Section 158(1B) of the Labour Relations Act ("LRA") prohibits the Labour Court from reviewing any decision or ruling made during conciliation or arbitration proceedings conducted under the aegis of the Commission for Conciliation, Mediation and Arbitration ("CCMA") or any bargaining council before the issue in dispute has been finally determined by the CCMA or the bargaining council. However, the Labour Court may intervene if it is of the opinion that it is "just and equitable" to do so. Despite this, it is not uncommon for aggrieved parties in arbitration proceedings to approach the Labour Court on an urgent basis and request that the Labour Court stay the arbitration proceedings pending the finalisation of a review application instituted prior to the conclusion of the arbitration.
The recent decision of the Labour Court in City of Johannesburg Metropolitan Municipality v Lesego Dorcas Mphefo & 2 Others is one such matter.
The Council for the City of Johannesburg Metropolitan Municipality ("COJ") had passed a resolution to conditionally appoint Ms Mphefo as the Executive Director: Economic Development, in terms of section 57 of the Local Government: Municipal Systems Act. In terms of this section, Ms Mphefo was required to conclude a written employment contract and a performance agreement within 60 days of the commencement of her employment. If she failed to do so, her appointment would lapse. Ms Mphefo did not comply with the provisions of this section resulting in the COJ notifying her that her appointment had lapsed by operation of law.
Aggrieved by this outcome, Ms Mphefo referred an unfair dismissal dispute to the relevant bargaining council. Prior to the commencement of arbitration, the COJ raised two jurisdictional issues: firstly, that Ms Mphefo had not concluded a contract of employment and was therefore not an employee; and secondly, that if she was indeed an employee, she was not dismissed and that her appointment had lapsed by operation of law. This meant that the bargaining council did not have the jurisdiction to arbitrate the dispute. The arbitrator ruled that an employment relationship did exist and that Ms Mphefo had been dismissed by the COJ. Consequently, the arbitrator concluded that the bargaining council had jurisdiction to arbitrate the dispute.
Aggrieved by this ruling, the COJ approached the Labour Court for an order reviewing and setting aside the ruling.
Subsequent to launching the review application, the COJ requested Ms Mphefo to agree to the postponement of the arbitration proceedings, pending the finalisation of the review application. Ms Mphefo did not agree to the requested postponement and the COJ approached the Labour Court for urgent relief to stay the arbitration proceedings pending the finalisation review application.
Prinsloo J stated that, in general, the Labour Court is reluctant to review rulings made during arbitration proceedings before they are concluded, as premature intervention could encourage parties to engage in dilatory tactics instead of progressing with the arbitration. Section 158(1B) pre-empts the Labour Court from reviewing interlocutory rulings and prompts the Court to do so only if it is deemed just and equitable. In light of this, the Labour Court should be loath to intervene in pending arbitration proceedings. The only exception would be if the aggrieved party establishes that it is just and equitable for the Court to intervene by entertaining the application to review and set aside the arbitrator's ruling.
The Court found that the COJ had a prima facie right to approach the Court to review the jurisdictional ruling. The Court also held that, if the COJ was required to continue with the arbitration before the review application was adjudicated, it could suffer irreparable harm in defending the alleged unfair dismissal dispute. In the Court's view, all parties would be prejudiced if the arbitration proceedings continued before the Labour Court determined the review application. They would invest time, money, and resources in a process before a body that might lack jurisdiction, leading to further litigation and increasing the Court's burden. The Court held that the balance of convenience favoured the COJ. The prejudice that Ms Mphefo would suffer if the arbitration proceedings were stayed could be limited by expediting the review application. The Court concluded that the only remedy available to the COJ was to stay the arbitration proceedings pending the finalisation of the review application on an expedited basis.
Conclusion
This judgment is interesting because it appears that the Labour Court was prepared to stay the arbitration proceedings pending the finalisation of the review application because the review application would be dispositive of the matter and could bring an end to Ms Mphefo's unfair dismissal claim. If the Court found that Ms Mphefo was not an employee or had not been dismissed, the underlying cause, i.e. the unfair dismissal dispute which was being arbitrated, would be removed. This would oust the jurisdiction of the bargaining council to entertain this dispute any further.
Given this context, it can be inferred that the Labour Court may be more inclined to intervene in ongoing arbitration disputes when the relief sought is focused on the jurisdiction of the forum concerned. Depending on the facts of the specific case, it may be just and equitable for the Labour Court to exercise its wide discretion to intervene if it is just and equitable to do so.
* Reviewed by Peter le Roux, an Executive Consultant in ENS' Employment practice.
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