A recent and significant Labour Court ruling has provided crucial clarity for employers, confirming that their right to discipline an employee for misconduct does not expire or "prescribe" over time.
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FreepikThe decision, handed down on 16 April 2025, in the case of Public Investment Corporation v More and others, establishes that the Prescription Act of 1969 cannot be used by employees as a shield to escape accountability for past actions.
Delayed dismissal
The case brought a fascinating legal question to the forefront. It involved an employee who was dismissed in 2020 following disciplinary charges. The charges related to misconduct that had occurred five years earlier, in 2015, when the employee recommended that the company’s CEO enter into a credit facility with terms that differed from those approved by the investment panel. This long delay between the incident and the disciplinary action became the central point of contention.
During her disciplinary hearing, the employee raised a novel defence. She argued that her alleged misconduct was essentially a breach of her employment contract — a failure to render her services properly. In her view, this failure constituted a "debt" as defined by the Prescription Act. Under the Act, most debts prescribe, or are extinguished, if not claimed within three years. She argued that since the company had waited five years, its right to act on this "debt" had expired.
While this argument was dismissed by the chairperson of the internal disciplinary enquiry, it found surprising success before a commissioner at the Commission for Conciliation, Mediation and Arbitration (CCMA) during the subsequent unfair dismissal dispute.
The commissioner agreed with the employee, ruling her dismissal was unfair because the right to discipline had prescribed. This created significant uncertainty for employers and prompted the company to take the CCMA's ruling to the Labour Court for review.
Labour Court ruling
The Labour Court decisively overturned the CCMA's decision. It clarified that the primary purpose of the Prescription Act is to ensure that creditors pursue claims through formal legal proceedings in a timely manner. The court’s reasoning was twofold:
First, the Act’s mechanisms simply do not fit the context of an internal disciplinary process. For instance, Section 15 of the Act, which deals with interrupting the running of prescription, requires the service of a formal "process" like a court summons or notice of motion. A disciplinary charge sheet issued by an employer is not a legal document in this sense. Similarly, Section 17 requires that prescription be raised in formal court filings, which do not exist in an internal hearing.
Second, and more fundamentally, the court found that disciplinary action is not a claim for a "debt". Employee discipline is rooted in the principles of fairness embedded in labour law, not in the law of contract. An employer's action to address misconduct is about maintaining standards and fairness in the workplace, not collecting a debt.
The crucial takeaway for employers
While this ruling confirms employers are not bound by the Prescription Act’s timelines for internal discipline, it is not a free pass to delay action indefinitely. The principles of labour law still demand that discipline be implemented as soon as reasonably possible after misconduct is discovered. A significant and unexplained delay can still harm an employer’s case, potentially making a dismissal procedurally or substantively unfair on other grounds.
Delays can lead to arguments that the employer has condoned the misconduct, and can prejudice the employee's ability to recall events and present a fair defence. Therefore, swift, decisive, and fair action remains the gold standard.
