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[2010] ZALCJHB 50
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Bombardier Transportation (Pty) Ltd v Mtiya NO and Others (JR644/09) [2010] ZALCJHB 50 (11 March 2010)
THE
LABOUR COURT OF SOUTH AFRICA
(HELD
AT JOHANNESBURG)
CASE
NO. JR 644/09
In
the matter between:
BOMBARDIER
TRANSPORTATION
(PROPRIETARY)
LIMITED Applicant
and
LUNGILE
MTIYA N.O
1
ST
Respondent
THE
COMMISSION FOR CONCILIATION,
MEDIATION
AND
ARBITRATION 2
ND
Respondent
DERICK
JOHANNES
3
rd
Respondent
BOMBARDIER
TRANSPORTATION (CHINA)
LIMITED
4
TH
Respondent
JUDGMENT
VAN
NIEKERK J
Introduction
[1]
This is an application brought in terms of s 158(1) (g) of the Labour
Relations Act in which the applicant seeks to have a certificate
of
outcome issued by the first respondent (‘the commissioner’)
reviewed and set aside. The applicant claims that when
she issued the
certificate, the commissioner exceeded her powers (because there was
a jurisdictional challenge that had not been
resolved), that she
ignored relevant evidence indicating that there was a jurisdictional
issue to be decided, and that she committed
misconduct in the form of
a material error of law. The applicant further contends that the
Court should decide the jurisdictional
issue by substituting the
commissioner’s ruling with a decision to the effect that the
CCMA lacks jurisdiction to entertain
the third respondent’s
referral of his unfair dismissal dispute.
The
facts
[2]
The factual background to the application is briefly the following.
The third respondent (‘Johannes’) was employed
by
Bombardier China as a commercial director. He was engaged in terms of
a fixed term contract, initially to expire in June 2008.
Johannes was
assigned to South Africa to work on the Gautrain Project, and that it
was agreed that his remuneration would be paid
through Bombardier
Canada’s payroll to Johannes’s bank account in Hong Kong,
the city of which Johannes is a resident.
The contract contains a
choice of law clause in terms of which its terms are to be
interpreted and enforced in accordance with
the laws of Hong Kong.
Various discussions took place between the applicant and Johannes
concerning an extension of the contract.
On 18 September 2008
Bombardier China advised Johannes that his contract would be extended
for a further 6 months only, a period
that included agreed notice.
The applicant claims that Johannes subsequently left its employ
on 31 October 2008 in circumstances
where he (Johannes) terminated
the contact.
[3]
On 10 November 2008 Johannes referred an unfair dismissal dispute to
the CCMA. On 2 February 2009, the applicant filed an application
in
terms of Rule 14 of the CCMA rules setting out a number of grounds on
which it contended that the CCMA lacked jurisdiction to
entertain the
dispute. These included a challenge to the CCMA’s territorial
jurisdiction (on the basis that the law of Hong
Kong applied) and a
denial that the applicant had dismissed Johannes.
[4]
At a hearing convened on 13 February 2009, it was agreed that
Johannes would file an answering affidavit and that the matter
would
be set down for argument on 14 April 2009. On 13 February 2009, the
commissioner issued a certificate of outcome recording
that the
dispute remained unresolved. An explanatory note, dated 16
February 2009, was also sent to the parties. The note
reads as
follows:
“
The above case
was scheduled for a conciliation of the 13
th
February 2009 before Commissioner Lungile Mtya.
The scheduled
conciliation could not commence because the employer representative,
Fritz Malan, raised a jurisdictional point and
also requested a
Senior Commissioner to deal with the matter.
The commissioner
recorded that the parties agreed to re-schedule on the 14th April
2008
(sic).
It would seem that
parties did not take cognizance of the provisions of section 135(2)
of the Labour Relations Act (LRA). This matter
was initially filed
with the CCMA in November 2008 and the provisions of Section 135(5)
must apply. The commissioner will thus
issue a certificate.
The applicant may
apply for arbitration and the employer can then raise the
jurisdictional issue at arbitration…”
[5]
The applicant filed this application in response to the certificate.
The applicant relies primarily on a judgment by this Court
in
EOH
Abantu (Pty) Ltd v CCMA & another
(2008) 29
ILJ
2588
(LC) to contend that a commissioner was bound to decide any
jurisdictional point raised in conciliation proceedings before
issuing a certificate of outcome, and that her failure to do so
constitutes a reviewable irregularity.
The
relevant legal principles
[6]
Two different approaches to the status of certificates of outcome
issued in the face of jurisdictional challenges have emerged.
The
first is that adopted by this Court (per Basson J) in
EOH
Abantu (Pty) Ltd v Commission for Conciliation, Mediation and
Arbitration & another
(
supra)
and
Avgold –
Target Divisions v CCMA
[2010] 2 BLLR 159
(LC). In terms of this
approach, the CCMA’s jurisdiction to conciliate is dependent on
a number of jurisdictional facts having
been satisfied. While the
CCMA may not rule on its own jurisdiction, it must assess whether it
has jurisdiction and must do so
before conciliation commences. If a
conciliating commissioner issues a certificate of outcome without the
jurisdictional conditions
having been met, a commissioner later
appointed to arbitrate the dispute has no power to dismiss the matter
on the basis of a lack
of jurisdiction, even if the arbitrating
commissioner thinks that the conciliating commissioner’s ruling
was wrong. Where
a conciliating commissioner declines to make a
decision on jurisdiction but has nonetheless issued a certificate of
outcome, the
arbitrating commissioner is bound to arbitrate the
dispute unless the certificate is reviewed and set aside. In short, a
certificate
of outcome confers jurisdiction on the CCMA to adjudicate
a dispute referred to it, and remains valid and binding on the
parties
until such time as it is reviewed and set aside.
[7]
This approach draws much of its inspiration from
Fidelity Guards
Holdings (Pty) Ltd v Epstein NO & others
(2000) 21 ILJ 2382
(LAC), a case in which the Labour Appeal Court held that once a
certificate of outcome is issued by a conciliating
commissioner, an
arbitrating commissioner has jurisdiction to determine a dispute
until such time as the certificate is reviewed
and set aside. That
case concerned a dispute that had been referred to the CCMA outside
of the statutory time limits. The employer
was clearly aware of the
point, but remained silent until the stage of an application to
review the arbitration award in the employee’s
favour. In the
review proceedings, the employer contended that in the absence of a
timeous referral, the CCMA did not have the
necessary jurisdiction to
make the arbitration award. The Labour Appeal Court rejected this
submission and as I have indicated,
held that once a certificate of
outcome has been issued stating that the dispute remains unresolved,
the CCMA has the jurisdiction
to arbitrate the dispute.
[8]
The first approach also holds that is peremptory for a conciliating
commissioner to deal with a jurisdictional issue if it appears
during
the conciliation phase that a jurisdictional issue has not been
determined. Support for this view is found in the provisions
of Rule
14.
[1]
On this basis, in
EOH
Abantu,
the Court concluded: “
In
other words, where a party raises a jurisdictional point during
conciliation or where it appears that there exists a jurisdictional
reservation, such point must be determined by the conciliation
commissioner. Where the conciliating commissioner fails to do so,
such a refusal will constitute a reviewable irregularity.”
[9]
To the extent that this approach is based on the
Fidelity Guards
judgment, it is not clear to me that the judgment serves as authority
for the assertion that a certificate of outcome affords the
CCMA
jurisdiction to arbitrate an unfair dismissal dispute. In truth,
Fidelity Guards
is concerned only with the proposition that a
failure to review an administrative act timeously may result in that
act acquiring
the force of law (in the sense that it will not be
susceptible to review) even though the act is invalid and unlawful.
[10]
The alternative approach to the status of certificates of outcome
issued in the face of a challenge to the CCMA’s jurisdiction
is that set out in
EOH Abantu (Pty) Ltd v CCMA & others
[2010] 2 BLLR 172
(LC). In that case, the Court (per Cele J) held
that Rule 14 means no more than that a conciliating commissioner
should determine
whether or not the referral alleges that the
respondent is an employer and that the referring party is an employee
who has been
dismissed (at 184G). If no such allegation is made, the
commissioner should issue an ‘advisory jurisdictional ruling’
to the effect that the CCMA has no jurisdiction to conciliate the
dispute. The referring party may then refer the dispute to
arbitration,
when the arbitrating commissioner will be able to
determine the jurisdictional issue, assisted by evidence. If the
necessary averments
are properly made in the referral form (i.e. it
is evident from the referral that it was made by an employee who was
employed by
the respondent employer) but the respondent later
counters them and challenges the CCMA’s jurisdiction, the
conciliating
commissioner must find that there is a dispute of fact,
a dispute which must be resolved through the leading of evidence. In
these
circumstances, the commissioner must issue a certificate to the
effect that the dispute could not be resolved through conciliation.
In either instance, it would seem, the conciliating commissioner
makes no ruling on the jurisdictional challenge, but defers that
determination to the arbitration phase of the statutory dispute
resolution process.
[11]
There are at least two difficulties with this approach. First, not
all jurisdictional challenges involve only disputes of fact
–
one can imagine many examples where the parties would agree on the
facts but differ on the legal principles to be applied.
Secondly, and
more fundamentally, it seems to me that it is not always appropriate
that the mere existence of a jurisdictional
challenge requires a
conciliating commissioner always to defer the challenge to the
arbitration phase. In my view, there is a category
of jurisdictional
dispute that a conciliating commissioner might easily and
appropriately determine. I refer to these below.
The
third way
[12]
There is a third approach to these issues that may address some of
the difficulties identified above, and which may have the
additional
benefit of a greater degree of flexibility in the management of the
conciliation process, thus promoting the statutory
goal of
expeditious and efficient dispute resolution.
[13]
The first step in this approach is to recognise that many
“jurisdictional issues” raised by parties in conciliation
proceedings are not jurisdictional questions in the true sense. For
example, whether a person is an independent contractor or an
‘employee’ as defined in s 213 of the LRA is more
properly a question that falls within the power of the CCMA to
determine
in the course of the arbitration proceedings (i.e. the
adjudication stage of the matter) in relation to a dispute before it.
It
is not a question that must necessarily be determined prior to
conciliation taking place, nor is it a jurisdictional question
contemplated
by Rule 14 of the CCMA’s rules. A challenge to the
CCMA’s jurisdiction on the basis that there was no dismissal
falls
into the same category. The only true jurisdictional questions
that are likely to arise at the conciliation phase are whether the
referring party referred the dispute within the time limit prescribed
by s 191(1) (b), whether the parties fall within the registered
scope
of a bargaining council that has jurisdiction over the parties to the
dispute to the exclusion of the CCMA, and perhaps whether
the dispute
concerns an employment-related matter at all.
[2]
The distinction to be drawn is one between facts that the legislature
has decided must necessarily exist for a tribunal to have
the power
to act (and without which the tribunal has no such power) and facts
that the legislature has decided must be shown to
exist by a party to
proceedings before the tribunal, the existence of which may be
determined by the tribunal in the course of
exercising its statutory
powers.
[3]
The power given to
the CCMA to determine the fairness of a dismissal includes the power
to determine whether or not an applicant
was an employee, and whether
she was dismissed. These questions ordinarily fall to be determined
in the course of the CCMA’s
adjudication functions. It follows
that a conciliating commissioner is under no obligation to determine
them at the conciliation
phase.
[13]
In relation to the status of a certificate of outcome, in
Goldfields
Mining South Africa (Kloof Mine) v National Union of Mineworkers &
others
[2009] 12 BLLR 1214
(LC), a case that dealt with a
challenge to the reason for dismissal proffered by a referring party
in an unfair dismissal claim,
I said the following:
“
Two broad
approaches appear to have emerged. The first is to regard the matter
as one concerning jurisdiction, and to require a
conciliating
commissioner to determine the dispute about the reason for dismissal
at the conciliation stage. On this approach,
the certificate of
outcome (at least in so far as it categorises a dispute and indicates
the forum to which it should be referred)
represents a jurisdictional
ruling. The second approach is to attach no jurisdictional
significance to the certificate of outcome,
and to regard the
certificate as no more than a record that on a particular date, a
dispute referred to the CCMA in particular
terms remained unresolved.
On this approach, while a conciliating commissioner will normally
indicate the nature of the dispute
in the certificate of outcome, the
categorisation or description of the dispute has no bearing on the
future conduct of the proceedings.
In particular, the forum for any
subsequent proceedings initiated by a referring party is determined
by what the employee alleges
the dispute to be, and irrespective of
the terms in which the certificate was completed.
[12]
In my view, for the reasons recorded below, the LRA clearly adopts
the latter approach. In other
words, a certificate of outcome has no
legal significance beyond a statement that the dispute referred to
conciliation has been
conciliated and was resolved or remained
unresolved, as the case may be. In so far as the pro forma
certificate makes provision
for a commissioner to categorise the
dispute and to indicate the means by which or the forum in which it
is ultimately to be resolved,
these are not functions contemplated by
the Act, and they have no legal significance.
[13]
Section 135 of the LRA regulates the resolution of disputes through
conciliation. In broad terms,
the section requires a commissioner to
be appointed to attempt to resolve a dispute referred to the CCMA
within a period of 30
days from the date on which the referral was
received. Section 135 (5) provides:
“
When conciliation
has failed, or at the end of the 30-day period or any further period
agreed between the parties-
(a)
the commissioner must issue
a certificate
stating whether or not
the dispute has been resolved
; (emphasis added)
(b)
the Commissioner must serve
a copy of that certificate on each party
to the dispute or person who represented a party in the conciliation
proceedings; and
(c)
the commissioner must file
the original of that certificate with the
Commission.”
The subsection is
curiously drafted. The preamble anticipates the failure of the
conciliation process and the lapse of the 30-day
(or agreed further
period), but not the successful resolution of the referred dispute.
It seems to me that two scenarios are contemplated.
The first is that
a conciliation meeting is convened within the 30-day period and that
the commissioner’s intervention fails
to resolve the dispute.
In this instance, the commissioner must issue a certificate stating
that the dispute remains unresolved.
The second scenario contemplates
the expiry of the 30-day period (or further agreed period) with no
conciliation meeting having
been convened; alternatively, the expiry
of the 30-day period or any agreed further period. At that point, a
conciliation meeting
may have been convened (or not), and the dispute
would have been resolved (or not) through conciliation or by any
other means.
In the first instance, the obligation to issue a
certificate is triggered by an event (the failure of a conciliation
convened within
the 30-day period); in the second instance, the
obligation is triggered by the effluxion of time (the expiry of the
30-day or agreed
further period).
[14]
Section 135 (5), to the extent that it considers the issuing of a
certificate to be mandatory,
sits uncomfortably with those provisions
of the Act that regulate the statutory dispute resolution process
beyond the conciliation
stage. In the case of disputes about unfair
dismissals,
[4]
section 191 (5) provides:
“
If a council or a
commissioner has certified that the dispute referred remains
unresolved,
or if 30 days have expired since the council or the
Commissioner received the referral and the dispute remains
unresolved
-
(a) the council or the
Commission must arbitrate the dispute at the request of the employee
…
This wording clearly
contemplates that if 30 days have elapsed from the date on which the
CCMA received the referral of the dispute,
the dispute may be
referred to arbitration or to this court for adjudication without a
certificate of outcome,. Or, as Freund AJ
put it in Seeff Residential
Properties v Mbhele NO & others (2006) 27 ILJ 1940 (LC), “…
even if a certificate
of outcome has not been issued, arbitration
remains mandatory if 30 days have expired since the council or the
commission received
the referral and if the employee requires this.”
(at 1946A). In this sense, the legal effect of a certificate of
outcome
is therefore minimal, if there is any effect at all. It is a
misconception to suggest therefore, as the applicant does in these
proceedings, that a party is entitled to secure, whether by way of an
application to vary or an application for review, that a
certificate
is cast in particular terms as to the nature of the dispute or the
ultimate destination of the dispute in the statutory
dispute
resolution scheme.”
[14]
In other words, a certificate of outcome is no more than a document
issued by a commissioner stating that on a particular date,
a dispute
referred to the CCMA for conciliation remained unresolved. It does
not confer jurisdiction on the CCMA to do anything
that the CCMA is
not empowered to do, nor does it preclude the CCMA from exercising
any of its statutory powers. In short, a certificate
of outcome has
nothing to do with jurisdiction. If a party wishes to challenge the
CCMA’s jurisdiction to deal with an unfair
dismissal dispute,
it may do so, whether or not a certificate of outcome has been
issued. Jurisdiction is not granted or afforded
by a CCMA
commissioner issuing a certificate of outcome. Jurisdiction either
exists as a fact or it does not.
[15]
On this approach, rule 14 does no more than require a conciliating
commissioner to give proper consideration to any jurisdictional
points raised, including an assessment of whether it is a ‘true’
jurisdictional point and if so, whether it is reasonably
capable of
being disposed of prior to conciliation, or properly left to the
arbitration stage. The proper response of a commissioner
to
jurisdictional challenges can therefore be summarised as follows:
1. When
a respondent issues a jurisdictional challenge to a properly
completed referral form, a conciliating commissioner
may elect to
determine the jurisdictional question or to defer it. In making that
election, the commissioner will generally regard
a challenge to the
effect that the dismissed person was not an ‘employee’ as
defined or that she was never dismissed
as matters that are not truly
jurisdictional issues, and defer the challenge to the arbitration
phase. In respect of other challenges,
the commissioner ought to be
guided by the nature of the challenge, the extent to which matters
are intimately bound up with the
substantive merits of the dispute,
the determination of difficult questions of mixed law and fact, and
the need for evidence to
resolve them.
2.
If a
jurisdictional challenge is heard and upheld prior to the
commencement of conciliation proceedings, the commissioner’s
ruling puts an end to the dispute. It is not necessary in these
circumstances for the commissioner to issue a certificate of outcome
(since the dispute was never capable of being resolved by the CCMA)
and the ruling binds the CCMA and all parties to the dispute.
[5]
This jurisdictional ruling stands unless and until it is reviewed and
set aside by this Court.
3. If
within the 30-day period assigned for conciliation the conciliating
commissioner elects not to determine
any jurisdictional challenge,
the commissioner must issue a certificate reflecting that the dispute
remains unresolved. The commissioner
issues the certificate in terms
of s 135(5) because conciliation has failed, not because the
jurisdictional challenge has been
deferred.
4. If
30 days have elapsed since the referral was received, the
commissioner is bound to issue a certificate stating
that the dispute
remains unresolved, despite the existence or otherwise of any
jurisdictional challenges. The commissioner issues
the certificate
because she is required to do so by s 135 (5).
5. Any
certificate of outcome issued by a commissioner has no legal
significance other than to certify that on
the date it was issued, a
dispute referred to the CCMA for conciliation remained unresolved.
The certificate has no bearing on
any jurisdictional issue raised by
any party, and is not relevant in any process in which a
jurisdictional question is determined.
6. In
the absence of any relevant and prior jurisdictional ruling made by a
conciliating commissioner, any party
to a dispute referred to
arbitration may raise any challenge to the CCMA’s jurisdiction
at that stage, and the challenge
must be dealt with by the
arbitrating commissioner in terms of s 138(1).
The
merits of the review application
[16]
Of course, the issue in the present matter is rather narrower, in the
sense that it relates to the appropriate time at which
a party to a
dispute may raise a challenge to jurisdiction. The crisp issue before
the Court warrants restating, and can be expressed
as follows –
is it a reviewable irregularity for a conciliating commissioner to
defer a challenge to the CCMA’s jurisdiction
to the arbitration
phase of the statutory dispute settlement process?
[17]
It follows from the approach articulated above that the answer to
this question must almost always be in the negative. The
approach
assumes that while the limited category of true jurisdictional
questions lend themselves to determination at the conciliation
phase
and ought to be dealt with at that point, this cannot be an
inflexible rule – the conciliating commissioner must be
given a
discretion in appropriate circumstances to defer a decision to the
arbitration phase. The present case is a good example.
While it may
be suggested that the question of territorial jurisdiction is not
dissimilar to one that would be raised in respect
of the jurisdiction
of a bargaining council, a moment’s reflection will reveal that
the private international law issues
raised by the applicant’s
claim raises the matter to a different level of complexity. Rule 14
must necessarily be read in
this light. In other words, the Rule does
not mean that all jurisdictional questions raised at conciliation
must necessarily be
determined by the conciliating commissioner, on
pain of a failure to do being regarded as a reviewable decision.
[18]
It follows that when in the present matter the commissioner deferred
the applicant’s jurisdictional challenges to the
arbitration
phase of the dispute resolution process, she did not commit a
reviewable irregularity. It follows too that the certificate
of
outcome issued by the commissioner was properly issued, and that the
dispute between the parties should be enrolled for an arbitration
hearing, at which any jurisdictional challenges that the applicant
elects to pursue should be determined.
Substitution
[19]
Johannes has undertaken to abide by the court’s decision in the
application to review and set aside the certificate of
outcome. He
only opposes the relief sought in paragraph 2 of the notice of
motion, i.e. that the commissioner’s ruling should
be
substituted by a ruling to the effect that the CCMA has no
jurisdiction to entertain the referral. The Labour Appeal Court and
this Court have held that they should correct a decision rather than
refer it back to the CCMA for a hearing
de
novo
in
the following circumstances: (i) where the end result is a foregone
conclusion and it would merely be a waste of time to order
the CCMA
to reconsider the matter; (ii) where a further delay would cause
unjustified prejudice to the parties; (iii) where the
CCMA has
exhibited such bias or incompetence that it would be unfair to
require the applicant to submit to the same jurisdiction
again; or
(iv) where the court is in as good a position as the CCMA to make the
decision itself.
[6]
In the
present matter, the parties have not put before the CCMA (nor this
Court) the full facts and arguments on jurisdiction.
The parties
agreed to do so on 14 April 2009, and a determination of the
jurisdictional challenge may well have occurred on that
date but for
the present review application. In effect, the applicant, having
agreed that the jurisdictional issues are yet to
be determined by the
CCMA now requires a reviewing court to be a court of first instance
in respect of the jurisdictional dispute.
The CCMA has not even
considered the question of jurisdiction. The CCMA has not yet
accepted that it has jurisdiction, nor has
it made a ruling to the
effect that it has no jurisdiction. In these circumstances, I fail to
appreciate on what basis it can be
contended that there is a decision
of the CCMA which ought to be substituted.
[20]
Finally, in relation to costs, the applicant has persisted in seeking
substitutionary relief and for this reason, the opposed
costs of the
application incurred by the third respondent ought to be paid by the
applicant.
For
the above reasons, I make the following order:
1. The application to
review and set aside the certificate of outcome issued by the first
respondent is dismissed
2. The dispute is
referred back to the CCMA to be enrolled for an arbitration hearing,
at which any disputes relating to the CCMA’s
jurisdiction must
be determined.
3. The applicant is to
pay the costs of these proceedings.
ANDRE VAN NIEKERK
JUDGE OF THE LABOUR
COURT
Date
of Judgment: 11 March 2010
Appearances:
For
the applicant: Mr. Fritz Malan
ENS
Attorneys
For
the respondent: Adv A Redding SC
Instructed
by Brian Bleazard Attorney.
[1]
Rule 14 states: “If it appears during conciliation proceedings
that a jurisdictional issue has not been determined, the
commissioner must require the referring party to prove that the
Commission has the jurisdiction to conciliate the dispute through
conciliation”.
[2]
In other words, is the dispute one that concerns a matter of mutual
interest between employer and employee. See s 135 (1) of
the LRA.
Ordinarily, all of these matters ought be detected and dealt with
during the initial screening of referrals for jurisdictional
compliance, and not many of them ought to reach the point of a
challenge after a conciliation meeting has been convened.
[3]
See Hoexter Aministartive Law in South Africa at 260 -261.
[4]
In the context of strikes and lock-outs, s 64(1) (a) (i) and (ii)
impose as one of the procedural constraints on the exercise
of those
rights that “
a
certificate stating that the dispute remains unresolved has been
issued…”
or “a period of 30 days, or any extension of that period
agreed to between the parties to the dispute, has elapsed since
the
referral of was received by the council or the Commission:…”.
If there is a dispute about the categorisation
of the dispute that
gives rise to the industrial action (and in particular whether the
dispute is one lawfully capable of resolution
by industrial action)
this would normally be resolved by this court in an application to
interdict the industrial action concerned.
[5]
It seems to me that a ruling made by a commissioner on a true
jurisdictional issue is a binding ruling rather than the mere
expression of a view, with the parties free to raise the same point
again at arbitration. But see
Seeff
Residential Properties v Mbhele NO & others
(2006)
27 ILJ 1940 (LC).
[6]
See:
Department
of Justice v CCMA & others
(2004) 25
ILJ
248 (LAC) at 304, para 48;
Rustenburg
Platinum Mines Ltd v CCMA & others
(2007) 28
ILJ
417
(LC) at para 12.)