Employment law update – Arbitrations

June 1st, 2014


By Talita Laubscher and Monique Jefferson

The court in Chabalala v Metal and Engineering Industries Bargaining Council and Others [2014] 3 BLLR 237 (LC) held that the conduct of the second respondent arbitrator is an example of how an arbitration should not be run.

Chabalala was dismissed for gross misconduct on 1 April 2011 following a disciplinary inquiry into allegations that he had accused Mr Vas, his manager and owner of the company where he was employed, inter alia, of employing foreigners to replace existing workers and of hiring unknown persons to kill the workers. Chabalala contended that his dismissal was unfair and referred a dispute to the Metal and Engineering Industries Bargaining Council (MEIBC). The second respondent, Braam van Wyk, presided over the arbitration and held that Chabalala’s dismissal was substantively and procedurally fair. Chabalala took the matter on review to the Labour Court on the basis that the commissioner had misconducted himself in the conduct of the proceedings to such an extent that he deprived Chabalala of a fair hearing.

With reference to Herholdt v Nedbank Ltd (Congress of South African Trade Unions as amicus curiae) [2013] 11 BLLR 1074 (SCA) the Labour Court, per Snyman AJ, confirmed, first, that a review of an arbitration award is permissible if the defect falls within one of the grounds in s 145(2)(a) of the Labour Relations Act 66 of 1995 (LRA). Snyman AJ further confirmed that the Labour Court has a supervisory function over the Commission for Conciliation, Mediation and Arbitration (CCMA) and bargaining councils and as part of this function, the court should point out flaws for rectification. Considering the facts of the matter, the Labour Court held that commissioner Van Wyk had committed serious misconduct and thus that the award was reviewable. The misconduct was such that it contaminated the entire arbitration and there was a complete absence of fair arbitration proceedings.

In summary, commissioner Van Wyk committed misconduct as follows: At the start of the proceedings, he launched into a monologue of self-glorification that lasted for about four pages of the record in which he indicated why he was better than other commissioners with legal training because he ‘came through the ranks’ and did not ‘inherit’ his position from legal practice. In narrowing the issues in dispute, Van Wyk ascertained that Chabalala sought retrospective reinstatement. While Chabalala was busy cross-examining Vas, Van Wyk abruptly called a halt to the cross-examination and caused Chabalala to be sworn in to give evidence. Before Chabalala could even state his case, Van Wyk lambasted him with hostile and aggressive cross-examination on the issue of reinstatement. He said, for example, that ‘the employer says the relationship of trust … is gone … does [Chabalala] think the employer is going to organise a big party with lots of champagne’. He then put it to Chabalala that reinstatement was inappropriate because there was ‘no love lost’ between Vas and Chabalala. In the end, solely because of the pressure exerted on him by Van Wyk and clearly having been bullied into doing so, Chabalala conceded that he rather wanted to be awarded compensation. Van Wyk proceeded to place the onus squarely on Chabalala to prove that his dismissal was unfair. In this regard, he explained that when he gave training to his managers at South African Airways, he would take his LRA and highlight chap 8 with different colours. He would, for example, highlight ‘unfair’ in red where it came to unfair dismissals, and if Chabalala wanted Van Wyk to award him compensation, then Chabalala would have to convince him that what had happened was unfair. When Chabalala tried to state a case, Van Wyk consistently interrupted him and subjected him to aggressive cross-examination, which included various propositions being put to Chabalala but not allowing Chabalala an opportunity to comment. When Van Wyk completed his cross-examination of Chabalala, he asked if Vas had any questions for him. Vas did not put any version to Chabalala and did not really cross-examine him. Not once was Chabalala given a chance to state a case.

Snyman AJ accepted that s 138(1) of the LRA permits a commissioner to conduct arbitration proceedings in a manner the commissioner deems fit. He held, however, that this does not give an arbitrator a licence actually to become engaged in the proceedings to such an extent that it becomes questionable as to whether the arbitrator is a representative of one of the parties. This section can also not be relied on to justify conduct that in essence deprives one of the parties of a fair hearing, which clearly is what happened in this case. The court accordingly held that Van Wyk acted unfairly, wrongfully and irregularly. It held that Van Wyk seemed to be ‘a law unto himself’ and this conduct severely damaged the credibility and integrity of the arbitration dispute resolution process under the LRA. In the circumstances, the award was reviewed and set aside. The court ordered that the matter be heard de novo before another commissioner, and that a copy of the judgment be forwarded to the persons responsible for case management at the MEIBC.

Fixed-term contracts

In Public Servants Association obo Mbiza v Office of the Presidency and Others [2014] 3 BLLR 275 (LC) Mbiza was employed in the Office of the Presidency as a housekeeping manager in the residence of the Deputy President, Ms Baleka Mbete. When his contract was terminated, he contended at the General Public Service Sectoral Bargaining Council that he had been unfairly dismissed. The employer argued that Mbiza had not been dismissed but that his contract had merely expired. The arbitrator held, however, that he was dismissed and that the dismissal was procedurally unfair but substantively fair because it was for a fair reason, namely incompatibility with Mbete. Mbiza applied for the review of the award and sought to have the finding of substantive fairness reviewed and set aside.

Mbiza was employed on a fixed-term contract that would have expired on 31 July 2009. However, on 8 December 2008 his manager informed him that his contract was terminated due to ‘incompetence’. Two days later she informed him that the reason for the termination was not ‘incompetence’ but ‘incompatibility’. The termination of his employment was confirmed in writing on 18 December and he was requested to leave the office with immediate effect, although he would be paid until 31 July 2009. The arbitrator found that the dismissal was procedurally unfair but substantively fair. Mbiza argued that this finding was unreasonable and thus reviewable.

The court, per Steenkamp J, noted that the arbitrator applied the correct test in cases of alleged incompatibility, namely that this relates to the employee’s inability or failure to maintain cordial and harmonious relationships with his peers. For a dismissal based on incompatibility to be procedurally fair, the employer must, prior to dismissal, make some sensible, practical and genuine efforts to effect an improvement in the interpersonal relationships. As regards substantive fairness, it must be proven that there is an absence of cordial and harmonious working relationships. In this regard, the arbitrator held that there ‘could have been uncomfortability’ [sic] or personality differences. However, Steenkamp J pointed out that there was no evidentiary basis for this finding. This rendered the finding unreasonable and the finding of substantive fairness accordingly reviewed and set aside.

As regards the appropriate remedy, the court noted that the employee did not wish to be reinstated. With reference to ss 194 and 195 of the LRA, the court held that compensation is in addition to any amount to which the employee is entitled in terms of his employment contract. The fact, therefore, that Mbiza was paid for his entire contract term did not disentitle him to compensation in respect of the unfair dismissal. The court accordingly awarded Mbiza three months’ compensation in respect of his unfair dismissal. In doing so, the court took into account that the employee’s dignity and the freedom to engage in productive work was impaired by the unfair dismissal, as well as the fact that he was paid until 31 July 2009 although he stopped working in January 2009.

Talita Laubscher BIur LLB (UFS) LLM (Emory University USA) is an attorney at Bowman Gilfillan in Johannesburg.

Monique Jefferson BA (Wits) LLB (Rhodes) is an attorney at Bowman Gilfillan in Johannesburg.

This article was first published in De Rebus in 2014 (June) DR 42.



De Rebus