Passenger Rail Agency of South Africa (Pty) Ltd v Mathobela and Others (2024/127351) [2024] ZALCJHB 446 (13 November 2024)

THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG

Not Reportable

Case No: 2024-127351

In the matter between:

PASSENGER RAIL AGENCY OF SOUTH AFRICA (PTY) LTD Applicant and SIPHIWE MATHOBELA First Respondent SIMEON MIGHTY MOLOKO N.O. Second Respondent COMMISSION FOR CONCILIATION, MEDIATION AND ARBITRATION Third Respondent

Heard: 12 November 2024

Delivered: 13 November 2024

JUDGMENT

MAKHURA, J

[1] The applicant, the Passenger Rail Agency of South Africa (PRASA or the applicant), seeks this Court’s intervention in incomplete arbitration proceedings before the Commission for Conciliation, Mediation and Arbitration (CCMA), pending the determination of a review application against a CCMA ruling refusing its application for legal representation. After its unsuccessful legal representation

application, PRASA applied for postponement of the arbitration pending the determination of its review application before this

Court. This postponement application was dismissed, correctly so.

[2] The CCMA has now scheduled the arbitration for 2 December 2024. PRASA, in response to the postponement ruling and the scheduling of the arbitration, launched this urgent application. The application is unopposed.

[3] In Netherburn Engineering CC t/a Netherburn Ceramics v Mudau NO and Others,[1] the Labour Appeal Court (LAC) reaffirmed that the purpose of the Labour Relations Act (LRA) was to provide a speedy, cheap and

informal dispute resolution system. Further, the LAC found that it would be untenable if the right to legal representation in conduct

and incapacity disputes were to be absolute or a general right. The company’s application for leave to appeal the LAC decision to the Constitutional Court was unsuccessful.[2]

[4] This Court in Trustees for the time being of the National Bioinformatics Network Trust v Jacobson and others[3] (Jacobson) was confronted with a similar set of facts as in the current matter, dealing with an urgent application where the commissioner refused legal representation and the applicant sought to interdict the continuation of the arbitration proceedings pending determination of a review application. Van Niekerk J (as he then was), dismissing the urgent application, held that:

‘There are at least two reasons why the limited basis for intervention in criminal and civil proceedings ought to extend to uncompleted

arbitration proceedings conducted under the auspices of the CCMA, and why this court ought to be slow to intervene in those proceedings.

The first is a policy related reason - for this court routinely to intervene in uncompleted arbitration proceedings would undermine the informal nature of the system of dispute resolution established by the Act. The second (related) reason is that to permit applications

for review on a piecemeal basis would frustrate the expeditious resolution of labour disputes. In other words, in general terms,

justice would be advanced rather than frustrated by permitting CCMA arbitration proceedings to run their course without intervention by this court.’[4]

[5] The Court observed that the default position of rule 25[5] of the CCMA Rules is that in cases of dismissal for misconduct and incapacity, a party to arbitration proceedings is not entitled to legal representation unless the commissioner and the parties consent, or on application by either party the commissioner concludes, after considering the factors set out in the provision, that it would be unreasonable to expect a party to deal with the dispute without legal representation.[6]

[6] On 1 January 2015, section 158(1B) of the Labour Relations Act[7] (LRA) was promulgated. This section provides that:

‘The Labour Court may not review any decision or ruling made during conciliation or arbitration proceedings conducted under the auspices of the Commission or any bargaining council in terms of the provisions of this Act before the issue in dispute has been finally determined by the Commission or the bargaining council, as the case may be, except if the Labour Court is of the opinion that it is just and equitable to review the decision or ruling made before the issue in dispute has been finally determined.’

[7] The intention of the section is clear. It aims to discourage litigants from bringing review applications against interlocutory

rulings before the main issue in dispute is determined. This is the default position. The proviso, of course, is that such interlocutory

rulings may be reviewed if it is just and equitable to do so. PRASA must show in its review papers that it is just and equitable for this Court to intervene in the uncompleted arbitration proceedings. PRASA has not demonstrated in these urgent proceedings that it has a prima facie case to succeed in its review application. In fact, its papers are silent on this issue. This, in my view, is fatal to this application. In any event, I have serious doubt, having considered the ruling, that PRASA would succeed.

[8] The threshold to show that it is just and equitable for this Court to intervene in an uncompleted arbitration proceedings is a stringent

one, as is apparent in the most recent LAC judgment in Moolman v Commission for Conciliation, Mediation and Arbitration and Others[8] (Moolman). Dealing with an appeal in a matter where, after the commissioner granted an employee an application for disclosure of information,

this Court intervened and reviewed and set aside that ruling, the LAC considered the purpose of enacting section 158(1B) and the correct approach this Court should adopt when confronted with review application of these rulings:

‘When section 158 (1B) of the LRA was introduced in 2014, the legislative policy considered was to regulate and avoid piecemeal processing of arbitration and mediation proceedings through reviews of interlocutory rulings made by commissioners during those proceedings.

This section guides litigants to delay their challenges to interlocutory rulings pending the finalisation of the hearing. In other words, review applications are not encouraged until the award is issued and the arbitration proceedings are finalised. This consideration bears significant weight when the Labour Court considers the exercise of discretion to intervene in uncompleted proceedings.

It should be noted that the legislature did not introduce a total prohibition on reviews of interlocutory rulings in arbitration and mediation proceedings but rather allowed for an exception to the general rule. As a matter of principle, interference in uncompleted arbitration proceedings through review is only permissible in exceptional circumstances. The requirement to intervene in exceptional circumstances is underpinned by the legislative policy requiring speedy finalisation of labour disputes, which dictates that the court should not interfere with incomplete proceedings but allow a hearing to run its course. This underscores the importance of the Court's role in ensuring a fair and just resolution, which should strike a balance between the interests of all parties involved. The correct approach to adopt in this regard was set out in South African Broadcasting Corporation (SOC) Limited v Commission for Conciliation Mediation and Arbitration and Others as follows:

“A case must be truly exceptional to warrant a departure from the norm that a review is appropriate only once the dispute has been finally determined in a completed arbitration hearing. This is consistent with the statutory purpose of expeditious dispute resolution, which the LRA seeks to achieve”.’[9]

[9] It is concerning that more than a decade and a half since the first judgment on this issue, and almost ten years since the promulgation

of section 158(1B), this Court is burdened by an application of this nature. This is even more concerning because this application is brought by a big state-owned entity, using the taxpayers’ money, when the legal principles are so obvious.

[10] The employee was dismissed for breach of PRASA’s supply chain management processes, which included his alleged involvement and role as a member of the Contract Tender and Procurement Committee in the procurement of Diesel-Electric Locomotives Tender which was awarded to Swifambo Rail Leasing (Pty) Ltd. This award of tender was later set aside by the High Court and the appeal to the Supreme Court of Appeal was unsuccessful.

[11] PRASA contends that it has the right to legal representation by virtue of rule 25 of the CCMA Rules. It however immediately

acknowledges that the right is not automatic but asserts that its “right” to be legally represented was “unfairly and unreasonably dismissed”.

[12] In Moolman, the LAC held that this court may intervene in incomplete arbitration proceedings where if allowed, the ruling would cause irreparable harm to the other party. For example, where the damage caused by the ruling if allowed to stand could not be adequately remedied after the finalisation of the arbitration proceedings.[10] Another example in my view is where the commissioner’s ruling deals with a jurisdictional point which has the effect of disposing

of the dispute or where there are procedural defects such that the commissioner is not properly clothed with the requisite jurisdiction.

A ruling in an application for legal representation has no effect on disposing of the issue in dispute.

[13] With regard to the alleged harm it would suffer, PRASA contends that:

‘The applicant is a large State-Owned Entity, the first respondent's dismissal followed from his misconduct of participating in irregularly awarding a tender valued at R3.5 billion (three billion five hundred million Rand) to Swifambo. This is, without a doubt, a serious matter.

When the tender process was being reviewed in the HC and SCA, the applicant employed the services of two Senior Counsel and two juniors. The aforesaid employment was not due to the applicant's affordability but simply because the magnitude and complexity of the matter warranted the said employments.’

[14] During arguments, Mr Mokoatlo, counsel for PRASA, submitted that the matter is complex because of its history, which involved the employment of two senior counsel and juniors to set aside the tender. Further, he submitted that the award was worth over R3.5 billion and this makes the matter even more serious. PRASA considered the matter internally and was of the opinion that it would not be able to deal with the matter because, so the submission continued, PRASA does not have competent officials to deal with a matter of this nature at arbitration. In other words, PRASA’s officials in the labour, human resources and legal departments are incompetent to deal with this matter.

[15] The alleged complex legal questions raised in the matter are all issues that may be addressed in due course should PRASA seek later to review the award and to subject the commissioner's decisions and the reasons underlying them to scrutiny by this court.[11] Therefore, that PRASA employed external legal practitioners to set aside the tender and during disciplinary proceedings does not

automatically mean that the dismissal dispute raises complex legal issues that cannot be dealt with by a big state-owned entity nor does it warrant legal representation.

[16] PRASA made a blunt statement in its founding affidavit that it cannot run the arbitration “without the assistance of external legal representation”. Well, it must, and it will, or else, it risks a default award being taken against it, because it has not shown any exceptional circumstances to warrant the Court’s intervention in the uncompleted arbitration proceedings. The test is not whether the applicant, in this case, PRASA, is of the opinion that it cannot deal with the matter internally and therefore desires or prefers to be represented by an external legal representative. The opinion of the litigant is immaterial and of no relevance.

[17] The employee in this case is self-representing. That a large state-owned entity claims that it cannot represent itself against an unrepresented former employee in misconduct arbitration proceedings is perhaps a serious indictment of the capabilities, abilities and competencies of PRASA’s personnel in the human resources, labour relations and legal departments. The deponent to the founding affidavit in this matter describes herself as a Group Chief Human Capital Officer. The dispute revolves around the involvement of the employee and his role in the awarding of the tender. The issue is not the setting aside of the tender before a court of law, but the employee’s involvement and role in the irregular tender. It is inexplicable that PRASA’s internal units would contend that they are unable to deal with this matter.

[18] The contention that the applicant will not obtain substantial redress in future and that it would suffer prejudice is a fallacy. I have addressed this issue earlier in my judgment that in terms of Jacobson, an applicant for legal representation will be entitled to address the issues in due course during its review proceedings, should it so elect to challenge the commissioner’s award.

[19] Lastly, PRASA contends that the pending review application against the legal representation ruling will be rendered academic if the arbitration continues. This is a fundamentally flawed argument. PRASA has no right to legal representation in its dispute with the employee. It has not demonstrated in these proceedings prima facie that it has reasonable prospects of successfully setting aside the legal representation ruling.

[20] To sum up, section 158(1B) is unambiguous. PRASA has failed to demonstrate that it has a prima facie right to legal representation nor has it pleaded that it has reasonable prospects of success in its review application. It has also failed to demonstrate that it would not obtain substantial redress in due course. There are no exceptional circumstances warranting the Court’s intervention at this stage. To do so would be to undermine the legislative purpose of section 158(1B). This application, and I must say the review application as well, are a waste of the taxpayers’ money. The application stands to be dismissed.

[21] In the premises, the following order is made:

Order

1. The application is dismissed.

M. Makhura

Judge of the Labour Court of South Africa

Appearances:

For the Applicant: Mr K. Mokoatlo

Instructed by: Mapongwana Attorneys

[1] [2008] ZALAC 13; [2009] 4 BLLR 299 (LAC) at paras 44 – 46.

[2] See: Netherburn Engineering CC t/a Netherburn Ceramics v Mudau NO and others (2009) 30 ILJ 1521 (CC); [2009] 6 BLLR 517 (CC).

[3] (2009) 30 ILJ 2513 (LC); [2009] ZALC 35.

[4] Ibid para 4; see also Ngobeni v Passenger Rail Agency of SA Corporate Real Estate Solutions & others (2016) 37 ILJ 1704 (LC); [2022] ZAGPJHC 399; Technology Corporate Management (Pty) Ltd v Mouse and others [2023] ZALCJHB 122.

[5] The Rules for the Conduct of Proceedings before the Commission for Conciliation, Mediation and Arbitration, GG 48445, 21 April 2023. Rule 25(1)(c) provides: ‘If the dispute being arbitrated is referred in terms of section 69(5), 73 or 73A of the BCEA or 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, a party is not entitled to be represented by a legal practitioner or a candidate attorney in the proceedings unless: (i) the commissioner and all the other parties consent; (ii) the commissioner concludes that it is unreasonable to expect a party to deal with the dispute without legal representation, after considering- (a) the nature of the questions of law raised by the dispute; (b) the complexity of the dispute; (c) the public interest; and (d) the comparative ability of the opposing parties or their representatives to deal with the dispute.’

[5] The Rules for the Conduct of Proceedings before the Commission for Conciliation, Mediation and Arbitration, GG 48445, 21 April 2023. Rule 25(1)(c) provides:

‘If the dispute being arbitrated is referred in terms of section 69(5), 73 or 73A of the BCEA or 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, a party is not entitled to be represented by a legal practitioner or a candidate attorney in the proceedings unless:

(i) the commissioner and all the other parties consent;

(ii) the commissioner concludes that it is unreasonable to expect a party to deal with the dispute without legal representation, after considering-

(a) the nature of the questions of law raised by the dispute;

(b) the complexity of the dispute;

(c) the public interest; and

(d) the comparative ability of the opposing parties or their representatives to deal with the dispute.’

[6] Ibid at para 5.

[7] Act 66 of 1995, as amended.

[8] [2024] ZALCJHB 339.

[9] Ibid at paras 42 – 43.

[10] Moolman at para 46.

[11] Jacobson at para 6.