Determining when to apply for a review of an arbitration award
Danny Hodgson
Consultant at Klopper Attorneys Inc.
danny@klopper.co.za
Introduction
Once an arbitration hearing at the Commission for Conciliation Mediation and Arbitration (CCMA) or relevant bargaining council has been finalised, the commissioner will issue an arbitration award containing their finding and setting out brief reasons for reaching that finding. In most cases where a decision is made in relation to a dispute, the unsuccessful party is often unhappy with the outcome and usually has several reasons for disagreeing with the commissioner’s decision. Unfortunately for the unsuccessful party, an arbitration award is final and binding and cannot be appealed.This means that a party is not given the chance to reargue the merits of their matter in the hopes of receiving a different outcome from a different adjudicator. However, the Labour Relations Act 66 of 1995 (LRA) does allow parties to apply to the Labour Court to review an arbitration award on specified grounds. A review is distinguishable from an appeal in that it is more focused on the procedure that was followed in reaching the finding and less focused on the merits of the matter. This article will discuss the grounds of review that are available to parties as well as the tests that are applied by the Labour Court in determining whether an arbitration award should be reviewed and set aside in order to assist parties make an informed decision when deciding whether to apply for a review.
Grounds of review in the LRA
Section 145 of the LRA regulates the review of arbitration awards and provides that any party to a dispute who alleges a defect in any arbitration proceedings may apply to the Labour Court, within 6 weeks of the date of receiving the award, for an order setting aside the arbitration award. A defect is defined as:
- The commissioner committed misconduct in relation to their duties as an arbitrator.
- The commissioner committed a gross irregularity in the conduct of the arbitration proceedings.
- The commissioner exceeded their powers.
- The award was improperly obtained.
When will a commissioner have misconducted themselves?
A commissioner is required to determine the nature of the dispute, apply their mind to the evidence before them and come to a reasonable decision. A failure to do so may constitute misconduct by the commissioner or alternatively, a gross irregularity in the conduct of the proceedings. The distinguishing factor between misconduct and a gross irregularity is that for there to be misconduct there must be some wrongful or improper conduct on the part of the commissioner. An example of misconduct in arbitration proceedings would be the commissioner acting in a biased manner.
When will a commissioner commit a gross irregularity in the conduct of proceedings?
The focus in terms of this ground of review is on the commissioner’s failure to comply with their duties in determining a dispute which affects a party’s right to a fair trial. For the irregularity to amount to a gross irregularity it must relate to material errors of fact or law. Examples of gross irregularities include the failure of a commissioner to take into account material evidence, incorrectly applying legal principles or misunderstanding the nature of the dispute.
When will a commissioner have exceeded their powers?
A commissioner has the power to determine disputes falling within the jurisdiction of the CCMA and has certain powers in respect of the remedies that they can award. This category therefore concerns situations where a commissioner exceeds those powers by determining a dispute which they did not have jurisdiction to determine or by making an award which they were not authorised to make.
When will an award have been improperly obtained?
This category relates to a situation where the successful party bribes or by some other means compels the commissioner to issue an award in their favour.
The tests applied by the Labour Court in deciding a review application
When hearing a review application, the Labour Court applies certain tests to determine whether the defect is of such a nature that the award should be set aside. These tests are referred to as the reasonableness test and the correctness test.
The reasonableness test comes from the case of Sidumo and Another v Rustenburg Platinum Mines Ltd and Others [2007] 28 ILJ 2405 (CC) and is the test that is applied when the factual findings of the commissioner are challenged on review, such as in the case where a gross irregularity in the conduct of proceedings is alleged. This test poses the question – is the decision reached by the commissioner one that a reasonable commissioner could not reach? If so, the arbitration award will be reviewed and set aside. It is therefore not sufficient to simply allege that one of the above defects are present but one must further establish that as a result of the defect the commissioner reached a decision which was not reasonable.
The correctness test was cited in the case of SARPA v SA Rugby (Pty) Ltd and Others; SA Rugby (Pty) Ltd v SARPU [2008] 9 BLLR 845 (LAC) and this is the test that is applied by the Labour Court when the legal or jurisdictional findings of the commissioner are challenged, such as in the case where it is alleged that the commissioner exceeded their powers by determining a dispute which they did not have jurisdiction to determine. This test poses the question – is the decision reached by the commissioner correct? The Labour Court will analyse the objective facts and legal principles to determine whether the decision reached by the commissioner was right or wrong. If it is wrong, the arbitration award will be reviewed and set aside.
Conclusion
Should a party wish to have an arbitration award set aside they will have to determine whether they have any potential grounds of review. It can be quite difficult for a party to determine whether they have any prospects in succeeding with a review application as the grounds of review can often overlap making it difficult to determine which test to apply. The process in bringing a review application is also quite complex and there are strict Labour Court Rules and time periods to comply with. It is therefore recommended that you consult an attorney to assist you in bringing your review application to ensure a smooth process and give you the best chance of success.
