Arbitration Awards

Nov 24, 2021

Can an arbitration award be reviewed?

The answer to the question is, yes, it can be reviewed.

An arbitration award by the Commission for Conciliation, Mediation and Arbitration (CCMA) or Bargaining Council (DC) is “final and binding” and there is no right of appeal against such award.

But the reality of referring a matter to the CCMA (reference to CCMA includes BC) is that arbitration awards are not always rational. Another reality is that some commissioners are not beyond committing misconduct in relation to their duties as arbitrators, or gross irregularities in the conduct of arbitration proceedings.

It is for this reason that the Labour Relations Act 66 of 1995 makes provision for the review of arbitration awards by the Labour Court. Section 145(2) of the act sets out the grounds for review as follows:

  • The commissioner committed misconduct in relation to his duties as an arbitrator; and/or;
  • Committed a gross irregularity in the conduct of the arbitration proceedings; and/or;
  • Exceeded his powers.

Practical examples of where an arbitration award would stand to be reviewed by the Labour Court would be where the commissioner was clearly biased, or where the commissioner did not allow the cross-examination of witnesses, or where the commissioner adjudicated a dispute that should have been referred to the Labour Court.

In addition to these grounds for review, an arbitration award stands to be reviewed if the conclusion reached by the commissioner does not have a rational connection to the evidence presented to the commissioner. In this regard, since the matter of Carephone (Pty) Ltd v Marcus & Other (1998), the Labour Court has used what is called the “justifiability” or “rationality” test to determine whether an arbitration award is reviewable. This test enables the Labour Court to examine the reasoning of the commissioner in reaching his conclusion and asks whether the arbitration award is “justifiable in relation to the reasons given for it”. The court is required to assess how the commissioner evaluated the evidence, the inferences drawn from the evidence, and the manner in which the commissioner applied the law to the evidence.

A review application must be brought within six weeks of the date that the award was served on the applicant in the review application. Late review applications may be condoned on good cause shown.

Unfortunately, bringing a review application is often costly and takes time. Aspects of the procedure to a review application include, among others, the CCMA making the tapes (or record) of the arbitration proceedings available to the applicant and the applicant arranging for the transcription of the CCMA tapes.

The Labour Court may make various rulings in respect of a review application including:

  • Setting aside the arbitration award and substituting the arbitration award with another ruling; or
  • Referring the matter back to the CCMA for adjudication in front of the same or another commissioner; or
  • Dismissing the review application and upholding the arbitration award.

In Potch Speed Den v Rajah (1999) 8 LC 1.11.47 an application was made for suspension of an arbitration award issued by the CCMA, pending the outcome of an application to review and set aside the award. It was held that the arbitration award had been issued in favour of the respondent in a dismissal dispute. The question was whether a review application of an arbitration award which has already been made an order of court is competent – as the arbitration award has undergone a change of status once it is made an order of court, a person seeking to have it reviewed should apply to the court to have the order rescinded or set aside – next step would be to apply to the court to review and set aside the award, or to rescind the award in the CCMA – in other words, once an award has been made an order of court, there can be no review of the award until at least the order of court has been rescinded or set aside (but not on review). The application was accordingly dismissed.

Rescission Application

The term “default award” refers to the situation where the employer fails to attend the arbitration hearing and the arbitrator therefore makes an award in the employee’s favour.

The arbitrator has to accept the employee’s version and find against the absent employer.

Whose fault is it when CCMA notices of any kind do not reach the parties? At times the CCMA fails to send notices to the parties. For example, in the case of a banking industry dispute, the CCMA agreed to postpone the arbitration hearing.

However, neither the commissioner nor the employee was notified of this. As the employer had been notified it did not attend on the day, but the hearing went ahead anyway.
This error was only discovered on the date of the postponed hearing when the employer turned up for the hearing. The employer was then informed that the arbitration hearing had been held already and an award would be send to the parties!

On other occasions, the CCMA has been able to provide proof that it sent notices to the parties but one or other party claims not to have received its notice. This apparent paradox could be explained in a number of ways:

  • The CCMA faxes the notice to the employer but, while it does arrive on the employer’s fax machine, it is not given to the executive dealing with the matter.
  • It is possible that the CCMA case administrator, being under pressure of work, might send the fax in a faulty way. For example, if the notice is put into the fax machine upside down in error, the recipient will get blank pages.
  • If the notice is sent by registered post it is possible for the post office to deliver the registered slip to the wrong address.

That is, the post office’s registered slip, notifying the party that a registered article is to be collected, could be put into the wrong post box in error. While the CCMA’s notice has been sent, it has not been received by the addressee!

What can be done if any of these or other serious errors result in a party not receiving the notice and the arbitration hearing goes on without that party? The first step is to apply for a rescission (or cancellation) of the default award.

There are strict rules and time deadlines for rescission applications.

A rescission application is normally made to the same arbitrator who made the original arbitration award on the grounds that the award was erroneously sought or made in the absence of any party affected by it or it contained an ambiguity or an obvious error or omission.

A rescission application might be granted if it is properly put together and proof is submitted of factors such as illness, or failure of the CCMA effectively to serve the notice.

In the rescission application the main issues argued are the applicant’s reasons for absence and the applicant’s prospects of succeeding with the case if the rescission is granted.

Should the rescission application be turned down, the arbitrator can be taken on review to the Labour Court.

In the case of Northern Province Local Government Association vs CCMA and Others, the Labour Court found that commissioners are not entitled to regard fax transmission slips as definitive proof that the party received the notice of the arbitration hearing.

This judgement should not make parties complacent. Due to the fact that fax transmission reports are generally accepted as proof of legal service of notices, any argument as to why such fax reports should not be accepted need to be very well argued.

In the absence of convincing proof and argument, the CCMA’s rescission ruling is likely to be upheld by the Labour Court.

In Kungwini Residential Estate & Adventure Sport Centre Ltd v Mhlongo NO & others (2005) 15 LAC 6.13.1 a case of constructive dismissal was referred to the CCMA by the third respondent. The referral being out of time, an application for condonation was made and granted. This led to the appellant’s seeking rescission of the condonation ruling. Rescission was refused, and that decision was taken on review. The review application was also unsuccessful, and the present appeal ensued.

It was held that various errors had occurred in this matter. The condonation ruling was incorrect as it was made in the absence of notice to the parties, and was defective for reasons set out by the court. This should have led to the recission application being granted. The appeal was upheld.

An application to review an arbitration award requires a proper understanding of the processes and legal requirements involved based on proven irregularities committed by the commissioner. Understanding the circumstances under which a rescission application can be brought is equally important.

The content does not constitute legal advice, are not intended to be a substitute for legal advice and should not be relied upon as such. Kindly contact us on info@labourman.co.za or 021 556 1075 to speak to one of our consultants.

Author:

Wallace Albertyn

Wallace Albertyn is a Senior Associate and Legal Advisor at LabourMan Consultants.

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