Section 191(5A)(c) of the Labour Relations Act 66 of 1995 (LRA) states that unless a party has objected to a con-arb process, arbitration must commence immediately after conciliation.
Rule 17(2) of the Rules for the Conduct of Proceedings before the Commission for Conciliation, Mediation and Arbitration (the Rules) states that a party who wishes to object to the con-arb process, must file an objection seven days prior to the matter being set down for con-arb.
The question before the court was whether an objection filed within seven days of the con-arb, and thus in breach of r 17(2); can nevertheless be a lawful objection contemplated in s 191(5A)(c).
The applicant had a relationship with the third respondent (De Jager). On the applicant’s version, De Jager was an independent contractor, while De Jager claimed to be the applicant’s employee.
At the end of this relationship, De Jager claimed he was dismissed and referred an unfair dismissal dispute to the Commission for Conciliation, Mediation and Arbitration (CCMA). Con-arb was set down for 10 September 2018. On 7 September 2018, three days before the con-arb process, the applicant filed an objection to arbitration commencing immediately after conciliation. On 10 September 2018, the second respondent (the arbitrator) noted the objection to arbitration but found that because it was filed within seven days of the con-arb process, it was not valid.
The arbitrator continued to arbitration and heard De Jager’s claim in the absence of the applicant and, thereafter, delivered a default award.
The applicant’s application to rescind the default award was dismissed (first rescission ruling). The applicant made a second application to rescind the first rescission ruling, which suffered the same fate (second rescission ruling).
The applicant approached the Labour Court to set aside both rescission rulings.
As stated, the question before the court was whether a commissioner could ignore the objection filed on the basis that it was filed in breach of r 17(2).
Having examined s 191(5A)(c), the court interpreted this section to mean that once a party objects to the con-arb process, then arbitration cannot commence immediately after conciliation. The section itself was silent on any time frame in which such an objection must be filed.
Importantly, any section must be interpreted within the prism of the constitution. Section 34 of the Constitution gives everyone, including the applicant, a right to have their dispute resolved by application of the law in a fair manner.
The court reiterated the point that the Rules cannot trump legislation. The Rules are there for the convenience of the court and not the other way round. Thus, a commissioner cannot be a ‘captive of the time frames prescribed in the Rules’ and in so doing, act contrary to what the LRA states.
The court held:
‘Rules deal with form and the Act deals with substance. Substantively, the LRA does not allow arbitration to proceed where another party had objected. Rule 17(2) provides that a party that intends to object to a dispute being dealt with in terms of section 191(5A), must deliver a written notice to the Commission and the other party, at least seven days prior to the scheduled date in terms of sub-rule (1). Read within the context of the Rules and the LRA, it does not follow that a notice not given at least seven days renders the objection defective to a point of the objection being ignored. Any other reading rendering the objection ineffective will be in conflict with the clear provisions of the section in particular the phrase “in respect of which no party has objected”.
…
Therefore, in my considered view, an objection equals no commencement of arbitration immediately. A party who objects acquires the right not to have the arbitration proceedings to commence. Such a right cannot be taken away by the Rules nor be ignored by a commissioner.’
The court went further to say that the Rules do not state that an objection filed within seven days of the con-arb is invalid, as what the arbitrator found.
When the arbitrator continued to hear the matter in default, he did not do so in terms of s 138(5) of the LRA, which gives a commissioner the discretion to continue the arbitration when the party who did not refer the matter, ‘failed to appear’.
The court found that the applicant did not fail to appear at the arbitration, but rather the arbitration, in light of the objection, ought not to have commenced. Put differently, if the arbitration was unlawful, there cannot be talk about a failure to appear at the arbitration.
The result being that the arbitrator was not empowered by the LRA nor the Rules to continue to arbitration after the certificate was issued.
The court reaffirmed the view that when a commissioner exercises a statutory function, which a party feels aggrieved in respect of; then the appropriate remedy is to review the conduct of the commissioner in terms of s 158(1)(g) of the LRA. The applicant chose to rescind the default judgment.
Addressing the second rescission ruling, the court quickly disposed of the ruling on grounds that the arbitrator was functus officio in ruling on the second rescission application once he gave his ruling on the first application.
Regarding the first rescission application, on the notion that the arbitration was unlawful, it stood to reason that the arbitrator’s rescission ruling was invalid in law and hence reviewable.
The court set aside both rulings and replaced them with a finding that the default award is rescinded.
Moksha Naidoo BA (Wits) LLB (UKZN) is a legal practitioner holding chambers at the Johannesburg Bar (Sandton), as well as the KwaZulu-Natal Bar (Durban).
This article was first published in De Rebus in 2023 (April) DR 35.
