Aimed at regulating proceedings in the Commission for Conciliation, Mediation and Arbitration (CCMA), the CCMA Rules serve a vital function. However, in the recent judgment of the Labour Court, the Labour Court declined to uphold the enforcement of the CCMA’s rule regarding objections to the con/arb process. This resulted in a default award against the employer, and the costs, delay and inconvenience of having to bring a review application to the Labour Court.
The case concerned the referral of an unfair dismissal dispute to the CCMA. In accordance with section 191(5)(a) of the Labour Relations Act, 1995 (LRA) the unfair dismissaldispute was enrolled for a con/arb hearing. Three days before the hearing, the employer ‘objected to the immediate commencement of arbitration.’ Despite its objection, the commissioner proceeded with arbitration and issued a default arbitration award against the employer.
The key legal question before the Labour Court was whether a commissioner may immediately proceed with an arbitration involving a dispute referred to in terms of section 191(5)(a)[1] of the LRA, despite an objection by the other party to the dispute. While parties to a dispute are indeed allowed to object to arbitration, CCMA Rule 17(2) stipulates that this objection must be made by ‘written notice to the [CCMA] and the other party, at least seven days prior to the scheduled date.’ The employer failed to comply with this rule and so the commissioner proceeded with arbitration immediately after the conciliation failed. In contrast to the view of the commissioner, the Labour Court held that the employer acquired the right not to have arbitration proceedings commence the minute they objected to such proceedings, and that this right could neither ‘be taken away by the Rules nor be ignored by a commissioner.’ As a result, the Labour Court set aside the default arbitration award made against the employer.
The judgment has major implications. Firstly, the parties to a dispute scheduled for con/arb are entitled to object to arbitration at any time before arbitration proceedings begin, regardless of the time periods stipulated by the CCMA Rules. Secondly, although the decision only deals with time limits in the Rules that are in conflict with the LRA, the judgment may be misinterpreted to create the impressions that the CCMA Rules are no more than guidelines. This may create uncertainty and may undermine the enforcement of the Rules, and the administration of the CCMA, an organisation which is already burdened by a high case load and restricted budget. The judgment is currently the subject of an application for leave to appeal. In order to avoid the challenges associated with a default arbitration award, we recommend that parties to CCMA disputes aim to comply with the time periods in the CCMA Rules.
Valinor Trading 133 CC t/a Kings Castle v LJ De Jager & Others [2023] ZALCJHB 10 (3 February 2023)
The author would like to thank Jessica Blunden (candidate attorney) for co-authoring and Verushka Reddy (Director) for her contribution to this blog.
[1] Section 191(5)(a) relates to the following types of disputes: if the employee has alleged that the reason for dismissal is related to the employee’s conduct or capacity, or the employee has alleged that the reason for the dismissal is that the employer made the continued employment intolerable or the employer provided the employee with substantially less favourable conditions or circumstances at work after a transfer in terms of section 197 or 197A, unless the employee alleges that the contract of employment was terminated for a reason contemplated in section 187 (automatically unfair dismissals)
