Valinor Trading 133 CC t/a Kings Castle v CCMA and Others (JR292/19) [2023] ZALCJHB 33; (2023) 44 ILJ 1106 (LC); [2023] 4 BLLR 321 (LC) (3 February 2023)

IN THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG

Reportable

Case No: JR292/19

In the matter between:

VALINOR TRADING 133 CC t/a KINGS

CASTLE Applicant

and

THE CCMA First

Respondent

COMMISSIONER M.C LEBEA N. O Second

Respondent

L.J DE JAGER Third

Respondent

Heard: 01 February 2023

Delivered: 03 February 2023

Summary: Application to review and set aside a rescission ruling. Once a statutory function is performed the functionary becomes functus officio. An exercise of the same function is a nullity and ought to be set aside as such.

Where a party objects to a commencement of arbitration immediately after conciliation, a commissioner is not empowered to arbitrate. The fact that the objection was not done in terms of the rules of the Commission for Conciliation, Mediation and Arbitration does not detract from the fact that a party has objected. Continuing with arbitration in the face of an objection is inconsistent with section 34 of the Constitution of the Republic of South Africa, 1996.

An arbitration award issued contrary to the provisions of the Labour Relations Act is a nullity and ought to be set aside as such. An award issued without the necessary jurisdictional powers is a nullity and ought to be set aside as such. Held (1): The rescission rulings are reviewed and set aside. The rulings are replaced with an order that default award is rescinded and set aside. (2): There is no order as to costs.

JUDGMENT

MOSHOANA, J

Introduction

[1] Rules are designed for conducting proceedings and are not meant to trump a statutory provision. It has long been held that Rules exist for the Court and not the Court for the Rules or for the Court to be a captive of the Rules[1]. Section 115 (2A) of the Labour Relations Act[2] (LRA) affords the Commission for Conciliation, Mediation and Arbitration (CCMA) a discretionary power to make regulating rules.

Section 210 of the LRA provides that if any conflict, relating to matters dealt with in the LRA, arises between the LRA and the

provisions of any other law save the Constitution of the Republic of South Africa, 1996 (the Constitution), or any Act expressly amending the LRA, the provisions of the LRA will prevail.

[2] What serves before me is a review application seeking to review and set aside two rescission rulings related to a default award.

Background facts

[3] In view of the approach I take in this matter, it is not necessary to be elaborative in narrating the facts appertaining the dispute between the parties involved herein. Essentially effective from 1 October 2017 to and including 30 July 2018, Valinor Trading 133 CC (Valinor) and Mr. L.J De Jager (De Jager) had a relationship. On the version of Valinor, it was an independent contracting relationship. On the version of De Jager, it was an employer and employee relationship. At a point, the said relationship ceased. On the version of De Jager, he was dismissed when the relationship ended. This assertion is disputed by Valinor.

[4] Owing to the fact that De Jager considered himself to have been dismissed, he referred a dispute to the CCMA and alleged an unfair dismissal. Upon receipt of the referral, the CCMA invoked the provisions of section 191 (5A) of the LRA. As such the dispute was enrolled for con/arb on 10 September 2018. On 7 September 2018, three days before the enrolled date, Valinor, objected to the immediate commencement of arbitration, within the contemplation of section 191 (5A) (c) of the LRA.

[5] That notwithstanding, the learned Commissioner Lebea (Lebea) decided to proceed with arbitration in the absence of Valinor. Having done so, on 19 September 2018, Lebea issued a default arbitration award (default award) against Valinor. Upon gaining knowledge of the default award, Valinor promptly applied to have the default award rescinded, within the contemplation of section 144 of the LRA. On 13 November 2018, after considering the rescission application, Lebea in a written ruling dismissed the application (first impugned ruling).

[6] For reasons that are not altogether clear, Valinor sought to rescind the first impugned ruling. Weirdly, on 10 January 2019, Lebea sought to entertain such a strange application. Having done that on 10 January 2019, Lebea penned another ruling in terms of which the second rescission application was dismissed (second impugned ruling).

[7] Disenchanted by these rulings, Valinor launched the present application seeking to review and set aside both rulings.

Evaluation

[8] In my fervently held view, this matter sharply raises one important legal question. A disposition of that legal question, is a disposition of the entire application before me. The question is: Is a commissioner empowered to proceed with an arbitration involving a dispute referred to in terms of section 191 (5) (a) of the LRA despite an objection by the other party to the dispute? Differently put, is the commissioner empowered to ignore an objection purely on the basis that it was not raised at least seven days before the enrolment date as provided for in the CCMA Rules?

[9] To my mind, where a party has objected, irrespective of the timing of the objection, a commissioner is not empowered to proceed with the arbitration or to ignore the objection. Should a commissioner ignore the objection and proceed, the decision that shall follow is a nullity and ought to be considered as such.

The provisions of section 191 (5A) (c) and its interpretation.

[10] The section provides that despite any other provision in this Act, the commission must commence the arbitration immediately after certifying that the dispute remains unresolved if the dispute concerns - (c) any other dispute contemplated in subsection (5) (a) in respect of which no party objected to the matter being dealt with in terms of this section.

[11] Textually, the above proviso means that once a party objects to arbitration, arbitration cannot lawfully commence. Contextually, this section must be read with other provisos, in particular section 136 (1) (b) of the LRA which allows any party to the dispute to within 90 days of the certification request that the dispute be resolved through arbitration. The only purpose of section 191 (5A) is to have certain types of disputes resolved with expedition. For that reason, an objection process is not available to dismissal disputes relating to probation and disputes of unfair labour practice relating to probation. Where an objection is raised the purpose of the LRA would still be achieved in relation to expeditious resolution of disputes in instances where objection is allowed.

[12] Of importance every statutory provision must be interpreted within the prism of the Constitution. Section 34 of the Constitution guarantees everyone, Valinor included, 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.

[13] In light of the above provisions, it will be wrong, in my view, to interpret the section to mean that any objection raised outside the prescribed period ceases to be an objection. It is important to emphasize that the section itself does not prescribe a time period within which to object.

[14] The Rules for the Conduct of Proceedings before the Commission for Conciliation Mediation and Arbitration (Rules)[3] are discretionarily published to regulate and not to prescribe as it were. A CCMA commissioner cannot be a captive of the time frames prescribed in the Rules. Such is clear when the provision of rule 35 of the Rules is taken into account. The rule provides for a wide discretion to condone any failure to comply. Importantly, sub rule 35 (2) provides that in exercising its powers and performing its functions the Commission may act in such a manner as it deems expedient in the circumstances in order to achieve the objects of the LRA. In doing so, it shall have regard to substance rather than form, save where the LRA provides otherwise.

[15] Rules deal with form and the Act deals with substance. Substantively, the LRA does not allow arbitration to proceed where another party had objected. Rule 17 (2) provides that a party that intends to object to a dispute being dealt with in terms of section 191 (5A), must deliver a written notice to the Commission and the other party, at least seven days prior to the scheduled date in terms of sub rule (1). Read within the context of the Rules and the LRA, it does not follow that a notice not given at least seven days renders the objection defective to a point of the objection being ignored. Any other reading rendering the objection ineffective will be in conflict with the clear provisions of the section in particular the phrase “in respect of which no party has objected”.

[16] The Labour Appeal Court (LAC) in Premier Gauteng & Another v Ramabulana N.O[4] pitch-perfectly stated the following:

“[19] The provisions of the Rules of the CCMA which apply to the scenario which occurred in this case are in rule 30(1)(a). This is because of rule 13(4) which says that rule 30 applies to such a scenario. Rule 30(1)(a) provides that ‘[i]f a party to the dispute fails to attend or be represented at any proceedings before the Commission, and the party … had referred the dispute to the Commission, a commissioner may dismiss the matter by issuing a written ruling’. The question arises: What does it mean to say that in such a situation the commissioner may dismiss the matter? In seeking to determine what the CCMA Rules mean in this regard, certain observations must be borne in mind. The one is that a commissioner dealing with such a matter has no power to deal with the merits of the dispute in a sense of deciding whether or not a dismissal is fair or not. His authority is limited to attempting to conciliate the dispute. Apart from attempting to conciliate a dispute, his powers would be limited to doing whatever is incidental to attempts to conciliate the dispute that would be like adjourning the conciliation meeting and, maybe, ruling that no further conciliation attempts or meetings would be made in which case he probably should certify that the dispute remains unresolved as provided for in s 191(4) of the Act.

[20] Another observation that must be borne in mind is that it is the Act that provides for the making of CCMA Rules in s 115(2)(cA)(iii)(aa) – which relates to conciliation – it empowers the CCMA to make the rules ‘regulating the practice and procedures – for any process to resolve a dispute through conciliation’. This means that such rules – insofar as they relate to conciliation – are not meant by the Act to take away any substantive right of any party. At any rate, where the Act confers a right on a party, the CCMA Rules cannot take that away. Any rule that does that would be in conflict with the Act – an untenable situation. Obviously the Act prevails in this such a case. Furthermore, it must be borne in mind that in terms of s 191(4) of the Act a party to a dispute who refers a dispute to the CCMA or bargaining council for conciliation has a right, once a period of 30 days from the date when the CCMA or a bargaining council

received the referral has lapsed, to have his dismissal dispute arbitrated if he so requests or has a right to refer it to the Labour Court for adjudication, without such party having done anything after referring the dispute for conciliation. The CCMA Rules cannot take that right away.

[21] The constriction that must be given to provisions of the Rules of the CCMA must, as far as possible, be a construction that reconciles them with the Act rather than a construction that places them on a collision course with the Act. Indeed, the construction given to them must, as far as possible, be consistent with the powers of the CCMA as conferred by the Act.” [Own emphasis]

[17] Therefore, in my considered view, an objection equals no commencement of arbitration immediately. A party who objects acquires the right not to have the arbitration proceedings to commence. Such a right cannot be taken away by the Rules nor be ignored by a commissioner.

The conduct of Lebea

[18] The transcript reveals the following conduct:

“COMMISSIONER…I mean I notice to object to the process. However, the objection was only sent on the 7th September …and therefore the notice of objection therefore falls short of the seven days required in terms of the rules.

Therefore, there is no valid objection to the proceedings … I therefore proceed with Arbitration.”

[19] The difficulty with the above conduct by the learned Lebea is that neither the Rules nor the LRA speaks of a valid objection. Both the applicable section and the applicable rules reference objected and object respectively. Significantly, the rule does not prescribe that if a notice of objection is given outside the minimum seven days

contemplated, the notice is rendered null and void. A clear intention of the drafters of the Rules emerge on sub rules 17 (4) and (5). In terms thereof, what the commissioner is obligated to do is conciliation irrespective of the objection notice. Certainly, if the drafters of the Rules intended that a commissioner must proceed with arbitration in the presence of the so-called ‘invalid objection’ such would have been explicitly stated. On the contrary, sub rule 17 (5) contemplates a situation where arbitration does not proceed and calls for another scheduling by amongst others notifying the parties.

[20] It is clear that when Lebea proceeded, he was not doing so under the powers contemplated in section 138 (5) of the LRA. He simply proceeded because the objection was defective in his respected erudite view. Section 138 (5) is reserved for instances of failure to appear. In casu, it may be said that technically, Valinor ‘failed to appear’. In my view, Valinor did not fail to appear. Based on the objection, no arbitration was to commence. Once arbitration does not legally commence, there can be no speak of failure to appear. The question is failure to appear where? There is no arbitration legally capable of commencing where there is a party who objected to its commencement. A commissioner is not empowered to veto, as it were, an objection of a party.

[21] Neither the LRA nor the Rules empowered Lebea to commence arbitration. Having commenced arbitration proceedings contrary to the applicable law, particularly the LRA, on application of the principle of legality, Lebea as a functionary exercised the powers that he does not have.

[22] I have already pointed out that the LRA does not allow arbitration proceedings to commence where a party objects. In the event, it is argued that the Rules allow commencement where the notice ‘falls short’ time wise, therefore a conspicuous conflict arises between the LRA and the Rules. In such an instance, section 210 of the LRA perspicuously provides that the LRA shall prevail.

[23] As I conclude, the conduct of Lebea commencing arbitration contrary to the provisions of the LRA read with the Rules offends the principle of legality which is the cornerstone of our constitutional democracy. One of the stated purposes of the LRA is to advance social justice and labour peace. Such conduct as that of Lebea do not advance social justice and labour peace.

The rescission applications

[24] In two judgments of this Court, Glencore Operations SA (Pty) Ltd v CCMA and others[5] and Solomons v Phokela NO and others[6] a view was expressed that where a commissioner exercised a statutory function or a purported one, the appropriate remedy is to launch a review in terms of section 158 (1) (g) of the LRA. In commencing arbitration proceedings, Lebea purported to function in terms of the LRA.

[25] Nevertheless, Valinor opted to seek a rescission as opposed to a review of the default award. In my view, the second rescission ruling is a nullity. On application of the common law principle of functus officio, Lebea was not authorized to entertain the second rescission application[7]. Having entertained the application, Lebea, yet again acted contrary to the principle of legality.

[26] With regard to the first rescission ruling, had Lebea observed as he should have that where there is an objection arbitration proceeding cannot commence, he would not have issued the default award. That being the case, Lebea ought to have rescinded the default award. In refusing to rescind the default award, effectively, Lebea was allowing a nullity to stand. In the circumstances, the ruling is invalid in law and reviewable.

Conclusions

[27] In summary, Lebea was not allowed in law to commence arbitration proceedings. Having commenced them, his conduct offends the principle of legality and the decision he reached, which factually exists, without the jurisdictional powers is a nullity devoid of any legal force. The second rescission ruling ought not to have been issued on application of the functus officio rule, which is a species of the rule of law. Having issued the ruling contrary to the common law rule, the ruling is also a nullity devoid of any legal consequences.

[28] In light of the reasons outlined above, the first rescission ruling is incapable of any legal justification and is reviewable.

[29] For all the above reasons, the rulings issued by Lebea are not justifiable and are reviewable in law.

[30] In the results I make the following order:

Order

1. Both the rulings issued by Commissioner Lebea under the auspices of the CCMA under case number LP6905-18 dated 13 November 2018 and 10 January 2019 respectively are hereby reviewed and set aside.

2. They are replaced with an order that the default award issued under the same case number dated 19 September 2018 is hereby rescinded and set aside.

3. There is no order as to costs.

GN Moshoana

Judge of the Labour Court of South Africa

Appearances:

For the Applicant:

Mr J Matthee of Rhedeer Attorneys,

Polokwane.

For the third Respondent:

No appearance

[1] See: Safcor Forwarding (JHB) (Pty) Ltd v NTC 1982 (3) SA 654 (A); Scott v Golden Valley Supermarket [2002] 3 All SA 1 (A) and Trans-African Insurance Co Ltd v Maluleka 1956 (2) SA 273 (A).

[2] No. 66 of 1995, as amended.

[3] Published under GN 194 in GG 43038 dated 21 February 2020.

[4] (2008) 29 ILJ 1099 (LAC).

[5] (2021) 42 ILJ 2446 (LC).

[6] (JR99/2021) [2021] ZALCJHB 192 (2 August 2021).

[7] See: PT Operational Services (Pty) Ltd v RAWU obo Ngwetsana (2013) 34 ILJ 1138 (LAC).