South African Sports Confederation and Olympic Committee (SASCOC) v Commission for Conciliation, Mediation and Arbitration and Others (JR 2642/2019) [2021] ZALCJHB 23 (1 March 2021)

THE LABOUR COURT OF SOUTH AFRICA

(HELD AT JOHANNESBURG)

Not reportable

CASE NO: JR 2642/2019

In the matter between:

SOUTH AFRICAN SPORTS CONFEDERATION

AND OLYMPIC COMMITTEE (SASCOC)

Applicant

and

COMMISSION FOR CONCILIATION

MEDIATION & ARBITRATION

First Respondent

COMMISSISONER CM LEBEA N.O. Second Respondent

HEERALALL DHANIRAM ‘VINESH’

MAHARAJ Third Respondent

SUNDRASAGREN ‘TUBBY’ REDDY

Fourth Respondent

JEAN KELLY

Fifth Respondent

Application heard: 18 February 2021.

Judgment delivered: 01 March 2021. Judgment delivered electronically, by email, sent to the parties’ representatives.

JUDGMENT

VAN NIEKERK J

[1] This is an application to review and set aside an interlocutory ruling made by the second respondent (the arbitrator) on 14 November 2019. In his ruling, the arbitrator ordered the applicant to disclose a forensic investigation report prepared by its attorneys at a stage when alleged misconduct by the third, fourth and fifth respondents (the employees) was the subject of investigation. The scope of the review initially extended to a ruling issued by the arbitrator that

concerned the jurisdiction of the first respondent, the CCMA. On account of a recent judgment by the Labour Appeal Court directly

addressing the grounds for review (Revon Adams v National Bargaining Council for the Freight and Logistics Industry and Others [2020] 9 BLLR 867 (LAC)), the applicant did not persist with the application to set aside that ruling. The present proceedings were thus confined to the order for disclosure of the investigation report.

[2] The dispute between the parties has its roots in the dismissal of the third, fourth and fifth respondents (the employees) during January 2018 and their referral of unfair dismissal disputes to the CCMA. The dispute was ultimately referred to a hearing before the arbitrator. That hearing has been protracted, and it is unlikely that they will

be concluded soon. After the rulings that are the subject of the present application were issued, the applicant sought a postponement

of the arbitration hearing, pending the outcome of urgent review proceedings. The arbitrator ruled that the proceedings should be postponed sine die, subject to certain conditions. The applicant contends (and the arbitrator would appear to concur) that the rulings under review are critical to the further continuation of the arbitration proceedings and that clarity is required at this stage, if only to ensure that the ongoing proceedings are not rendered irregular by the effect of the arbitrator’s rulings.

[3] Although the general rule is that rulings or decisions made during the course of arbitration proceedings may be subjected to review only after the issue in dispute has been finally determined by the CCMA, the court has a discretion in terms of section 158 (1B) of the Labour Relations Act (LRA) to hear the review application at an earlier stage. Given the nature of the arbitrator’s ruling and so is not to unduly delay the finalisation of the arbitration proceedings, in my view, it is just and equitable for the review application to be heard notwithstanding the fact that the arbitration proceedings

remain incomplete.

[4] The ruling under review records that during the arbitration proceedings on 26 July 2019, the employees’ legal representative stated that they had requested the applicant to disclose certain documents, and that the latter had refused to do so on the basis that the documents were not relevant. Amongst the documents requested was an investigation report. The employees made a formal application for disclosure of the document. After an exchange of written submissions concerning the issue of professional legal privilege as it related to the investigation report, the arbitrator issued the ruling under review. His ruling records a brief summary of the submissions made by the parties. On behalf of the employees, it was submitted that the applicant was entitled to claim privilege in respect of communications which took place in preparation for the arbitration hearing, and in relation to the arbitration hearing itself. It is not in dispute that the investigation report was commissioned by the applicant, which instructed the firm Norton Rose Fulbright Inc. to undertake a forensic investigation and produce a report. The applicant then decided to charge the employees in terms of its disciplinary code and procedure, after which a disciplinary hearing was convened. The employees contend that the nature of the investigation was such that it constituted an internal procedure, and that the subsequent disciplinary hearing did not constitute legal proceedings. For the purposes of any legal professional privilege that may have attached to the report, legal proceedings could only have been contemplated by the applicant when the employee’s dispute was referred to the CCMA. Further, the applicant could not have foreseen that litigation would ensue at the time when the investigation was commissioned and conducted – this was a choice made by the employees. Further, the employees contended that disciplinary action could not be equated with litigation and that it would be contrary to public policy should the applicant be permitted not to disclose the report.

[5] The arbitrator then summarised the applicant’s submissions. In broad terms, the applicant submitted that Norton Rose Fulbright Inc. had been appointed to advise on alleged misconduct by the fourth respondent. Prior to the investigation, the fourth respondent had compiled a report which he had submitted to the minister, and opened a docket with the South African police services, without disclosing the existence or contents of the report to the applicant’s board. The applicant submitted that all statements made by its board, employees, representatives, agents or third parties to its legal

representatives during the investigation stage or in preparation for the litigation that ensued, were procured and made for the purpose of pursuing the charges brought against the employees on the applicant’s instruction. Further, litigation as contemplated between the fourth respondent and the applicant when the fourth respondent declared a dispute with the applicant’s board during June 2017. The applicant submitted that it was evident from the fourth respondent’s conduct that litigation as contemplated even at that time. The investigation report was concluded after a fact-finding exercise, but expressed a view between attorney and client on the findings of the investigation. In any event, the report was not relevant, since evidence would be given at the arbitration by relevant witnesses.

[6] In his analysis, the arbitrator referred to rule 29 of the CCMA rules which provides, amongst other things, that either party to an arbitration proceeding may request the other to disclose any documents or material relevant to the dispute. The rule 29 (3) empowers a commissioner to make an order as to the disclosure of relevant documents or other evidence. The arbitrator concluded that the investigation report had been obtained neither for the purposes of pending or contemplated litigation, nor for the purpose of giving or receiving legal advice. On that basis, the arbitrator ruled that the investigation report is not protected by legal professional privilege. Insofar as relevance is concerned, the arbitrator concluded that the investigation report related to the substantive fairness of the employee’s dismissal in that they were charged based on that report. In addition, he found that the employees may wish to challenge the credibility of the applicant’s witnesses

and would require the investigation report in that regard. Statements made by witnesses during the investigation would be relevant to dealing with the issue of credibility. The arbitrator’s reasoning appears from the following passage:

… As pointed out above, relevance means that when facts, if from their existence inference may properly be drawn as to the existence of the fact in issue. The investigation report is conceded by both parties as the basis of the charges brought against the Applicants by the Respondents. It thus cannot be accepted that the document that was the basis for the Applicant’s charges which led to the subsequent dismissal is relevant to the current proceedings. The respondent in its submissions conceded that the Applicants were charged as a result of the investigation. Therefore, proper inference may be drawn as to the relevance of the investigation report to the current dispute. I therefore find that the investigation report is relevant to the Applicants’ dispute.

[7] The parties agreed that the test to be applied in these proceedings is not the reasonableness threshold established by Sidumo & another v Rustenburg Platinum Mines Ltd & others [2007] 12 BLLR 1097 (CC). The applicant’s case is that for the purposes of section 145 (2)(a)(ii), the arbitrator committed a gross irregularity in the form of a material error of law. It is thus incumbent on the applicant to establish first, that the arbitrator committed an error of law; and, secondly, that the error of law was material (see Myburgh and Bosch Reviews in the Labour Court (Lexis-Nexis 2016) at 242-3).

[8] It is not in dispute that the applicant’s board appointed Norton Rose to conduct a preliminary investigation into the conduct of the employees, and that Norton Rose provided the applicant with two investigation reports, in respect of allegations by an employee of sexual harassment by Reddy, and broader allegations of misconduct by Maharaj and Reddy. For convenience, I refer to the reports collectively as ‘the investigation report’, following the wording in the ruling under review. The applicant accepts that the ruling and the outcome of the present application will apply to both

investigation reports.

[9] It is also not disputed that the investigation report is marked ‘privileged and confidential -attorney work product’ and that it was sent to the applicant’s board in confidence. After receipt of the report, it is not disputed that the applicant’s board decided to institute disciplinary proceedings against the employees. As I have noted, charge sheets were formulated and an internal disciplinary enquiry was conducted before an independent senior counsel, which the employees elect not to attend. The report was not used as evidence in the disciplinary enquiry; instead, it formed part of the factual basis for the decision to pursue disciplinary charges against the employees, based on actual documentary evidence recovered during the investigation. The documentary evidence has been discovered to the employees. As for witnesses who provided information to investigators, and which is summarised in the investigation report, their evidence will, where relevant, be presented at the arbitration hearing as was done in the disciplinary proceedings. Finally, the applicant does not rely on the

investigation report in the arbitration proceedings

[10] The applicant submits, as it did in the arbitration hearing, that the parameters of that hearing are strictly and clearly defined to include only the issues of the procedural and/or substantive unfairness of the employee’s dismissal. The investigation report does not relate to the validity and lawfulness of the process. It follows that in respect of dismissals themselves, and as such, is irrelevant to the arbitration proceedings. All documents to be utilised and relied on by the applicant in proving the charges against the employees have been discovered. Further, the applicant contends that the investigation report attracts legal professional privilege, which it has not waived. In the premises, the applicant submits that the arbitrator made the following incorrect findings in coming to the conclusion that the applicant was obliged to discover the investigation report: first, that the disciplinary hearing did not constitute litigation and that consequently, the investigation report did not attract litigation privilege; secondly, that the conduct of the investigation was a fact-finding exercise and was not procured in view of obtaining legal advice with the result that the report does not attract professional legal privilege; thirdly, that it would be unfair to the employees not to have access to the report because there could be information contained in the report necessary for them to prepare a defence.

[11] The discovery of documents in proceedings in the CCMA is regulated by rule 29. That rule reads as follows:

(1) at any time after the request for arbitration, but not less than fourteen (14) days prior to the hearing date, either party may request the other party to disclose any documents or material relevant to the dispute.

(2) The party to whom the request is made must respond to the request within five (5) from the date on which the request was received.

(3) A commissioner may either before or during the proceedings on his/her own accord, or an application, make an order as to the disclosure of relevant documents or other evidence.

(4) Notwithstanding the above, the parties may agree on the disclosure of documents or other relevant evidence.

[12] The rule be appreciated in the context of the nature of the CCMA as a statutory dispute resolution agency. Section 138 (1) of the LRA requires that a commissioner must determine a dispute fairly and quickly, and deal with the substantial merits of the dispute with the minimum of legal formalities. There are no pleadings in CCMA arbitrations. Much of what is contained in the uniform rules regarding discovery before close of pleadings, discovery after close of pleadings, what documents must be discovered and rules relating to the inspection and production of documents simply do not apply. The authorities to which the arbitrator referred (and indeed, the authorities to which both parties refer in the present proceedings) concerned the interpretation and application of the Uniform Rules. I would venture to suggest that these authorities ought to be approached with a degree of caution, and with the knowledge that the purpose and policy underlying the LRA is to establish a very different system of dispute resolution, one in which formalism has been explicitly rejected in favour of a system for the adjudication of unfair dismissal disputes that is simple, quick, cheap and non-legalistic (see Explanatory Memorandum prepared by the Ministerial Legal Task Team January 1995 (1995) 16 ILJ 278 at 318).

[13] Rule 29 of the CCMA rules is the starting point. That rule discloses only relevance as a criterion for the disclosure of documents. As reflected above, rule 29 (3) empowers a commissioner to make an order as to the disclosure of relevant documents. Relevance must, of course, be assessed in relation to the nature of the proceedings before a commissioner. The proceedings before the arbitrator concerned dismissals that were alleged to be substantively and procedurally unfair. Although the arbitrator correctly observed that the case before him required a determination of the substantive and procedural fairness of the employees’ dismissal, what he appears to have ignored is the fact that arbitration proceedings are proceedings de novo. In other words, it is incumbent on the applicant to establish, on the evidence that it elects to lead in the arbitration hearing, that there was a fair reason for the dismissals, that dismissal was an appropriate sanction, and that the employees were afforded an opportunity to state their cases before being dismissed. The CCMA guidelines on misconduct arbitration (see GN R 224 of 17 March 2015) makes clear that an arbitration is a new hearing, which means that the evidence concerning the reason for dismissal is heard afresh before the arbitrator. The arbitrator must determine whether the dismissal is fair in the light of the evidence admitted at the arbitration, and does not merely review the evidence considered by the employer when it decided to dismiss. Clearly, the

employees had no right to discovery or disclosure of the investigation report when the disciplinary enquiry was convened. To the extent that the arbitrator held that the investigation report contains information related to the substantive fairness of the dismissals as it was the investigation report that gave rise to the charges, this is simply not correct. The chairperson of the disciplinary hearing provided the substantive reasons for the employees’ dismissals in his findings, which have been discovered and provided to the employees. The investigation report is thus entirely irrelevant to the issue of the fairness of the employee’s dismissal, particularly given that it was not used in the disciplinary enquiry and will not be relied on by the applicant in the arbitration proceedings. It follows that the arbitrator committed a material error of law when he found that the report should have been disclosed on the basis that it was relevant. Given that the finding, it is not necessary for me to canvass the parties’ submissions in relation to the application of legal professional privilege.

[14] In relation to costs, the court has a broad discretion in terms of section 162 to make orders for costs according to the requirements of the law and fairness. While the applicant has succeeded in these proceedings, I must necessarily take into account that a substantial proportion of the papers are made up by the attempt to review the arbitrator’s ruling and abandoned shortly before the hearing of the present application. I accept that the applicant proceeded on its understanding of the law as it stood at the time the review application was initiated, and that it abandoned its attempt to review the ruling when the LAC ruled as it did after the papers had been filed. In the circumstances, it seems to me that the requirements of the law and fairness are best served by each party bearing its own costs.

I make the following order:

1. The ruling issued by the second respondent on 14 November 2019 and under case number HO 478-18 in which the applicant was ordered to disclose certain forensic investigation reports, is reviewed and set aside.

2. The ruling is substituted by the following:

‘The investigative reports prepared by Norton Rose Fulbright Inc. are not subject to disclosure in terms of rule 29’.

André van Niekerk

Judge of the Labour Court of South Africa

APPEARANCES

For the applicant: Adv G Fourie SC, with him Adv M Feinstein, instructed by Norton Rose Fulbright South Africa Inc.

For the 3rd to 4th respondents: Adv van der Vyver, instructed by Sun Attorneys