ARBITRATION

STATUTORY ARBITRATION

Con-arb

An amendment to the LRA now permits councils and the CCMA to arbitrate disputes immediately if conciliation fails. The process of ‘con-arb’ has potential dangers. For one, the same commissioner must necessarily act as both conciliator and arbitrator, meaning that, when acting in the latter capacity, he or she may have been privy to compromising information received when acting in the former capacity. This may render the process subject to review. If the dispute related to probation, the parties must apparently comply with that process. However, in all other matters, the parties must be afforded a right to object to ‘con-arb’. If a party objects, the commission or council is obliged to deal with the matter by following the normal procedure.

Set down

If the commission is satisfied with the referral, it will set the matter down for arbitration. The parties are entitled to at least 21 days’ notice, unless they have agreed to a shorter period.

Postponements

The CCMA rules provide for postponements of scheduled arbitration proceedings either by agreement between the parties or on application by one. If a matter is postponed by agreement all parties, the CCMA must be informed in writing more than seven days before the scheduled. Failing that, the party seeking agreement may apply for a postponement at any stage up to the scheduled date by filing a formal application, supported by affidavit(s), setting out the reason why postponement is sought. The application must be bona fide, and not used as a tactical manoeuvre for the purpose of obtaining an advantage to which the applicant would not for the purpose of obtaining an advantage to which the applicant would not otherwise be legitimately entitled.

Withdrawals

A party may withdraw a matter at any time by informing the commission and the other party.

Powers of arbitrators

Arbitrators are equipped with extensive powers to subpoena witnesses or documents. An arbitrator’s general duty is to determine a dispute in the manner prescribed or permitted by the Act concerned. Although the power to grant relief is wide, arbitrators can only grant relief permitted by legislation. An arbitrator who, for example, grants compensation in excess of that permitted by the LRA will exceed his or her power and act unlawfully.

Presence of the parties

Parties are generally required to attend arbitration proceedings in person. The Act permits arbitrating commissioners to dismiss matters if the referring parties fail to appear or to send representatives. If the other party is absent, the commissioner may either postpone the matter or continue in its absence, ie proceed ‘by default’. If, however, parties give compelling excuses for their absence, matters should for the sake of prudence be postponed, even if no formal application has been filed. Otherwise, the default proceedings may have to be rescinded. An arbitrator is obliged to ensure that all parties who may be affected by the award are joined in the proceedings. The test for whether a person should be joined is whether the person has a ‘direct’ and ‘substantial’ interest in the matter, ie whether the award would affect the person’s legal rights. It is the arbitrator’s duty to ensure that all interested parties have been cited as such and have been informed of the proceedings. Parties may be joined in arbitration proceedings even if they were not parties to the preceding conciliation proceedings.

Representation

In any arbitration proceedings, a party to the dispute may appear in person or be represented only by a legal practitioner or a director or employee of that party or, if a closed corporation, a member, or by any member, office-bearer or official of the referring party’s registered trade union or a registered employers’ organisation. In matters concerning dismissals relating to the conduct or capacity of the employee. Legal practitioners may appear only with the consent of the commissioner and all the other parties. This applies only to the hearing on the merits in such matters; points in limine and applications for postponements may be argued by legal practitioners. Consent by the parties to legal representation is not sufficient; commissioners must apply their minds independently to such applications, and exercise their discretion judicially.

Legal representation may be allowed if the commissioner finds that it would be ‘unreasonable to expect a party to deal with the dispute without legal representation’, given the nature of the questions of law raised by the dispute, its complexity, the public interest, and ‘the comparative ability of the opposing or their representatives to deal with the dispute’. Legal representatives seeking right of appearance in matters concerning dismissals for misconduct and incapacity should bring their applications before the matter is set down. Commissioners may require proof of the representative’s bona fides and qualification. If the commissioner allows proceedings to continue with representatives who do not have right of appearance, the entire proceedings may be set aside.

Who may attend?

The LRA does not expressly state whether members of the public, apart from the parties and their witnesses, may attend CCMA and council hearings. However, as a statutory body, the commission is bound to conduct arbitration proceedings ‘in open court’, members of the public should be allowed to attend arbitration proceedings, unless a party objects and the commissioner for sound reason rules otherwise. Both parties and their witnesses are entitled to attend the hearing. Before they have testified, witnesses to be called by either side should leave the room while the other witnesses of that party are giving evidence. The reason for this rule of practice is to avoid the testimony of one witness being coloured by the testimony of another.

In exceptional circumstances, witnesses may be permitted to give their testimony incognito or in the absence of certain parties. When considering applications for witnesses to give evidence in camera, the CCMA has applied the principles generally followed by the High Court in such matters, namely, to allow it if it is in the interests of justice, if it will not cause irreparable harm to the other party, and if there is real danger to the witness concerned.

The hearing

Commissioners are required to record the proceedings electronically, and to preserve and safeguard documentary and other evidence. When conducting hearings, arbitrating commissioners may choose the ‘adversarial’ approach normally applied by courts of law, or the ‘inquisitorial’ approach adopted in some European legal systems. The accusatorial mode requires the presiding officer to adopt a relatively passive stance, and to leave it to the parties to conduct their respective cases, confining interventions to clarification of points or to rulings on procedure. In the inquisitorial mode, the presiding officer ‘descends into the arena’ by questioning witnesses and even cross-examining them, to the extent possible.

The minimum requirement for statutory arbitrations is that the parties should all have a fair hearing. This implies that they must be afforded the opportunity to call witnesses, to cross-examine witnesses called by other parties, to make representations to the commissioner, and to have the evidence and representations impartially considered by the arbitrator. Arbitration proceedings conducted by the CCMA and bargaining councils are not merely ‘reviews’ of the disciplinary hearings conducted by the employer. They are, as the courts have frequently held, hearings de novo. This means, that, when considering the merits, commissioners must base their decisions on all the evidence led by the parties pertaining to the circumstances preceding the issue in dispute.

PROCEDURE

Formal introductions

The arbitrator normally commences proceedings by reading the case name and number into the record, announcing his or her own name, and requesting the parties and the representatives to place themselves on record. At this stage, arbitrators should disclose any previous relationship they may have had with a party, if any, and establish the credentials of the representatives.

Housekeeping

The parties should be asked whether any documents have been prepared for the hearing, and whether the respective parties are familiar with the other’s documents. If not, the parties should be afforded an opportunity to peruse the other’s documents. When this has been done, the representatives should be asked whether they are prepared to accept that the documents are what they purport to be, and that their contents are true. The replies should be recorded.

If no pre-arbitration conference has been held, the parties should also be asked their views on who should commence leading evidence. While the party on whom the onus rest (the employer in dismissal disputes, unless the existence of the dismissal is in dispute) normally begins, this is not an absolute rule; it may well be that the proceedings may be facilitated if the referring party commences, particularly if the other party is uncertain of the nature and scope of the referring party’s case. If there is no agreement, the commissioner must decide who should begin. The commissioner should also establish the language in which the proceedings are to be conducted, and whether an interpreter will be required.

Recording

Arbitration proceedings should be mechanically or electronically recorded. The responsibility of recording the proceedings rests with the commissioner, although nothing prevents the parties from recording proceedings themselves with the consent of the commissioner.

Reverting to conciliation

The Act specifically provides that the commissioner may at any time suspend the arbitration proceedings and attempt to resolve the dispute by conciliation. This is subject to the proviso that all the parties consent. Act provides that an attempt at conciliation merely suspends the arbitration, it is implicit that the arbitration may be revived it conciliation fails. However, the arbitrator would have to ensure that nothing happened during the conciliation attempt to compromise his or her impartiality.

In limine issues

Once housekeeping is completed, the commissioner should ask the parties whether they have any in limine points they wish to raise. So, for example, an employer party may wish to contend that the commission lacks jurisdiction because the other is not an employee, or was never dismissed, or because the referral was late and has not been condoned. Decisions on in limine points may be interlocutory or final. The distinction has a bearing on whether such decisions may be taken on review immediately, thus suspending the proceedings, or whether the objection party should wait until the arbitration has run its course and review it later.

Opening statements

The parties or their representatives should be asked if they wish to make opening statements. An opening statement should identify the basis for the relief sought or for the defence, and briefly set out the facts on which the party will rely. The purpose of an opening statement is merely to provide an arbitrator who may know absolutely nothing about the case with some idea of how it is likely to unfold. Opening statements may also assist the arbitrator to narrow the issues.

Narrow issues

After opening statements have been presented, it may become apparent to the commissioner that it is possible to narrow the issues, ie to identify those issues on which the parties are actually in agreement (ie common cause facts). All agreements in this regard should be recorded and mentioned in the award.

Presenting Evidence

The duty to begin

Evidence may be presented in vive voce or documentary form, first by one party, then by the other. The general rule is that the party who bears the onus should commence leading evidence, but this is not an inflexible rule.

Viva voce evidence

Vive voce is presented orally through witnesses, who are called one by one in the order decided by the party calling them. Oral evidence is given under oath, or after each witness has affirmed that he or she will tell ‘the truth, the whole truth, and nothing but the truth’. The witness is expected to give evidence from memory, and may not read from a prepared statement. Documents are contemporaneous notes, may be used to refresh witness’s memory, provided they are disclosed to the other party. Generally, the decision on which witnesses to call and which documents to present rests with the parties. With the exception of applicant or respondent parties themselves, the general practice is for witnesses of each side to remain outside the arbitration room until they have given evidence. This is to prevent their evidence from being influenced by what they might hear from other witnesses. A party intending to call an expert witness should give the other notice and provide in advance a summary of the expert testimony to be led. After being sworn in or affirmed, each witness’s testimony is normally presented in three stages: evidence -in-chief, cross-examination and re-examination.

Evidence-in –chief involves the representation of evidence in response to questions, if the party is represented. When witnesses have completed their evidence-in-chief, the other party is entitled to cross-examine. The purpose of cross-examination is to put to the witness as much of the other party’s case as is inconsistent with the witness’s version, to explore inconsistencies and, within limits, to shake the witness’s confidence in his or her version. If aspects of a witness’s evidence are not challenged in cross-examination, they will generally be accepted as true. Commissioners may be required to assist lay litigants with the principles of cross-examination. Re-examination serves only to clear up or complete matters raised in cross examination. After a witness has been re-examined, the commissioner may wish to ask further questions to clarify certain issues or to canvas additional issues. Once a party who has opened the proceedings has called all its witnesses, the other party does the same, each witness being subject to cross-examination and, if deemed necessary, re-examination. It goes without saying that all evidence presented in arbitration proceedings must be given in the presence of both parties.

Documentary and real evidence

If its authenticity is contested, documentary evidence (which includes photographs, diagrams and electronic or digital recordings and the like) must be introduced through a witness who is able to attest to its authenticity. Once admitted, documents form part of the evidence.

Closing statements

After all the evidence is before the arbitrator, the respective parties are generally invited to make closing submissions, the purpose of which is to persuade the arbitrator that the decision should be for, or against, a party on the facts and the law.

Conclusion of the proceedings

After closing submissions, the commissioner is in a position to make his or her decision. Commissioners normally ‘reserve judgment’, and inform the parties that their awards will be handed down within the period prescribed by the Act.

The award

Arbitration commissioners must ‘issue an arbitration award with brief reasons’, signed by that commissioner, within 14 days of the conclusion of the arbitration proceedings. When the award is issued the CCMA is required to serve a copy on each party to the dispute or their representatives, and a further copy must be filled with the registrar of the Labour Court. Once a commissioner issues the award, he becomes functus officio in respect to the matter. This means that a commissioner cannot subsequently change his or her mind and alter the award, unless there are grounds for variation of rescission.

Contempt of commission, or council

Parties appearing before the commission and bargaining councils are obliged to behave themselves with reasonable decorum. Although the CCMA and councils are not courts of law, the LRA empowers commissioners to ‘make a finding’ that a person is in contempt for a range of reasons set out in the Act. These include disregarding a subpoena, refusing to take the oath or to make an affirmation as a witness or (subject to the rules of privilege) refusing to answer any question fully and to the best of the person’s knowledge and belief, willfully hindering the commissioner in performing his or her statutory functions, insulting, disparaging or belittling the commissioner, or prejudicing or improperly influencing the proceedings or improperly anticipating an award, willfully interrupting the proceedings or misbehaving in any other manner during the proceedings, or ‘doing anything else in relation to the Commission which, if done in relation to a court of law, would have been contempt of court’. Unlike judges and magistrates, commissioners do not themselves have capacity to convict people of contempt. They may, however, make a finding that a person is guilty of contempt. In that event the commissioner must, in terms of the Act, refer their finding, together with the record of the proceedings, to the Labour Court for decision. The court must then subpoena the person found in contempt or any other person to appear before it and may make any order it deems appropriate.

Costs

Costs can be awarded in an arbitration hearing if a party, or the person who represented that party in the arbitration proceedings, acted in a frivolous or vexatious manner by proceeding with or defending the dispute in the arbitration proceedings. A matter may be deemed ‘frivolous’ if it is entirely without merit; and ‘vexatious’ if proceedings are pursued or defended solely to annoy or inconvenience the other party.

Rescission and variation

Once commissioners issue awards they generally become functus officia ie a commissioner may not withdraw or alter the award even if the commissioner subsequently becomes convinced that it was entirely wrong. However, provision is made for variation or rescission of awards in limited circumstances, set out in section 144 of the LRA. These are where the award was ‘erroneously sought or erroneously made in the absence of any party affected’, where the award contains ‘an ambiguity, or an obvious error or omission’, or where the award was granted ‘as a result of a mistake common to the parties to the proceedings’. In the case of a party applying for a rescission, good cause must be shown. Good cause that the applicant has a reasonable explanation for its absence, and a reasonable prospect of succeeding in the main action. Rescission is therefore not granted merely o he asking. Awards may be varied or rescinded by either the commissioner who issued the award or by any other commissioner ‘appointed by the director for that purpose’.

Enforcement

The LRA proclaims any arbitration award issued by a commissioner, and certified as such by the CCMA director, to be ‘final and binding’ and enforceable ‘as if it were an order of the Labour Court. The expression ‘final and binding’ does not exempt awards from review. Strictly speaking, the launching of a review application against an award does not suspend its operation. However, the Labour Court will invariably stay the execution of an award if a review application has been filed, provided the applicant proves reasonable prospects of success. The staying of an award may require a special application. Where enforcement of an award is stayed pending review, the application. If the review application fails, the award will be enforced then and there.

For further information on the Employment Equity Act any labour related matters, you can contact
Bernard Reisner:

W.Tel no.: 021-423-3959
Cell: 082-433-8714
Fax: 021-4232105
E-mail: bernard@capelabour.co.za
Website: www.capelabour.co.za