“DETERMINING JURISDICTION” – COMMISSION FOR CONCILIATION MEDIATION AND ARBITRATION (CCMA) OR BARGAINING COUNCIL?

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[Joy Global Africa (Pty) Ltd v Commission for Conciliation Mediation and Arbitration and Others (JA 119/13) [2015] ZALAC 1 (15 January 2015)] – SA Labour Appeal Court Judgment.

In Joy Global Africa [at 3] the South African Labour Appeal Court (LAC) held that the primary issue for determination was whether the CCMA was entitled to assume jurisdiction in an unfair dismissal dispute, where the parties were members of a bargaining council or fell within the registered scope of a bargaining council, and one of them was a member of a bargaining council.

Most CCMA Commissioners have been allocated a matter for dispute resolution in accordance with the enabling legislation, to wit the SA Labour Relations Amendment Act, 20 of 2013 (the LRA) where at some stage during a hearing a jurisdictional challenge has been raised by a party. Said challenge could be raised during conciliation or arbitration proceedings.

The reader may ask “so what…why all the fuss about ‘jurisdiction’…?

Out the outset it should be mentioned that the article is focused and would be of possible interest to South African readers; and especially those who represent parties pursuant to a referral of an employment law dispute for resolution by means of conciliation or arbitration proceedings by the CCMA and subject to certain statutory prerequisites and provisos to a bargaining council for resolution.

WHAT IS “JURISDICTION” AND WHAT IS THE IMPORTANCE THEREOF?

Jurisdiction means the power or competence of the CCMA to hear and determine a dispute between the parties, i.e. to conciliate and arbitrate a dispute between the parties.  [See: Gcaba v.  Minister of Safety and Security & Others (2010) 31 ILJ 296 (CC); [2009] 12 BLLR 680 (LC) at par. 74].

It is trite that the CCMA is an independent juristic body in terms of Section 112 of the LRA.  As such it does not have inherent jurisdiction. Further, it does not derive its jurisdiction from common law as in a High Court, but solely from Acts of Parliament.

The CCMA mainly derives its jurisdiction from the LRA but to a limited extent also from the Basic Conditions of Employment Act, 2013 (the BCEA), the Employment Equity Amendment Act, 2013 (the EEA) and other statutes.

Exclusive jurisdiction to enforce certain LRA rights has been assigned to the CCMA.  At arbitration the CCMA has the power to uphold or to dismiss a claim provided it has the power or competence to do so.  If the CCMA does not have the power or competence to entertain (consider) the claim, it neither has the power to uphold the claim nor the power to dismiss the claim (other than to dismiss the claim for want of jurisdiction).

Therefore, the claim must be one that is capable of being pursued before and ruled upon by an Arbitrator of the Commission.

A core function of the CCMA is to resolve disputes, referred to it in terms of the LRA, through conciliation and arbitration. As a statutory body, the CCMA is obliged to act within the bounds of the LRA. Its assumption of jurisdiction over a dispute that is not referred to it in terms of the LRA will, therefore, infringe upon the principle of legality.

The CCMA cannot, however, decide upon its own jurisdiction. In South African Rugby Players Association (SARPA); SA Rugby (Pty) Ltd and Others; v SA Rugby Players Union and Another [2008] 9 BLLR 845 (LAC) at para 40 the LAC held that:

‘As a general rule [the CCMA] cannot decide its own jurisdiction. I can only make a ruling for convenience. Whether it has jurisdiction or not in a particular matter is a matter to be decided by the Labour Court.

This means that…., the CCMA may not grant itself jurisdiction which it does not have. Nor may it deprive itself of jurisdiction by making a wrong finding that it lacks jurisdiction when it actually has jurisdiction. There is, however, nothing wrong with the CCMA enquiring whether it has jurisdiction in a particular matter provided it is understood that its decision on such an issue is not binding in law on the parties.’

THE PROVISIONS OF THE LRA – “JURISDICTION”:

Section 147 of the LRA provides a statutory exception to the rule that the CCMA may not pronounce upon its own jurisdiction. Where the disputing parties fall under the jurisdiction of a bargaining council, the CCMA will not have jurisdiction unless jurisdiction has been conferred on the CCMA in terms of the provisions of s 147 of the LRA.9 Section 147 of the LRA provides in relevant part:

‘(2) (a) If at any stage after a dispute has been referred to the Commission, it becomes apparent that the parties to the dispute are parties to a council, the Commission may –

(i) refer the dispute to the council for resolution; or

(ii) appoint a commissioner or, if one has been appointed, confirm the appointment of the commissioner, to resolve the dispute in terms of this Act.

(b)…. ‘

(3) (a) If at any stage after a dispute has been referred to the Commission, it becomes apparent that the parties to the dispute fall within the registered scope of a council and that one or more parties to the dispute are not parties to the council, the Commission may –

(i) refer the dispute to the council for resolution; or

(ii) appoint a commissioner or, if one has been appointed, confirm the appointment of the commissioner, to resolve the dispute in terms of this Act.

(b) ….’

An employee may request the CCMA or a bargaining council with jurisdiction to conciliate the dispute within 30 days of the date of the dismissal or the employer’s final decision to dismiss or uphold the dismissal.

It happens ever so often that an employee would refer a dispute in error to the CCMA where there is a bargaining council clothed with jurisdiction derived from the provisions of the LRA to perform dispute resolution functions.

In Nehawu obo Kgekwane v Department of Developmental Planning Case No: JA 68/13, 15 January 2015 (LAC) at paras 16-17 the LAC held:

“‘Section 147 of the LRA makes provision for the performance of dispute resolution functions by the CCMA in exceptional circumstances, in order to avoid delays that might otherwise be caused by jurisdictional disputes. The section, accordingly, confers a choice on the CCMA whether to resolve a dispute that has been erroneously referred to it or whether to re-direct it to the proper forum.”

In terms of subsections (2) and (3) of section 147 of the LRA respectively, if at any stage after a dispute has been referred to the CCMA, it becomes apparent (or evident) that the parties to the dispute are parties to a bargaining council or that the parties to a dispute fall within the registered scope of a bargaining council but one or more of the parties are not parties to that council, the CCMA may either refer the dispute to that bargaining council for resolution or appoint a commissioner, or if one has already been appointed, confirm the appointment of such commissioner to resolve the dispute.

In Joy Global Africa the employer dismissed the employee whereupon a dispute was erroneously referred to the CCMA in that there was a bargaining council with jurisdiction to arbitrate the dispute.

Upon receipt of the notice of set down the employer formally notified the CCMA’s case management that the CCMA lacks jurisdiction by virtue of the existence of a bargaining council with jurisdiction and that the employer was a member ‘a party’ to the council. No response was received from the CCMA.

Unaware of the jurisdictional notice the Commissioner proceeded with the arbitration in absentia and a default arbitration award was handed down against the employer. The employer applied for rescission of the award inter alia based on the ground that the CCMA lacked jurisdiction to entertain the matter.

The rescission application was dismissed on the ground that the CCMA could “assume jurisdiction to any dispute that falls under the jurisdiction of any bargaining council if the jurisdiction issue was not raised at the beginning of the arbitration.”

The presiding Commissioner found the employer to be in wilful default and that the explanation for default as without substance and unreasonable.

On review the Labour Court set aside the award of the Commissioner in the rescission application on the ground that the CCMA lacked jurisdiction, as the parties were members of a bargaining council.

On appeal and as was referred to supra the South African Labour Appeal Court (LAC) held that the primary issue for determination was whether the CCMA was entitled to assume jurisdiction in an unfair dismissal dispute, where the parties were members of a bargaining council or fell within the registered scope of a bargaining council, and one of them was a member of a bargaining council.

The Labour Court found section 147(2)(a) of the LRA to be applicable to the jurisdictional question in the matter on the basis that the parties fell under the registered scope of a bargaining council. Whilst both parties fall within the registered scope of the council, only the employer was a member thereof.

The Labour Appeal Court held that subsection (3)(a) of section 147 of the LRA applied, and not subsection (2)(a) thereof. Regardless, however, of which of the two subsections of s 147 was applicable, once it became apparent or evident that the parties to the dispute were parties to a bargaining council, or fell within the registered scope of a bargaining council, and one or more of them were not parties to the bargaining council, a Commissioner can only continue to hear the matter if his or her appointment was confirmed by the CCMA as provided for in subsection 2(a)(ii) or 3(a)(ii) of s 147 of the LRA. [Emphasis added].

The LAC referred to Kgewane at para [18]:

“[W]here a dispute is referred to the CCMA, the matter may not proceed before the CCMA once it is ascertained that the parties are parties to a bargaining council or fall within the registered scope of a bargaining council, until the options set out in section 147(2) and (3) have been exercised by the CCMA.

… [O]nce that is ascertained, it is then for the CCMA or its delegate (and not the Commissioner hearing the matter when this was ascertained) to determine whether to refer the matter to the bargaining council or to appoint a Commissioner to determine the dispute or if one has already been appointed, to confirm his or her appointment” [Emphasis added].

Thus, the LAC held that the employer placed its founding affidavit before the Commissioner, in the rescission application, contending that it was a member of the council and that the employee fell within its registered scope, the Commissioner was required in terms of section 147(3)(a) of the LRA to request the CCMA management to make a ruling on whether to refer the dispute to the council for resolution, or whether the Commissioner could continue to determine the dispute. That was not a decision for the Commissioner to make.

The appeal was dismissed with an order as to costs.

COMMENTARY:

Of importance is that the Court accepted that at the commencement of the arbitration proceedings the Commissioner may not have been aware of the existence of the ‘jurisdictional challenge’ by the employer in the form of a letter addressed to the Commission’s case management.

However, when presented with an unchallenged version at the rescission application the Commissioner should have recognised the jurisdictional challenge and required a decision of the CCMA management in terms of section 147 of the LRA.

The LAC held at [12]: “Instead he dismissed the challenge to the CCMA’s jurisdiction by erroneously assuming that he was entitled to continue dealing with the matter. Thus, once a challenge to the CCMA’s jurisdiction was raised, the Commissioner was required to refer it to the appropriate CCMA official for a decision in terms of section 147 of the LRA. This he erroneously failed to do.”

The Labour Appeal Court Court referred to the judgment of the Labour Court:“While it is correct that there are circumstances in which the CCMA may deal with a dispute otherwise falling within the jurisdiction of a Bargaining Council, these provisions are not consistent with the arbitrator’s view of his jurisdiction.” [At 12].

Notwithstanding the notice by the employer addressed to the CCMA’s case management as in Joy Global Africa employers should take careful notice of the Rules of the CCMA and more specifically the provisions of Rule 31:

“31. How to bring an application.

(1) This rule applies to any—

(a) application for condonation, joinder, substitution, variation or rescission;

(b) application in a jurisdictional dispute;

(c) other preliminary or interlocutory application.

(2) An application must be brought on notice to all persons who have an interest in the application…” [Emphasis added].

After having been duly served with a notice of set down a prudent and responsible party would not merely write a letter in which it is mentioned in passing that the jurisdiction of the CCMA is challenged and hope that the letter reached the responsible case management officer.

The possibility always exists that a letter, in the midst of a deluge of others handled by the CCMA staff may arrive at the desk of a person who is not necessarily employed in the capacity of a case manager and not inducted to divine, in the absence of some clue, who should be given the document nor how rapidly that should happen, may predictably lead to delay or misplacement or outright loss of the document.

In such circumstances the presiding Commissioner would in all probability not be aware of a purported jurisdictional challenge and as a consequence a default award may be handed down.

Suffice it to contend that CCMA Rule 31 stipulates in minute detail the procedure to be followed should a party wish to raise a jurisdictional challenge. It should be done in the form of an application, not a letter.

In conclusion, writer is of the considered opinion that a party duly served with a notice of set down should take the time to attend to the CCMA proceedings, raise the jurisdictional challenge and not merely rely on a letter send to the CCMA.

After all the Rules of the CCMA should be respected and complied with by the users.

The amended CCMA Rules have been promulgated and would be in effect from 01 April 2015.

Parties to proceedings before the CCMA should take cognisance of the Rules and duly comply failing where to an award as to costs may be a real possibility.

 

Johann Scheepers

2015-03-27

Copyright

Copyright reserved. No part of this article/ guide may be reproduced, without prior written permission by the author.

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