Brief Summary

Labour Law — Review of arbitration award — Jurisdiction of CCMA — Applicants sought to review an arbitration award where the Commissioner ruled that the CCMA lacked jurisdiction over the dispute, referring it to the Labour Court instead. The applicants contended they were unfairly dismissed, while the first respondent argued that their fixed-term contracts had expired. The Commissioner based his decision solely on written submissions, denying the applicants the opportunity to present oral evidence and cross-examine witnesses. The court found that the Commissioner’s failure to allow oral evidence constituted a procedural irregularity, rendering the arbitration award reviewable. The court upheld the applicants' request to set aside the award and referred the matter back to the CCMA for arbitration by a different Commissioner.

Comprehensive Summary

Summary of Judgment

1. Introduction

This matter concerned an opposed application in the Labour Court to review and set aside an arbitration award issued under the auspices of the Commission for Conciliation, Mediation and Arbitration (CCMA). The award had determined that the CCMA lacked jurisdiction because, in the commissioner’s view, the dispute was one concerning contracts of employment and should be pursued in the Labour Court or civil courts under section 77(3) of the Basic Conditions of Employment Act 75 of 1997.

The applicants were T Chiseno and 190 other employees, supported by the National Union of Mineworkers. The first respondent was the employer, Norkim Raiseboring CC t/a North-West Mining CC and North-West Mining Services (Pty) Ltd. The CCMA was cited as the second respondent, and the commissioner who issued the award, Simon Malaza N.O., was cited as the third respondent.

Procedurally, the employees had referred an unfair dismissal dispute to the CCMA. During the CCMA proceedings, the employer raised multiple points in limine, with the principal contention being that the employees had not been dismissed because their alleged fixed-term contracts had simply expired. After the CCMA issued an award declining jurisdiction, the applicants launched a review in the Labour Court. The applicants also sought condonation for a late review filing, which the Labour Court granted due to the relatively short delay.

The general subject-matter of the dispute was whether the employees were dismissed (and, if so, whether that dismissal was unfair), or whether their employment ended through the termination/expiry of fixed-term employment contracts, and how that characterization affected CCMA jurisdiction.

2. Material Facts

The applicants referred an unfair dismissal dispute to the CCMA, and the matter was set down for arbitration on 29 June 2011. The employer raised several preliminary objections; the central objection was that there had been no dismissal because the employees were engaged on fixed-term contracts that ended when those contracts expired.

The parties agreed during the CCMA proceedings that the commissioner should determine the preliminary issues (and, effectively, the dismissal/jurisdiction question) on written submissions, without oral evidence. The written submissions were delivered within agreed timeframes, and the commissioner issued a determination based solely on those submissions.

A material feature for the Labour Court was that the dispute involved serious factual contests, including whether the employees were employed on fixed-term contracts (as the employer alleged) or contracts of indefinite duration (as the applicants alleged). The judgment noted that these factual disputes were not adequately ventilated or tested before the CCMA, and that the commissioner’s chosen procedure left him unable to resolve the contested factual issues.

As to the events leading to termination, the employer’s version (as reflected in the submissions) linked the terminations to an alleged illegal/unprotected strike on 31 January 2011, which prompted the employer’s client, Harmony Gold Mining Company Limited, to terminate the employer’s contract at Evander 8 shaft on 1 February 2011. The termination of the client contract was presented as directly linked to the termination of the applicants’ employment. The Labour Court observed that, on the submissions, the terminations appeared to have been triggered by the employees’ conduct (described by the applicants as “ill-discipline”), though it remained unclear on the record whether the legal mechanism was expiry of fixed-term contracts or dismissal.

Although the applicants later expressed concern in their written submissions that it was “unusual” to determine a contested unfair dismissal dispute without oral evidence and cross-examination, the commissioner proceeded on the basis of the earlier agreement and issued an award concluding that the dispute was contractual and therefore outside CCMA jurisdiction.

3. Legal Issues

The Labour Court was required to determine whether the arbitration award was reviewable and should be set aside under section 145 of the Labour Relations Act 66 of 1995, in circumstances where the commissioner determined the dispute on written submissions only and then declined jurisdiction.

The central questions were whether the commissioner committed a reviewable irregularity or misconduct in the conduct of the arbitration process, and whether the commissioner’s conclusion that the CCMA lacked jurisdiction was unreasonable in the review sense (including in a process-related/dialectical sense).

The dispute primarily involved the application of legal standards to the facts, coupled with an evaluation of whether the commissioner’s procedure (particularly in the face of factual disputes) prevented a fair and proper determination of the issues he was required to decide—most notably whether a dismissal occurred or whether employment ended through contract expiry.

4. Court’s Reasoning

The Labour Court accepted that, on the record, the parties had agreed that the commissioner would decide the preliminary issues on the basis of written submissions, and the court treated that agreement as binding. On that basis, the court did not accept that the commissioner committed misconduct merely by implementing what the parties had agreed.

However, the Labour Court considered that the commissioner’s approach nonetheless resulted in a failure to address the true dispute placed before him. The court emphasised that CCMA arbitration is a hearing de novo, and that where there are serious disputes of fact, an arbitrator should exercise discretion to allow oral evidence and cross-examination so that contested issues can be properly interrogated. The judgment invoked the approach in Room Hire Co (Pty) Ltd v Jeppe Street Mansions (Pty) Ltd 1949 (3) SA 1155 (T), in the sense that where a dispute cannot properly be determined on the papers, it may require referral to evidence (or trial).

The court reasoned that the commissioner should have anticipated serious factual disputes from the outset, given the employer’s denial of dismissal and reliance on alleged fixed-term expiry. In that context, the onus on the employees to prove the existence of a dismissal was a matter that ordinarily required an evidential hearing. By proceeding without oral evidence and cross-examination, the commissioner effectively prevented a proper inquiry into whether a dismissal occurred, and whether the contracts were fixed-term or indefinite.

In applying the review standard, the Labour Court adopted a process-related (dialectical) unreasonableness approach, drawing on Sidumo and Another v Rustenburg Platinum Mines Ltd and Others (2007) 28 ILJ 2405 (CC) and the Labour Court authority of Southern Sun Hotel Interests (Pty) Ltd v Commission for Conciliation, Mediation and Arbitration and Others (2009) 11 BLLR (LC). The court treated the reasonableness requirement as extending to both process and outcome, and held that a failure to have regard to material facts may constitute a gross irregularity because it prevents a fair determination of the dispute.

On the jurisdictional point, the Labour Court held that the CCMA does have jurisdiction to determine unfair dismissal disputes, even though such disputes arise from employment contracts. The court considered that the dispute referred to the CCMA was not pleaded as a breach of contract claim, but as an unfair dismissal claim. The commissioner’s approach was criticised as having diverted into contractual analysis and ultimately deciding a jurisdiction point on a basis that did not resolve (and, in the court’s view, did not properly engage with) the essential question: whether the employees were dismissed or whether their employment ended through contract expiry.

The Labour Court concluded that the commissioner’s process led him to determine something other than what he was required to determine, and that this constituted reviewable unreasonableness. The award was therefore set aside, and the matter was remitted for proper arbitration before a different commissioner.

5. Outcome and Relief

The Labour Court granted condonation for the late filing of the review application, having regard to the relatively short delay.

The arbitration award issued under CCMA case number MP 1866/2011 dated 25 July 2011 was reviewed and set aside.

The dispute was remitted to the CCMA for consideration de novo by a commissioner other than the third respondent.

No order was made as to costs.

Cases Cited

Room Hire Co (Pty) Ltd v Jeppe Street Mansions (Pty) Ltd 1949 (3) SA 1155 (T).

Sidumo and Another v Rustenburg Platinum Mines Ltd and Others (2007) 28 ILJ 2405 (CC).

Southern Sun Hotel Interests (Pty) Ltd v Commission for Conciliation, Mediation and Arbitration and Others (2009) 11 BLLR (LC).

Legislation Cited

Labour Relations Act 66 of 1995, section 145.

Basic Conditions of Employment Act 75 of 1997, section 77(3).

Rules of Court Cited

No rules of court were cited in the judgment.

Held

The Labour Court held that, although the parties’ agreement to proceed by written submissions was binding and did not on its own establish misconduct, the commissioner’s handling of the arbitration process in a matter involving serious factual disputes resulted in a failure to properly determine the question he was required to decide, namely whether a dismissal occurred or whether employment ended by expiry of fixed-term contracts.

The court further held that the CCMA has jurisdiction over unfair dismissal disputes and that the commissioner’s conclusion that the dispute was purely contractual and outside CCMA jurisdiction was reviewable for process-related unreasonableness, given the failure to properly engage with material disputes of fact and the consequent misdirection away from the dismissal enquiry.

LEGAL PRINCIPLES

A CCMA arbitration is a hearing de novo, and in disputes involving material factual contests, the arbitration process ordinarily requires that parties be afforded an opportunity to lead oral evidence and test evidence through cross-examination, subject to the commissioner’s discretion.

On review under section 145 of the Labour Relations Act 66 of 1995, the standard of reasonableness applies to both the outcome and the process by which the commissioner reaches the outcome. A commissioner’s failure to have regard to material facts or to conduct the proceedings in a manner that enables a fair determination of the true dispute may amount to a gross irregularity and render an award reviewable for process-related (dialectical) unreasonableness.

The CCMA has jurisdiction to determine unfair dismissal disputes, even where those disputes arise from or relate to employment contracts; characterising a contested dismissal dispute as a contractual dispute, without properly determining whether a dismissal occurred, may constitute a reviewable misdirection in the conduct of the arbitration and the jurisdictional enquiry.

Chiseno and Others v Norkim Raiseboring CC t/a North-West Mining CC and North-West Mining Services (Pty) Ltd and Another (JR2515/11) [2013] ZALCJHB 86 (9 May 2013)