IN THE LABOUR COURT OF SOUTH AFRICA (HELD IN JOHANNESBURG) Case number: JR2343/05 In the matter between: SEEFF RESIDENTIAL PROPERTIES Applicant And COMMISSIONER N. MBHELE N.O First Respondent COMMISSION FOR CONCILIATION, MEDIATION & ARBITRATION Second Respondent DEIDRE NADIA SMITH Third Respondent JUDGMENT Freund A.J.: INTRODUCTION: 1. This is an unopposed application for an order reviewing and setting aside a certificate of outcome in respect of an alleged unfair dismissal dispute issued by a Commissioner appointed by the Commission for Conciliation, Mediation and Arbitration ( the CCMA ). 2. The facts as disclosed in the Founding Affidavit are straightforward. The Third Respondent worked as an estate agent at the Applicant s Krugersdorp office. The relationship between the parties was terminated by the Applicant. The Third Respondent thereafter referred a dispute to the CCMA alleging that she had been unfairly dismissed by the Applicant. On 29 August 2005 a conciliation meeting was convened at the offices of the CCMA
2 in respect of this referral. 3. The Applicant s attorney, Mr. Berkowitz, attended the conciliation meeting intending to raise an objection to the CCMA s jurisdiction to deal with the Third Respondent s alleged unfair dismissal claim. The argument he proposed to advance on behalf of the Applicant was that the Third Respondent had not been an employee of the Applicant but had been an independent contractor. Mr. Berkowitz had prepared a Notice of Motion giving notice that the Applicant intended to apply for an order declaring that the CCMA did not have jurisdiction to determine the unfair dismissal dispute and had prepared a supporting written statement. He sought leave to hand the application to the First Respondent ( the Commissioner ) but she refused to accept receipt thereof and refused to consider the application. Mr. Berkowitz submitted to her that, before she could conciliate the dispute, she first had to investigate whether she had jurisdiction to deal with the dispute. She responded by saying that, if the dispute could not be resolved, she would issue a certificate of outcome. Mr. Berkowitz suggested that before she issued the certificate, she should perhaps seek guidance from a senior commissioner. She disregarded this, prepared the relevant certificate and distributed copies thereof. Mr. Berkowitz requested her to place a copy of the jurisdiction application in the CCMA file, which she declined to do.
3 4. It is the Applicant s case that the Commissioner was obliged to investigate whether the CCMA had the requisite jurisdiction and that her decision to issue the certificate of outcome without first investigating this issue constitutes a reviewable irregularity. 5. I agree that the Commissioner s failure to investigate the jurisdictional issue is a reviewable irregularity. I say this for the reasons which follow. 6. Rule 14 of the Rules for the Conduct of Proceedings before the CCMA (as published in GN R1448 in GG 25515 of 10 October 2003 and as amended) ( the CCMA rules ) provides as follows: 14. How to determine whether a Commissioner may conciliate a dispute If it appears during conciliation proceedings that a jurisdictional issue has not been determined, the Commissioner must require the referring party to prove that the Commission has the jurisdiction to conciliate the dispute through conciliation. 7. This Rule is a rule made by the Governing Body of the CCMA under its powers in terms of Section 115 (6), read with Sections 115(2)(cA) and 115 (2A) of the Labour Relations Act No. 66 of 1995 ( the LRA ). The Rule constitutes a form of delegated legislation which bound the Commissioner. 8. It is self evident, on the facts outlined above, that during relevant conciliation proceedings it must have become apparent to the Commissioner that a jurisdictional issue existed which had not been determined. In those circumstances the Commissioner was bound in terms of the Rule to require the referring party, in this case the Third
4 Respondent, to prove that the Commission had the jurisdiction to conciliate the dispute through conciliation. The Commissioner failed to do so. By so doing she acted in breach of a law circumscribing her powers and her decision to issue the certificate of outcome without investigating the jurisdictional issue raised is therefore reviewable in terms of the constitutional principal of legality. (See Fedsure Life Assurance Ltd and Others vs Greater Johannesburg Transitional Metropolitan Council and Others, 1999(1) SA 374 (CC), at paragraphs [58] and [59]; President of the Republic of South Africa and Others vs South African Rugby Football Union and Others 2000(1) SA 1 (CC), at paragraph [148].); Gerber v Member of the Executive Council for Provincial Government, Development and Another 2003(2) SA 346 (SCA) at paragraph [35]; Pharmaceutical Society of South Africa and Others v Tshabalala Msimang and Another N.N.O; New Clicks South African (Pty) Ltd v Minister of Health and Another 2005(3) SA 238 (A) at paragraph[41]). 9. The Commissioner s failure to enquire into the jurisdictional issue is a sufficient basis to determine the outcome of this application. However, I wish to add a few further comments. 10. First, it appears to me that Rule 14 of the Rules of the CCMA alters what might otherwise have been the applicable legal position. It puts beyond doubt the obligation (and not merely the right) of a commissioner to determine whether the CCMA has jurisdiction if it
5 becomes apparent that a jurisdictional issue has not been determined. 11. Second, I do not know why the Commissioner refused to investigate the jurisdictional issue raised by the Applicant for determination. None of the Respondents have filed answering affidavits and the record filed in this matter comprises no more than the Third Respondent s referral form and the certificate of outcome issued by the Commissioner. It may be, however, that the Commissioner took the view that, if a respondent wanted to raise the point that the referring party had not been its employee, this was not a matter to be considered at the conciliation stage and that it was a matter only to be considered by the arbitrating commissioner in due course. Such an approach would be consistent with certain decisions of this Court, e.g. Dempster vs Kahn and Others (1998) 19 ILJ 147 (LC); BHT Water Treatment (a division of Afchem (Pty) Ltd incorporating PWTSA) vs CCMA and Others (2002) 23 ILJ 141 (LC); AVBOB Mutual Assurances Society vs Commission for Conciliation, Mediation and Arbitration, Bloemfontein and Others (2003) 24 ILJ 535 (LC). There are two answers to this. First, even if the Commissioner believed that her jurisdiction to conciliate did not turn on whether or not the referring party was in truth an employee, she was nevertheless bound in terms of Rule 14 of the CCMA s Rules to inquire into the correctness of that very proposition. Second, there is weighty authority which contradicts the cases referred to above and
6 which is to the effect that a conciliating commissioner has no jurisdiction even to conciliate unless the referring party is, in fact, an employee. See e.g. Tier Hoek vs CCMA (1999) 1 BLLR 63 (LC); Virgin Active (Pty) Ltd vs Mathole N.O. and Others (2002) 23 ILJ 984 (LC); Sapekoe Tea Estates vs Commissioner Maake and Others (2002) 23 ILJ 1603 (LC); Flexware (Pty) Ltd v CCMA and Others (1998) 19 ILJ 7475. In my view it is clear from these cases and from Section 191(1)(a) of the Act (which permits a dismissed employee to refer an unfair dismissal dispute for conciliation) that the referring party must, in truth, be an employee and therefore that no jurisdiction exists to conciliate the dispute if the referring party is not an employee. 12. Third, this is one of several cases which has come before me in which a party has sought an order reviewing and setting aside a certificate of outcome issued by a CCMA commissioner. Indeed, the very next case on my roll was such a case. I am not persuaded that there was any need to bring these applications, even if they were legally sound. These applications rest on what I believe to be a misconception as to the legal effect of a certificate of outcome. In particular, parties appear to believe that, if they can prevent a certificate of outcome from being issued, or review and set aside a certificate of outcome which has been issued, this will ipso facto put an end to any possible arbitration of the underlying unfair dismissal dispute. In my view, this is not correct.
7 13. Section 191 of the LRA regulates disputes about unfair dismissals. Section 191(1)(a) permits a dismissed employee to refer a dispute about the fairness of his or her dismissal to a bargaining council or to the CCMA. Section 191(4) provides that the bargaining council or the CCMA must attempt to resolve such dispute through conciliation. That is the context in which Section 191(5)(a) provides (in the relevant parts) as follows: If a council or a commissioner has certified that the dispute remains unresolved, or if 30 days have expired since the council or the Commission received the referral and the dispute remains unresolved a) the council or the Commission must arbitrate the dispute at the request of the employee if (i) (my emphasis) (Sub subsections (1) to (iv) of Section 191(5)(a) are presently immaterial; their effect is that arbitration rather than adjudication by the Labour Court must take place in respect of an unfair dismissal dispute if the employee has alleged certain facts in respect of the reason for the dismissal.) 14. The words I have emphasised above, make it quite clear, in my view, that even if a certificate of outcome has not been issued, arbitration remains mandatory if 30 days have expired since the council or the Commission received the referral and if the employee requires this. (See, in this regard, De Vries v Lionel Murray Schwormstedt & Louw
8 (2001) 22 ILJ 1150 (LC)). 15. In my view, the fact that a conciliating commissioner has declined to issue a certificate of outcome because he or she is of the view that the CCMA lacks jurisdiction on the basis that the referring party was not an employee or was not dismissed is a matter of no consequence to the commissioner appointed to arbitrate the dispute, who is entitled to consider the same jurisdictional question afresh. See in this regard SA Broadcasting Corporation vs Commission for Conciliation, Mediation and Arbitration and Others (2003) 24 ILJ 211 (LC) at paragraphs [19] and [20]; Etschmaier vs Commission for Conciliation, Mediation and Arbitration and Others (1991) 20 ILG 144 (LC) at paragraphs [40] to [48]; Benicon Earthworks & Mining Services (Edms) Bpk vs Jacobs N.O. and Others (1994) 15 ILJ 801 (LAC) at 803H to 804H; Wyeth SA (Pty) Ltd v Mangele and Others (2005) 20 ILJ 749 (LAC) at paragraphs [6] to [7]. 16. Frequently disputes as to whether or not the referring party was, in truth, an employee (as defined in Section 213 of the LRA) or whether the employee was, in truth, dismissed (as contemplated in Section 189 of the LRA) turn on disputed facts. Sometimes they turn also on principles of law beyond the knowledge of unrepresented litigants. In my view disputes over such issues are best ventilated and determined
9 at the arbitration phase. The conciliation phase was, in my view, never intended by the lawgiver to be a phase in which complex factual and legal issues were to be determined. Nevertheless, for the reasons set out above, I accept that if a respondent to a referral insists on raising a jurisdictional challenge based on the contention that the referring party was either not an employee or was not dismissed, Rule 14 of the CCMA Rules requires the conciliating commissioner to investigate the merits of this challenge. If the challenge is upheld, a certificate of outcome will not be issued. As explained above, very little turns on this. 17. If, as I believe to be the case, it is correct that the views taken by the conciliating commissioner on these jurisdictional questions do not bind the commissioner appointed to arbitrate, it appears to me that little purpose is served (save, perhaps, in unusual factual settings) in bringing before this Court case after case in which parties seek to review and set aside decisions made by conciliating commissioners in respect of whether or not the CCMA has jurisdiction. 18. In saying this I have not lost sight of the views expressed by the Labour Appeal Court in Fidelity Guards Holdings (Pty) Ltd vs Epstein N.O. and Others (2000) 21 ILJ 2382 (LAC). That case concerned an appeal against the dismissal of a review application aimed at reviewing and setting aside an arbitration award. The appeal failed. The case turned on whether or not the arbitrating commissioner had jurisdiction,in circumstances where a certificate of outcome had been issued but where the employee had failed to refer the matter to the CCMA for conciliation within the required 30 day period and had not applied for
10 condonation. The Court held as follows (per Zondo J.P. at paragraph [12]): In my view the language employed by the legislature in s 191 is such that, where a dispute about the fairness of a dismissal has been referred to the CCMA or a council for conciliation, and the council or commissioner has issued a certificate in terms of s 191(5) stating that such dispute remains unresolved or where a period of 30 days has lapsed since the council or the CCMA received the referral for conciliation and the dispute remains unresolved, the council or the CCMA, as the case may be, has jurisdiction to arbitrate the dispute. That the dispute may have been referred to the CCMA or council for conciliation outside the statutory period of 30 days and no application for condonation was made or one was made but no decision on it was made does not affect the jurisdiction to arbitrate as long as the certificate of outcome has not been set aside. It is the setting aside of the certificate of outcome that would render the CCMA or the council to be without jurisdiction to arbitrate. 19. The facts in the Fidelity Guards matter are entirely distinguishable from the present case and from many of the jurisdictional reviews which come before this Court in respect of certificates of outcome. In the
11 Fidelity Guards matter the jurisdictional issue pertained to the late referral of the dispute to the CCMA. That is a matter which may be condoned in terms of Section 191(2) of the LRA. However, if such condonation is not granted the CCMA lacks jurisdiction to conciliate the dispute. 20. It is within this different context that Zondo J.P. discussed (in paragraphs [15] to [20] of the Fidelity Guards judgment) the question as to at what stage a party who objects on one or other ground to the processing of the dispute should institute review proceedings. The learned Judge President held that this should be done within a reasonable time (at Paragraph [15]) but doubted that a hard and fast rule could be made as to whether a party should approach the Court about jurisdictional objections before or after the completion of the processes before the CCMA. It is my view that, in a case involving a dispute as to whether a person was or was not an employee of the respondent party, review proceedings would generally be premature until after the arbitrating commissioner has had an opportunity of hearing evidence and argument in respect of this issue and of coming to a view thereon. See the SABC case (supra) at paragraph [35]. CONCLUSION:
12 21. Although, in my view, little turns on the validity of the certificate of outcome in this case, I am nonetheless persuaded that the Applicant has shown a reviewable irregularity which vitiates the Commissioner s decision to issue it. 22. As regards the question of costs, the Applicant asks for an order on the scale as between attorney and own client against the First and/or the Second Respondents. It seeks this essentially on the basis of the Second Respondent s refusal to consider the jurisdictional issue raised, notwithstanding being referred to the provisions of Rule 14 of the CCMA Rules. Whilst I accept that the Second Respondent erred in this regard, I am not persuaded that she necessarily acted in bad faith. As indicated above, it may be that she believed that the point sought to be taken by the Applicant ought more appropriately to have been taken at the arbitration stage. Indeed, having regard to the fact that, in my view, so little turns on the reviewability or otherwise of the certificate of outcome; to the fact that this application was not opposed; and to the general reluctance of a Court to make a costs order against a public officer or public body which acts in good faith (see Herbstein and Van Winsen The Civil Practice of the Supreme Court of South Africa Fourth Edition at paragraphs 723 to 725), I am not persuaded that the Applicant is entitled to a costs order at all. 23. I therefore make the following order: The certificate of outcome issued by Commissioner Nomasana Mbhele dated 29 August 2005 under case number: GAJB 20341/05 is reviewed and set aside. FREUND, A.J. APPEARANCES: FOR THE APPLICANT: Mr. C. Berkowitz of Berkowitz Attorneys DATE OF HEARING: 2 May 2006 DATE OF JUDGEMENT: 26 May 2006