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[2015] ZALCJHB 39
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Zondi v City of Johannesburg and Others (J 2461/12) [2015] ZALCJHB 39 (17 February 2015)
REPUBLIC OF SOUTH
AFRICA
IN THE LABOUR
COURT OF SOUTH AFRICA, JOHANNESBURG
Case
no: J 2461/12
DATE:
17 FEBRUARY 2015
Not
Reportable
In the matter
between:
NOMBALILOUISA
ZONDI
....................................................................................................
Applicant
And
THE CITY OF
JOHANNESBURG
............................................................................
First
Respondent
THE
EXECUTIVE MAYOR OF THE CITY
OF
JOHANNESBURG METROPOLITAN
MUNICIPALITY
...........................
Second
Respondent
MODIEHI
SELEMELA
.............................................................................................
Third
Respondent
Heard:
8 July 2014
Delivered:
17 February 2015
Summary
:
Declaratory order: in terms of section 158 of the LRA read with
section 77 of the BCA; interpretation of the employment contract,
it
provides for accredited private dispute resolution Agency clause over
which the parties have dispute, where there is a dispute
about the
alternative dispute resolution clause, parties cannot be rendered
forum less, parties should be wary of entering into
contracts that
are waiving the enjoyment of the fundamental rights in terms of the
Bill of Rights as entrenched in the Constitution
of the Republic of
South Africa.
Jurisdiction: the
alternative dispute resolution clause entrenched in the Fixed Term
Performance Contract of Employment excluded
the jurisdiction of other
fora and expressly excluding the jurisdiction of this Court and that
of the CCMA; the private Arbitration
agreement does not have the
effect of ousting the jurisdiction of the Court;
Merits:
the Court refused to deal with the ‘Unfair Labour Practice’
dispute as there are Accredited Private Dispute
Resolution Agencies
as envisaged by Fixed Term Performance Contract of Employment, and
further that the SALGBC is capable of hearing
the dispute. The
parties referred back to the SALGBC for the resolution of the
dispute.
JUDGMENT
RALEFATANE AJ
Introduction
[1]
This
is an application for a declaratory order in terms of section 158 of
the LRA
[1]
read with section 77
of the BCEA
[2]
.
Background
details
[2]
The Applicant applied for the declaratory
order that the dispute be referred to Accredited Private Dispute
Resolution Agency as
stipulated by the Fixed Term Performance
Contract of Employment (Contract) or alternatively to deal with the
dispute in terms of
section 158 of the LRA.
[3]
The
First and Second Respondents in this matter are opposing the
application (Respondents).
[3]
[4]
The Applicant started working for the First
Respondent on 01 March 2009 occupying the position of Risk Control
Manager (financials),
later appointed the Acting Deputy Director,
Special Projects (2010 Soccer World Cup and BRT Rea Vaya) the
position she held from
June 2009to July 2010. In July 2010, the
Applicant was appointed to act in the position of Head: Operational
Risk and Business
Continuity until about 22 June 2011, which was
after 12 months of acting when the said position was advertised under
circular Number
007/2011.
[5]
The Applicant responded to the vacancy
advertisement where upon she was among the five shortlisted
candidates therefore invited
for an interview, which took place on 10
August 2011. Subsequent to this interview, there was further
interview for the top four
candidates and the Applicant was one of
them.
[6]
The interviews for the said top four
candidates were held on 14 November 2011 where the Applicant appeared
before a different interviewing
panel from the first panel of 10
August 2011.
[7]
On 30 November 2011, Mrs Nxumalo of the
Respondents called the Applicant to a meeting to inform her of the
interview results, which
were negative news for her. The Applicant
was unhappy with the unsuccessful results and immediately notified
Mrs Nxumalo of her
intention to declare the dispute.
[8]
On 13 December 2011,the Applicant lodged a
grievance with the first Respondent which remained unresolved. The
Applicant’s
dispute that led to her lodging the grievance is
that the Respondent failed to promote her.
[9]
Further dispute is that for both senior
positions that she has acted on, the Respondents never paid her
performance bonus proportionate
to the said positions and the acting
allowance although those positions are two levels above her
contracted position of Risk Control
Manager (financials).
[10]
The
Applicant was not aware that as a fixed term contractor she is also
entitled to acting allowance until she discovered during
the
preparation for the intended action to refer the dispute to the
SALGBC
[4]
that other employees
in fixed term contracts like her were paid acting allowances. She
further discovered that even the Respondents’
condition of
service policy makes provision for acting allowance to all employees.
[11]
Following
that the Applicant declared the dispute on the following issues which
she referred to the SALGBC
[5]
where the conciliation failed and certified unresolved on 4 April
2012-
a.
No promotion;
b.
No payment of acting allowance; and
c.
No payment of bonus.
[12]
As
per the advice of her legal representative, the Applicant abandoned
the SALGBC
[6]
process, before it
can be arbitrated, and referred the dispute to this Court on the
basis that the matter was viewed complex as
it might involve a
question of whether the acting allowance and performance bonus would
be regarded as benefits in terms of section
187 of the LRA.
[7]
[13]
Before
referring the matter to this Court, the Applicant notified the
SALGBC
[8]
on 30 May 2012 in
terms of section 191(6) of the LRA
[9]
of her intention. The Applicant having being taken forward and
backward by SALGBC
[10]
in
failing to reach the decision regarding section 191(6) of the LRA
application, she was on that basis further advised by her
legal
representatives that her employment Contract also makes provision for
alternative dispute resolution in the form of Accredited
Private
Dispute Resolution Agency.
[14]
On 31 July 2012, the Applicant advised the
Respondents about the private arbitration clause as provided in that
Contract and as
per that clause also forwarded to the Respondents the
list of arbitrators from which to appoint one to arbitrate the
dispute. The
Respondents responded on 16 August 2012 expressing
disagreement to go along to the private arbitration route on the
basis that
there are no Accredited Private Dispute Resolution
Agencies as envisaged in arbitration clause.
[15]
The parties entered into a Contract with
effect from 01 February 2009 where the Applicant was appointed in the
position of Manager:
Risk Control Financials with termination period
being the 31January 2014. It appears that the Contract has expired
however the
dispute arose at the time the Contract was still valid
which means that the ‘right’ already existed. Further
that even
if the contract can terminate there are certain aspects
that do not terminate with the contract and this is one of them.
Accredited
private dispute resolution agency
[16]
The Applicant’s Contract of
employment provides for alternative dispute resolution in the form of
accredited private dispute
resolution agency.
[17]
Clause
21 of the said Contract
[11]
is
the one in issue and it provides for dispute resolution procedures as
follows:
‘
21
DISPUTE RESOLUTION PROCEDURES
21.1 Any dispute
arising out this Agreement, and a result of following the grievance
procedure as set out above, or the interpretation
or application of
this Agreement, shall be submitted to and determined by arbitration
in accordance with the arbitration rules
of an accredited private
dispute resolution agency as amended. The arbitrator shall be
mutually agreed upon, and shall be selected
from a list of
arbitrators supplied by an accredited private dispute resolution
agency.
21.2 The parties
shall, prior to the arbitration date, be required to meet with the
arbitrator in order to determine the appropriate
terms of reference
for the arbitrator, and his power, and to submit an agreement in
writing to the arbitrator.
21.3 This procedure
shall, however, not apply to any dispute arising out of any hearing
relating to misconduct, incapacity or performance,
as set out in 7,
17 and 18 above, or any failure to agree on any new contract of
employment once this agreement’s terms have
expired.
21.4 Any other
dispute and/or any disciplinary step short of dismissal,
whether relating to poor performance, misconduct,
ill health,
incapacity or an operational requirement dismissal, shall
similarly be referred to be determined by private arbitration.
The
arbitrator shall, in such circumstances, be mutually agreed upon and
be selected from the list of arbitrator supplied by accredited
private dispute resolution agency.
21.5 Should the
parties fail to agree on the identity of the arbitrator within a
period of 14 days after the date of the dismissal
or date of the
decision to apply a step short of dismissal, either of the parties
shall be entitled to request the Managing Director
or Senior Manager,
for the time being of such accredited private dispute resolution
agency to make the appointment of the arbitrator.
The Managing
Director or Senior Manager of the accredited private dispute
resolution agency, in making the appointment, shall have
regard to
the nature of the dispute, and shall have regard to the parties’
requirement of speedy arbitration in the selection
of arbitration in
the selection of arbitrators. If the appointment, shall have regard
to the dispute, and shall be given to experienced
attorneys or
advocates on the panel of arbitrators of the accredited private
dispute resolution agency.
21.6 The arbitrator
shall be entitled further to determine the procedure to be followed
in the arbitration, but to ensure that each
party has the right to be
heard, lead appropriate witnesses, submit documentation, and to argue
in respect of the appropriate outcome
and remedy. The arbitrator
shall, in determining the procedures to be followed, be guided by the
parties intention to have the
dispute finally adjudicated upon within
as short as possible a period from the date of the dismissal, or of
the dispute, arising.
21.7 The parties
shall be entitled to be represented by a representative of choice at
the arbitration, and the outcome of the arbitration
shall be final
and binding. The employee shall be bound to the dispute resolution
procedures contained herein, and shall not be
able to seek relief
from the CCMA, or the Labour Court, in terms of the LRA, relating to
any dispute or decision short of dismissal.
The parties, right,
however, to seek appropriate relief, in the form of a review
application, or any interim relief as provided
for in the Arbitration
Act, from any Court of competent jurisdiction, where such relief is
justified in law, shall not, however,
be excluded.
21.8 The fact that
any dispute has been referred to, or is the subject of an
arbitration, as well as any information submitted or
furnished to the
arbitrator, or in any other matter forming part of the record of any
arbitration proceeding, shall be kept confidential
by the parties to
such proceeding’.
[18]
Specific clauses in the contract are
discussed as follows:
Clause
21.1 provides that:
‘
Any
dispute arising out of this Agreement and as a result of following
the grievance procedure as set out above, or the interpretation
or
application of this Agreement, shall be submitted to and determined
by arbitrator rules of an accredited private dispute resolution
agency, as amended. The arbitrator shall be mutually agreed upon, and
shall be selected from a list of arbitrators supplied by
an
accredited private dispute resolution agency’.
Clause
21.4 provides that:
‘
Any
other dispute and/or any disciplinary step short of dismissed,
whether relating to poor work performance, misconduct, ill health,
incapacity or an operational requirement dismissal, shall similarly
be referred to be determined by private arbitration. The arbitrator
shall, in such circumstances, be mutually, agreed upon and be
selected from the list of arbitrator supplied by an accredited
private
dispute resolution agency’.
Clause
21.7 provides further that;
’…
The
employee shall be bound to the dispute resolution procedures
contained herein, and shall not be able to seek relief from the
CCMA,
or the Labour Court, in terms of the LRA, relating to any dispute or
decision short of dismissal’.
[19]
The Respondents submitted that it is
impossible to enforce clause 21 as there is no kind of accredited
private arbitration agency
as envisaged in the clause and submitted
that the term: ‘accredited ‘means private dispute
resolution agency which
is accredited by the CCMA in terms of section
127 of the LRA. Further that the Contract was drafted at the time
when it was thought
that such accreditation regularly happened and
others such as Tokiso were so accredited. The Respondent went on to
submit that
it has been several years that the CCMA has not
accredited any private arbitration agency and until the CCMA
accredits an arbitration
agency, clause 21 of the Contract will
remain incapable to implement because currently there are no such
accredited agencies.
[20]
The Respondents aver that as the
Applicant’s dispute relates to non-payment of acting allowance,
performance bonus, and non-
promotion that constitutes ‘ULP’
therefore this Court lacks jurisdiction in that the dispute falls
within the jurisdiction
of the SALGBC. In the premise, the
Respondents submit that the dispute be referred back to SALGBC to be
dealt with in accordance
with section 191(5) (a) (iv) of the LRA.
Further that section 158(2) (b) of the LRA does not cover the
Applicant’s dispute.
[21]
It is further the Respondents’
contention that the Applicant’s prayer to review and set aside
the appointment of the
Third Respondent constitutes variation of her
initial claim in as far as alleging that the Third Respondent’s
appointment
constitutes an ‘ULP’. This dispute in
particular was never conciliated on therefore the Court will not have
the jurisdiction
over it.
Evaluation
[22]
In the main prayer, the Applicant seeks
declaratory order that her dispute be referred to an accredited
private dispute resolution
agency for arbitration in accordance with
clause 21of the Contract.
[23]
In the alternative she seeks declaratory
order that the Respondents pay her the acting allowance, the
performance bonus, and the
review and setting aside of the Third
Respondent’s appointment.
[24]
The Court will first deal with the
declaratory order in terms of the Applicant’s main prayer and
depending on the outcome
thereof the Court will then turn to the
Applicant’s alternative prayer. The outcome might be to direct
the parties to a forum
that can deal with the matter or after
evaluating the submissions decide to accept the Applicant’s
request to dispose of
the matter. Should the decision be that the
matter be referred to a certain forum then it would be not necessary
to deal with the
Applicant’s alternative prayer.
[25]
Turning to the main prayer, there is no
point in liming in relation to the Court’s jurisdiction and
this Court is satisfied
that it is well clothed with the jurisdiction
to deal with the declaratory order.
[26]
The Applicant’s main prayer is that
this Court grants an order declaring that the dispute be referred to
an accredited private
dispute resolution agency for arbitration as
contemplated in clause 21 of the Contract.
Section
158 states as thus:
‘
(1)
the Labour Court May-
(a)
make any appropriate order, including–
(i)
the grant of urgent interim order relief;
(ii)
…
(iii)
an order directing the performance of any
particular act which order, when implemented, will remedy a wrong and
give effect to the
primary objects of this Act;
(iv)
a declaratory order;
(b)
‘
order compliance with any provision
of this Act’.
(c)
‘
deal with all matters necessary or
incidental to performing its functions in terms of this Act or any
other law’.
(2) ‘If at any
stage after a dispute has been referred to the Labour Court, it
becomes apparent that the dispute ought to
have been referred to
arbitration, the Court may-
(a) stay the
proceedings and refer the dispute to arbitration, or
(b) with the consent
of the parties and if it is expedient to do so, continue with the
proceedings with the Court sitting as an
arbitrator, in which case
the Court may only make any order that a commissioner or arbitrator
would have been entitled to make.
(3) The reference to
arbitration in subsection (2) must be interpreted to include
arbitration-
(a)
Under arbitration of the Commission;
(b)
Under the auspices of the accredited
council;
(c)
Under the auspices of the accredited
agency;
(d)
In accordance with a private resolution
procedure, or
(e)
If the dispute is about the interpretation
or application of collective agreement’.
Section
157 of the LRA provides these;
‘
(1)
Subject to the Constitution and section 173, and except where this
Act provides otherwise, the Labour Court has exclusive jurisdiction
in respect of all matter’s that elsewhere in terms of this Act
or in terms of any other law are to be determined by the Labour
Court.
(2) The Labour Court
has concurrent jurisdiction with the High Court in respect of any
alleged or threatened violation of any fundamental
right entrenched
in Chapter 2 of the Constitution of the Republic of South Africa,
1996, and arising from-
(a)
Employment and from labour relations,
(b)
Any dispute over the constitutionality of
any executive or administrative act or conduct, or any threatened
executive or administrative
act or conduct, by the state in its
capacity as an employer,
(c)
…
(3)
…
(4) (a) The Labour
Court may refuse to determine any dispute other than an appeal or
review before the Court, if the Court is not
satisfied that an
attempt has been made to resolve the dispute through conciliation.
(b) A certificate
issued by a commissioner or a council stating that a dispute remains
unresolved is sufficient proof that an attempt
has been made to
resolve that dispute through conciliation.
(5)
except as provided in section 158(2), the Labour Court does not have
jurisdiction to adjudicate an unresolved dispute if this
Act requires
the dispute to be resolved through arbitration’.
[27]
In terms of clause 21 of the Contract, the
parties agreed that any dispute arising out of it, shall be submitted
for determination
by arbitration under the auspices of accredited
private dispute resolution agency.
[28]
During the subsistence of the Contract a
dispute arose which is of an ‘ULP’ nature. The details of
the dispute are already
stated above in this judgment.
[29]
After the dispute arose the Applicant
approached the SALGBC for the resolution. The dispute was conciliated
and remained unresolved
after which the certificate of unresolved was
issued. The normal procedure would be to refer the dispute for
arbitration upon being
certified unresolved but in this case the
Applicant decided to refer the matter to this Court.
[30]
Let
us revise the procedure to resolve the ‘ULP’ claim in
terms of schedule 4 of the LRA
[12]
.
After the ‘ULP’ dispute has arisen, the aggrieved party
may refer the dispute to either the commission (CCMA) or the
relevant
bargaining council where the employer is a member. By virtue of the
employer being a member to a bargaining council its
employees, by
virtue of them being employed by the employer concern, become members
in which case all the disputes falling within
the jurisdiction of
that council will be referred thereto.
[31]
If the dispute remains unresolved after
conciliation it should be arbitrated by either the CCMA or the
council, whichever the case
may be, unless the ‘ULP’
dispute relates to discrimination in which case the dispute will be
referred to the Court.
The council or the CCMA will subsequent to
arbitration proceedings issue the award that is final and binding.
[32]
The ‘ULP’ dispute was
conciliated on by the SALGBC and certified failure to resolve. As
there was no allegation of discrimination
the dispute was capable of
being arbitrated by the SALGBC.
[33]
As per the advice of legal representatives,
the Applicant applied to the SALGBC in terms of section 191(6) of the
LRA declaring
the intention to refer the dispute to this Court for
adjudication.
Section
191 (6) provides that:
‘
Despite
subsection (5) (a) or (5A), the director must refer the dispute to
the Labour Court, if the director decides, on application
by any
party to the dispute, that to be appropriate after considering
(a)
….
(b)
whether there are questions of law raised by the dispute,
(c)
the complexity of the dispute,
(d)
…
(e)
the public interest.
(7) When considering
whether the dispute should be referred to the Labour Court, the
director must give the parties to the dispute
and the commissioner
who attempted to conciliate the dispute, an opportunity to make
representations.
(8) The director
must notify the parties of the decision and refer the dispute-
(a)
to the commission for arbitration; or
(b)
to the Labour Court for adjudication.
(9)
The director’s decision is final and binding.
(10) No person may
apply to any court of law to review the director’s decision
until the dispute has been arbitrated or adjudicated,
as the case may
be.
(11) (a) The
referral, in terms of subsection (5) (b), of the dispute to the
Labour Court for adjudication, must be made within
90 days after the
SALGBC or (as the case may be) the commissioner has certified that
the dispute remains unresolved.’
[34]
The SALGBC failed to deal with section
191application to the finality. Listening to how the SALGBC handled
the application, one
would understand the reason for the Applicant’s
unhappiness. The manner in which the SALGBC handled the 191
application is
not the core subject matter for this Court to tackle,
however, it is tempting to comment when people bestowed with the
powers or
statutory mandate, can play abdication
.
Section 191 is clear as to what is expected of a director when faced
with this kind of application. In this instance the
director/secretary
general of the SALGBC referred the application to
be dealt with by an arbitrator who considered the matter and
correctly interpreted
section 191 where after she found that the
director/secretary general of the SALGBC is bestowed with section 191
function. As to
whether the director/secretary general may delegate
the powers contained in this section (as he tried to do), can be the
discussion
for another time.
[35]
Alternative dispute resolution fora like
the CCMA or the SALGBCs are established for a good reason among
others to provide speedy
dispute resolution, with less costly
process, less legalistic proceedings, in a fair and just manner,
including alleviation of
series of cases channelled to the Court. If
the forum entrusted with this alleviation function, does not
discharge its mandate
the purpose for the establishment of such forum
is meaningless and fail in the justice service.
[36]
In the absence of hope in getting
assistance from the SALGBC relating to section 191 (6) application,
the Applicant approached this
Court relating to the above mentioned
prayers.
[37]
The interpretation of the Applicant’s
employment Contract especially clause 21 is the departure point.
[38]
The Respondents relies upon clause 21 of
the said Contract to say that no forum has jurisdiction except the
CCMA accredited private
dispute resolution agency. This clause
expressly excludes the jurisdiction of the Court and that of the CCMA
as far as the
Applicant’s alternative prayer is concerned and
all other fora are also excluded.
Clause
21.7 provides that:
‘
The
employee shall be bound to the dispute resolution procedures
contained herein, and shall not be able to seek relief from the
CCMA,
or the Labour Court, in terms of the LRA, relating to any dispute or
decision short of dismissal’.
[39]
It is common cause that the parties
intended the accredited private dispute resolution agency as
envisaged by section 127 of the
LRA which provides as follows:
Section 127 (1) ‘Any
council or private agency may apply to the governing body in the
prescribed form for accreditation to
perform any of the following
functions-
(a)
Resolving dispute through conciliation; and
(b)
Arbitrating dispute that remain unresolved
after conciliation, if this Act requires arbitration.’
[40]
The arbitration clause was meant to assist
the parties to resolve the dispute should it arise. However, the
Applicant approached
the SALGBC and the Respondent never objected to
its jurisdiction irrespective of it being excluded as per clause 21
of the Contract.
In fact the Respondents still content that the
Applicant should allow the SALGBC to dispose of the dispute. The
Respondents indicated
that there are other employees who have entered
into Fixed Term Employment Contracts containing arbitration clauses
like that of
the Applicant but they have in the past referred their
disputes to the SALGBC.
[41]
While the SALGBC was busy attending to the
resolution of the dispute, the Applicant decided to remove the
dispute to this Court.
It is without doubt that if the Applicant had
not withdrawn the matter from the SALGBC it would have being resolved
by now.
[42]
The reason for the said removal was not
jurisdictionally related. The Applicant was advised by her legal
representative that the
non-payment of acting allowance and
performance bonus are complex as the question will arise whether or
not they are befits in
terms of section 187 of the LRA. This
submission does not carry weight because the SALGBC has in the past
dealt with similar disputes
and like other councils does have
jurisdiction.
[43]
The Respondent took cognisance of the fact
that there are other accredited private dispute resolution agencies
which are not CCMA
accredited and for that they cannot be accepted.
This Court must admit that the Respondents do not advance any valid
reason for
not accepting any other accredited dispute resolution
agency. On the pages of the contract submitted to this Court there is
no
explanation whatsoever as to the meaning of ‘accredited
private resolution agency’. There is also no express provision
that the said agency is strictly referring to the agency that is CCMA
accredited. Therefore literally the meaning ofclause21 would
be that
any accredited private dispute resolution agency was intended.
[44]
The Respondents’ submission that
there are no CCMA accredited agencies is not correct in that there
are CCMA accredited agencies
such as TOKISO, Equillore Dispute
Settlement Services (Pty) Ltd, Tomnotfo Trading, and JFKS Consulting
(Pty) Ltd. It is apparent
that contrary to the Respondents’
submission, clause 21 is capable of implementation. The delay caused
in this matter was
unnecessary as the parties had choices of agencies
that are intended in clause 21.
[45]
The duly concluded Contract is not to be
undermined reciprocally the Contract should not purport to undermine
the existing laws
by trying to avoid them. The intention of the
parties to a Contract must be respected. The parties in the Contract
must know what
they are agreeing upon and more importantly the
consequence thereof. In some of the cases employees do not have the
choice to refuse
or reject the employment Contracts when presented to
them because they are in dire need of the job. In most of the cases
the employers
draft the employment Contracts which are in turn
presented to the employees to accept the terms thereof and it goes
with the truth
that employers draft the Contracts in such a way that
they are more favoured.
[46]
It is concerning when the Contract is in
such a way that it prejudices the powerless party (employee) by
providing less favourable
clauses or Contracting to exclude or limit
the fundamental rights as provided in the Bill of Rights. The parties
to a Contract
should take care when entering into a Contract not to
infringe the Bill of Rights by preventing any party to exercise such
rights.
Section 23 of the Constitution provides that everyone has the
right to fair labour practices. Arbitration agreements should not
be
ignored as it is the parties’ choice of how they wish their
dispute to be resolved unless before the decision-maker it
is
apparent that such arbitration agreement is likely to be prejudicial
or likely to produce unreasonable result. This is to say
that as much
as arbitration clauses cannot be ignored, they do not mean to oust
the jurisdiction of the Court and of that of the
bargaining councils
where parties are members in the view that there are collective
agreements.
[47]
In
the Appeal Cameron J, emphasised in Brisley v Drotsky
[13]
that Courts are required to respect the freedom to contract as
'contractual autonomy informs also the constitutional value of
dignity.' To simply ignore an arbitration agreement without
justification would defeat the contractual autonomy which will be
repugnant
to the encouragement to opt for alternative dispute
resolution as a means of reducing backlog of cases and to have
dispute resolved
quicker.
[48]
The
Constitutional Court, in Lufuno Mphaphuli & Associates (Pty) Ltd
v Andrews and Another
[14]
, the
Court dealt with arbitration proceedings albeit in the context of a
challenge to the outcome of a review. In this case the
Constitutional
Court emphasised that "the decision to refer a dispute to
private arbitration is a choice which as long as
it is voluntarily
made should be respected by the courts." Where it can be shown
that an arbitration agreement was entered
into freely and voluntarily
by the parties, the courts will be reluctant to exercise their
discretion and hear the matter before
it is referred to arbitration.
[49]
It
is of cardinally importance to note that the LRA
[15]
specifically provides for parties to enter into agreements to resolve
disputes through private arbitration and is encouraged.
[50]
South African Courts held in numerous
decisions supporting the arguments that arbitration agreements do not
oust the jurisdiction
of the Court. It is rather a matter of a Court
that has jurisdiction declining to exercise that jurisdiction in the
face of privately
agreed alternative dispute resolution processes.
The Courts will require the parties to adhere to the processes they
have chosen
in their agreement before coming to a Court, however, in
appropriate circumstances a Court may decide to hear the merits of
the
case without requiring the parties to exhaust the alternative
dispute resolution process as agreed. South African Courts are
however
mindful of the fact that agreements properly reached should
not be ignored.
[51]
Coetzee
v Comitis
[16]
, Fabian McCarthy
v Sundowns Football Club and Others
[17]
the courts support the argument that the Court can intervened and
determined the disputes which had arisen without requiring
arbitration
as agreed between the parties.
[52]
The Court per Molahlehi J analysed the law
relating to arbitration clauses and jurisdiction. Molahlehi J pointed
out that as a matter
of South African law arbitration clauses in
general did not oust the jurisdiction of the Courts. The Court would
always retain
jurisdiction and oversight but that did not mean the
agreement between the parties could simply be ignored. The Court went
further
to state that while South African Courts have jurisdiction
and retain such jurisdiction irrespective of an arbitration agreement
the parties will be held to their agreement save where there are
special circumstances.
[53]
In
the case of Cargill Zimbabwe v Culvenham Trading (Pty) Ltd
[18]
the
Court held that
"an
arbitration clause does not have the effect of ousting the
jurisdiction of the court. It merely seeks to complement the
court
process in resolving disputes by engaging in an alternative dispute
resolution process,
but
remains under the control of the courts."
The
Court in Cargill discussed circumstances which would be taken into
account by a Court exercising discretion as to whether to
send the
parties to adhere to their private arbitration agreement or not. Some
of the circumstances to take into account is whether
or not it would
be prejudicial for the parties to follow the private arbitration
agreement. In addition to the special circumstances
discussed in
Cargill case, it would further be important to take into
consideration the time that will lapse in following such
private
processes, the costs involved unless the issue of costs is agreed
upon in the arbitration agreement, and if the Applicant
party is
required in terms of that private arbitration agreement to pay or
contribute towards the costs of private process, then
as far as that
clause it would mean that it and that the Court has been convinced by
the party seeking to by-pass the agreement.
[54]
The predicament is when parties realise
that a certain clause in a contract is not possible to implement but
still fail to come
to an alternative agreement to amend such clause
which causes challenges or do away with it. The inference that can be
drawn is
that the power is with the Respondent and it is not willing
to revisit the Contract while the Applicant is frustrated. It cannot
be argued otherwise that clause 21 is meant to be applied by the
Applicant because employers do not necessarily declare labour
disputes.
[55]
The Applicant cannot be without a forum to
resolve her dispute owing to clause 21 of the Contract that excludes
other fora. However,
irrespective of the provision of clause 21 the
Applicant still approached the Council to lodge her dispute which the
Respondent
never objected. The Respondent still submits that the
Applicant should allow the Council to finalise the matter. In this
event
where both parties agree to the jurisdiction of the SALGBC,
there should not be a problem as to which forum is relevant to hear
the Applicant’s dispute.
[56]
The SALGBC had jurisdiction to hear this
matter but the parties opted to have arbitration agreement clause
which should be respected.
There are more arguments in favour of
enforcing private arbitration provisions as agreed by the parties,
however, the decision-maker
has to consider as to which forum is
likely to be prejudicial or likely to produce unreasonable results.
Should it be clear that
the private arbitration is likely to be
prejudicial the decision-maker may exercise the discretion to order
the parties to refer
the matter to the forum that will serve more
justice.
[57]
In this case, time has already being
consumed and more than that the parties have disagreement in terms of
the private arbitration
agency. It is found that there are private
agencies as envisaged in the arbitration agreement which this Court
may order the parties
to refer the dispute thereto but for the mere
fact that the Applicant has already successfully so referred the
dispute to the SALGBC,
which this Court holds that it has the
necessary jurisdiction, the Applicant is required to go back to the
SALGBC for it to finalise
what it has started.
[58]
The Court has discretion whether to stay
the proceedings and refer the matter to arbitration or hear it unless
there are special
circumstances justifying the Court exercising its
jurisdiction to hear the matter despite the parties' agreement and
the Applicant
in this matter is required to refer her dispute back to
the SALGBC for arbitration because there are no special circumstances
compelling
this Court to hear the dispute. The reasons furnished by
the Applicant in support of requesting this Court to hear the dispute
are not compelling and persuasive.
[59]
It is evident that the jurisdiction of the
Council is not in issue except that the Applicant’s legal
representative is of
the opinion that non-payment of acting allowance
and performance bonus might raise complex question which this Court
is not persuaded
by that opinion. The Council is well placed to deal
with this matter and make determination. In the premise, it is this
Court’s
view that the matter should be referred back to the
Council for finalisation.
[60]
Based on the Court’s findings, it
will not be necessary to deal with the jurisdictional issue as raised
by the Respondent
and the Applicant’s alternative prayer which
include the setting aside of the appointment of the Third Respondent
Order
[61]
I therefore make the following order:
a)
That the Applicant refers the dispute back
to the Council (SALGBC) for resolution;
b)
That there is no costs order.
Ralefatane AJ
Acting
Judge of the Labour Court of South Africa
Appearances:
For the
Applicant: Adv. Mokoena SC
Instructed by:
Madikizela Nyathi Attorneys
For the
Respondents: Adv. Malindi SC
Instructed
by: Moodie & Robertson
[1]
Labour Relations Act 1995 (Act 66 of 1995).
[2]
Basic
Condition of Employment Act, (Act 75 of 1997).
[3]
Unless
otherwise stated the First and Second Respondents will be referred
to as ‘Respondents’.
[4]
South African Local Government Bargaining (SALGBC).
[5]
Para 6 footnote 3 supra.
[6]
Para
6 footnote 3 supra.
[7]
See par 1 supra.
[8]
See footnote 3 supra.
[9]
Para 1 supra.
[10]
See footnote 3 supra.
[11]
Fixed Term Performance Contract of Employment
[12]
Dispute
Resolution
Flow
Diagram 14 of the Labour Relations Act 1995 (Act 66 of 1995)
at page 253
[13]
[2002]
(12) BCLR 1229
(SCA).
[14]
[2009]
(6) BCLR 527 (CC).
[15]
See footnote 1 supra.
[16]
2001
(1) SA 538 (C).
[17]
(2000)
JOL 10381 (LC).
[18]
HH
42 – 2006.