South Africa: The CCMA's New Guidelines For Misconduct Arbitrations - Part 1

Last Updated: 22 November 2011
Article by Alex Ferreira and Louietta Du Toit

Most Read Contributor in South Africa, September 2018

introduction

1. The CCMA has during September 2011 published a document titled "Guidelines on Misconduct Arbitrations" ("the Guidelines"), which will become effective on 1 January 2012. The Guidelines have been published with the purpose of promoting consistent decision-making by CCMA Commissioners during arbitrations relating to dismissals for misconduct, and in order to give effect to the constitutional right to lawful, reasonable and procedurally fair administrative action, as contained in Section 33(1) of the South African Constitution.

2. This document inter alia contains detailed guidelines for the conduct of arbitration proceedings, for the evaluation of evidence, for the assessment of the procedural as well as the substantive fairness of a dismissal, and for the determination of an appropriate remedy for a dismissal that is found to have been unfair.

3. CCMA Commissioners are, in terms of Section 138(6) of the Labour Relations Act 66 of 1995 ("the LRA"), legally obliged to take the Guidelines into account. Furthermore, insofar as the Guidelines contain interpretations of the law, they constitute CCMA policy, and arbitrators must accordingly specifically justify any deviation from this policy by reasons specifically set out in the relevant arbitration award. The CCMA and its commissioners remain, however, bound by the stare decisis principle, meaning that their interpretation of the law must be in accordance with binding decisions of Court.

4. This is the first article in a series of articles meant to advise litigants who may have to arbitrate before the CCMA after 1 January 2012, in the face of the new Guidelines. These articles do not purport to be an exhaustive guide to, or a comprehensive summary of, the Guidelines, but are primarily intended to practically assist litigants, both in critically assessing the manner in which arbitrators conduct their arbitrations, and in potentially formulating subsequent applications for the review of arbitration proceedings, should this be necessary and be justified at the conclusion of such proceedings.

5. The purpose of this first introductory article is to primarily examine those sections of the Guidelines which advise arbitrators on how to conduct arbitration proceedings relating to misconduct.

6. It is likely that the CCMA will publish further supplementary guidelines in due course.

how an arbitrator should conduct arbitration proceedings

7. An arbitration hearing does not constitute a review of an employer's decision to dismiss an employee. The Guidelines re-affirm that the arbitration is a "new hearing" – the arbitrator must decide afresh, based on the evidence before him, whether or not the dismissal was fair. The arbitrator may, however, refer to documents related to the preceding disciplinary process, such as the record of a disciplinary enquiry, to the extent that these documents are admitted as evidence during the arbitration. An arbitrator may draw a positive inference if a witness's evidence is consistent with the record of a disciplinary enquiry, while an adverse inference may be drawn if a witness changes his or her version.

8. The Guidelines also re-affirm that an arbitrator must conduct an arbitration hearing impartially. If an arbitrator engages in biased conduct or acts in a manner which is unfair or unreasonable to any of the parties, this obligation will be violated and, inter alia, may well serve as a basis for a review.

9. An arbitrator must decide on the procedure to be followed for the arbitration and inform the parties thereof. This decision as to which procedure to follow is within the arbitrator's discretion. In terms of Section 138(1) of the LRA, an arbitrator may decide on the form of proceedings he deems appropriate to resolve the dispute fairly and quickly, and he must deal with the substantial merits of the dispute with the minimum of legal formalities. It follows from this that arbitration proceedings need not be conducted in the same way as a formal court hearing and need not be subject to the same formalistic rigours.

10. An arbitrator should specifically consider the following factors when deciding on an appropriate procedure:

10.1

the complexity of the factual and legal matters involved;

10.2

the attitude of the parties to the form of proceedings (this is accordingly something which the parties themselves may wish to address the arbitrator on);

10.3

whether or not the parties are represented;

10.4

whether legal representation has been permitted; and

10.5

the degree of experience of the parties or their representatives in appearing at arbitrations.

11. The Guidelines suggest that an arbitration hearing should normally involve six distinct stages, the sequence of which may vary depending on the particular procedure followed. The Guidelines contain particular provisions relating to each of the following six stages:

11.1

Preparation and introduction ("Stage 1");

11.2

Dealing with preliminary issues ("Stage 2");

11.3

Narrowing the issues ("Stage 3");

11.4

The hearing of evidence ("Stage 4");

11.5

The award ("Stage 6").

stage 1

12. The Guidelines provide that the arbitrator should expressly inform the parties concerning certain particulars relating to the arbitration, during Stage 1 of the arbitration: these include the scope of his powers, the fact that the parties may at any stage of the proceedings agree to settle the matter, and the fact that they are entitled to exercise certain rights in terms of Section 138(2) of the LRA. These rights mean that, irrespective of the form of the arbitration proceedings, the parties must be entitled to give evidence, to call and question witnesses, and to present concluding arguments.

13. The extent to which it is necessary that the nature and particulars of the proceedings be explained to the parties, should be determined by the parties' or their representatives' knowledge and experience of CCMA proceedings. For example, it may be particularly important that the arbitrator explain to an inexperienced and/or unrepresented party that it is entitled to cross-examine the other party's witnesses. An arbitrator should be alert to circumstances which indicate that a party's case is being prejudiced due to an incorrect understanding of the nature of the proceedings: for example, if a party fails to cross-examine the other party's witnesses, the arbitrator should ordinarily bring this to the attention of the party in question and try to correct any possible misunderstanding which may exist in the mind of that party.

stage 2

14. Preliminary issues, such as the recusal of the arbitrator, condonation, jurisdiction, legal representation, and discovery of documents, should be dealt with during Stage 2, before the commencement of the actual arbitration hearing.

15. Both the parties and/or the arbitrator may raise preliminary points. Parties must be given the opportunity to argue and, if necessary, lead evidence on the preliminary points raised. Should any party request clarification on a preliminary issue, the arbitrator must provide him/her with the necessary explanation.

16. A party may apply for legal representation at this preliminary stage and may also do so at a later point during the course of the proceedings. Legal representation may also be allowed by the arbitrator for a specific purpose only, such as to argue a preliminary point.

17. The arbitrator is obliged to deal with and confirm the following preliminary points, irrespective of whether they are specifically raised by either party:

17.1

The fact that the CCMA has jurisdiction to hear the particular dispute; and

17.2

The proper and correct identification of both parties, i.e. as a natural person, partnership, closed corporation, company or other legal person.

18. A ruling on preliminary issues should also be made at this stage, unless the preliminary point raises complex legal issues which require further consideration, in which case the proceedings may be adjourned. It is sufficient if the reasons for decisions on preliminary issues are contained in the final arbitration award. However, if a decision on a preliminary issue resolves the dispute, the arbitrator must issue an award containing the reasons and the factual basis for the decision.

stage 3

19. For purposes of expediting the resolution of the dispute, the arbitrator should facilitate an agreement between the parties on the legal and factual issues of the matter during Stage 3. This should be the case insofar as this is required by the complexity of the matter, and to the extent that it has not already been done during conciliation or otherwise. The employee and employer party should thus be invited by the arbitrator to respectively clarify certain aspects, which is normally done in the form of brief opening statements by both sides.

20. At this stage, the arbitrator should deal with the question of substantive fairness, by referring to each of the issues listed in the guidelines in cases of dismissal for misconduct, as contained in Item 7 of Schedule 8 to the LRA.

21. At the conclusion of this stage, the arbitrator should record the agreement reached between the parties regarding the common cause issues, the issues in dispute and the issues which must be decided in order to resolve the dispute.

stage 4

22. Stage 4 is an opportunity for the parties to lead their own evidence and to question and challenge each other's evidence. The arbitrator should decide on and inform the parties of the form of these proceedings, after considering the various factors already listed above.

23. If one or both of the parties are unrepresented, or have inexperienced representatives, the arbitrator would be expected to be more actively involved in this process and he must ensure that the parties are aware of and can exercise their rights in terms of Section 138(2) of the LRA. A failure to adhere to this duty may provide the basis for a review application to the Labour Court, in circumstances where an inexperienced or unrepresented party may be prejudiced as a result of the arbitrator's failure to adhere to his duty.

24. The Arbitrator has the following duties in relation to witnesses at an arbitration hearing:

24.1

to ask the witnesses to identify themselves, to swear them in, and to advise them of the process of questioning;

24.2

to ensure that the testimony of witnesses is recorded electronically or digitally; and

24.3

to take notes of the evidence given and to keep these notes in a file.

25. If a party's witness is present during the evidence of another witness called by the same party, the corroborating evidence of the former witness will usually not carry much weight, and an arbitrator should expressly inform the parties of this. Witnesses who have not yet testified should generally not be present in the arbitration hearing, but may be present if a party specifically requires it, and it is therefore important that parties be informed that this may have an impact on the evidential value of the testimony of their witnesses.

stage 5

26. During Stage 5 of the proceedings, parties have a final opportunity to argue their cases, based on the evidence presented. An arbitrator may allow parties to also file written arguments within seven days of the hearing, if there are complex issues involved.

27. An arbitrator may not base an arbitration award on a point which was not relied upon during the arbitration proceedings, unless the parties are called upon to make written or oral submissions on that point, before the award is made.

stage 6

28. Subsequent to all of the above, the arbitrator issues an arbitration award during Stage 6. The section of the Guidelines that deals specifically with the issuing of arbitration awards will be discussed in a subsequent article.

conclusion

29. Parties are advised to be mindful of the Guidelines during misconduct arbitrations, and particularly those sections which impose specific duties upon arbitrators.

30. While not all the Guidelines are drafted in express mandatory terms, and generally indicate how arbitration proceedings "should" be conducted, arbitrators are obliged to take the Guidelines into account. By assessing the conduct of an arbitrator with reference to the Guidelines, a party may be able to more easily prove that the arbitrator exceeded his powers, committed misconduct in relation to his duties and/or committed a gross irregularity in the conduct of the proceedings. In terms of Section 145 of the LRA, such grounds might constitute a defect in the arbitration proceedings, rendering the arbitration award reviewable.

31. With this in mind, the Guidelines should serve as an essential and practical yardstick against which to measure the conduct of CCMA arbitrators after 1 January 2012.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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