“OBJECTION TO CON/ARB!”, “OVERRULED!”

Employers are routinely notified by the Commission for Conciliation, Mediation and Arbitration (“CCMA”) that they must attend so-called “con/arb” processes relating to disputes referred to the CCMA against them by former employees. Often these disputes concern alleged unfair dismissals relating to misconduct. In such cases, employers have the right to – and regularly do – object to the arbitration proceeding immediately after conciliation, should the latter process fail. The CCMA Rules make provision for employers to deliver notice of their objection to con/arb at least seven days before the process is set down.

Question: what happens, though, should the objection be lodged less than seven days before the con/arb process?

A judgment on this question was handed down on 3 February 2023 in the matter of Valinor Trading 133 CC t/a Kings Castle v LJ De Jager & Others.

In this case, the company, three days before the con/arb proceedings (in an unfair dismissal dispute relating to misconduct), objected to the CCMA automatically proceeding with arbitration following the conclusion of the conciliation. Nevertheless, the Commissioner dismissed the company’s objection on the basis that the objection was not brought to the attention of the CCMA at least seven days prior to the con/arb as set out in Rule 17(2) of the CCMA’s Rules. In the company’s absence, the Commissioner issued a default award against the company in the employee’s favour.

The company was aggrieved by the default award and applied to rescind it. That application was dismissed. The company pursued a second rescission application, which also was dismissed. Ultimately, the company applied to review the rescission rulings before the Labour Court.

In the Labour Court proceedings, the Judge recorded that the crisp legal question requiring determination was “whether a commissioner was empowered to ignore an objection purely on the basis that it was not raised at least seven days the date of the con/arb, as provided for in the CCMA Rules?”.

The Judge referred to section 191(5A) of the Labour Relations Act (“LRA”), which states that, in the absence of an objection, arbitration must immediately commence after certifying that the dispute remains unresolved. The Judge interpreted that provision to mean that, once a party objects to arbitration, arbitration cannot lawfully commence. The Judge went further to confirm that Rule 17(2) of the CCMA Rules, read within the context of the provisions of the LRA, cannot be interpreted to render an objection ineffective where a party fails to object to the con/arb process seven days before its commencement.

In other words, a Commissioner cannot, and does not have the discretion to, dismiss an objection to con/arb (in disputes where they validly can be made) submitted less than seven days before the set down date. Therefore, the Judge held that the Commissioner in this case was not allowed in law to commence the arbitration after the objection was received, albeit late under the CCMA Rules.

This is an important case because not only does it remind parties to a CCMA dispute that they have the right to object to the con/arb process (in certain types of disputes), but that a party can raise this objection without fear that the arbitration will proceed directly thereafter. This may be necessary where a party, for whatever reasons, forgets to file the objection timeously. That said, it is remains advisable to parties to deliver notice of their objection to con-arb as timeously as possible.