Article 21/2021

Labour Edge

The failure by an arbitrator to apply his or her mind to the material issues at hand will usually be an irregularity.  However, before such irregularity will result in the setting aside of an arbitration award, it must reveal a misconception of the true enquiry or result in an unreasonable outcome.  What are the requirements to be met for an arbitration award to be set aside under the above circumstances?

The locus classicus remains Head of Department of Education v Mofokeng and Others (2014) 25 SALLR 82 (LAC); (2015) 36 ILJ 2802 (LAC); [2015] 1 BLLR 50 (LAC), where the labour appeal court said the following:

‘[30]   The failure by an arbitrator to apply his or her mind to issues which are material to the determination of a case will usually be an irregularity. However, the Supreme Court of Appeal (“the SCA”) in Herholdt v Nedbank Ltd and the labour court in Goldfields Mining South Africa (Pty) Ltd (Kloof Gold Mine) v CCMA and others have held that before such an irregularity will result in the setting aside of the award, it must in addition reveal a misconception of the true enquiry or result in an unreasonable outcome…

[32]    …Mere errors of fact or law may not be enough to vitiate the award. Something more is required. To repeat: flaws in the reasoning of the arbitrator, evidenced in the failure to apply the mind, reliance on irrelevant considerations or the ignoring of material factors etc. must be assessed with the purpose of establishing whether the arbitrator has undertaken the wrong enquiry, undertaken the enquiry in the wrong manner or arrived at an unreasonable result. Lapses in lawfulness, latent or patent irregularities and instances of dialectical unreasonableness should be of such an order (singularly or cumulatively) as to result in a misconceived inquiry or a decision which no reasonable decision-maker could reach on all the material that was before him or her.

[33]    Irregularities or errors in relation to the facts or issues, therefore, may or may not produce an unreasonable outcome or provide a compelling indication that the arbitrator misconceived the inquiry. In the final analysis, it will depend on the materiality of the error or irregularity and its relation to the result. Whether the irregularity or error is material must be assessed and determined with reference to the distorting effect it may or may not have had upon the arbitrator’s conception of the inquiry, the delimitation of the issues to be determined and the ultimate outcome. If but for an error or irregularity a different outcome would have resulted, it will ex hypothesi be material to the determination of the dispute. A material error of this order would point to at least a prima facie unreasonable result. The reviewing judge must then have regard to the general nature of the decision in issue; the range of relevant factors informing the decision; the nature of the competing interests impacted upon by the decision; and then ask whether a reasonable equilibrium has been struck in accordance with the objects of the LRA. Provided the right question was asked and answered by the arbitrator, a wrong answer will not necessarily be unreasonable. By the same token, if an irregularity or error material to the determination of the dispute may constitute a misconception of the nature of the enquiry so as to lead to no fair trial of the issues, with the result that the award may be set aside on that ground alone. The arbitrator however must be shown to have diverted from the correct path in the conduct of the arbitration and as a result failed to address the question raised for determination.’

What is the viewpoint of the labour appeal court, as expressed in SA Municipal Workers’ Union obo Morwe v Tswaing Local Municipality and Another [2023] 2 BLLR 131 (LAC); (2022) 33 SALLR 60 (LAC)?

An employer set out its employees’ rights in disciplinary hearings in the applicable disciplinary code and incorporated same into their employment contracts.

What are the options available to an employee when an employer allegedly owes such employee monies in terms of a contract of employment?