Premier Foods (Pty) Ltd (Nelspruit) v CCMA and Others (LC) (unreported case no JR2103/12, 8-11-2016) (Snyman AJ)

By Yashin Bridgemohan

The determination when dealing with review grounds as provided in s 145(2) of the Labour Relations Act 66 of 1995 (LRA) was summarised in Baur Research CC v Commission for Conciliation, Mediation and Arbitration and Others (2014) 35 ILJ 1528 (LC) at para 18  as follows:

‘What this means is that where it comes to an arbitrator acting ultra vires his or her powers or committing misconduct that would deprive a party of a fair hearing, the issue of a reasonable outcome is simply not relevant. In such instances, the reviewable defect is found in the actual existence of the statutory prescribed review ground itself and if it exists, the award cannot be sustained, no matter what the outcome may or may not have been. Examples of this are where the arbitrator should have afforded legal representation but did not or where the arbitrator conducted himself or herself during the course of the arbitration in such a manner so as to constitute bias or prevent a party from properly stating its case or depriving a party of a fair hearing. The reason for reasonable outcome not being an issue is that these kinds of defects deprive a party of procedural fairness, which is something different from the concept of process related irregularity.’

Further in the case of Naraindath v Commission for Conciliation, Mediation and Arbitration and Others (2000) 21 ILJ 1151 (LC) at para 27 the court held:

‘A failure to conduct arbitration proceedings in a fair manner, where that has the effect that one of the parties does not receive a fair hearing of their case, will almost inevitably mean either that the commissioner has committed misconduct in relation to his or her duties as an arbitrator or that the commissioner has committed a gross irregularity in the conduct of the arbitration proceedings.’

Facts

The third respondent had been dismissed by the applicant on 2 May 2012 for misconduct. The third respondent then referred an unfair dismissal dispute to the Commission of Conciliation, Mediation and Arbitration (CCMA).

The matter was set down for con-arb on 12 June 2012 and came before the second respondent. The second respondent, after hearing each of the parties’ respective opening submissions, proceeded with conciliation to try and settle the matter, which was to no avail.

When proceedings resumed, on record, the applicant attempted to move an application for the recusal of the second respondent. This recusal application was based on statements the second respondent had made to the applicant’s representative in the course of the settlement discussions in conciliation about the evidence in the case and the applicant’s prospects of success. The second respondent, however, refused to hear the application and proceeded with the arbitration.

The applicant not satisfied with the second respondent’s conduct then approached the Labour Court (LC) to review and set aside the arbitration award.

LC’s judgment

Snyman AJ noted that it was entirely inappropriate for the second respondent to have derailed the recusal application in the way in which he did. He failed to allow the applicant to properly argue and motivate the application. He had provided, without hearing the applicant’s argument that he was going to interrupt the applicant and that there were no grounds for his recusal.

Snyman AJ noted further that as the second respondent was confronted with a recusal application, he had to decide it in line with the relevant principles applicable to said applications.

Snyman AJ provided that the second respondent became involved in the conciliation part of the process in excess of what would be considered to be proper to still allow him to conduct the arbitration, without a perception of impartiality. But more importantly, the second respondent gave advice to the applicant and told the applicant what he considered the applicant’s prospects were, being that the applicant would lose. This was not appropriate, entirely irregular behaviour, and constituted misconduct.

Snyman AJ provided further that the second respondent had an opportunity to remedy the matter when the applicant raised his concern by bringing a recusal application. From a perspective of conducting himself ethically and responsibly, the second respondent should have recused himself, once this concern was raised. But instead, he placed the requirement of expeditious dispute resolution above all else, to the extent of even not allowing the applicant to properly raise the concern. This constituted misconduct by the second respondent in conducting the arbitration proceedings, and vitiated the entire proceedings rendering it a nullity.

The court concluded that the events that took place during the conciliation process of the con-arb proceedings and specifically the way in which the second respondent had become involved in the conciliation and the views he expressed, had deprived the applicant of a lawful, reasonable and procedurally fair hearing in the arbitration that followed. The matter was aggravated by the way in which the second respondent arbitrarily disposed of the issues raised by the applicant in the form of a recusal application, and then recorded in his award that the arbitration proceeded by agreement, which was incorrect. This constituted an arbitrators misconduct as contemplated by s 145(2)(a)(i) of the LRA.

The court accordingly reviewed and set aside the arbitration award made by the second respondent. The court further ordered that the dispute be remitted back to the CCMA for a de novo arbitration hearing, before an arbitrator other than the second respondent.

Conclusion

This judgment is important as it highlights that the following grounds constitutes misconduct on the part of arbitrators –

• discussing evidence and advising parties on their meek prospects of success during conciliation;
• failing to properly hear an application for recusal; and
• making an incorrect note on an arbitration award that proceedings continued by agreement after refusing to properly hear an application for recusal.

The above grounds may be used by an aggrieved party in support of an application made to the LC to have the arbitration award reviewed and set aside.

Yashin Bridgemohan LLB (UKZN) PG DIP Labour Law (NWU) is an attorney at Yashin Bridgemohan Attorney in Pietermaritzburg.

This article was first published in De Rebus in 2017 (April) DR 38.