CCMAil
Special Edition July 2005
CONTENTS
CASE ALERTS .....................................................................................................................................................................................2
LABOUR COURT AND LABOUR APPEAL COURT DECISIONS ......................................................................................................4
DECISIONS: OTHER DISPUTE RESOLUTION FORUMS ..................................................................................................................6
LABOUR WATCH
 When Is A Person An Employee Or An Independent Contractor? .......................................................................................................8
 Evaluating The Best Practice To Use In Preparing For Conciliation And Arbitration ...........................................................................10
 Resolve Labour Disputes Honourably – And Fast ............................................................................................................................16
 FACT & LAW: Status Of Refugees In South African Labour Law ................................................................................................17
 The Principles Of Double Jeopardy ...............................................................................................................................................18
 The Benefits Of Conciliation – Arbitration (CON – ARB) Process .................................................................................................21
GLOBAL TRENDS
 A New Role Model – Centralised Bargaining In Ireland .....................................................................................................................23
EDITORIAL TEAM
Lucky Moloi
Dorothy Khosa
Tshidi Letsoalo
Our special thanks go to Edwin Molahlehi (the Director of the CCMA), Eugene van Zuydam, Jeremy Daphne, Nad Murugan, & Gill
Loveday for their effective and efficient contributions, and making this Special Edition a reality. Thank you.
Special CCMAil Edition July 2005: Page 1
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By Lucky Moloi
EC6051-02 Walter v Protek Security Systems CC –
Commissioner: Niemand
Absent without leave/desertion.
The respondent had relied on a printout report drawn from a
computer-system which it had in place to capture all phone calls
that had been made from its offices.
The applicant claimed that he had been unfairly dismissed following
a disciplinary hearing. He alleged that it had not occurred to him
that his absence would “cause a problem”. The applicant also
disputed the procedural fairness of his dismissal on the grounds
that the initiator had also been the chairperson of the hearing.
Noted: That the applicant’s conduct had manifested dishonest
intent. He had circumvented payment of private calls made to his
family and friends.
The respondent denied that the applicant’s dismissal had been
unfair.
It was undisputed that the applicant had been charged with
deserting his post and arriving late for work. He had been found
guilty on both charges and was summarily dismissed.
Noted: That the applicant had breached a rule which he had been
aware of.
Also noted: That the applicant had admitted that he had not made
prior arrangements with management, and that he should have
done so.
Further noted: That the employer did not dispute that the initiator
had also chaired the hearing.
Held: That the applicant had been guilty of the offence of deserting
his workplace and arriving late for duty without permission.
Also held: That the dismissal of the applicant had been
procedurally unfair. The respondent was ordered to pay the
applicant compensation equivalent to two months’ remuneration.
Case references
County Fair Foods (Pty) Ltd v CCMA (1999) 20 ILJ 1701 (LAC)
Nampak Corrugated Wadeville v Khoza (1999) 20 ILJ 578 (LAC)
Toyota SA Motors (Pty) Ltd v Radebe & Others (2000) 21 ILJ 340
(LAC)
ECEL871-03 NUM obo Siyaya v ESKOM Distribution –
Commissioner: Brand
Abuse of telephone lines – Applicant dismissed for abusing
respondent’s telephone system.
The matter came before the CCMA in terms of s 191(5)(a) of the
LRA. The applicant was dismissed after he had been found guilty of
using an unauthorised pin-code to circumvent payment of private
calls.
The applicant had denied the allegations against him.
Also noted: That the respondent had also testified that another
employee had also been dismissed for the similar offence. In the
circumstances there was no basis to rely on another employee’s
conduct to argue that the dismissal of the applicant constituted an
inconsistent treatment.
Held: That the dismissal of the applicant had been both
substantively and procedurally fair. The applicant was not entitled
to any relief.
Case references
Anglo American Farms t/a Boschendal Restaurant v Komjwayo
(1992) 13 ILJ 573 (LAC)
Caswell v Powell Duffryn Associated Collieries Ltd (1939) 3 All E.R.
722
Coin Security Group (Pty) Ltd v TGWU & Others (1997) 10 BLLR
1261 (LAC)
County Fair Foods (Pty) Ltd v Commission for Conciliation
Mediation and Arbitration & Others (1999) 20 ILJ 1701 (LAC)
De Wet v President Versekerings Maatskappy 1978 (3) SA 495
(CPD)
Dion Discount Centres v Rantlo (1995) 12 BLLR 16 (LAC)
Early Bird Farms (Pty) Ltd v Mlambo (1997) 5 BLLR 541 (LAC)
Eskom v Mokoena (1997) 8 BLLR 965 (LAC)
Fourie’s Poultry Farm (Pty) Ltd t/a Chubby Chick v CCMA & Others
(2001) 10 BLLR 1125 (LC)
Miller v Minister of Pensions (1947) 2 All ER 372
Ocean Accident & Guarantee Corporation Ltd v Koch 1963 (4) (SA)
147 (A)
Nampak Corrugated Wadeville v Khoza (1999) 20 ILJ 578 (LAC)
Metro Cash & Carry Limited v Tshehla (1997) 1 BLLR 35 (LAC)
SACCAWU & Others v Irvin & Johnson Ltd (1999) 8 BLLR 741
(LAC)
West Rand Estates Ltd v New Zeeland Insurance Co Ltd 1925 AD
245
Williams v Gilbeys Distillers & Vinters (Pty) Ltd (1993) LCD 327 (IC)
NW6577-04 Khanye v Karen & Francois Combrinck –
Commissioner: Dube
Assault – Employer assaulted and dismissed applicant.
The applicant alleged that, after he had locked the shop, the
respondent phoned requesting him to bring the cash takings for
the day. The applicant informed him that the cash had been
Special CCMAil Edition July 2005: Page 2
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used to replenish stock. The respondent became furious after
hearing the applicant’s response. On arrival at the shop, he
punched the applicant who, in turn, retaliated. He had managed
to flee but not before the respondent told him to leave the
premises.
Noted: That there had been no hearing that preceded the
dismissal. No fair reason had been provided for the dismissal.
Also noted: That the respondent had failed to comply with s
188 of the LRA read together Schedule 8 of the Code of Good
Practice when dismissing the applicant.
Held: That the dismissal of the applicant had been unfair both
substantively and procedurally. The respondent was ordered to
pay the applicant compensation equal to eight months’ salary.
NW7555-04 Knoetze v Stokkiesdraai Vakansie Oord –
Commissioner: Mocwaledi
Constructive dismissal.
The commissioner was called upon to determine whether the
dismissal of the applicant was for a valid reason and in
accordance with a fair procedure.
The applicant led uncontested evidence that the respondent had
employed her as a resort manager. She alleged that she had
been compelled to resign with immediate effect. The applicant
also claimed that she had been forced to resign because a Mr.
Van Vuuren, who had threatened to withdraw financial
assistance to the company if the respondent did not get rid of
her. She further alleged that the respondent had false criminal
charges laid against her so as to get rid of her.
Noted: That tremendous pressure had been brought against the
applicant to resign.
Also noted: That she had been competent as a manager and
had served at Orkney Vaal Holiday Resort for a period of 4
years.
Held: That her resignation had not been voluntary, but had
been created by the respondent’s conduct towards her. The
commissioner, therefore, held that the dismissal of the applicant
was both substantively and procedurally unfair. The respondent
was ordered to pay the applicant compensation equivalent to
the applicant’s remuneration for a period of four months.
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By Tshidi Letsoalo
Labour Court: D236/04 / D292/04
Enforce Guarding (Pty) Ltd v Minister of Labour & Others (1):
Judge Ngcamu
Application for condonation- Administrative law – Review.
The applicant sought exemption from a sectoral determination
regulating minimum ordinary hours of work and overtime in the
security industry. The Director General of the Department of Labour
rejected that application. The applicant then launched an
application for review of that decision, but before the judgement
was handed down, the Director-General issued a compliance order,
to which the applicant filed an objection, which was also rejected.
The Director General then lodged an application to enforce the
compliance order, and the applicant appealed outside the period
prescribed by the LRA, and sought condonation.
Noted:
On the application for condonation:
-
-
-
That it had been unnecessary to consider prospects of
success in that the applicant had failed to provide a
reasonable explanation for the delay in filing the appeal.
That the applicant’s appeal rested on the claim that the
amount owing in terms of the compliance order had been
owed for more than 12 months. However, that limitation had
been removed by the latest amendments to the LRA.
That the applicant had no vested right to refuse to pay the
amount owing, and that there had been no prospects of the
appeal succeeding.
With regards to the review application:
-
-
That the respondents had argued that the application had
been brought before internal procedure (that is, appeal in
terms of the BCEA) had been exhausted, which, they
contended that it was a breach of the requirements of the
Promotion of Administrative Justice Act 3 of 2000.
That the application had been launched before the appeal was
finalised because the Court had refused to condone the late
noting of the appeal. However, the statutory appeal procedure
would only be completed once the matter has been finally
decided.
Held: That the application for condonation and the review
application were accordingly dismissed.
Case reference
Mziya v Putco Ltd (1999) 2 BLLR 103 (LAC)
Labour Court: D436/01
Maharaj v CP de Leeuw (Pty) Ltd: Judge Landman
Dismissal – Automatically unfair.
The applicant, a black registered quantity surveyor, resigned after
an unqualified white colleague was promoted to the vacant post of
regional head. Before his resignation, the applicant raised amongst
other issues that he had been paid considerably less than other
white colleagues. He had expressed his dissatisfaction over these
matters, in grievances that he had recorded. He alleged that he had
been constructively dismissed and that his dismissal had also been
automatically unfair as it was caused by the employer’s racial
discrimination against him.
Noted: That the applicant’s resignation had been premature in that
he had not appropriately raised his grievances with management
before resigning. The Court also noted that it had been unable to
find that Mr Maharaj was not appointed because he is not white, as
the most probable basis for the applicant not to be appointed in the
position of local director had been that he was not a good
communicator, nor a rainmaker.
Further noted: That the non-promotion of the applicant had not
been unfair and that the applicant’s dismissal had not been on
racial grounds. However, the promotion and appointment of an
unqualified surveyor may well be such as to render the employment
relationship intolerable and this may have caused the applicant to
be constructively dismissed.
Held: That in the absence of a discrimination claim, it lacked
jurisdiction to adjudicate the matter. As the matter only concerns
constructive dismissal, it was accordingly, referred to the CCMA for
arbitration.
Labour Court: P 302/03
Venture Otto SA (Pty) Ltd v Metal Engineering Industries
Bargaining Council: Judge Farber
Breach of Agreement – Employer undertaking to abide by award
and then breach agreement after deciding to take the matter on
review.
The respondent employee referred a dispute to arbitration after the
applicant had introduced a new grading system and was awarded
the lowest grade. That resulted in him being deprived of
incremental salary increases and periodical discretionary bonuses.
The respondent arbitrator ruled that the employee had been
demoted and had ordered the applicant to pay the employee
compensation equivalent to the bonuses of which he had been
deprived. When the time specified to payment passed, the
employee took the award to the employer and was told that the
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local director had agreed that the applicant would comply with the
award and the employee was further asked if the amount could be
paid on the next pay date.
Court. The arbitrating commissioner reinstated the respondents and
ordered the appellant to compensate them for losses occasioned
by their dismissal
The employee and the HR manager then concluded a written
agreement stating that the amount would be paid as indicated. A
week later, the employee was informed, by the HR manager, that
senior management had decided not to comply with the agreement,
because it intended taking the award on review.
The respondents then successfully applied to have the award made
an order of court. The judicial managers sought to have the order
reviewed and subsequently abandoned the matter. The
respondents then instituted contempt proceedings against the
appellant. One of the judicial managers had argued that the award
should not have been made an order of court because the High
Court’s leave had not been obtained before the action was
instituted. The court a quo held that the judicial managers were
guilty of contempt of court because, although they may have been
convinced that the order was wrongly granted, they were
nevertheless bound to comply with it until it was set aside by a
competent court.
Noted: That, at the time of the agreement, the applicant had no
intention of impeaching the award. Only later, upon obtaining legal
advice, had the applicant’s managing director decided to give
instructions that the matter be taken on review. By then, the
decision was too late, as the applicant had already bound itself by
an agreement to honour the award.
Held: The application was dismissed with costs.
Case references
Dabner v SA Railways and Harbours 1920 AD 583
Natal Rugby Union v Gould 1999 (1) SA 432 (SCA)
Labour Appeal Court: JA42/03
North West Star (Pty) Ltd (under judicial management) v
Serobatse & Another: Judges Zondo, Davis,Jafta
Contempt of Court – Defences- Judicial managers guilty of
contempt by failing to ensure that the CCMA reinstatement order
was complied with.
The appellant, after having dismissed the respondents was placed
under judicial management by the order of High Court. A few weeks
later, the respondents referred a dispute to the CCMA concerning
their dismissal. The dispute was arbitrated after the appellant was
finally placed under judicial management. The final order had
stayed all actions against the appellant without leave of the High
Noted: That the judicial managers were obliged in their capacities
as the appellant’s representatives to ensure that the appellant had
complied with the order. Their failure to take such steps rendered
them guilty of contempt of court. The Court also noted that it had
not been open to the judicial managers to ignore the order simply
because they believed that it had been wrongly granted.
Further noted: That, five years has passed since the respondents
had obtained an arbitration award from the CCMA. The delay had
been caused by the manner in which the appellant and its judicial
managers had handled the situation.
Held: That the respondents were granted leave to bring urgent
committal proceedings if their attempts to obtain relief were further
frustrated. The appeal was, accordingly, dismissed.
Case reference
City of Tshwane Metropolitan Municipality v Campella NO & Others
(2004) 1 BLLR 1 (LAC)
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By Dorothy Khosa
High Court, South Eastern Cape Local Division: 2060/04
Rieck v Crown Chickens (Pty) Ltd t/a Rocklands Poultry: Judge
Plasket
Vicarious liability – Plaintiff claims damages from defendant on
basis of vicarious liability.
The plaintiff had been employed by a labour broker. She rendered
her services at the premises of the defendant as a cashier in its
factory shop. She was, however, subjected to the day to day
instructions and control of the defendant and reported to its
management. While working at the factory, the plaintiff alleged that
she was abducted by some robbers and taken hostage to secure
their gateway in a motor vehicle that they stole from a customer.
The plaintiff alleged that, as the robbers sped away from the
premises, members of the defendant’s security fired shots. One of
the shots struck her in the left elbow. She claimed damages from
the defendant of an amount of R1 535 938,60. She alleged that the
defendant was vicariously liable for the unlawful and negligent act
of a member of its security personnel. The defendant argued that
the gunshot was not inflicted by its employee acting during the
course and scope of its employment with the defendant. The
defendant further argued that the gunshot wound was inflicted by
one of the robbers who abducted the plaintiff.
Noted: That the Compensation for Occupational Injuries and
Diseases Act 130 of 1993 (COIDA) provides a system of ‘no fault’
compensation for employees who are injured in accidents that arise
out of and in the course of their employment or who contract
occupational diseases. Employees are, therefore, entitled to
compensation regardless of whether their injury or illness was
caused by the fault of their employer or any other person. At the
same time employees are prevented from instituting claims for
damages against their employers for damage suffered as a result of
the accident or disease.
Held: That the plaintiff had been a victim of an occupational injury
and was, therefore, entitled to compensation in terms of the
COIDA. The plaintiff had discharged the onus that rested on her to
establish that the defendant’s employee who had fired the shot that
struck her, had acted negligently.
It was found that the defendant had been liable to the plaintiff for
such damages as she may prove she had suffered as a
consequence of having been shot by an employee of the
defendant, acting within the course and scope of his employment.
The defendant was directed to pay the plaintiff’s costs in respect of
the merit of her claim. Such costs should include the costs of
photographs and of a pre-trial inspection in loco attended by the
plaintiff’s attorney.
Case references
Beetge v Road Accident Fund (SE)
Cape Town Municipality v Paine 1923 AD 207
Carmichele v Minister of Safety and Security & Another 2001 (4) SA
938 (CC)
Jooste v Score Supermarket Trading (Pty) Ltd (Minister of
Labour intervening) 1999 (2) SA 1 (CC)
Van Den Berg v Coopers & Lybrand Trust (Pty) Ltd & Others 2001
(2) SA 242 (SCA)
Midway Two Engineering & Construction Services v Transnet Bpk
1998 (3) SA 17 (SCA)
Minister of Law & Order v Monti 1995 (1) SA 35 (A)
Minister of Police v Rabie 1986 (1) SA 117 (A)
S v Walters & Another 2002 (4) SA 613 (CC)
Wait v Minister of Defence [2002] 2 All SA 414 (E)
Supreme Court of Appeal: 070/04
Commissioner for the South African Revenue Service &
Another v TFN Diamond Cutting Works (Pty) Ltd: Judges
Zulman, Streicher, Lewis, Heher and Ponnan
Vicarious liability – Theft by employee – Customs official stealing
diamonds detained at airport – Innocent employer liable for harm
caused by intentional act of employee acting in course and scope
of duties.
On his return from the United States, one of the respondent’s
directors had a parcel of uncut diamonds confiscated at the
Johannesburg International Airport because the original invoices for
the purchase could not be found. The diamonds had been placed in
a safe by employees of the first appellant. When the director
subsequently returned to the airport with the required
documentation, he was informed that the diamonds were missing.
The respondent alleged that the diamonds had been stolen by a
SARS official. The first appellant and the second appellant (the
Minister of Finance) were held jointly and severally liable for the
loss of the diamonds, and thus responsible for paying the
respondent such damages as could be proved. The appellants
contended that they could not be held accountable for the loss
because the thief had not acted within the course and scope of his
duties as a customs official, and that they were exempted from
liability by virtue of the Customs and Excise Act 91 of 1964.
Noted: That the keys to the safe had been in the custody of the
employee concerned. Had the employee been negligent, he would
have been liable in terms of the rules of vicarious liability.
Negligence was a form of fault. So too, was an intentional act. The
employee’s duty was to safeguard the diamonds. He had not done
so. It followed, therefore, that the first respondent was liable for the
loss caused by its employee.
Further noted: That the Custom and Excise Act exempts the State
and any officer from liability for loss of or damage to goods stored
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in “State warehouses”. The Court was prepared to assume, in the
appellants’ favour that the airport safe fell within the statutory
definition of “State warehouse”.
Held: However, that the word “loss” did not include theft of goods in
State warehouses. This was because not only the State, but also its
officers were indemnified. If loss included theft by officers, it would
mean that officers could steal from State warehouses with impunity.
The legislature could never have intended to create so
preposterous a situation.
The appeal was dismissed with costs.
Case references
Administration, Transvaal v Carletonville Estates Ltd 1959 (3) SA
150 (A)
Benning v Union Government (Minister of Finance) 1914 AD 180
Ess Kay Electronics (Pty) Ltd and Another v First National Bank of
Southern Africa Ltd [2001] 1 All SA 315 (SCA)
Venter v Rex 1907 TS 910
Supreme Court of Appeal: 301/04
Media 24 Ltd & Gasant Samuels v Sonja Grobler: Judges
Farlam, Navsa, Conradie, Heher & Van Heerden
Vicarious liability – Appeal – Employer liable for damages
conducted by former employee to another employee.
This was an appeal from a judgment in the Cape High Court, in
which the first and second appellants were held jointly and
severally liable to pay the respondent a total amount of R776 814.
This was the figure at which the Court quantified the damages
which she had suffered as a result of sexual harassment. It held
that she had been subjected over a period of approximately five
months by the second appellant and for which the first appellant
was vicariously liable.
Noted: That the first respondent had appointed the second
respondent as the applicant’s direct supervisor and that he had
(second respondent) abused his position of authority, which
enabled him to create a hostile work environment. The second
respondent’s behaviour was foreseeable.
Held: That the appeals of both appellants should fail. Their appeals
were dismissed with costs.
Case references
Barnard v Santam Bpk 1999 (1) SA 202 (SCA)
Carmichele v Minister of Safety and Security 2001 (4) SA 938 (CC)
Dingley v The Chief Constable, Strathclyde Police 2000 SC (HL)
Fedlife Assurance Ltd v Wolfaardt 2002 (1) SA 49 (SCA)
Lillicrap Wassenaar and Partners v Pilkington Brothers (SA) Ltd
1985 (1) SA 475 (A)
Michael v Linksfield Park Clinic (Pty) Ltd 2001 (3) SA 1188 (SCA)
Minister van Polisie v Ewels 1975 (3) SA 590 (A)
Van Deventer v Workman’s Compensation Commissioner 1962 (4)
SA 28 (T)
Van Wyk v Lewis 1924 AD 438
Vigario v Afrox Ltd 1996 (3) SA 450 (W)
Metal Engineering Industries Bargaining Council: MEEL75
National Union of Metalworkers of SA obo Bhulwana v
Boardman Brothers (Pty) Ltd: Arbitrator Maré
Contract of employment – Unilateral change to terms and
conditions of employment – Employer imposing ‘no smoking’ rule
throughout its factory – Employees having no contractual
entitlement to smoke – Not unilateral change to conditions of
employment.
The respondent introduced a rule prohibiting smoking throughout its
factory. The applicant union referred a dispute to arbitration
claiming that the imposition of the rule without consultation
amounted to a unilateral change to terms and conditions of
employment. The union further claimed that the suspension without
pay of an employee for smoking in the men’s rest room had
amounted to an unfair labour practice.
The respondent argued that the right to prohibit the use of tobacco,
alcohol or any other habit forming drugs vested in the owner of any
premises and was entrenched in s 9 of the Tobacco Products
Control Act 83 of 1999. The employer had a responsibility towards
the health of its workers and was not required to consult on the
issue. Furthermore, the employee had been, on the balance of
probabilities, smoking on the premise and there was a fair reason
for his suspension.
The union conceded that the only area of contention was whether
the employer had applied the no-smoking rule consistently. While
management and administrative staff could leave the premises and
smoke at will, most factory workers were ‘locked in’ and could only
smoke during their lunch break.
Held: That a total ban on smoking did not constitute a unilateral
change to terms and conditions of employment. There was no
contractual entitlement to smoke at the workplace. For the right to
smoke to be considered as a condition of employment it would
need to qualify as a ‘condition’ under which the affected employees
were employed. Any dispute over the fairness of the
implementation of the rule would have to be addressed as a mutual
interest dispute.
Further held: That the employer had not discharged the onus of
proving that the employee had indeed been smoking in the rest
room and that his suspension without pay was accordingly unfair.
The employer was ordered to pay the employee the wages lost
during the period of suspension.
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WHEN IS A PERSON AN EMPLOYEE OR AN INDEPENDENT CONTRACTOR?
Summarised by Dorothy Khosa
Presented by Jeremy Daphne
(Bloemfontein Breakfast Seminar)
In his presentation, Daphne discussed the difficulties that are
encountered when one distinguishes between an employee and an
independent contractor. In substantiating this, Daphne made
reference to Brassey, who argued that:
“the truth is that no test exists for determining who is an employee,
if by that is meant some touchstone by which the relationship can
quickly and certainly be identified. It would be surprising if there
were. Employment is a complex and multi-faceted social
relationship; its forms are protean, and its existence must be
defined by a process whose application goes unremarked in most
other branches of the law, the process of assessing all the relevant
facts”.
In order to overcome these difficulties, Daphne made reference to
section 200A of the Labour Relations Act, 1995 (LRA) and section
83A of the Basic Conditions of Employment Act, 1997 (BCEA). The
two sections address the presumption as to who is an employee
and deeming of persons as employees, respectively.
Interpretation of the Labour Relations Act
The starting point in determining whether a person is an employee
is to follow and be informed by the provisions of section 3 of the
LRA. This section provides that any person applying the LRA must
interpret its provisions –
(a)
(b)
(c)
“to give effect to its primary objectives;
in compliance with the Constitution; and
in compliance with the public international law obligations
of the Republic”.
A ‘purposive’ approach to interpretation considers a statutory
provision broadly so as to give effect to the Constitution and to the
underlying purpose of the statute. It usually implies a generous
interpretation that may take into account the legal history that gave
rise to the statute.
services. Persons working under a contract for services
(independent contractors) are expressly excluded from the
definition. The exclusion also includes persons performing work for
which they do not receive, or are not entitled to receive
‘remuneration’, for example, unpaid ‘volunteer’ who works for a
charitable institution. Paragraph (b) of the definition is much wider
than the first one. It even appears wide enough to include
independent contractors (who are not expressly excluded).
Distinction between an employee and an independent
contractor
The distinction between an employee and an independent
contractor has been the source of much legal debate in the courts.
In many cases the distinction is not too difficult, for example, a bank
teller and a plumber. The distinction is also evident between an
archetypal employee and a typical independent contractor.
Archetypal employee works for a single employer in a permanent,
full-time capacity, is subject to the supervision of the employer, etc.
Typical independent contractor performs a discreet service for a
fee, does not work for a single employer, etc.
The distinction is not always straightforward. In order to deal with
grey areas the courts have evolved three classical tests. The tests
are as follows:



Control test – employer has the right to prescribe what work is
done and the manner in which it is to be done.
Organisational or integration test – is the person part and
parcel of the organisation?
Dominant impression test – no single indicator is decisive and
the contract as a whole must be examined whether it is a
contract of employment or a contract for the performance of
independent services.
Definition of an employee
Table 1 illustrates certain primary characteristics of an employment
contract vs. a contract for work. These characteristics were
discussed in the case of SA Broadcasting Corporation v McKenzie
(1999) ILJ 585 (LAC).
Section 213 of the LRA defines an ‘employee’ as:
Table 1: Contract of service v Contract of work
(a) “any person, excluding an independent contractor, who works
for another person, or for the State and who receives, or is entitled
to receive, any remuneration; and
(b) any other person who, in any manner, assists in carrying on or
conducting the business of an employer”.
Contract of service
(Employee)
Contract of work
(Independent contractor)
Object of contract – rendering
of personal services by
employee.
Performs services personally.
Object of contract – the
production of a specified result.
Paragraph (a) incorporates the common law concept of an
employee. Under common law, an employee is someone who
works under a contract of service as opposed to a contract for
Not obliged to render services
personally.
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Employer may choose when to
make use of employee’s
services.
The
employee
performs
services under the supervision
and control of the employer.
Termination of contract on
death or retirement.
Contract of service terminates
on expiry of period of service.
Time for performance usually
specified.
Subservient only to the contract.
Death of independent contractor
does not necessarily terminate
contract of work.
Contract of work terminates on
completion of specified work or
production of a specified result.
The courts have stressed that one must consider all the factors to
decide if it is the individual’s personal labour or services that is the
object of the contract (employee), or the product or result of the
service or labour that is the object of the contract (independent
contractor). The legal relationship must be gathered from the
contract and the realities of the relationship – and not simply from
the way the parties have chosen to describe it.
Provisions of section 200A of the LRA
The 2002 amendments to the LRA aim to address the problems
associated with establishing the distinction between an employee
and an independent contractor. The legislature introduced a
rebuttable presumption, which if triggered, shifts to the employer
the burden of proving that a worker is not an employee. Section
200A (1) has created a presumption that until the contrary is
proved, a person who renders services to any other person is
presumed, regardless of the form of the contract, to be an
employee, if any one or more of a list of seven factors are present.
The seven factors are drawn largely from the jurisprudence of the
courts to provide a framework of indicators pointing to an
employment relationship. The list of factors includes elements of all
three traditional tests as well as the ‘economic realities’ test. These
include the following:
(a)
(b)
(c)
(d)
(e)
manner in which the person works is subject to the
control or direction of another person,
the person’s hours of work are subject to the control or
direction of another person,
in the case of a person who works for an organisation,
the person forms part of that organisation,
the person has worked for that person for an average of
at least 40 hours per month over the last three months,
that person is economically dependent on the person for
whom they work or render services,
(f)
(g)
the person is provided with tools of the trade or work
equipment by that person, and
the person only works for or render services to one
person.
This means that even if the contract between the parties indicates
that the person is an independent contractor, if any of the listed
factors is present that person is presumed to be an employee. It is
then up to the employer to prove on a balance of probabilities that
despite the existence of these factors, the applicant is not an
employee.
The earnings threshold
In terms of section 200A (2), section 200A (1) presumption will only
come into effect if the person claiming to be an employee earns
less than the statutory minimum prescribed by the BCEA – currently
R115 572 per annum. Conceptually, there can be no reason to
distinguish the nature of the relationship solely on the basis of how
much a worker earns. Rather, it confirms the purpose of the LRA
amendments being to protect workers that are economically most
vulnerable rather than redefining the employment relationship. The
existing law will thus continue to apply in respect of persons
earning above the threshold, subject to the Code of Good Practice
envisaged by section 200A (4).
Advisory arbitration award
If a proposed or existing working arrangement involves persons
earning the statutory limit or less, any person to the arrangement
may approach the Commission for Conciliation, Mediation and
Arbitration for an advisory award on whether the persons involved
in the arrangement are employees.
Conclusion
In concluding the presentation, Daphne emphasised that an
employment relationship must exist for the provisions of the LRA
and the BCEA to apply. If it is the individual’s personal labour or
services that is the object of the contract, it is likely to involve an
employee. If it is the individual’s product or result of the service or
labour that is the object of the contract, it is likely to involve an
independent contractor. Until the contrary is proved, a person who
renders services to any other person is presumed to be an
employee if any one or more of a list of seven factors contained in
section 200A (1) of the LRA are present. The presumption is
rebuttable – the employer can prove on a balance of probabilities
that the individual concerned is an independent contractor.
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EVALUATING THE BEST PRACTICE TO USE IN PREPARING FOR CONCILIATION AND ARBITRATION
By Tshidi Letsoalo and Sunita Parbhoo
Presented by Eugene van Zuydam
(Essential Labour Practice)
INTRODUCTION
Following Notification of Conciliation or Con-Arb Hearing/s
Both conciliation and arbitration are important processes at the
CCMA. As such, it is essential to be thoroughly prepared prior to
attending either process. Parties should prepare for both processes
in order for them to present their cases successfully. They should
have a clear and concise understanding of how the dispute arose.
For example, an employee should be guided by Schedule 8 of the
Labour Relations Act so as to identify for themselves and for the
conciliator how the employer has breached the guidelines for a fair
dismissal. As soon as the parties receive a notification letter to
attend a CCMA hearing, they should start preparing for it.
Avoid postponements
In principle, the preparatory steps for conciliation also apply to
arbitration, including: the correct completion of the request for an
arbitration form, appropriate representation, being suitably prepared
and dealing with jurisdictional issues. Unlike conciliation, however,
arbitration is a more formal process and the arbitrator must make a
determination on the outcome of the dispute in the form of an
arbitration award. Conciliation is a voluntary process where parties
agree to the terms of the agreement. In arbitration, the arbitrator
imposes an award on the parties after hearing the evidence.
CONCILIATION
Conciliation preparations
Important information which parties should have ready to give to
the conciliator includes:
o
o
o
o
o
o
o
o
o
Date of which the worker started working for the employer,
Position held by the worker at the time of the dismissal,
Amount of money the worker was earning at the time of
dismissal,
Date of the incident or event which led to dismissal,
Date of notification to attend a disciplinary or performance
enquiry, and/or the date of suspension pending the enquiry,
Date of which the enquiry was held,
Date of the enquiry outcome – usually the same date as the
actual dismissal,
Date of any internal appeal process and its outcome, and
Date the dispute was referred.
Parties should take any documents which may be important to the
dispute with them to conciliation. Documents may include a payslip,
a letter of appointment, the employment contract, the notification of
an enquiry and the letter of termination.
Once a notice of a conciliation hearing has been received, avoid
requesting postponement. The CCMA Rules do not provide for
postponement at conciliation and “generally” an application for
postponement will not be considered. If the parties require time to
settle, then the conciliation will be postponed to a fixed date for the
filing of a settlement agreement. Whether or not filed, a certificate
will be issued on the postponed date declaring the dispute as being
resolved or unresolved.
Ensure appropriate representation
Ensure representation at the conciliation hearing follows the
requirements of section 135 (4) of the Act:
In conciliation proceedings, a party to the dispute may appear in
person or be represented only by –
(a) Director or employee of that party; or
(b) Any member, office bearer or official of that parties registered
trade union or registered employers' organisation
The commissioner has no discretion to deviate from the provisions
of the Act.
Attend the hearing
'No-shows' undermine the Act's objective of quick and fair dispute
resolution. It removes any chance of settlement and are a
significant drain on CCMA resources. The actual applicant must
also attend the hearing.
CCMA Rule 13 states:
(1) “The parties to a dispute must attend a conciliation in person
whether or not they are represented.
(2) If a party is represented at the conciliation, but fails to attend in
person, the commissioner may:
(a) Continue with the proceedings,
(b) Adjourn the proceedings, or
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(c) Dismiss the matter by a written ruling”.
Determine the nature of the dispute
It is important that the dispute is properly categorised at the
conciliation stage. CCMA Rule 15 states the following:
whether the case may proceed to CCMA arbitration or to the
Labour Court for adjudication, or whether the parties may consider
the use of industrial action to pursue their interests.
ARBITRATION
Arbitration preparations
“A certificate issued in terms of section 135(5) that the dispute has
or has not been resolved, must identify the nature of the dispute as
described on the referral document or as identified by the
commissioner during the conciliation process”.
The parties will have to prepare themselves properly to be able to
present their case to the arbitrator by means of evidence and legal
argument. In preparations, parties should consider the following
factors:
Be prepared
o
o
The CCMA will notify the parties of the date, time and venue of the
conciliation hearing. In terms of Rule 11, the Commission must give
the parties at least 14 days notice unless otherwise agreed.
Ensure representatives are well versed with the case and have
settlement proposals as well as a mandate. Endeavour to develop
a creative mandate enabling a range of settlement options.
o
o
o
o
o
Schedule sufficient time to allow for the hearing to proceed over the
allocated time frame, where necessary and possible. This could
facilitate settlement.
Bring documentation that might assist in clarifying issues, including
documentary evidence. However, leading evidence through
witnesses is not required at conciliation.
Aim to settle at conciliation
o
All relevant evidence must be gathered;
Witnesses who are available and willing to testify need to be
informed of the date, time and venue of arbitration;
Any relevant documents that will help the parties prove their
case must be collected together in a bundle;
Each page of the bundle of documents should be numbered
from one upwards;
The bundle should be copied so that there is a copy for all the
parties at the process including the arbitrator;
The parties should attempt to have a pre-arbitration meeting to
discuss the issues in dispute and to share documents,
Parties should work out an arbitration plan or strategy with
their representatives, and
The plan would outline what will be said in the opening
statement, which witnesses will testify to which aspects of the
dismissal and a summary of any relevant case law that
supports the case.
FOLLOWING NOTIFICATION OF ARBITRATION
Complete and serve the CCMA referral form correctly,
timeously and consider the jurisdictional issues
Settlement at the conciliation stage should be seen as first prize in
terms of the dispute resolution process provided by the Act.
Conciliation provides for the quick and fair resolution of disputes.
The decision-making regarding the outcome lies in the hands of the
parties involved and the conciliation process is uncomplicated. It is
also inexpensive and does not require legal representation. Be
prepared to participate in conciliation hearings with a view of
engaging with the process and exploring all possible options for
settlement. Avoid carrying over any personal tensions that might
have arisen during the internal process and be prepared to
concentrate on finding solutions to the dispute.
Following CCMA Rule 18, complete and serve the referral form
Where an agreement is reached at the conciliation hearing, the
commissioner will issue a certificate of outcome and a settlement
agreement, stipulating the terms of the settlement. A conciliation
settlement agreement is final and binding on both parties. If the
conciliation hearing does not result in a settlement being reached,
an outcome certificate will be issued to this effect. The nature of the
dispute, as stated on the outcome certificate, will determine
Avoid late referrals and consider jurisdictional issues. Examples of
where the CCMA would not have jurisdiction to arbitrate (unless the
parties agree) are where it is an unfair discrimination dispute and
where it is a dismissal due to operational requirements relating to
two or more employees.
LRA 7.13.
Bear in mind that the CCMA can only arbitrate if a request for
arbitration is filed and a certificate has been issued. The CCMA
holds the view that S191(5) is subject to the provisions of
S135(5)(a), which requires the conciliating commissioner to issue a
certificate when (1) conciliation has failed or when (2) the 30-day
period has expired from the date the CCMA received the
conciliation referral. In terms of S 136(1)(8) of the Act the arbitration
must be referred to the CCMA within 90 days of the issuing of the
certificate.
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Start preparations timeously
The CCMA will notify the parties of the date, time and venue of the
arbitration hearing. In terms of Rule 21, the Commission must give
the parties at least 21 days notice of the arbitration hearing, unless
otherwise agreed. It is advisable to immediately begin preparations
for the arbitration by consulting with all relevant witnesses and
obtaining all relevant documentary evidence.
Prepare submissions and evidence
Parties, if they are not represented at arbitration, need to have
some insight into evidence, how to present evidence and the
concepts of relevance and admissibility.
What is meant by evidence?
Definition of “evidence”
Evidence is made up of relevant facts and inferences which can be
drawn from those facts, which tend to prove or disprove an issue in
dispute. Proof is thus the primary goal of the law or rules of
evidence.
Definition of the law of evidence
The “law of evidence” is the body of law which regulates the proof
of facts generally in a court of law or other adjudicative process,
such as arbitration.
Presenting evidence, is therefore, regulated by law, and constitutes
the facts that are used to prove or disprove a case. Following the
law of evidence, the arbitrator can accept not all the facts. In order
to be admissible, evidence must be relevant and reliable.
If the one party does not agree with the evidence led by the other, it
is important to dispute it – otherwise it will be accepted by the
chairperson.
The following are the main types of evidence:
Type of evidence
Indirect evidence
Direct evidence
Oral
evidence
evidence
Documentary
evidence
Real evidence
Important terms and definitions
Circumstantial
Hearsay
Disputed docs
Real evidence
Admissible evidence – An arbitrator will not admit (accept) all
evidence that is presented. The arbitrator will only allow a party to
present admissible evidence. To be considered “admissible”,
evidence must be relevant and reliable.
Relevant evidence – Evidence must be relevant, i.e., connected
directly to the issues in dispute.
Reliable evidence – To be reliable, the evidence must come from
a trustworthy source. Evidence must be credible (believable) and
preferably corroborated by other evidence or tested by crossexamination.
Corroboratory evidence – This is evidence which supports or
confirms other evidence.
Oral evidence - This is sometimes called viva voce evidence which
means “live voice” evidence. This is considered to be reliable
evidence because the witness who gives oral evidence can be
questioned or cross-examined to test the reliability of the evidence.
Oral evidence is usually direct evidence because the witness
testifies to what he/she saw, heard or otherwise perceived with
his/her own senses. Oral evidence about what someone else saw
or heard, and is generally indirect hearsay evidence.
Documentary evidence – A document can be described as
“everything that contains written or pictorial proof of something (see
Seccombe v Attorney General 1919 TPD 270). From this, it is clear
that a document must contain some sort of written representation
and should be evidence or proof of some fact.
For example, a contract of employment signed by the employee
and the employer is proof of the fact that the parties had entered
into an employment relationship on a specific date. The handing in
of a document does not prove the facts that are contained in the
document. Both parties must either agree that the document is true
and correct or the parties submitting the document must have a
witness to testify that the document is true and correct.
Real evidence – Real evidence is usually a tangible object such as
an assault weapon, clothing, a photograph, video and sound
recordings, and objects that were allegedly stolen or broken. The
physical object or thing is brought before the arbitrator for
examination. Things do not speak for themselves and real evidence
must generally be introduced or referred to by a witness.
Hearsay evidence – Hearsay evidence is an example of evidence
which may be quite relevant but which is sometimes inadmissible.
Hearsay evidence may be oral or written evidence relating to the
facts that a witness did not personally see, hear, or experience
through his/her own senses, but which was heard from someone
else. The witness relies on a report that was received from
someone else (the originator). In other words, it is second-hand
evidence.
Example of hearsay evidence
X has been dismissed for theft of company property. At arbitration
to decide if X’s dismissal was fair, the company calls the head chef
working in the canteen. The chef did not see X steal the goods but
testifies that he heard Pete, another canteen worker; say that X had
stolen company property. This evidence is hearsay and will not be
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admissible as proof that X stole company goods. Pete will have to
testify, himself, about what he had seen.
Inspection in loco – When an arbitrator goes out and inspects a
workplace or any other relevant place it is called a site inspection or
an inspection in loco. This also constitutes real evidence. The
arbitrator makes observations and must be permitted to make
submissions regarding the inferences to be drawn from the
arbitrator’s observations.
Products of modern technology that is utilised as real
evidence – Although this has already been covered under the
section entitled “real evidence”, bear in mine that there is an
overlap between some types of technological evidence, for
example, videotapes, computer printouts, etc and documentary
evidence that has been discussed above.
o
o
o
Photographs, plans, diagrams and models: They are all
deemed to be documents for the purposes of the law of
evidence. None of these forms of evidence can be
introduced without a witness testifying to its authenticity
or without the consent of the other party.
Video and audio recordings as evidence: Video and
audiotapes differ from other categories in the sense that
the human eye cannot decipher them in their natural
state but have to be “transferred’ by a tape recorder.
Video and audio recordings are admissible in the Labour
Court and in arbitration hearings. The primary test for
the admissibility of such a recording as evidence is
relevant.
Computer output as evidence: Because computer
generated data is open to manipulation, it will nearly
always require the oral evidence of a witness to testify to
the integrity of the data to establish authenticity and
reliability.
decide whose version is the most probable. The arbitrator will then
be obliged to rule in favour of the party whose version sounds more
likely or more probable.
The burden of proof – In arbitration, one party has the burden or
onus of proof. This means that the party has the duty of proving
something to the arbitrator on a balance of probability. If the parties
have both given probable but conflicting evidence on a point in
dispute and the arbitrator is unable to decide which version is more
probable, the arbitrator will rule against the party who bears the
onus or burden of proof.
In dismissal disputes, section 192 (1) states that the workers has
the onus or burden to prove that a dismissal did take place. Once
the dismissal has been proved or admitted by the employer, the
onus or burden shifts in terms of section192 (2) to the employer to
prove that the dismissal was fair.
Hold a pre-arbitration hearing
A voluntary pre-arbitration conference may assist the parties to
narrow the issues in dispute – However, bear in mind Rule 20,
which states:
(1) The parties to arbitration must hold a pre-arbitration
conference dealing with the matters referred to in sub rule if
directed to do so by the Director, and
(2) In a pre-arbitration conference, the parties must attempt to
reach consensus on a wide range of issues.
Circumstantial evidence – this form of evidence constitutes
indirect proof. It depends on evidence of circumstances where the
arbitrator can draw a reasonable and probable conclusion.
Although such evidence carries less weight than direct evidence, it
can be enough in arbitration to prove a fact.
NOTE: Unless a dispute is settled, the parties must draw up and
sign a minute setting out the facts on which the parties agree or
disagree. The referring party must ensure that a copy of the prearbitration conference minute is delivered to the appointed
commissioner within seven days of the conclusion of the prearbitration conference. If any other party fails to attend a prearbitration conference without a justifiable reason, the
commissioner may make an order of costs against that party.
Example of circumstantial evidence
Bring appropriate witnesses
A witness testifies that he heard noises of an argument coming
from a room and then sees X emerging from the room holding a
knife dripping with blood and Y stumbles out of the room with a stab
wound in his arm – this constitutes circumstantial evidence related
to assault (misconduct).
The standard of proof – This refers to the standard by which
evidence must be measured to be accepted as proof. In a criminal
trial, the standard of proof is referred to as “beyond reasonable
doubt”. If the evidence presented leaves a reasonable doubt that
the person accused of a criminal offence is guilty, the accused must
be given the benefit of the doubt and be found not guilty.
The standard of proof in arbitration is the civil law standard which is
“on a balance of probabilities”. In arbitration, the arbitrator must
weigh up the probabilities, as presented in the evidence, and
Ensure that the appropriate witnesses are available for the hearing,
but avoid bringing unnecessary witnesses. Do not request the
CCMA to subpoena witnesses unless absolutely necessary. Follow
CCMA Rule 37 when requesting a subpoena.
Attend the hearing
Where the applicant fails to appear in person or be represented at
arbitration proceedings, the commissioner may dismiss the matter
in terms of section 138 (5)(a) of the Act. Section 138 (5)(b) of the
Act allows the commissioner to proceed with the arbitration hearing
in the case where the respondent does not appear. If the arbitrator
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proceeds without the respondent, the respondent will still be bound
by the arbitration award.
The arbitration award must be issued within fourteen days
An arbitration award must be issued within fourteen days of the
conclusion of the arbitration proceedings and served on both
parties. On good cause shown, the CCMA Director may extend this
period. The arbitration award usually covers the following areas:
details of hearing and representation, issues to be decided,
background to the issue, survey of evidence and arguments,
analysis of evidence and arguments and the award.
The issue of representation at the CCMA has always been a
contentious one. From the inception of the CCMA, members of the
legal profession as well as a wide variety of business/HR/IR/labour
relations consultants have felt and argued that the limited rights of
representation stipulated in the LRA were both unreasonable and
unfair. Prior to the August 2002 LRA amendments, representation
at the CCMA was set out in certain sections of the LRA, viz:
Section 135 (4) of the LRA
“In conciliation proceedings, a party to a dispute may appear in
person or be represented only by(a) A director or employee of that party; or
(b) Any member, office bearer or official of that party’s registered
trade union or registered employers’ organisation”
Avoid acting in a frivolous or vexatious manner
Section 138 (4) of the LRA
Arbitration Fee
“In any arbitration proceedings, a party to the dispute may appear
in person or be represented only by-
In cases of dismissal relating to conduct or capacity where a
commissioner finds that a dismissal is procedurally unfair, in terms
of section 140(2) of the Act, the commissioner may charge an
employer an arbitration fee (in addition to the provisions of section
194 (1) of the Act).
(a) A legal practitioner;
(b) A director or employee of the party; or
(c) Any member, office bearer or official of that party’s registered
trade union or registered employers’ organisation”.
Cost order for vexatious or frivolous behaviour
In terms of section 138 (10) of the Act, a commissioner may include
an order of costs if a party or person who represented the party in
the proceedings acted in a vexatious or frivolous manner:
a) by proceeding with or defending the dispute in the arbitration
proceedings, or
b) in its conduct during the arbitration proceedings.
Meaning of “costs”
The term “costs” refers to an order by a CCMA commissioner for
parties to pay the other party or parties for certain expenses
incurred in having a dispute resolved through arbitration. Cost
orders only allow certain expenses incurred in the arbitration to be
recovered, such as legal costs incurred and certain disbursements
incurred, such as subsistence and traveling costs of witnesses.
If a commissioner grants costs, a bill of costs must be drawn up
and served on the parties, and on the CCMA. The CCMA will then
tax the bill of costs. Taxation is the assessment of the amount
allowed for costs claimed and is carried out by a CCMA taxing
officer following CCMA Rule 39. Once the bill of costs has been
taxed the amount of money allowed by the taxing officer can be
claimed from the other party.
CCMA representation
Section 140 (1) which is entitled to “special provisions for
arbitrations about dismissals for reasons related to conduct or
capacity”
(1) If the dispute being arbitrated is about the fairness of a
dismissal and a party has alleged that the reason for the
dismissal relates to the employee’s conduct or capacity, the
parties, despite section 138(4) are not entitled to be
represented by a legal practitioner in the arbitration
proceedings unless(2)
(a) The commissioner and all the other parties consent, or
(b) The commissioner concludes that it would be unreasonable to
expect a party to deal with the dispute without legal
representation, after considering
(i) The nature of the questions of law raised by the dispute,
(ii) The complexity of the dispute,
(iii) The public interest, and
(iv) The comparative ability of the opposing parties to deal with
the arbitration of the dispute.
Many hoped that the August 2002 legislative amendments would
relax the provisions and allow wider rights of representation to more
categories of labour/legal practitioners and representatives,
including labour consultants and paralegal officers who had always
been excluded from representing clients at both CCMA conciliation
and arbitration proceedings. This did not materialise and, despite
the fact that some parties believed that the CCMA had adopted a
more lenient or relaxed approach to the question of representation,
the view of the CCMA was that nothing had really changed in that,
although sections 135 (4), 138(4) and 140(1) had been repealed by
Acts of Parliament, they were retained in the transitional provisions
of Schedule 7 item 27. Item 27 provided that the listed sections
would remain in force until the CCMA Rules came into force. The
CCMA drafting team presented a rule (which would have been Rule
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25) on the issue of representation to the social partners but this
was not acceptable and the situation remained the same as far as
representation is concerned. Rule 25 was redrafted and the
relevant sections were retained, albeit in footnote 5 to Rule 25.
Furthermore, Rule 13(1) and Rule 17 (7) retained the LRA
provisions on representation.
Frustrated parties predicted that challenges to the constitutionality
of the limited rights of legal representation would soon follow. The
judgement of Netherburn Engineering case (judgement handed
down on the 31 August 2003) presented such a challenge.
This matter had initially been the subject of an arbitration hearing
under the auspices of the CCMA. The applicant in the matter, a Ms
Moabelo, was represented by a union official at the arbitration
hearing. The respondent, Netherburn, represented by a Mr
Featherstone had argued that it should be represented by its
attorney. The commissioner had declined to allow legal
representation to the respondent party. This decision not to allow
Netherburn legal representation was the subject of a review
application to the Labour Court. In addition, Netherburn claimed an
absolute right to be represented by a legal practitioner and, further,
that section 140 (1) of the LRA was unconstitutional and should be
found to be such. In this regard, the respondent’s representative
argued that section 140(1) of the LRA was inconsistent with one or
more or all of the following rights set out in the Constitution:
(a) Section 1 (c): “The Republic of South Africa is one, sovereign
democratic state founded on the following values: Supremacy
of the Constitution and the rule of law”.
(b) Section 23 (1): Everyone has the right to fair labour practices;
(c) Section 34: Everyone has the right to have any dispute that
can be resolved by the application of law decided in a fair
public hearing before a Court or where appropriate, another
independent and impartial tribunal or forum;
(d) Section 33 (1): Everyone has the right to administrative action
that is lawful, reasonable and procedurally fair.
(e) Section 9(1): Everyone is equal before the law and has the
right to equal protection and benefit of the law, and
(f) Section 9 (3): The state may not unfairly discriminate directly
or indirectly against anyone on one or more grounds,
including race, gender, sex, pregnancy, marital status, ethnic
or social origin, colour”.
Judge Landman considered the constitutional challenges:
Netherburn relied on section 33 (1) of the Constitution, that is,
everyone has the right to administrative action that is lawful,
reasonable and procedurally fair. The CCMA is an organ of state
but not a court of law.The CCMA performs some functions that are
of an administrative nature. However, despite the fact that Zondo,
in an obiter remark in the matter of Shoprite Checkers (Pty) Ltd v
Ramdaw NO & Others (2001)22 ILJ 1603, stated that the making of
an arbitration award by a CCMA commissioner constituted an
administrative action, Judge Landman preferred the view
expressed by Wallis AJ in Shoprite Checkers (Pty) Ltd v Ramdaw
NO and Others (2000) IJ 1232 that arbitration was not an
administrative action.
Regarding the right to representation implicit in section 34 of the
Constitution, Netherburn’s representative submitted that the phrase
“Fair public hearing” in section 34 of the Constitution governed both
hearings before a court and other impartial tribunals or forums such
as the CCMA. He proceeded from the premise that legal
representation is the constitutional right of litigants participating in
civil litigation. Judge Landman did not share the view that the
requirements for a fair hearing were the same for courts and
tribunals. If this was so, the fundamental distinction between Courts
and tribunals would be ignored. He stated that, whereas section 34
read with the emphasis on the right to access to a civil court,
implied the right to legal representation, the same could not be said
about access to an appropriate impartial tribunal. Legal
representation could be appropriate in some situations and
tribunals but not in others. One could not state that the right of legal
representation vis-à-vis a tribunal was implicit in section 34 of the
Constitution. However, it was consistent with the right to a fair
hearing before a tribunal for it to have discretion (as per common
law) to admit legal representation in appropriate circumstances.
Such circumstances would be determined by the law establishing a
particular tribunal or the common law, informed by the Constitution.
Netherburn’s representative submitted that the law in relation to
legal representation in misconduct/incapacity dismissals as
contrasted with all the other forms of arbitration conducted by the
CCMA is unequal in operation and therefore arbitrary. He submitted
further that because arbitrariness is inconsistent with the rule of
law, the LRA therefore violates ss 1 and 9 (1) of the Constitution.
Landman held that it was correct that the LRA was inconsistent in
the way in which it dealt with legal representation at arbitration
proceedings. However, in terms of the Netherburn matter, there
was no differentiation as regards the qualified right of legal
representation between it and its former employee. Both an
employer and an employee who seek to be represented by a legal
practitioner at arbitration proceedings conducted before CCMA
commissioners are treated on the same footing, as neither one of
them has an unqualified right to legal representation The fact that
where both the employer and employee party in a particular matter
apply to be legally represented and this privilege is granted to one
of them and not to the other, does not mean that section 140 (1) of
the LRA discriminates between them.
Judge Landman stated that he was unable to find that Netherburn
had suffered any discrimination. Although he had adverted to the
inconsistency and inherent illogicality in the LRA as regards the
question of legal representation, he felt that where the inconsistent
or irrational regulation did not infringe a particular constitutional
right, it did not permit the conclusion that because one section of
the LRA was out of step with a more expanded or generous right,
that section 140 (1) was invalid in terms of the Constitution.
It appears, therefore, that the hopes of those who had felt that a
Constitutional challenge to the diminished rights of legal
representation in the CCMA would see the CCMA allowing more
categories of representatives through its doors and relaxing the
limitations on representation, have been dashed. According to the
Netherburn judgement, the diminished rights of legal representation
are not unconstitutional and thus, the status quo on representation
remains,
at
least,
until
the
next
challenge.
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RESOLVE LABOUR DISPUTES HONOURABLY – AND FAST
By: Nad Murugan
There can be no greater pain in the backside than a dragging
labour dispute. For both company and employee finding a solution,
a middle ground, or an ultimate winner in the battle of the
workplace as soon as possible is of utmost importance. Labour
disputes often drag on for eternity - like the weekend before
payday, the N1 in Johannesburg morning traffic or an Indian
wedding. What makes matters worse is that labour disputes can
take a violent turn in the courtroom, leaving both parties
desperately clinging to their last morsel of sanity as weeks, turn into
months, and sometimes years, as lawyers do what they do best –
taking time. In all fairness, the delay in coming to some sort of
conclusion is not all the fault of the men and women from legal
fraternity, but the tremendous backlog in CCMA and other
accredited dispute resolution providers such as bargaining councils
and private agency dealings.
A new piece of legislation, designed to make the whole process
much more effective, less complicated and fair came into effect on
1 August 2002. Section 188A of the Labour Relations Act (LRA),
commonly referred to as, pre dismissal arbitration, is the new
messiah of a process littered with unnecessary steps and
procedures. The philosophy driving the LRA is the aim to ensure
quick and inexpensive resolution of disputes and promote peace in
the labour market itself. If this all sounds very much like a UN
peace –keeping mission to Iraq, then you are not far off. Similarly to
the situation in that troubled country, mere legislation will not do the
trick in securing peaceful solutions. Peace can only exist, in country
or the labour market, if everyone feels that their rights are
respected and being protected.
In the past, the process from initiation to conclusion was a very
long, tedious and costly exercise. If an employee was alleged to be
guilty of misconduct, the employer had to complete a proper
investigation, and then decide whether disciplinary enquiry should
take place. This entailed calling witnesses, taking place out of work
and generally disrupting the day-to-day operations of the company.
To add fuel to the fire, the employees of most established
companies had the right to appeal, which is an entirely different
process and only then, should there be no agreement did the
parties approach the commission or their bargaining councils to
which they belong or through a private agency.
Section 188A comes into play when the seriousness of the
(alleged) conduct or capacity could lead to a more severe action
such as dismissal. “This is normally referred to as the one stop
shop,” says Nad Murugan, senior part-time commissioner with
CCMA and corporate advisor on the use of South African labour
legislation effectively to resolve labour disputes. “This particular
provision of the Act ensures that the award issued by the appointed
arbitrator is final and binding and it maybe enforced as if it were an
order of the Labour Court provided that the award is certified by the
director of the CCMA. Arbitration can be done through the
Commission itself, through a bargaining council or any private
agency, provided they are accredited by the CCMA to perform the
function of section 188(A).
The greatest benefit of this provision is that it cuts out the whole
process of disciplinary hearings, appeals conciliations and
arbitrations. The provision simplifies everything and reduces the
time, expense and trauma for all parties concerned. The basic gist
of this provision is as follows: An employer may, with the consent of
the employee, request a council, a private agency or the
Commission itself to conduct an arbitration into allegations about
the conduct, or the capacity, of that employee. The parties may be
represented by a co-employee, a director, an official office bearer of
a union or employers’ organisation if the one party is, in fact, a
company.
Only by agreement between the parties can legal representation be
allowed in terms of section 188 A. “In most cases I have dealt with,
both parties were legally represented by agreement and, in general,
it does benefit both parties,” says Murugan. “With regards to the
costs involved with section 188A, the current fee charged by the
CCMA stands at R3 420.00 per day which is inclusive of VAT, if the
matter is over and done with – no next steps, no added drama, just
the cost saving benefits of a speedy conclusion.”
When applying for section 188A, employers are in a position to
choose which accredited council, private agency or if the CCMA for
that matter, will handle its case. Experienced arbitrators will be
commissioned to deal with the 188(A) applications. “Each industry
is different and has different attributes,” says Murugan. “The
arbitrator would use discretion and take into account all aspects of
the dispute related to conduct or capacity and make reference to
particular codes of conduct of the company – although he or she is
not bound by that and any relevant Code of Good Practice as
provided for in the Act”.
In the end, all that anyone can really expect is that the decision
made is just and fair. This process has benefits for both sides. The
person that is appointed to head the arbitration is bound by a code
of ethics entitling both parties to a fair hearing. This should go some
way in eliminating or eradicating continuous allegation of biasness
against chairpersons of disciplinary enquiries. The section 188A
provision will contribute to minimise wastage of company and, in
addition, make life much easier on the employee. “There are
several major points to look at alleged misconduct disputes as to
whether an employee is in the wrong.” says Murugan. “ What is the
company rule, is the rule fair, valid and practical, did the employer
clearly communicate this rule, was it broken by the employee, and
lastly, is it fair to dismiss the employee because of it?” As
mentioned, the major benefit of this provision is the fact that it
saves time. From the moment section 188A application is filed, the
arbitration must be scheduled within 21 days to be held. The
outcome of the dispute must also be issued timeously. From the
time of completion of the hearing, the arbitrator is obliged to hand
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down a decision within fourteen days so that both parties may know
their fate as quickly as possible. If either party wishes to challenge
the outcome, the only place to that would be in a labour court.
Labour disputes need not carry on indefinitely, provision of section
188A is here to make life a whole lot easier on all the parties
involved. However, the only way to win a battle with honour, is to
find the best way to avoid fighting the battle at all…
For more information contact Nad Murugan on Tel/Fax (011)
486 1066/ 072 297 2361.
STATUS OF REFUGEES IN LABOUR DISPUTES
By Lucky Moloi
In terms of the Refugees Act 130 of 1998, a refugee means any person who has been granted asylum in terms of this Act. Therefore, in
terms of section 27 of the Refugees Act, refugees also have general rights which entail that a refugee:
(a)
Is entitled to a formal written recognition of refugee status in the prescribed form,
(b)
Enjoys full legal protection, which includes the rights set out in Chapter 2 of the Constitution and the right to remain in the
Republic in accordance with the provisions of this Act,
(c)
Is entitled to apply for an immigration permit in terms of the Aliens Control Act, 1991, after five years' continuous residence in the
Republic from the date on which he or she was granted asylum, if the Standing Committee certifies that he or she will remain a
refugee indefinitely,
(d)
Is entitled to an identity document referred to in section 30,
(e)
Is entitled to a South African travel document on application as contemplated in section 31,
(f)
Is entitled to seek employment, and
(g)
Is entitled to the same basic health services and basic primary education which the inhabitants of the Republic receive from time
to time.
Therefore, a refugee who has been granted asylum in terms of section 24 (3) (a) of the Refugees Act, is also covered by the Bill of Rights
as enshrined in the Constitution of the Republic of South Africa. It enshrines the rights of all people in our country and affirms the
democratic values of human dignity, equality and freedom. The state must respect, protect, promote and fulfil the rights in the Bill of Rights
(Constitution). Thus, the Commission for Conciliation, Mediation and Arbitration (the CCMA), as an independent organ of state, must also
respect, protect, promote and fulfil those rights. A refugee shall, therefore, fall within the ambit of the Labour Relations Act 66 of 1995, the
Basic Conditions of Employment Act 75 of 1997, and the Employment Equity Act 55 of 1998.
The refugee, as a complainant in terms of the Labour Relations Act 66 of 1995, shall refer a dispute directly to the CCMA using the
prescribed form and indicating the nature of the dispute as envisaged by the by the above-mentioned labour legislation and in compliance
with the CCMA Rules.
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THE PRINCIPLES OF DOUBLE JEOPARDY
By Gill Loveday
Summarised by Lucky Moloi
Introduction
The principles of autrefois convict or autrefois acquit derive from
the South African criminal law and mean that a person accused of
committing a crime and brought to trial before a competent court
may not be tried a second time for the same offence. At the second
trial, the accused may raise the plea of autrefois convict if he or she
has already been found guilty and convicted of the same offence or
the plea of autrefois acquit if the accused has already been
charged with the same offence and acquitted. In civil courts a
similar principle, known as res judicata, exists, meaning that a party
to a dispute may not pursue a claim against the other party a
second time, if that same claim has already been finally resolved or
disposed of by a competent court.
Applicability in labour law
It is doubtful whether any of these principles have direct application
in labour law. They are certainly not mentioned in any statutory
legislation. However, the essence of the above legal principles has
found its way into labour law and is often referred to by the
colloquial and, possibly American inspired term, of “double
jeopardy”. This means that it is generally considered unfair for an
employer to subject an employee to a second disciplinary enquiry
and impose a more severe sanction for the same offence for which
the employee had already been disciplined or acquitted. Grogan
(2003:17) has this to say about “double jeopardy”:
“If employees have been acquitted at a disciplinary inquiry, or if the
presiding officer has imposed a penalty less severe than dismissal,
they cannot generally be subjected to a second inquiry in respect of
the same offence. Nor may management ignore the decision of the
chairman of a properly constituted disciplinary hearing and
substitute its own decision. A dismissal in such circumstances
would invariably be unfair”.
Grogan goes on to say, however, that in exceptional circumstances
the courts would condone breaches of the “double jeopardy rule”
and quotes as an example the Labour Appeal Court decision in
BMW (SA) (Pty) Ltd v Van der Walt (2000) 21 ILJ 113 (LAC).
Grogan states that the Court found the circumstances sufficiently
exceptional in the Van der Walt case. It endorsed the employer’s
decision to hold a second disciplinary enquiry and to impose
dismissal where a previous enquiry had found the employee not
guilty of the charge, except for having made misrepresentations to
the employer which had not warranted any penalty. Gill Loveday, in
this article, expresses a different opinion by stating that “it appears,
however, that Grogan and at least one other arbitrator
misinterpreted the rationale of the LAC decision”.
employee, Van der Walt, came to hear of this and secured an
invoice to allow him to remove the equipment from the premises.
Both the invoice and the scrap authorisation reflected incorrectly
that the equipment was of no financial value. A certain close
corporation wanted to purchase the redundant equipment and Van
der Walt secured a second invoice falsely reflecting that the
equipment was being removed from the employer’s premises for
repairs. He then misrepresented to the close corporation that he
had sold the equipment to a company, which was prepared, in turn,
to sell it to the close corporation. The company, in fact, belonged to
Van der Walt and he would have profited from the sale in the
amount of R50,000.00. The close corporation, however, became
suspicious and alerted the employer, which then charged Van der
Walt with fraud. The company did not do a very thorough
investigation ahead of the enquiry, which led to Van der Walt being
exonerated from the main charge of fraud and only found guilty of a
misrepresentation, which the presiding officer did not believe
warranted any sanction.
After the full extent of Van der Walt’s dishonesty emerged, the
employer subsequently re-charged him with fraudulent
misrepresentation and dismissed him. Van der Walt referred an
unfair labour practice in terms of the LRA of 1956 to the then
Industrial Court, which found that the dismissal was unfair. The
employer took the matter on appeal to the Labour Appeal Court.
The LAC, in deciding when and if it is permissible for an employer
to institute a second disciplinary enquiry for the same offence, held
that the only criterion that should inform such a decision is that of
fairness to both parties. That is, fairness to the employer as well as
to the employee. The majority decision, per Conradie JA, set out
the principle as follows:
“Whether or not a second disciplinary enquiry may be opened
against an employee would, I consider, depend upon whether it is,
in all the circumstances, fair to do so. I agree with the dicta in
Amalgamated Engineering Union of SA & Others v Carlton Papers
of SA (Pty) Ltd (1988) 9 ILJ 588 (IC) that it is unnecessary to ask
oneself whether the principles of autrefois acquit or res judicata
ought to be imported into labour law. They are public policy rules.
The advantages of finality in criminal and civil proceedings are
thought to outweigh the harm which may in individual cases be
caused by the application of the rule. In labour law, fairness alone
is the yardstick. See also Botha v Gengold [1996] BLLR 441 (IC);
Maliwa v Free State Consolidated Gold Mines (Operations) Ltd
(1989) 10 ILJ 934 (IC). I should make two cautionary remarks. She
mentions that it may be that the second enquiry is ultra vires the
employer's disciplinary code (Strydom v Usko Ltd [1997] 3 BLLR
343 (CCMA). That might be a stumbling block. Secondly, it would
probably not be considered to be fair to hold more than one
disciplinary enquiry save in rather exceptional circumstances”.
The facts of the Van der Walt case were that the employer had
declared certain wheel alignment equipment redundant. An
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The Court found that at the first enquiry, the full import of Van der
Walt’s dishonest activity had not been fully canvassed and that Van
der Walt had deliberately misled the employer at the enquiry. The
employer had acted in good faith but had not initially appreciated
that Van der Walt had dishonestly and fraudulently removed
redundant equipment belonging to the employer so as to sell it for
personal gain. In such circumstances, the Court held that the
employer should be entitled to re-open the case once it had all the
relevant information and subject the employee to a second
disciplinary enquiry. Dismissal was an appropriate sanction
because, even if the employer ought to have seen through Van der
Walt’s scheme earlier, it would not be fair that Van der Walt “should
come away innocent” or that the employer should be “compelled to
retain an employee in whom it had justifiably lost all confidence”.
already been disciplined. The employer, dissatisfied with this
outcome, subjected the employee to a second disciplinary enquiry.
The arbitrator found such conduct to be untenable because an
employer cannot be allowed to “review” disciplinary outcomes and
overturn them if not to the employer’s liking. Such an approach, the
arbitrator held would be unfair and impinge on an employee’s
fundamental rights to a fair and transparent disciplinary procedure.
Zondo AJP (as he then was), in giving a dissenting judgment,
suggested that in dealing with cases of “double jeopardy” the courts
should adopt one of three positions or approaches exclusively and
then act consistently with that approach. The first proposition and
the one that Zondo advocates, is that an employer should never
have the right to hold a second disciplinary enquiry once an
employee has already been either found not guilty or found guilty
and sanctioned.
While the arbitrator’s decision on the specific facts of the case may
have been justifiable, had the general prohibition been taken on
review, it would very probably have been set aside, as can be seen
from the more recent Labour Appeal Court’s review of another
arbitrator’s decision in Bradford v Metrorail Services (Durban) &
Others (2003) 24 ILJ 2269 (LAC).
The judge sets out a list of advantages such an approach would
yield, notably that employers would be obliged to investigate
misconduct and prepare thoroughly for disciplinary enquiries, it
would promote legal certainty, it would preclude abuse by
employers of harassing an employee with endless disciplinary
enquiries for the same offence and because such an approach
would find greater acceptance with employees and trade unions, it
would be less likely to create workplace instability or labour unrest.
The second proposal mentioned but rejected out of hand by Zondo
AJP is that an employer always has the right to hold a second
disciplinary enquiry irrespective of the outcome of the first enquiry.
The third proposition would be that the courts should preclude
employers from holding a second enquiry unless exceptional
circumstances necessitate it, such as new evidence coming to light
or that the failure to hold a second enquiry would result in a
miscarriage of justice.
Although this was a dissenting minority judgment, the arbitrator in
SALSTAFF obo Brink and Portnet (2002) 23 ILJ 628 (BCA), agreed
with the views expressed by Zondo to prohibit employers from
subjecting employees to a second disciplinary enquiry on the basis
that such an approach would be more in keeping with the aims and
objectives of the new LRA, (the Van der Walt case had been
decided in terms of the old LRA). The arbitrator found that a
reasonable employee, if told that an employer has the right to
overturn decisions of chairpersons, would lose faith in the
employer’s disciplinary process. This would lead to a breakdown in
workplace discipline, dissatisfaction and ultimately industrial unrest,
contrary to the objectives of the LRA.
The facts of the case before the arbitrator were very different from
the facts of the Van der Walt case. In SALSTAFF obo Brink, the
employee had sworn in front of a customer and been reported to
her superior. The superior had issued the employee with a verbal
reprimand. Thereafter, the employee was formally charged with
using bad language but the chairperson appointed to chair the
enquiry refused to do so on the grounds that the employee had
The arbitrator consequently prohibited the employer from
proceeding with any further disciplinary action against the
employee concerned. But rather astonishingly, the arbitrator also
prohibited “on a general level” the employer from (ever) “interfering
with the decision of a chairperson of a disciplinary hearing or for
that matter with the decision of a chairperson of an appeal hearing”.
In this case the employee, a traffic control officer with 21 years
service, was discovered to have made R834.00 worth of fraudulent
claims from petty cash. A meeting was held and the employee’s
manager, with little information at his disposal, issued the employee
with a verbal warning for an “irregularity” which was entered onto
his personal record. Thereafter, the employer brought charges of
fraud, forgery and dishonesty against the employee relating to the
same fraudulent claims from petty cash and dismissed him. A
bargaining council arbitrator found this to have been unfair and
ordered the employer to reinstate the employee.
On review, the Labour Court set the award aside because it found
that the arbitrator had committed a gross irregularity by failing to
appreciate that an employer may discipline an employee for the
same offence a second time. The employee took the Court’s
decision on appeal but the majority of the Labour Appeal Court
concurred with the Labour Court.
The majority decision of the Court found that the arbitrator had
misconceived the true legal position and had misinterpreted the
rationale in the Van der Walt case. Jafta AJA stressed that because
an employee has already been disciplined (in casu with a verbal
warning) for an offence, it does not mean that the employer is
precluded from holding a formal disciplinary enquiry and imposing
dismissal for the same offence. A second disciplinary enquiry and
the imposition of the sanction of dismissal do not automatically or
invariably render the dismissal unfair. The arbitrator had
misunderstood the dictum in the Van der Walt case by concluding
that an employer may not discipline an employee a second time for
the same offence unless exceptional circumstances prevail. The
correct interpretation of the Van der Walt decision is that the
paramount and only determining factor in evaluating an employer’s
action in instituting disciplinary action a second time is fairness. The
court’s reference to “exceptional circumstances” in the Van der Walt
case is “merely one of two caveats and not the actual or real test to
be applied.” The correct legal position is that a second enquiry
would be justified if it would be fair to institute it in the
circumstances.
The Court went on to explain the concept of fairness as follows:
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“The concept of fairness, in this regard, applies to both the
employer and the employee. It involves the balancing of competing
and sometimes conflicting interests of the employer, on the one
hand, and the employee on the other. The weight to be attached to
these respective interests depends largely on the overall
circumstances of each case.”
Quoting with approval from NUMSA v Vetsak Co-operative Ltd
1996 SA 577 (A), the Court referred to the following dictum in
respect of fairness:
“Fairness comprehends that regard must be had not only to the
position and interests of the worker, but also those of the employer,
in order to make a balanced and equitable assessment. In judging
fairness, a court applies a moral or value judgment to established
facts and circumstances.”
Applying the legal principles to the facts of the case in Branford, the
court concluded that in the circumstances “it would be manifestly
unfair for the company to be saddled with a quick, ill-informed and
incorrect decision of its employee who misconceived the
seriousness of the matter and hurriedly took an inappropriate
decision leading to an inappropriate penalty.”
It was pointed out in Wium v Zondi & Others (2002) 11 LC 7.22.2
J3854/00 that where the presiding officer is not empowered to
make a binding decision but only a recommendation, it does not
amount to “double jeopardy” when a more senior level of
management overrides the recommended penalty and substitutes it
with a more severe penalty. In that case a person applying for the
post of school principal failed to reveal information about a criminal
conviction in his application and was charged with knowingly
making a false or incorrect statement. The presiding officer found
the employee guilty and recommended a final warning. The
Superintendent-General of Education did not accept the
recommendation and instead imposed a dismissal. The Court found
that this was not unfair and did not amount to double jeopardy in
that it was not a second enquiry but the consideration of the
recommended penalty as part of the same initial process.
Summary of the legal position
The legal position on double jeopardy can be summarised as
follows:
(a) An employer does not always have the right to institute
disciplinary action a second time against an employee for the
same offence.
(b) Equally, it cannot be said that an employer may never institute
disciplinary action a second time.
(c) It is not appropriate for courts (or arbitrators) to adopt a rigid
approach akin to the public policy rules applicable in criminal
or civil law when dealing with labour law disputes.
(d) The only yardstick that should be used to measure whether an
employer is justified in instituting disciplinary action a second
time is whether it is fair to both parties in the circumstances to
do so.
(e) Although other factors such as, the employer’s disciplinary
code or the existence of exceptional circumstances may
influence the evaluation of fairness – these factors will not
necessarily be determinative.
(f) If the employer’s disciplinary code provides that the presiding
officer is restricted to making a recommendation, the
consideration and substitution of the penalty recommended
will not amount to double jeopardy.
(g) In cases where the circumstances of the misconduct are not
fully canvassed at the initial enquiry; where new information or
evidence has subsequently surfaced or where a supervisor
has made a hurried, ill-informed and inappropriate decision
leading to an inappropriate sanction, the courts (and
arbitrators) are more inclined to find the employer is justified in
conducting a second disciplinary enquiry.
(h) It appears that a second enquiry is more likely to be justified
where the misconduct relates to acts of dishonesty that breach
the trust relationship paramount to sustaining a continued
employment relationship.
(i) It is therefore implied that each case of alleged double
jeopardy must be evaluated on its own merits by a
consideration of all the surrounding circumstances in the light
of what would be fair to both parties.
Conclusion
The fact that the LAC has left the door open to employers to
discipline the same offence a second time, is not a licence for
employers to disregard the tenets of workplace fairness and
employment equity without proper justification. Employers
cannot lightly threaten employment security and the
Constitutional protection of employees from unfair, capricious or
arbitrary conduct in disciplining employees. Such an approach
by the company would undermine their managers who have
been mandated to maintain discipline, would destroy employee
confidence in the company’s disciplinary procedures and would
seriously damage the credibility of the company’s HR
Department.
Once an employer has taken fair disciplinary steps, it would be
procedurally unfair to institute further disciplinary steps if that
would be unjustified in the circumstances. However, if the
second enquiry is found to be unjustified because it is unfair, the
second enquiry and its outcome are void. To establish
substantive fairness the employer has to prove that the
dismissal was for a reason related to the employee’s conduct,
capacity or for reasons related to the employer’s operational
requirements.
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THE BENEFITS OF CONCILIATION – ARBITRATION (CON-ARB) PROCESS
Compiled by Tshidi Letsoalo
Presented by Edwin Molahlehi
(Klerksdorp)
INTRODUCTION
WHEN IS CON-ARB NOT PERMITTED?
The con-arb concept is not new in the labour dispute resolution
arena. It is also a concept that has received a fair amount of
attention in the academic literature. In the South African labour
market the proposal to institutionalise the concept was introduced
in 1994 during the negotiations that led to the passing of the 1995
Labour Relations Act (the LRA).
The con-arb process is excluded in dismissal and unfair labour
practice disputes which are subject to Labour Court adjudication
rather than arbitration. Disputes where a con-arb is not applicable
are:
 Dismissals in breach of freedom of association
principles,
 All automatically unfair dismissals, that is, where the
reason for dismissal falls within one of the seven reasons
stated in sections 187 (1)(a) to (h) of the LRA,
 Dismissals of more than one worker based on
operational requirements of the employer, and
 Unfair labour practices that resulted from workers making
protected disclosures – section 186 (2)(d).
At the time the majority of labour dispute resolvers were strongly
opposed to the institutionalisation of the con-arb. The proposal
which was strongly put forward by the ministerial task team, which
was responsible for the drafting of the new LRA, was largely
influenced by the Australian experience.
The combination of the consensus and adjudicative process, which
at times is referred to as hybrid processes has a long history in
America. In South Africa, the hybrid processes were introduced in
the early development of progressive labour relations by the then
Independent Mediation Service of South Africa (IMSSA). The one
mixed dispute resolution process that was gaining popularity in the
late 80’s was the arb-med. The con-arb was then commonly
referred to as med-arb.
The concept con-arb was institutionalised and made part of the
compulsory dispute resolution mechanism of the LRA in 2002
amendments. Con-arb is a mixture of both conciliation and
arbitration. In its typical form the con-arb process starts off with
conciliation by a third party and if the parties are not able to reach
an agreement during the conciliation, the person who conciliated
proceed immediately to arbitrate the matter. In other words, the
same person who conducted the conciliation also conducts the
arbitration. This process provides the parties in dispute with a onestop and expeditious dispute resolution mechanism.
WHEN IS CON-ARB USED?
In terms of the LRA, con-arb is compulsory only for dismissals and
unfair labour practices relating to probation. In this regard section
191 (5A) provides that: “The Council or Commission must
commence the arbitration immediately after certifying that the
dispute remains unresolved if the dispute concerns:
a)
b)
The dismissal of an employee for any reason relating to
probation;
Any unfair labour practice relating to probation.
In other dismissals and unfair labour practices con-arb can be used
with the consent of the parties.
WHEN IS A CON-ARB OPTIONAL?
In all other dismissal and unfair labour disputes mentioned in
section 191 (5)(a), the parties have a choice. This includes:





Dismissal related to the worker’s conduct or capacity,
Constructive dismissal,
Operational requirements (retrenchments) of only one
worker,
The worker does not know the reason for dismissal, and
An unfair labour practice as described in section 186
(2)(a) to (c).
BENEFITS OF CON-ARB
Some of the advantages of using the con-arb process are:
 Con-arb is a “one–stop” dispute resolution process,
 An unresolved dispute at conciliation is referred and
determined immediately in a final and binding
arbitration,
 If the arbitration is not heard on the same day the
date can be determined without having to wait for
the matter to be scheduled as in the ordinary cause,
 Finality of the dispute and legal certainty are
obtained within a much quicker turn-around time,
 Maintains pressure on the parties to settle without
them losing ownership of the process if conciliation
fails,
 It does reduce the cost significantly,
 The arbitrator may be required to arbitrate only on
issues that had remained unresolved at conciliation,
 It induces the parties to prepare for their case for
both processes at the same time,
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



It induces parties to evaluate the relative merits of
their cases early which places them in a better
position to grasp the advantages of settling the
dispute,
Witnesses are more likely to still be available,
Witnesses will have a clearer, more accurate
recollection of the events or incidents about which
they are required to testify, and
It is less likely that relevant documents or other
types of real evidence will be damaged, lost or
misplaced.
Challenges in Implementation of Con-Arb
Since the promulgation of the amendments, the CCMA (nationally)
has conducted a total of 67000 con-arbs. Out of the 67000 conarbs conducted between period of August 2002 to February 2005,
30 % were settled and 59% were finalised in one day. Out of this
figure 16508 cases were settled with the assistance of the CCMA
and 964 cases settled by the parties themselves.
Rule 17 (1) of the CCMA requires the Commission to give both
parties at least fourteen days notice that the matter has been
scheduled for con-arb. There issue that has been raised in the light
of the combination of the two processes into one process has been
whether or not the fourteen days notice is sufficient. If the notice
period of fourteen days was to be extended, the challenge would be
the provisions of section 191 (5) which requires the CCMA to
conciliate a dispute within 30 days of the date of referral. In this
regard any notice period longer than 14 days would leave the
CCMA with insufficient time to conciliate disputes. The extension of
the period will defeat the underlying purpose of the process, being
expedited dispute resolution.
In terms of the amended CCMA rules the nature and procedural
steps for conciliation and arbitration are exactly the same in the
event of con-arb. The difference only lies in the timing of the two
events in that the con-arb envisages the dispute being finalised in
one day. Generally speaking, this means that the commissioner
who conciliated the dispute would arbitrate and issue a binding
award within fourteen days of the date of hearing.
parties who in complex matters are faced with irreconcilable and
principled positions, an avenue for narrowing down the issues and
agreeing on what issues are in dispute and which ones are not. In
other words, the flexibility of the process allows the parties to
conduct some form of a pre- arbitration meeting.
REPRESENTATION IN THE CON-ARB
The same principle that applies in conciliation and arbitration is
applicable in the con-arb process with regard to who may represent
parties. In con-arb proceedings a party to the dispute may appear
in person or may be represented only by:
a)
b)
c)
A legal practitioner;
A director or employee of that party;
Any member, office bearer of the official of the party’s
registered trade union or registered employer’s organisation.
With regard to legal representation in the con-arb process the rules
provides that the nature and procedural steps for both conciliation
and arbitration are exactly the same and therefore the issues of
legal representation in particular in the conciliation phase of the
con-arb remains unchanged.
Diagrams 1 and 2 illustrate the procedures taken by the CCMA in
conducting the con-arb process.
DIAGRAM 1: COMPULSORY CON-ARB PROCESS
REFERRAL OF DISPUTE (within 30 days)
MATTER SCHEDULED FOR HEARING
NOTICE OF THE CON-ARB HEARING
UNFAIR DISMISSALS OR UNFAIR LABOUR
PRACTICE PERTAINING TO PROBATION
In practice the CCMA has, unless parties consent otherwise,
appoint a different commissioner to hear the arbitration part of the
con-arb. The consent raised by both users and commissioner is
that the appointment of the same commissioner who conducted the
conciliation, would compromise confidentiality and the impartiality.
Anecdotal evidence indicates that the value and the success of the
con-arb depends on proper preparations by the parties in other
words the proper preparation for the conciliation part of the process
– looking at all the settlement options and bringing to the process
witnesses and relevant documentation and being ready to proceed
with arbitration in the event conciliation fails.
There seem to be no argument that from experience there is a
need to look closely on how to address the issue of scheduling
complex matter for con-arb. However, it has been pointed out that
the problem with complex matters is that parties do not take
advantage of the flexibility of the con-arb process in that it does
allow them to revert to the conciliation phase even in the middle of
the arbitration phase. The flexibility of the process also allows
CONCILIATION
SETTLED
END OF MATTER
NOT SETTLED
ARBITRATION
Award issued within 14 days
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The above approach was in line with the decision taken in the
matter of Nginza & Another v Ford No & Others (2000) 21 ILJ
1184 (LC). The matter was decided prior to the amendments of
2002, before the con-arb process was institutionalised.
DIAGRAM 2: IF A PARTY OBJECTS
REFERRAL OF DISPUTE (within 30 days)
MATTER SCHEDULED FOR HEARING
NOTICE OF THE CON-ARB HEARING
DISMISSAL & UNFAIR LABOUR PRACTICE OTHER THAN
THOSE RELATED TO PROBATION
NO OBJECTION TO
CON-ARB
CONCILIATION AND
ARBITRATION (CONARB)
Single & joint process)
OBJECTION BY A PARTY – 7
DAYS NOTICE
CONCILIATION
Separate processes
ARBITRATION
OBJECTION TO A CON-ARB PROCESS
A party wishing to object to a dispute being dealt with in terms of
con-arb process, is obliged, in terms of Rule 17 (2), to put its
objection in writing and notify both the CCMA and the other party at
least seven days prior to the scheduled date of the hearing.
However, objection will have no force and effect in terms of section
191 (5A)(a) and (b), if the dispute concerns the dismissal or an
alleged unfair labour practice relating to probation.
On receipt of an objection to the con-arb process the CCMA treats
the process as separate. Initially the approach adopted by the
CCMA was that of, scheduling the arbitration which ought to have
waited for the request from the applicant, that the matter be
referred to arbitration.
After conducting the arbitration as part of the con-arb, the
commissioner refused to release the award because he discovered
after writing the award that according to him the applicant did not
request for the arbitration in terms of section 136(1) of the LRA. In
dealing with the requirements of section 136(1) in relation to the
con-arb the Judge said:
“It cannot therefore be heard of the respondent to cry foul that there
was no (sic) request in terms of s136(1) of the Act, as the
respondent must have been fully aware that on this day what was
scheduled was not only conciliation but it was a date on which,
should conciliation fail (sic) arbitration proceedings will commence
immediately thereafter.”
However in the case of Ceramic Industries v CCMA &
Another,J1426/04, Judge Landman took a different approach. The
Court in this matter held that if a party objects to the process of
con-arb, the CCMA may not rely on Rule 17 which provides for the
conducting of the con-arb process immediately after conciliation to
proceed to arbitration. According to this judgement the CCMA
cannot where an objection to the con-arb has been lodged proceed
immediately with arbitration in the absence of the request to do so
in terms of s136(1) by any of the parties. In other words, the CCMA
can only schedule arbitration after receipt of the LRA 7.13 form
from the applicant.
The CCMA has interpreted the decision of Ceramic Industries to
be limited only to a situation where there is an objection to con-arb.
Where parties fail to attend the con-arb, the CCMA will proceed
with the arbitration part of the con-arb and issue a ruling or an
award.
CONCLUSION
Whilst the 2002 amendments that institutionalised the con-arb were
most welcomed, the challenge for the CCMA and the users is to
change the mindset to ensure that the con-arb process is embraced
as the most efficient, flexible and expeditious dispute resolution
process. There is also a need to review the issue of objections.
Should the current approach remain or should the legislation be
amended
to
require
for
the
objection.
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A NEW ROLE MODEL – CENTRALISED BARGAINING IN IRELAND
Summarised by Lucky Moloi
To centralise or decentralise wage negotiations? In most of Europe,
centralised bargaining has lost something of its former hue and is
seen by many to be inflexible and cumbersome. But in Ireland,
centralised bargaining has made a remarkable comeback. A recent
report by a group of independent observers concludes that the
competitiveness of the Irish economy has been considerably
enhanced by this system of wage determination.
agreements in moderating wage demands and in creating a
peaceful industrial relations environment.
One of the keenest debates in industrial relations in Europe is the
relationship between the institutional structure of the labour market
and economic performance and, in particular, the contribution of the
wage determination process to national competitiveness.
Considerable attention has focused on European economies, like
Germany and Sweden, whose traditionally centralised and
coordinated bargaining systems have come under significant
pressures in recent years. The case of Ireland has attracted less
attention.
These agreements have promoted considerably uniformity in pay
arrangements across the economy, particularly in the private
sector. The report reveals, for example, that, for the period 1987 to
1993, annual average real gross earnings rose by between 2% and
2.5% for employees in manufacturing, construction and financial
services. With changes in personal income tax arrangements,
agreed under the national wage agreements, the net, real takehome pay of employees rose above these levels.
Labour Market Study: Ireland, written by a team of authors from the
Economic and Social Research Institute (ESRI) and the Graduate
School of Business, University College Dublin, reports that the
exceptional performance of the Irish economy in recent years is
due, in no small measure, to the centralisation of the wage
bargaining process. The economy has seen phenomenal growth in
employment and output, resulting in increased prosperity and living
standards but without fuelling inflation. While this was underpinned
to a significant degree by ongoing moderate growth in the
international economy, the substantial additional expansion in the
Irish economy can be attributed to domestic factors. Foremost
amongst these has been the moderation in labour costs which led
to an improvement in Ireland's international competitiveness and
prompted a sharp rise in exports.
Significant growth in employment levels
Unemployment, for long amongst the highest in Europe, has also
decreased significantly. Total employment increased by an average
of over 45,000 per year between 1993 and 1996, while
unemployment declined from almost 17% in 1993 to just under 13%
in 1996. Ireland is perhaps unique amongst most European
countries in that its manufacturing sector continues to show
significant growth in employment, in the main due to continued
inward investment, but the indigenous sector, too, continues to
show significant expansion after a long period of stagnation and job
losses.
The establishment of competitive wage rates
While the report acknowledges that factors other than labour costs
have been important - such as the maintenance and improvement
of educational standards - particular importance is attached to the
role played by the negotiation of a series of nationalised wage
Since 1987, the social partners in Ireland have negotiated four
three-year wage agreements. The most recent - Partnership 2000had been agreed (see Record IE9702103F) as well as having had
a moderating effect on wage increases.
Further, these wage increases were shown to be particularly
moderate when compared to increases in national output. The ratio
of GDP to persons at work in the economy rose by 3.3% per annum
over the same period, indicating significant improvements in unit
wage costs. In manufacturing it is estimated that unit wage costs
declined by as much as 13%.
When Irish industrial hourly wages costs are compared to other
European economies, the contribution of the national wage
agreements is immediately apparent: between 1988 and 1992
hourly labour costs in Ireland rose by 17% second only to the
Netherlands, and significantly less than other EU member states.
Growing pressures in the public sector
The report draws attention to some significant differences in wage
movements in the public sector and private sector; a trend it
considers worrying. Annual earnings amongst employees in the
public sector, for instance, were 15% higher than those in the
private sector in 1987 and the differential increased to 25% by 1990
and 30% by 1993. Adjusting for inflation, it is estimated that
average earnings for public sector employees rose by 4.5% per
year, compared to 2%-2.5% in the private sector, over this six-year
period. Some of these increases can be attributed to the payment
of "special" wage increases (that is, above the norm increases
which had been deferred from a previous national agreement), and
to changes in skill mixes and occupational structures in the civil
service, but the size of the divergence would suggest that public
sector wages have grown at a faster pace than those in the private
sector.
This is an area of key concern for the report's authors who stress
the need for maintaining modest wage increases in the current
national agreement and, in particular, in the public sector where
wage pressures from key occupational groupings like nurses,
teachers, police and lower paid civil servants have begun to build in
recent months.
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The absence of wage drift
Notwithstanding these current pressures, the report comments on
the considerable success the wage bargaining process has had in
holding wage dispersion in check within the manaufacturing sector.
This is in stark contrast with the period of decentralised bargaining
from 1980 to 1987 when there were significant variations between
sectors with employees in the drink and tobacco industry and in the
multinational-dominated chemical industry faring far better than
those in other industries. With the return to centralised bargaining in
1987, however, inter-sectoral variations have become noticeably
less marked.
Drawing on work by Sheehan ("Crisis, strategic re-evaluation and
the re-emergence of tripartism in Ireland", Brian Sheehan,
Unpublished MComm thesis, Graduate School of Business,
University College Dublin (1996)), the report estimates that the
compliance rate for the three most recent national agreements was
over 90%. Where there have been above the norm wage increases,
these have been confined to a small number of companies and
have not had significant knock-on implications in other
organisations.
However, while above the norm wage increases may have been
rare, one of the most striking features of negotiations conducted
under the Programme for Competitiveness and Work (1994-96) at a
local level has been the implementation of wage freezes, wage cuts
and the recruitment of new employees on lower entry pay scales. It
is significant also that these "concession agreements" do not
necessarily make provision for catch-up wage increases once the
fortunes of the organisation are reversed. Examples here include
Waterford Crystal, De Beers, Krups, Bayer Diagnostics and Apple
Computers in the private sector and Irish Steel and TEAM Aer
Lingus in the semi-state sector. While these agreements have been
confined to a small number of companies, the precedent of
"concession bargaining" has been firmly established in the Irish
workplace. In this respect also centralised agreements have
demonstrated considerable flexibility at a local level.
Another significant feature of recent negotiations has been the
moderation and compliance demonstrated by foreign-owned
companies in comparison to the behaviour which characterised this
sector in the 1970s and early 1980s - a reflection, inter alia, of the
severity of inter-subsidiary competition within multinationals. In such
circumstances, the need to be "good citizens" and adhere to the
terms of a national wage agreement has provided management
with a convenient excuse to concede moderate wage increases,
even in instances where companies could have afforded to pay
above the norm wage increases.
Commentary
That Ireland should seek to maintain its centralised wage
bargaining system might seem quixotic to its European neighbours,
but the evidence in this report and argument presented would
suggest that the Irish economy has been well served by this system
of wage determination. Nonetheless, the pay pressures currently
building in the public sector are likely to offer a stern examination of
Ireland's social partners' and Government's ability - in this an
election year - to seek a compromise to suit all parties and yet
retain the benefits which have thus far accrued from its preferred
system of wage negotiations. John Geary, CEROP).
Reference
"Labour market studies: Ireland", eds: J. Sexton and P. O'Connell,
authors: J. Fitzgerald, J. Geary, T Lalor, B Nolan and E. O'Malley,
Office for the Official Publications of the European Communities,
Luxembourg.
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