LABOUR COURT JUDGMENT SENDS A STRONG MESSAGE TO UNIONS AND CCMA COMMISSIONERS AHEAD OF THE NEW YEAR

In one of the first reportable judgments of 2024, SAA v NUMSA & SACCA, the Labour Court has sent a strong message to Unions which litigate in the Commission for Conciliation, Mediation and Arbitration (“CCMA”) and CCMA Commissioners who consider preliminary issues in the CCMA.

Background Facts

During December 2019, SAA was placed in voluntary business rescue, as the airline found itself in a parlous financial position and as such required significant restructuring to achieve commercial viability. SAA accordingly initiated a restructuring exercise in 2020. The restructuring involved large-scale retrenchments as well as changes to the terms and conditions of employment of those employees who were retained by SAA. To reduce the adverse impact of the retrenchments, employees were also given the opportunity to participate in a Training and Lay-Off Scheme for 12 months after their retrenchment. The changed terms and conditions and placement in the Training and Lay-Off Scheme took place with the individual employees’ agreement.

Some eight months after the restructuring exercise was implemented and completed, and outside of the statutory periods to challenge a retrenchment, NUMSA and SACCA referred an unfair labour practice dispute to the CCMA. Their ostensible complaint was that the new terms and conditions of employment and placements on the Training and Lay-Off Scheme constituted an unfair labour practice dispute.

The Jurisdictional Challenge

SAA challenged the jurisdiction of the CCMA, as the dispute arose from a large-scale restructuring exercise and any challenge ought to have been referred to the Labour Court, by way of an urgent application and within the time periods set by section 189A of the the Labour Relations Act, 1995 (“LRA”). SAA argued that this was not an unfair labour practice dispute but a retrenchment dispute and that the CCMA had no jurisdiction. Commissioner Phala ruled that the matter must be arbitrated, after which he would determine whether the CCMA had jurisdiction and whether the dispute was truly an unfair labour practice dispute.

Application to Dismiss the Referral

Over roughly 19 months, the parties attended six CCMA hearings on the merits, with NUMSA and SACCA being unprepared on each occasion. At its wit’s end, SAA launched an application to dismiss the CCMA referral, owing to the unions’ failure to proceed with the dispute. Commissioner Phala dismissed that application and stated that CCMA commissioners do not have the power to dismiss matters before they are arbitrated.

The Review Application

Accordingly, SAA took the unusual step of launching a review application in the Labour Court, seeking to have the jurisdictional ruling, the dismissal ruling and a condonation ruling reviewed and set aside before the arbitration was held.

Norton AJ granted SAA’s review application with costs in a carefully considered and detailed judgment.

The CCMA has no Jurisdiction

The Labour Court held that the unions impermissibly morphed a dispute about a retrenchment process into an unfair labour practice dispute, which this was not. In any event, there could be no challenge to the fairness of SAA’s actions when the employees accepted the new terms and conditions of employment and the terms of the Training and Lay-Off Scheme.

Parties who refer disputes to the CCMA bear the onus to establish the CCMA’s jurisdiction in the matter. Despite being called upon to do so, the unions were unable to lay any factual basis for the matter to be considered as an unfair labour practice dispute.  

The CCMA is a body established by statute and is constrained to apply the definition of an unfair labour practice dispute set out in the LRA.

Commissioner Phala should have been alive to the issues and should have found that the CCMA had no jurisdiction to arbitrate the dispute. Thus the jurisdictional ruling was reviewed and set aside.

Applications to dismiss disputes in the CCMA are competent

The Labour Court was scathing of the unions’ conduct in failing to proceed with the matter on six separate occasions over a period of 19 months. The Labour Court held that as dominus litis (the party initiating the litigation), the unions bore the obligation to proceed with the matter expeditiously. However, the unions were fundamentally unprepared to proceed with the arbitration and were almost entirely to blame for the excessive delay.

The Court held that Commissioner Phala committed a material error of law in finding that he did not have the power to grant SAA’s application to dismiss the referral. Sections 138(1) and 138(9)(b) of the LRA require commissioners to deal with disputes “fairly and quickly” and in accordance with the primary objectives of the LRA. This includes the obligation to ensure effective and expeditious resolution of labour disputes.

The dismissal ruling was reviewed and set aside.

Just and equitable to review the preliminary rulings

Section 158(1B) of the LRA provides that the Labour Court may not consider review applications of preliminary or interlocutory rulings until after the CCMA proceedings have been concluded. The exception to this rule is when it would be just and equitable to do so.

The Labour Court held that the circumstances of the matter justified the review of the preliminary rulings before the conclusion of the arbitration proceedings, given that SAA had merit to its complaints against the unions and the commissioner.

Concluding Remarks

This is a welcome judgment which clarifies that unions and employees may not challenge a restructuring exercise by classifying it as an unfair labour practice dispute, even if the restructuring exercise does not result in dismissal.

Unions, applicants in the CCMA and CCMA Commissioners alike should heed the warning from this judgment: Unions and applicants can no longer get away with seeking continuous postponements in respect of the matter they themselves have referred to the CCMA and CCMA Commissioners cannot condone this behaviour. Employers facing similar behaviour are now armed with this judgment to have the CCMA referral dismissed before the arbitration proceeding. This judgment also reinforces the importance of expeditious resolution of labour disputes and is another tool that employers may use to ensure certainty and finality.

BY BRIAN PATTERSON AND SHIVANI MOODLEY