoever has a different take on my performance can come and see me.

The Spark

This is the part of the story that today’s blog post is based on. After the game, I drove back while listening to some rap music—JID is too good, too good! I got home and, miraculously, my internet problem was solved. I was finally connected and ready to "wire myself into the collective consciousness," as that’s where my work process truly begins.

First, I checked the blog website to see how it was doing. Views haven’t moved much, but S/O anyway—I’m still going to write and write and write. After checking the site, I hit LinkedIn. S/O to the "broke boyz" out there; I see you boys and girls in the cut, getting your name out there for the sake of prosperity.

Between 0:20 and 0:28, I saw a post from a gentleman seeking guidance on a legal problem. Now me, acting as the next Steph Curry, I paused, thought about the issue, and shot my shot. I’m no expert in this specific subject yet, but I put together what I could and commented with information that could at least serve as a starting point for his solution.

You can find the post in question here for context: (1) Post | Feed | LinkedIn. Hopefully, anyone reading this who understands the solution better can lend a helping hand to a fellow member of the human species. S/O Homo sapiens—I love y'all.

That is how the idea for this post was born, and that is how we got here. Now, let’s get to the nitty-gritty.

Here are the facts, as per the post by Mr. Reginald S. Kock:

________________________________________________________________________

QUICK FACTS: THE POST

" In about 2020 my former employer was liquadated (in the picture I am on duty for that employer). In about 2022 the employees were paid monies due to them. However, final payment was less than agreed to.

I then referred a dispute to the Labour Commissioner. In 2025 the Labour Commissioner ruled in my favour.

The respondents failed to raise appeal/review within the prescribed 30 days. I successfully applied for a compliance order.

Respondent calls me and requested my bank confirmation letter. They failed to pay on the 1st agreed date. They failed again on the 2nd agreed date.

I suspect they delaying while looking for a way out.

What can I do to enforce payment? Can I apply for their accounts to be freesed and I get my money directly from their accounts?"

Now what follows, is not a solution, nor is it legal advise. It is me scratching my curiosity about the interplay between Labour Relation Act, Insolvency Act and Companies act in the enforcement of Labour Awards. The following is a complied report on that intersexion. It stars with............

The Jurisprudential and Procedural Framework for the Enforcement of Labor Awards and Compliance Orders in South African Law

The enforcement of labor arbitration awards and compliance orders within the South African legal system represents a complex intersection of the Labour Relations Act 66 of 1995 (LRA), the Basic Conditions of Employment Act 75 of 1997 (BCEA), and the Insolvency Act 24 of 1936. When a Commissioner of the Commission for Conciliation, Mediation and Arbitration (CCMA) or a relevant Bargaining Council issues a ruling, the legal character of that ruling is defined by its finality and binding nature as established under Section 143(1) of the LRA. However, the transition from a favorable legal ruling to the actual recovery of funds is often obstructed by procedural technicalities, corporate restructuring, or deliberate stalling tactics employed by recalcitrant respondents.

In the context of a historical liquidation dating back to 2020, followed by partial payments in 2022 and a subsequent favorable ruling in 2025, the enforcement process must account for the identity of the current respondent and the legal "causa" of the debt. The fact that a compliance order was successfully obtained indicates that the administrative phase of the dispute has been exhausted, and the matter has moved into the realm of judicial execution. The failure of the respondent to honor agreed-upon payment dates after requesting sensitive documentation, such as bank confirmation letters, typically points to a strategic delay known in legal practice as "playing for time".

The Impact of Corporate Liquidation and Successor Liability

The initial liquidation of the employer in 2020 serves as the primary backdrop for this enforcement challenge. Under South African law, the liquidation of a company triggers Section 38 of the Insolvency Act, which automatically suspends all contracts of employment upon the granting of a provisional or final winding-up order. This suspension is designed to provide a 45-day window for the appointed liquidator to determine whether the business can be sold as a going concern or if operations must be terminated entirely. If the liquidator fails to revive the employment relationship within this period, the contracts are deemed terminated by operation of law.

However, the subsequent payment of some monies in 2022 and the 2025 ruling against a "respondent" suggest that the business did not simply vanish. Instead, the entity may have undergone a transfer of business as a going concern under Section 197 or Section 197A of the LRA. Section 197 provides for the automatic transfer of all employment contracts and associated liabilities from the "old employer" to the "new employer". Crucially, the new employer "steps into the shoes" of the old employer regarding all rights and obligations that existed prior to the transfer. If the liquidation was followed by a sale of the business or its assets in a manner that maintained the "identity" of the operations, the successor company becomes the liable party for the labor award.

Comparative Framework of Transfer Sections in the LRA

The determination of which entity is liable—and thus which entity the Sheriff should target—depends on the nature of the transfer following the 2020 liquidation.

Legislative Provision	Context of Application	Nature of Liability Transfer
Section 197	Solvent business transfer as a going concern	Automatic transfer of all rights, obligations, and liabilities to the new employer.
Section 197A	Transfer from an insolvent employer (Liquidation)	New employer is substituted in contracts, but prior obligations often remain with the insolvent estate unless otherwise agreed.
Section 200B	Joint and several liability in "sham" restructures	Allows the court to look through corporate veils if multiple entities are used to subvert labor laws.

The 2025 ruling by the Labour Commissioner, which went unchallenged for the prescribed 30-day review period, essentially confirms that the Commissioner found a legal basis to hold the current respondents liable for the short-payment of 2022. This ruling has reached "res iudicata" status, meaning the merits of the case can no longer be re-litigated.

The Procedural Evolution from Ruling to Compliance Order

The acquisition of a compliance order is a critical milestone in the enforcement journey. In the South African labor landscape, compliance orders are governed by Section 69 of the BCEA. When a respondent fails to comply with such an order, the matter is referred to the CCMA to be made an arbitration award under Section 73 of the BCEA. This conversion is essential because it transforms an administrative directive into a document that carries the same weight as a court order for the purposes of execution.

The certification process involves the completion of LRA Form 7.18. This form serves two primary purposes: first, it requests the Director of the CCMA to certify that the award is final and binding; and second, it includes a section for the application of a Writ of Execution. Once the Director or a delegated Commissioner signs this certification, the award is legally "deemed" to be an order of the Labour Court, specifically one for which a writ has already been issued. This "legal fiction" allows the successful party to bypass the slow and expensive process of approaching the High Court or Labour Court to have a registrar issue a standard writ.

The Logistics of LRA Form 7.18 and Certification

The execution of Form 7.18 requires meticulous attention to detail to avoid administrative rejection by the CCMA.

Required Action	Legal Basis / Requirement	Documentation Needed
Application for Certification	Section 143(3) of the LRA.	Completed Part 1 of LRA Form 7.18.
Proof of Service	Proof that the respondent received the award.	Fax transmission slip, registered mail slip, or signed acknowledgment.
Affidavit of Non-Compliance	Statement under oath that the debt remains unpaid.	Commissioner of Oaths signature on Form 7.18.
Writ of Execution	Part 3 of Form 7.18, enabling the Sheriff to act.	Detailed description of the amount owing plus interest.

Once the certification is granted, the award becomes an executable legal instrument. The respondent’s failure to pay on the agreed dates (the 1st and 2nd of the month) constitutes a clear breach of the compliance order and the underlying award. The request for a "bank confirmation letter" is frequently used as a pre-text to create a sense of movement while the respondent explores ways to shelter assets or initiate late-stage rescission applications.

Identifying and Neutralizing Stalling Tactics

In professional labor relations practice, the request for a bank confirmation letter from an individual who has already won a legal case is often interpreted as a delaying tactic. There is no statutory requirement in the LRA or BCEA that makes the payment of a certified award conditional upon the provision of a specific bank letter, provided the payment can be made into a verified account. The respondent’s subsequent failure to pay on the agreed dates after receiving such documentation reinforces the suspicion of mala fides (bad faith).

The legal remedy for such stalling is to proceed immediately with execution rather than continuing to engage in informal negotiations. In the matter of Spar v Mr Loubser, the Labour Court emphasized that employers who treat arbitration awards with "recalcitrance" and "contumacious disrespect" face severe penalties, including significant fines and potential imprisonment for directors. By agreeing to payment dates and then failing to meet them, the respondent has provided the employee with further evidence of willful non-compliance, which is a key requirement for contempt of court proceedings.

Interest as a Statutory Penalty for Delay

One of the most effective tools against intentional delays is the accrual of interest. Under Section 143(2) of the LRA, any arbitration award that orders the payment of a sum of money earns interest from the date of the award. This interest is calculated at the rate prescribed under the Prescribed Rate of Interest Act 55 of 1975.

The impact of this interest is significant over long durations. For a ruling made in 2025 regarding a 2022 debt, the interest calculations should be integrated into the final amount presented to the Sheriff for execution. This ensures that the respondent’s "delaying tactics" carry a direct financial cost, making it progressively more expensive for them to withhold payment.

Execution through the Sheriff of the Court

The transition from a certified award to the recovery of funds is managed by the Sheriff of the Court. Because Section 143(5) of the LRA mandates that monetary awards be treated as orders of the Magistrate’s Court, the execution process follows the rules of the Magistrate’s Court. This is a more accessible and localized process than High Court execution.

The employee must identify the Sheriff with jurisdiction over the respondent’s physical place of business or residence. In the Pretoria/Tshwane Central area, this is a critical step, as several Sheriff offices operate within different magisterial boundaries.

Strategic Contact Directory for Pretoria-Based Enforcement

For an employee seeking to enforce a ruling in the Pretoria region, the following institutional contacts are vital for the certification and execution phases:

Institution	Physical Address	Contact Information
CCMA Tshwane (Pretoria)	Metro Park Building, 351 Francis Baard Street, Pretoria	Tel: 012 317 7800; Fax: 012 392 9702; Email: pta@ccma.org.za
Labour Court (Johannesburg)	Arbour Square Building, 86 Juta Street, Braamfontein	Tel: 011 359 5700; Fax: 011 403 9328; Email: labourcourts@judiciary.org.za
Sheriff Pretoria Central	424 Pretorius Street, Arcadia, Pretoria	Tel: 012 320 3969; Email: officemanager@sheriffpretoriacentral.co.za
Sheriff Tshwane Central	433 Pretorius Street, Pretoria	Tel: 012 386 3302; Docex 213 Pretoria

The process of instructing the Sheriff involves handing over the original certified award and the LRA 7.18 form. The Sheriff will then:

1. Demand Payment: Serve the writ and demand immediate payment of the principal amount plus interest and costs.

2. Attach Movables: If payment is not forthcoming, the Sheriff will identify and "attach" movable property, such as vehicles, office furniture, or machinery.

3. Inventory and Removal: The Sheriff creates an inventory of these items. If the debt remains unpaid after a set period, the Sheriff removes the items to be sold at a public auction.

   
   

The Challenge of "Nulla Bona" and Security for Costs

A significant hurdle in the execution process is the possibility of a nulla bona return. This occurs when the Sheriff visits the premises but finds no attachable assets, or the assets found are insufficient to cover the debt. Respondents who have undergone liquidation or restructuring are often skilled at leasing assets rather than owning them, making attachment difficult.

Furthermore, the Sheriff typically requires the applicant to pay an upfront deposit or provide "security for costs" to cover the expenses of removal and storage of attached goods. For individual employees, this can be a financial barrier. However, the CCMA may provide assistance to employees who earn below the earnings threshold set in the BCEA and cannot afford the costs of the Sheriff.

Contempt of Court and Piercing the Corporate Veil

If the respondent is a company that appears to be operating but claims to have no assets (often after a liquidation/transfer cycle), the employee may pursue contempt of court proceedings in the Labour Court. This is a powerful remedy because it targets the human actors behind the corporate entity.

To succeed in a contempt application, the employee must show that the directors or managers of the respondent are willfully refusing to pay despite having the means to do so, or are actively frustrating the execution process. If the court finds them in contempt, it can order:

• Imprisonment: Usually a suspended sentence of 15 to 30 days, conditional upon payment.

• Hefty Fines: Fines that must be paid by the company or the directors personally.

• Compliance Directives: Specific orders to the directors to effect the payment within a strict timeframe.

Additionally, Section 200B of the LRA can be utilized to establish that "for the purposes of this Act, more than one employer may be held to be jointly and severally liable" for an award if they are found to be part of a scheme to avoid liability. This is particularly relevant when a business "liquidates" in 2020 but continues to operate under a slightly different name with the same directors and equipment.

Alternative Remedies: Section 65 Financial Inquiries

When the Sheriff is unsuccessful, the employee can move the matter to the Magistrate’s Court for a financial inquiry under Section 65A of the Magistrates’ Courts Act. This procedure is highly effective against respondents who claim to have "no money" while still operating.

The Section 65A process involves:

1. Notice to Appear: The respondent (or a director) is summoned to court to be questioned under oath regarding their financial position.

2. Disclosure of Documents: They must produce bank statements, balance sheets, and lists of debtors.

3. Payment Order: If the magistrate finds they have the means, the court can order them to pay the debt in monthly installments.

4. Emoluments Attachment Order: The court can order that the money be deducted directly from the respondent’s bank account or that debts owed to the respondent by third parties be paid to the employee instead (garnishee orders).

   
   

Ensuring Compliance with Prescription Laws

The timeline of this dispute—spanning from a 2020 liquidation to a 2025 ruling—must be carefully monitored to ensure the claim does not "prescribe" or become legally stale. In South African law, debt based on a labor claim generally prescribes after three years.

However, the three-year period is interrupted by the service of any process to claim payment, such as the referral to the Commissioner or the application for the compliance order. Once the 2025 ruling was issued, a new three-year window for execution opened. The employee must ensure that they do not allow another three years to pass without successfully executing the writ or initiating further legal proceedings, as this would extinguish the debt permanently.

Summary of Prescription and Interruption Events

Historical Event	Impact on Prescription	Current Status
2022 Short-payment	Prescription starts running.	Debt is active.
Referral to Commissioner	Prescription is interrupted.	Claim is protected.
2025 Ruling in Favor	A new 3-year prescription cycle begins.	Debt is legally "fresh."
Certification of Award	Further interruption of prescription.	Execution is authorized.

Strategic Recommendations for Immediate Action

The evidence indicates that the respondent is currently in a phase of "passive non-compliance," where they engage in communication to prevent legal escalation but do not actually intend to pay until forced. The fact that they have already missed two agreed-upon payment dates (the 1st of each month) provides the employee with the "cause of action" needed to escalate immediately.

The recommended course of action for the enforcement of the 2025 ruling is as follows:

1. Cease Informal Engagement: The employee should stop providing additional documentation (like repeated bank confirmation letters) to the respondent, as this is being used to justify delays.

2. Verify Certification: Ensure the award is certified via Form 7.18 at the CCMA Tshwane Office.

3. Instruction to Sheriff: Deliver the certified award to the Sheriff for Pretoria Central. Explicitly instruct the Sheriff to proceed with a "Writ of Execution" rather than just a "service of documents".

4. Financial Inquiry: If the Sheriff returns a nulla bona, immediately instruct an attorney to initiate Section 65A proceedings in the Pretoria Magistrate's Court to compel the respondent's directors to disclose their assets under oath.

5. Contempt Application: If the respondent’s non-payment remains blatant and willful, a contempt of court application should be launched in the Labour Court (Braamfontein), seeking a suspended prison sentence for the respondent’s managing director.

The South African labor law framework provides robust mechanisms to ensure that "liquidated" entities cannot evade their obligations through corporate shell games or stalling. By moving from administrative compliance to judicial execution, the employee can leverage the power of the Sheriff and the threat of personal liability to secure the payments that were ruled in their favor in 2025

Disclaimer: The views and analyses expressed on this blog are for informational and educational purposes only. This site serves as a self-guiding diary intended to facilitate my personal understanding of specific subjects and does not serve as an authoritative reference. Information is provided "as is" without any guarantees of completeness or accuracy. Please consult a local, professionally trained individual in the subject matter or you can conduct your own research for any formal inquiries or professional advice. PSA, dont corner an attorney at a Maza or a Braai on a weekend and consult there. Preferably arrange an appointment with the office