How an arbitrator should conduct arbitration proceedings
Preparation and introduction
Narrowing the issues
Hearing of evidence
Issuance of award
Assessment of evidence
In September 2011 the Commission for Conciliation, Mediation and Arbitration (CCMA) published a document entitled "Guidelines on Misconduct Arbitrations", which became effective on January 1 2012. The guidelines have been published to promote consistent decision making by CCMA commissioners during arbitrations relating to dismissals for misconduct, in order to give effect to the constitutional right to lawful, reasonable and procedurally fair administrative action, as set out in Section 33(1) of the Constitution.
This document contains, among other things, detailed guidelines for:
- the conduct of arbitration proceedings;
- the evaluation of evidence;
- the assessment of the procedural and substantive fairness of a dismissal; and
- the determination of an appropriate remedy for a dismissal that is found to have been unfair.
In terms of Section 138(6) of the Labour Relations Act (66/1995), CCMA Commissioners are legally obliged to take the guidelines into account. Furthermore, insofar as the guidelines contain interpretations of the law, they constitute CCMA policy, and arbitrators must accordingly justify any deviation from this policy by reasons specifically set out in the relevant arbitration award. However, the CCMA and its commissioners remain bound by the stare decisis principle, meaning that their interpretation of the law must accord with binding court decisions.
How an arbitrator should conduct arbitration proceedings
An arbitration hearing does not constitute a review of an employer's decision to dismiss an employee. The guidelines reaffirm that the arbitration is a "new hearing" – the arbitrator must decide afresh, based on the evidence before him or her, whether the dismissal was fair. However, the arbitrator may refer to documents related to the preceding disciplinary process, such as the record of a disciplinary inquiry, to the extent that these documents are admitted as evidence during the arbitration. An arbitrator may draw a positive inference if a witness's evidence is consistent with the record of a disciplinary enquiry, while an adverse inference may be drawn if a witness changes his or her version.
The guidelines also reaffirm that an arbitrator must conduct an arbitration hearing impartially. If an arbitrator engages in biased conduct or acts in a manner which is unfair or unreasonable to any of the parties, this obligation will be violated and, among other things, may well serve as a basis for a review.
An arbitrator must decide which procedure is to be followed for the arbitration and inform the parties thereof. In terms of Section 138(1) of the Labour Relations Act, an arbitrator may decide on the form of proceedings which he or she deems appropriate to resolve the dispute fairly and quickly, and must deal with the substantial merits of the dispute with the minimum of legal formalities. It follows from this that arbitration proceedings need not be conducted in the same way as a formal court hearing and need not be subject to the same formalistic rigours.
An arbitrator should specifically consider the following factors when deciding on an appropriate procedure:
- the complexity of the factual and legal matters involved;
- the attitude of the parties to the form of proceedings (the parties themselves may wish to address the arbitrator on this);
- whether the parties are represented;
- whether legal representation has been permitted; and
- the degree of experience of the parties or their representatives in appearing at arbitrations.
The guidelines suggest that an arbitration hearing should normally involve six distinct stages, the sequence of which may vary depending on the particular procedure followed. The guidelines contain particular provisions relating to each of the following six stages:
- preparation and introduction (Stage 1);
- dealing with preliminary issues (Stage 2);
- narrowing the issues (Stage 3);
- the hearing of evidence (Stage 4);
- final arguments (Stage 5); and
- the award (Stage 6).
The guidelines provide that the arbitrator should expressly inform the parties of certain particulars relating to the arbitration in the first stage of arbitration. These include:
- the scope of the arbitrator's powers;
- the fact that the parties may at any stage of the proceedings agree to settle the matter; and
- the fact that they are entitled to exercise certain rights in terms of Section 138(2) of the Labour Relations Act.
These rights mean that, irrespective of the form of the arbitration proceedings, the parties must be entitled to give evidence, call and question witnesses and present concluding arguments.
The extent to which it is necessary that the nature and particulars of the proceedings be explained to the parties should be determined by the parties' or their representatives' knowledge and experience of CCMA proceedings. For example, it may be particularly important that the arbitrator explain to an inexperienced or unrepresented party that he or she is entitled to cross-examine the other party's witnesses. An arbitrator should be alert to circumstances which indicate that a party's case is being prejudiced due to an incorrect understanding of the nature of the proceedings – for example, if a party fails to cross-examine the other party's witnesses, the arbitrator should ordinarily bring this to the attention of the party in question and try to correct any possible misunderstanding which that party may have.
Preliminary issues – such as the recusal of the arbitrator, condonation, jurisdiction, legal representation and discovery of documents – should be dealt with during the second stage of arbitration, before the commencement of the actual arbitration hearing.
Both the parties and the arbitrator may raise preliminary points. The parties must be given the opportunity to argue and, if necessary, lead evidence on the preliminary points raised. Should any party request clarification on a preliminary issue, the arbitrator must provide him or her with the necessary explanation.
A party may apply for legal representation at this preliminary stage and may also do so at a later point during the course of the proceedings. Legal representation may also be allowed by the arbitrator for a specific purpose only, such as to argue a preliminary point.
The arbitrator is obliged to deal with and confirm the following preliminary points, irrespective of whether they are specifically raised by either party:
- the fact that the CCMA has jurisdiction to hear the particular dispute; and
- the proper and correct identification of both parties – that is, as a natural person, partnership, closed corporation, company or other legal person.
A ruling on preliminary issues should also be made at this stage, unless the preliminary point raises complex legal issues which require further consideration, in which case the proceedings may be adjourned. It is sufficient if the reasons for decisions on preliminary issues are contained in the final arbitration award. However, if a decision on a preliminary issue resolves the dispute, the arbitrator must issue an award containing the reasons and the factual basis for the decision.
For purposes of expediting the resolution of the dispute, the arbitrator should facilitate an agreement between the parties on the legal and factual issues of the matter in the third stage of arbitration. This should be the case insofar as this is required by the complexity of the matter, and to the extent that it has not already been done during conciliation or otherwise. The employee and employer parties should thus be invited by the arbitrator to clarify respectively certain aspects, which is normally done in the form of brief opening statements by both sides.
At this stage, the arbitrator should deal with the question of substantive fairness by referring to each of the issues listed in the guidelines in cases of dismissal for misconduct, as contained in Item 7 of Schedule 8 to the Labour Relations Act.
At the conclusion of this stage, the arbitrator should record the agreement reached between the parties regarding the common cause issues, the issues in dispute and the issues which must be decided in order to resolve the dispute.
The fourth stage of arbitration is an opportunity for the parties to lead their own evidence and to question and challenge each other's evidence. The arbitrator should decide on and inform the parties of the form of these proceedings after considering the various factors already listed above.
If one or both of the parties are unrepresented or have inexperienced representatives, the arbitrator would be expected to be more actively involved in this process, and he or she must ensure that the parties are aware of and can exercise their rights in terms of Section 138(2) of the Labour Relations Act. A failure to adhere to this duty may provide the basis for a review application to the Labour Court in circumstances where an inexperienced or unrepresented party may be prejudiced as a result of the arbitrator's failure to adhere to his or her duty.
The arbitrator has the following duties in relation to witnesses at an arbitration hearing:
- to ask the witnesses to identify themselves, swear them in and advise them of the process of questioning;
- to ensure that the testimony of witnesses is recorded electronically or digitally; and
- to take notes of the evidence given and to keep these notes in a file.
If a party's witness is present during the evidence of another witness called by the same party, the corroborating evidence of the former witness will usually not carry much weight and an arbitrator should expressly inform the parties of this. Witnesses who have not yet testified should generally not be present at the arbitration hearing, but may be present if a party specifically requires it. It is therefore important that parties be informed that this may have an impact on the evidential value of the testimony of their witnesses.
During the fifth stage of the proceedings, parties have a final opportunity to argue their cases based on the evidence presented. An arbitrator may also allow parties to file written arguments within seven days of the hearing if complex issues are involved.
An arbitrator may not base an arbitration award on a point which was not relied upon during the arbitration proceedings, unless the parties are called upon to make written or oral submissions on that point, before the award is made.
Subsequent to all of the above, the arbitrator will issue a written arbitration award in the sixth and final stage, together with brief reasons for that award. The award must be issued within 14 days of the conclusion of the arbitration.
The guidelines suggest that evidence in an arbitration award should be organised and assessed in the following manner:
- by addressing the background facts;
- by summarising the evidence that has been led; and
- by analysing the evidence.
In this part of the award, the arbitrator should preferably outline the undisputed facts of the matter, which may be important for later analysis. Facts which are particularly important for the purpose of later analysis should be described in greater detail than those which are of lesser significance. The importance of such an assessment and the degree of detail used is that it generally indicates the particular facts which the arbitrator took into consideration in deciding the award and, by implication, also those facts which were not considered. Such considerations may be of great practical use when considering an award for the purpose of reviewing it to the Labour Court.
The guidelines require that certain specific factual aspects be expressly addressed:
- The parties to the dispute should be described. If applicable, the arbitrator should clarify whether a trade union is a party to the dispute or merely a representative of the employee.
- The relevant workplace should be described by referring to the sector, nature of the work and size of the workplace. This is significant because, depending on the particular workplace, there may be special considerations which the arbitrator must take into account when analysing the evidence, such as workplace-specific policies or procedures. Accordingly, the award should also contain a description of the regulation of conduct in the particular workplace, such as the applicable disciplinary codes and procedures, as well as existing collective agreements.
- The guidelines further require a description of the facts relevant to the employee in question, such as:
- the details of his or her contract of employment;
- the length of his or her service;
- the salary which he or she was earning at the date of dismissal; and
- his or her disciplinary records.
- The arbitrator should describe the procedural history of the dispute by summarising the relevant course of events which led to the arbitration hearing.
- The arbitrator should set out the relief sought by the employee.
- The award should also contain a description of the facts specific to the conduct of the arbitration itself, such as:
- those facts relating to legal representation;
- the date(s) of the hearing;
- the names of those who attended the arbitration; and
- the applications made and rulings issued during the conduct of the arbitration.
If factual issues have been raised in relation to preliminary points, they should be summarised, analysed and decided as such.
Summary of evidence
For the purpose of later analysis, the arbitrator should briefly record the relevant evidence led during the hearing. This should include a summary of any documentary evidence which was presented, such as the relevant parts of a contract of employment or the employer's disciplinary code. The guidelines advise arbitrators not to deal with issues of credibility or probability in this summary – these issues should preferably be dealt with during the analysis of the evidence which follows.
Analysis of evidence
In order to reach a decision on the procedural and substantive fairness of a dismissal, the arbitrator must ultimately assess and determine the probabilities of the matter and the credibility of the witnesses involved.
The guidelines suggest that it should be reflected in the arbitration award itself that the arbitrator has compared and weighed up the contending versions which were presented in order to determine the most probable version. The arbitrator must identify and justify the specific factors which led to such a determination.
The reliability of witnesses should be determined by assessing:
- the extent of their first-hand knowledge of the relevant events;
- any self-interest or bias which they may have in the matter;
- any contradictions or inconsistencies in their evidence;
- the corroboration of their evidence by other witnesses; and
- their credibility, which includes their demeanour when they gave evidence.
Parties to arbitration proceedings should keep these factors in mind when considering an arbitration award, since, for example, it may be objectionable for an arbitrator to rely mainly on the evidence of a witness who had no first-hand knowledge of the particular facts concerned.
The guidelines require that particular legislative provisions be invoked in relation to the assessment of different types of evidence:
- Evidence relating to procedural fairness should be assessed in accordance with Item 4 of the Code of Good Practice contained in Schedule 8 to the Labour Relations Act;
- Evidence relating to substantive fairness should be assessed in accordance with Item 7 of the Code of Good Practice; and
- The arbitrator should decide on the appropriate remedy specifically with reference to Sections 193 to 195 of the Labour Relations Act.
Arbitrators will be obliged to take the guidelines into account and, accordingly, parties are advised to be mindful of the guidelines when participating in an arbitration hearing and when considering an award issued by an arbitrator subsequent to an arbitration hearing.
The content of an arbitration award – namely, the structure and organisation of the facts, and the evidence and analysis recorded in an arbitration award – are important insofar as they may assist parties in assessing whether an arbitrator failed to take cognisance properly of all the necessary facts and evidence in reaching a conclusion and deciding the award. Such a failure may entitle a party to apply to the Labour Court for the review and setting aside of the arbitration award.
By assessing an arbitration award with reference to the guidelines, a party may be able to prove more easily that the arbitrator exceeded his or her powers, committed misconduct in relation to his duties or committed a gross irregularity in the conduct of the proceedings. In terms of Section 145 of the Labour Relations Act, such grounds might constitute a defect in the arbitration proceedings, rendering the arbitration award as reviewable.
With this in mind, the guidelines should serve as an essential and useful practical yardstick against which to measure conduct of a CCMA arbitrator and the contents of an arbitration award issued by the CCMA.
For further information on this topic please contact Alex Ferreira or Louietta Du Toit at ENSafrica by telephone (+27 11 269 7600), fax (+27 11 269 7899) or email ([email protected] or [email protected]).