Section 188A of the Labour Relations Act 66 of 1995 (LRA) provides for pre-dismissal arbitrations (PDA) which substitutes disciplinary enquiries with an arbitration before an independent arbitrator. The charges in a PDA are generally of a more serious nature and employees are in most cases suspended pending the outcome. A PDA in effect does away with the disciplinary process and may save the employer time and the costs of extensive litigation.

However, a PDA is a voluntary procedure and both the employer and employee must consent to this process. An employee who earns above the threshold set out in s6(3) of the Basic Conditions of Employment Act, No 75 of 1997 (currently R193 805.00 per month) can contractually consent to a PDA in terms of his or her contract of employment. Apart from obtaining an employee's consent, an employer is required to complete the prescribed form and pay the prescribed fee. Thereafter, the Commission for Conciliation, Mediation and Arbitration (CMMA) will appoint an independent arbitrator.

An independent arbitrator who conducts a PDA has identical powers to those conferred on a commissioner by s142 of the LRA. The independent arbitrator's PDA award is final and binding and has the same effect as a CCMA arbitration award.

Therefore, an employee may not refer a dispute to the CCMA on allegations of unfair dismissal or unfair labour practices after a PDA award is handed down. In addition, the PDA award cannot be appealed and a dissatisfied party's only option is to have the PDA award reviewed and set aside in terms of s145 of the LRA.

A major obstacle to an employer who chooses to conduct a PDA is that if the employer is unsuccessful with the PDA, the employee will remain in its employ and the employer will have to continue paying the employee until the PDA award

is reviewed and set aside. On the other hand, if an employee is dismissed before a dispute is referred to the CCMA then there is no obligation to pay the employee while the CCMA proceedings and the review application are pending.

With regard to the new amendments to the LRA, s188A of the Labour Relations Amendment Bill, 2012 (LRAB) provides that a PDA will now be referred to as an 'enquiry by arbitrator'. Furthermore, s188A(1) will enable parties to conclude collective agreements that make provision for an employer to conduct an 'enquiry by arbitrator'.

At first glance a PDA might seem fast-tracked and cost efficient, but to a large extent an employer loses control of the process and is dependent on the CMMA to appoint an independent arbitrator. The employer also runs the risk of having to pay an employee on suspension for the whole period it takes to finalise the review application.

Written by Hugo Pienaar, Director, and Anneline do Cabeco, Candidate Attorney, Employment, Cliffe Dekker Hofmeyr