In Gerber v Stanlib Asset Management (Pty) Ltd [2022] 3 BLLR 251 (LAC) the employee sought to appeal the decision of the Labour Court (LC) in terms of which the LC refused to determine an allegedly automatically unfair dismissal claim on the basis that the employee’s employment contract contained a private arbitration clause.
In this case, the employee was dismissed and referred an alleged unfair dismissal claim to the LC. The employer raised a point in limine that the LC did not have the jurisdiction to determine the dispute as the employee was bound by a private arbitration clause in the employment contract. The employee argued that this was not the case as the private arbitration clause was referred to in the grievance and disciplinary procedure and not in his employment contract. The employer argued that the grievance and disciplinary procedure was incorporated in the employment contract. This point in limine was upheld by the LC and the matter was referred to arbitration.
On appeal, the Labour Appeal Court (LAC) had to determine whether the LC had the jurisdiction to determine the unfair dismissal claim and, if so, whether the matter should have been stayed or referred to private arbitration. According to the employee the private arbitration clause had not been included in the disciplinary procedure at the time that he concluded the employment contract. He alleged that it was contained in a ‘secret’ document of which he had no knowledge. The court concluded that the employment contract referred to and incorporated the Employee Relations Handbook, as well as the disciplinary procedure and that the Employee Relations Handbook also made reference to mandatory private arbitration. It was held that the employee should have considered these documents prior to signing the employment contract. The employee also argued that the disciplinary procedure and the Employee Relations Handbook did not apply to him after his employment relationship ended but this argument was found to be without merit as the dispute was related to the disciplinary process that was followed with the employee.
It was accordingly held that the LC had correctly found that the disciplinary procedure and Employee Relations Handbook were incorporated in the employment contract and this agreement was binding on the employee. The appeal was accordingly dismissed.
Regarding whether it was appropriate for the LC to exercise its discretion and refer the matter to private arbitration, the LAC considered that the judge of the LC had found that the LC should not determine the matter ‘sitting as an arbitrator’ as the employee had not made out a case that justified making such a determination. It was held that the LAC could not interfere with this decision as it could only interfere if the discretion exercised was influenced by incorrect principles or a misdirection on the facts, or if the LC judge had reached a decision, which could not reasonably have been made by a court properly directing itself to all the relevant facts and principles. Reference was also made to the fact that it is trite that a party resisting a stay of court proceedings based on a private arbitration clause has the onus to demonstrate to the court that the stay should be refused based on exceptional circumstances. The LAC held that a private arbitration agreement will be upheld unless there are compelling reasons and therefore the LC had correctly found that there were no exceptional circumstances to justify continuing with the matter.
Monique Jefferson BA (Wits) LLB (Rhodes) is a legal practitioner at DLA Piper in Johannesburg.
This article was first published in De Rebus in 2022 (May) DR 37.
