Process over product: Reviewing the decision of a commissioner because of a gross irregularity in the conduct of the arbitration proceedings

Introduction

Section 145(2) of the Labour Relations Act 66 of 1995 ("the LRA") provides for the grounds upon which a decision of a commissioner in arbitration proceedings may be reviewed and set aside. One of these grounds as set out in s145(2)(ii) is when the commissioner "committed a gross irregularity in the conduct of the arbitration proceedings". 

In National Union of Metalworkers of South Africa (NUMSA) obo Mathoba v South Ocean Electric Wires Company (Pty) Ltd and Others (JR 49/19) [2023] ZALCJHB 248 (25 August 2023) the court set aside the decision of the commissioner because she committed a gross irregularity in the conduct of the arbitration proceedings which had the effect of tainting the outcome of the arbitration. This case serves as a stark reminder to commissioners that the process followed in relation to reaching a decision can be just as if not more important than the decision itself. 

The background 

The applicant in the matter was in the employ of South Ocean in the position of supervisor. When he found out he was being remunerated less than another supervisor who performed the same work as him, he lodged an internal grievance which was not resolved. With the assistance of his trade union, NUMSA, he referred the matter to the CCMA which also went unsettled and was thus referred to an arbitration. It is the decision of the commissioner in the arbitration proceedings that became subject to the review application. 

The arbitration

In the arbitration proceedings the applicant made oral submissions that he was remunerated less despite performing work of equal value as the other manager. In response, South Ocean made oral submissions to the extent that the other manager possessed superior work experience, was head-hunted based on his previous working experience and had trained the applicant.  However, no evidence was presented to the commissioner after he, out of his own accord identified the issue as one of alleged unfair discrimination. In other words, no proof had been put forward to test the issue of unfair discrimination.

The commissioner then allowed the parties to make written submissions on whether the applicant had identified the specific ground on which he had based his claim for unfair discrimination.  Only the applicant through his trade union filed the written submissions whereas South Ocean did not.  

The commissioner concluded that the fact that the applicant was remunerated differently was not sufficient to sustain a claim for discrimination and that the applicant ought to have identified the arbitrary ground of discrimination on which the claim was based instead of a mere allegation.  The result was that the commissioner dismissed the applicant's claim. 

The review 

In response to the commissioner's award, the applicant sought to review the decision of the commissioner based on the challenge that the commissioner committed a reviewable irregularity in failing to allow the parties to adduce evidence in respect of the allegation of differential remuneration for work of equal value. Furthermore, the applicant contended that the commissioner committed an error of law in finding that the there was no specific arbitrary ground of discrimination that was articulated to sustain the claim of discrimination. 

The court then proceeded to lay out the relevant case law at par 7 and restated the test in review matters as formulated in the Sidumo case by holding that: 

"the enquiry is whether the ultimate conclusion reached by the commissioner falls within the band of reasonableness."

The court then cited par 31 of Head of Department of Education v Mofokeng & Others (2015) 36 ILJ 2802 (LAC) and held:

"it is not only the unreasonableness of the outcome which is the subject of scrutiny but that the inquiry further includes a consideration of whether the commissioner misconceived the nature of the enquiry or had undertaken the enquiry in a misconceived manner."

Thereafter the court cited Motor Industry Staff Association & another v Silverton Spraypainters & Panelbeaters (Pty) Ltd & others (2013) 34 ILJ 1440 (LAC) and held that:

"in order for an error of law to amount to a reviewable irregularity, such an error must be found to have been material, in that, it must have had an effect of influencing the ultimate conclusions of the commissioner." 

At par 8 and 9 the court further identified the specific legislation that applies to cases of discrimination and held: 

"the provisions of section 6(1) of the Employment Equity Act (EEA) prohibits the discrimination of an employee in any employment policy or practice on the grounds listed therein or on any arbitrary grounds. Furthermore, in terms of section 6 (4), any other differential treatment in the terms and conditions of employment between employees of the same employer performing work of the same value premised on the grounds listed in subsection (1) constitutes an act of unfair discrimination. In terms of section 11(2) of the EEA, where an employee alleges that the discrimination complained of is based on arbitrary grounds, the employee has the duty to prove on the balance of probabilities that the conduct complained of was irrational; amounted to discrimination; and was unfair. This means that in cases where the discrimination is alleged on arbitrary grounds, the employee has the burden of proving the existence of the discrimination and further that the discrimination was unfair." (emphasis)

In its evaluation of the facts before it the court found that, the applicant's main complain that the commissioner erroneously precluded it from leading evidence to demonstrate that the conduct of South Ocean constituted an unfair discrimination, was correct. In this regard, at par 11 of the judgment the court held:

"It is trite that the consequences of excluding or preventing the presentation of material evidence by a commissioner are that parties are deprived of an opportunity to fully ventilate their respective cases at arbitration, and that disputes would not be fully and fairly determined. This omission invariably results in a reviewable irregularity. The same principle was set out in Goldfields, where it was held that in assessing whether a decision of the arbitrator falls within a band of reasonableness, it must be considered whether amongst other things, the Commissioner afforded the parties a fair opportunity to state their respective cases."

The court then held that it was clear that the commissioner issued her award solely on the oral submissions of the parties and the written submissions of NUMSA which were submissions that did not test the identified  issue of discrimination. 

The court expressed its dissatisfaction with the commissioner's process at paras 12 and 13 where the court held:

"there was no oral evidence which was adduced in order to test whether or not the conduct complained of fell afoul of section 6(1) read together with subsection (4) of the EEA...Clearly the enquiry ought not have ended at that point."

The court also pointed out that the commissioner relied on unsuitable case authority in reaching his decision. In one of the cases that the commissioner relied on, the difference in work pay was based on a bona fide clerical error on the system of the employer and the other case relied on by the commissioner was based on a challenge that the employer had committed unfair racial discrimination since the complaint was that other employees were paid lesser than their white comparators despite the fact that they were all employed as training officers. Both these cases did not speak to the facts of the case at hand and the court communicated that it took issue with this application at par 13 where it was held that:

"What escaped the Commissioner’s attention however was that the authorities he had relied on were distinguishable from the dispute before him in material respects."

In its conclusion of the facts before it, the court, at paras 16 and 17 held that: 

"the approach of the Commissioner in not affording Mathoba (the applicant) an opportunity of leading oral evidence to discharge his onus as required under section 11(2) of the EEA was not only irregular but also constituted a material error of law...The requirement for evidence to have been led in such cases is also premised on the principles set out in CUSA v Tao Ying Metal Industries and others to the effect that it is required of a commissioner to deal with the substantial merits of the dispute by taking into consideration all the relevant facts of the case and the evidence presented during the arbitration proceedings. In the light of the manner and conduct of the Commissioner in disposing of (sic) the claim, he had undertaken the enquiry in a misconceived manner, and also committed a material error of law that amounted to a reviewable irregularity. Clearly the outcome reached could not possibly have fallen within the bounds of reasonableness. It follows that the review application ought to succeed. 

Conclusion

When a matter is taken to arbitration within the scheme of the LRA, it is imperative that the commissioner deal with the matter in a way that balances the rights of both parties and follows due process.  Although the arbitration process is not meant to be rigid and was created to deal with labour disputes in an informal and expeditious manner, this does not mean that the minimum requirements of a fair hearing should be done away with. Furthermore, the informal nature of arbitrations does not give the commissioner the right to ignore the procedural and substantive requirements or tests set out in the legislation that governs the issue at hand. The process is therefore just as important as the product, and all parties, especially the commissioner, should understand this. 

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