Determining Jurisdiction - At Conciliation or Arbitration?

Determining Jurisdiction - At Conciliation or Arbitration? 2010 CCMA COMMISSIONERS INDABA “Against all Odds” Ritz Hotel 2 – 4 December 2010

What is jurisdiction? • Authority of the CCMA to conciliate and arbitrate disputes between parties • Limitations on such authority • CCMA is an independent statutory body established in terms of s 112 of the LRA • It does not have inherent jurisdiction • Its jurisdiction is not derived from the common law (like the High Court) but stems solely from Acts of Parliament

Where should jurisdiction be dealt with: Con or Arb? • There has been a lot of confusion about where jurisdictional issues should be dealt with • Some have argued that jurisdiction should be dealt with at the doorstep of the CCMA, ie in Conciliation = justification is = you cant come in if you do not belong at the CCMA • Some have argued that it should be dealt with at arbitration as conciliation is a process merely to try and resolve the matter and not deal with serious issues

Bombardier Transportation (Pty) Ltd v Mtiya NO and others (LC) The Facts: • Johannes (third respondent) employed by Bombardier China in terms of a fixed term contract • Contract to expire in June 2008 • Remuneration to be paid to his account in Hong Kong (where he was resident) despite working in SA • Contractual clause: terms to be interpreted and enforced in line with the laws of Hong Kong • Contract extended – 18 September 2008, Bombardier advised J that the contract would only be extended for 6 more months

Bombardier Transportation (Pty) Ltd v Mtiya NO and others (LC) • Applicant claimed that J terminated the contract and left its employ on 31 October 2008 • 10 November 2008: unfair dismissal dispute referred to the CCMA • 2 February: applicant filed an application in terms of Rule 14: argued that the CCMA lacked jurisdiction because it argued that: • the law of Hong Kong applied; and • the applicant had not dismissed J • The Commissioner issued a certificate of non resolution (expiry of 30 days) & advised Er to raise the jurisdictional issue at Arbitration

Reliance on Basson J in EOH Abantu (Pty) Ltd (2008): • Held that a commissioner was bound to decide any jurisdictional point raised in conciliation proceedings before issuing a certificate of outcome • Failure to do so = reviewable irregularity • IE: CCMA must assess whether it has jurisdiction before conciliation commences • If a conciliating commissioner issues a certificate of outcome without the jurisdictional conditions having been met, arbitrating commissioner has no power to dismiss the matter because of lack of jurisdiction • Arbitrator then bound to arbitrate unless the certificate is reviewed and set aside • (Based on Fidelity Guards Holdings (Pty) Ltd v Epstein NO LAC – dealt with a dispute referred outside the statutory time limits)

Alternative approach: Cele J in EOH Abantu [2010] (LC) • Conciliating commissioner makes no ruling on the jurisdictional challenge, but defers that determination to the arbitration phase of the statutory dispute resolution process

Van Niekerk J’s “Third Way” • Recognises that many ‘jurisdictional issues’ raised at conciliation proceedings are not jurisdictional questions ‘in the true sense’ • Eg whether a person is an IC or an ‘employee’ (ito s 213): better to be dealt with during arbitration proceedings • Same with the issue as to whether or not there was a ‘dismissal’ • Not necessary to deal with these matters prior to conciliation • Held that these issues are not jurisdictional questions contemplated by Rule 14

‘True jurisdictional questions’ • To be dealt with during initial screening of referrals: otherwise to be raised and dealt with during the conciliation phase: • Whether the referring party referred the dispute within the time limit prescribed by s191(1)(b); • Whether the parties fall within the registered scope of a bargaining council that has jurisdiction over the parties to the dispute (to the exclusion of the CCMA); and • Perhaps whether the dispute concerns an employment-related matter at all

Key distinction • Between ‘facts that the legislature has decided must exist before the CCMA acquires power to act, and facts which must be proved by the referring party’ (to be dealt with at arbitration) • IE CCMA power to determine the fairness of a dismissal includes the power to determine whether or not an applicant was an employee, and whether she was dismissed • Ordinarily fall to be dealt with as part of adjudication functions • THEREFORE: conciliating commissioner under no obligation to determine such issues at conciliation

The irrelevance of a certificate of outcome • Goldfields Mining South Africa v NUM [2009] (LC) (Van Niekerk) • Attach no jurisdictional significance to the certificate of outcome • Regard the certificate as no more than a record that on a particular date, a dispute referred to the CCMA remained unresolved • Commissioner’s categorisation of dispute has no bearing on the future conduct of the proceedings and no legal significance (because not a function contemplated by the Act) • Forum for subsequent proceedings is determined by what the employee alleges the dispute to be – not what the certificate says

S 191(5) • ‘If a council or a commissioner has certified that the dispute referred remains unresolved, or if 30 days have expired since the council or the Commissioner received the referral and the dispute remains unresolved – • a) the council or the Commission must arbitrate the dispute at the request of the employee Wording contemplates that if 30 days have elapsed from date referral received, the dispute may be referred to arbitration or to court without a certificate of outcome (relying on Seeff v Mbhele NO)

THEREFORE • Effect of a certificate of outcome is minimal, if there is any effect at all – actually, it has nothing to do with jurisdiction • (No more than a document issued by a commissioner stating that on a particular date, a dispute referred to the CCMA for conciliation remained unresolved) • Does not confer jurisdiction on the CCMA to do anything that it is not empowered to do • Nor does it preclude the CCMA from exercising any of its statutory powers

‘Jurisdiction either exists as a fact or it does not’ • A party may challenge CCMA’s jurisdiction (in the ‘true sense’?) to deal with an unfair dismissal dispute whether or not a certificate of outcome has been issued • Jurisdiction is not granted or afforded by a CCMA commissioner issuing a certificate of outcome

Role of rule 14? • On this approach, the rule does nothing more than require a conciliating commissioner to give proper consideration to any jurisdictional points raised • Including an assessment of whether it is a ‘true’ jurisdictional point and, if so • Whether it is reasonably capable of being disposed of prior to conciliation, or properly left to the arbitration stage

SUMMARY: The proper response of a commissioner to jurisdictional challenges • 1. Commissioner may elect to determine a jurisdictional question or defer it • guided by: the nature of the challenge; • whether the matters are intimately bound up with the substantive merits of the dispute; • determination of difficult questions of mixed law and fact; and • the need for evidence to resolve them • Whether or not the applicant is an ‘employee’ or whether or not the employee is dismissed are not truly jurisdictional issues, should be deferred to the arbitration phase

SUMMARY: The proper response of a commissioner to jurisdictional challenges • 2. If a jurisdictional challenge is heard and upheld prior to the commencement of conciliation, that ends the dispute • Certificate of outcome unnecessary • Ruling binds the CCMA and all parties • Jurisdictional ruling stands unless and until it is reviewed and set aside by the LC

SUMMARY: The proper response of a commissioner to jurisdictional challenges • 3. If within the 30-day period, conciliating commissioner elects not to determine any jurisdictional challenge, issue certificate because conciliation has failed • 4. If 30 days have elapsed, issue certificate, despite existence of any jurisdictional challenges, because of s 135(5) • 5. Certificate has no bearing on any jurisdictional issue raised by any party – not relevant to any process in which a jurisdictional question is determined

Dealing with jurisdiction at arbitration • 6. In the absence of any relevant and prior jurisdictional ruling (made by a conciliating commissioner), any party to a dispute referred to arbitration may raise any challenge to the CCMA’s jurisdiction at that stage • The challenge must be dealt with by the arbitrating commissioner in terms of s 138(1): “the commissioner may conduct the arbitration in a manner that the commissioner considers appropriate in order to determine the dispute fairly and quickly, but must deal with the substantial merits of the dispute with the minimum of legal formalities”

The merits of the review application in Bombardier • Is it a reviewable irregularity for a conciliating commissioner to defer a challenge to the CCMA’s jurisdiction to the arbitration phase? • No. • Private international law issues raised the complexity of the matter • Rule 14 to be read in this light • Certificate had been properly issued • Dispute to be enrolled for arbitration – jurisdictional challenges to be determined at this stage

CONCLUSION • Benefit of Van Niekerk J’s ‘Third Way’? • Emphasis in conciliation on ‘trying to settle’ • Allows for conciliating commissioners to be spared the rigours of complex ‘jurisdictional’ points and to focus on settlement • Pragmatic in terms of process streamlining • The change in approach • Remember: LAC in Zeuna-Starker v NUMSA held that a conciliator is obliged to enquire into the facts of a case prior to conciliation • Re-explanation of the notion of ‘jurisdiction’ necessitated: ‘who, what, when, where’ approach to be re-visited along with the new understanding of Rule 14 • Is the finding (at arbitration) that the applicant was not an employee or was not dismissed expressed in the form of a ‘jurisdictional ruling’?

Determining Jurisdiction - At Conciliation or Arbitration?