Who determines the true nature of the dispute at conciliation?

By Siphamandla Dube, Senior Associate and Owethu Mbambo, Candidate Attorney, Fasken Martineau

Section 135 of the Labour Relations Act, 1995 sets out the powers of a commissioner to resolve a dispute through conciliation. Section 135(3) provides that the commissioner must determine a process to resolve the dispute, which may include (a) mediating the dispute; (b) conducting a fact-finding exercise; and (c) making a recommendation to the parties, which may be in the form of an advisory award. These are the three primary functions of the commissioner when conciliating a dispute. Where conciliation has failed, or at the end of the 30 day period, the commissioner must issue a certificate stating whether or not the dispute has been resolved.

It is the commissioner’s duty to conduct a fact-finding exercise and the consequences thereof are the subject of this article. Rule 15 of the CCMA Rules provides – 

A certificate issued in terms of section 135(5) that the dispute has or has not been resolved, must identify the nature of the dispute and the parties as described in the referral document or as identified by the commissioner during the conciliation proceedings.

In September and Others v CMI Business Enterprise CC [2018] ZACC 4, the Constitutional Court considered, amongst other issues, whether a commissioner is bound by the referring party’s categorisation of a dispute in conciliation proceedings.

Theo September and two other employees resigned allegedly due to CMI Business Enterprise CC (“CMI“) making their working conditions intolerable. The employees thereafter referred an unfair discrimination dispute to the CCMA.

In their CCMA referral form, the employees described the dispute as “unfair discrimination section 10 of the Employment Equity Act” and recorded their desired outcome as “employer to stop discriminating us”. The dispute was conciliated and the commissioner issued a certificate of outcome certifying that a dispute of “unfair discrimination” remained unresolved and indicated that it could be referred to the Labour Court.

In the Labour Court, the employees sought an order that their resignations amounted to automatically unfair dismissals based on racial discrimination and requested compensation. CMI failed to oppose the claim in accordance with the Labour Court rules.

The Labour Court was satisfied that the employees were constructively dismissed as they were forced to work under intolerable working conditions which entailed racial abuse and racially discriminatory treatment and granted default judgment in favour of the employees. The Labour Court further held that the dismissal was “based on their race” and was automatically unfair in terms of section 187(1)(f) of the Labour Relations Act.CMI was ordered to pay the maximum compensation of 24 months remuneration to the employees.

CMI applied for rescission of the default judgment on the basis that the Labour Court did not have jurisdiction to hear the matter because the nature of the dispute had changed from what the employees referred to the CCMA. On the other hand, the employees alleged that it became apparent during conciliation that the dispute was in fact one of constructive dismissal and this was canvassed during conciliation.

The Labour Court found that it had jurisdiction to hear the matter because the matter had been conciliated. According to the Labour Court, a commissioner cannot be precluded from enquiring into the nature of the dispute because the referring party did not accurately describe the dispute. On this basis, the Labour Court concluded that it had jurisdiction as there was a referral of the dispute for conciliation and a certificate was issued stating that it had not been resolved. CMI’s rescission application was dismissed with costs.

CMI took the judgment on appeal to the Labour Appeal Court. The Labour Appeal Court held that the Labour Court was not entitled to venture beyond the referral form and the certificate of outcome to determine what dispute was conciliated. The Labour Appeal Court concluded that evidence relating to what transpired during conciliation was inadmissible in subsequent proceedings. As a result, the court found that the unfair dismissal dispute had not been conciliated and the Labour Court did not have jurisdiction to hear the dispute.

Aggrieved by the Labour Appeal Court’s decision, the employees approached the Constitutional Court to set aside the judgment. The Constitutional Court stated that Rule 15 of the CCMA Rules clearly intended the commissioner to have the right and power to investigate and identify the true nature of the dispute.

The Constitutional Court accepted that the general rule is that the referral form and certificate of outcome constitute prima facie evidence of the nature of the dispute conciliated. However, if it is alleged that the nature of the dispute is in fact different from that reflected on such documents, the parties may adduce evidence as to the nature of the dispute. On this basis, the Constitutional Court held that it would be wrong to adopt the Labour Appeal Court’s approach, which essentially precludes the courts from referring to evidence outside of the certificate of outcome and referral form, to determine the nature of the dispute conciliated.

The Constitutional Court concluded that – 

“Of importance, on a subject as technical as constructive dismissal, it is clamant that where during the conciliation process it appears to a commissioner that the true dispute may well involve this subject, she or he must actively satisfy her[self] or himself that it does or does not relate to this subject. If it does indeed relate to this subject, the commissioner’s certificate must reflect the true position. Even if the certificate does not, it would be formalism of the highest order for courts to ignore substance. Ultimately, the question is whether during the conciliation process the substance of the dispute sought to be conciliated became apparent.”

The majority judgment in the Constitutional Court accordingly found that the Labour Court had jurisdiction to grant the default judgment because the true dispute between the parties was conciliated. Thus, notwithstanding that the employees had referred an unfair discrimination dispute, during conciliation, the commissioner had determined the true nature of the dispute as one of constructive dismissal.

This decision is in line with the plethora of Labour Appeal Court and Labour Court judgments where it had been held that the commissioner is not bound by what the parties select in their referral forms as the nature of the dispute. It is the commissioner’s duty to determine the true nature of the dispute between the parties. This judgment further illustrates the Constitutional Court’s approach that substance must precede formalism and that in subsequent proceedings an enquiry may be made on the true nature of the dispute conciliated, notwithstanding the categorisation of the dispute by the referring party or the commissioner.

For more information please contact Siphamandla Dube or Owethu Mbambo at sdube@fasken.comor +27 11 586 6095

You may visit Fasken Martineau at https://www.fasken.com/en/johannesburg/ 

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