The legal nature of the CCMA Certificate of Outcome

URL: http://www.engineeringnews.co.za

Policy, Law, Economics and Politics - Deepening Democracy through Access to Information

This privately-owned website is operated and maintained by Creamer Media

Polity

Published: 11 Nov 2009

The legal nature of the CCMA Certificate of Outcome

The matter of Strautman v Silver Meadows Trading 99 CC (Pty) Ltd t/a Mugg and Bean Suncoast and Others1 dealt with the legal nature of a certificate of outcome issued by the Commission for Conciliation, Mediation and Arbitration ("CCMA") following a conciliation process before a commissioner.

It is understandable that this issue causes confusion among litigants. The certificate of outcome ("the Form 7.12") is drafted in such a way that the commissioner does indicate his or her view on a number of issues including the category of the dispute, the reason for the dispute as well the recourse available to the Applicant should the dispute remain unresolved. However, it is not apparent from the face of it what status these views hold in law. This case provides some clarity.

The Applicant, Igno Strautmann, was employed by Kishara CC t/a Mugg and Bean Suncoast as a general manager. He was also a member of the close corporation that employed him. As often happens, the members of the close corporation fell out and as a result in June 2006, the business of Mugg and Bean Suncoast was sold as a going concern to the First Respondent, Silver Meadows Trading 99 CC (Pty) Ltd t/a Mugg and Bean Suncoast. The First Respondent contended that prior to the sale of the business, the Applicant had agreed to withdraw from the business and that in fact it was a condition of the sale that he would no longer be involved in the business. On the other hand, the Applicant contended that he had been dismissed unfairly in that there was no reason given for his dismissal and further that it was in no way related to the transfer of the business.

The Applicant accordingly referred a dispute to the CCMA in which he claimed that he had been constructively dismissed by the First Respondent because the First Respondent declined to "offer (him) employment as before". At some point in the CCMA proceedings, the Applicant had to concede that in the absence of his resignation, there was no constructive dismissal. The matter then proceeded on the basis that the Applicant was dismissed at the instance of the First Respondent.

The dispute was set down for con-arb on 1 November 2006 before Commissioner JD Veden. The First Respondent did not attend the proceedings and on the same day, Commissioner Vedan issued a certificate of outcome ("the Certificate") by completing the Form 7.12.

The Certificate recorded that as at 1 November 2006, the dispute between the parties remained unresolved. The Commissioner indicated on the Certificate that the nature of the dispute was an ‘unfair dismissal'. The Commissioner then went on to add in his own writing the following:

* "Section 197 transfer of company as a going concern"
* "Automatically unfair dismissal in terms of section 187(1)(g) of LRA".

The Commissioner also indicated on the Certificate that the dispute could be referred to the Labour Court.

After consulting his attorney, the Applicant took the view that he had not been dismissed for a reason that was automatically unfair and the matter was set down for arbitration on 27 May 2007 before Commissioner B Pillemer (the Second Respondent in the Labour Court).

At the arbitration, the First Respondent raised a number of points in limine including the following:

* the absence of any employment relationship between the Applicant and First Respondent;
* a contention that the Applicant had not been dismissed; and
* a submission to the effect that if the Applicant had been dismissed, it was for a reason related to a transfer in terms of section 197 of the Labour Relations Act ("LRA") and that the dispute therefore ought to be adjudicated by the Labour Court rather than the CCMA.

The Second Respondent issued a ‘ruling on jurisdiction' after hearing argument from both parties on the points in limine. The Second Respondent ruled that following a failure to conciliate the dispute, Commissioner Vedan issued a certificate of outcome indicating that the CCMA did not have jurisdiction to arbitrate the dismissal because it was an automatically unfair dismissal. She went on to add that:

"the CCMA is accordingly functus officio. It has ruled that it does not have jurisdiction...

I rule that the matter cannot proceed at the CCMA as arbitration and, if the Applicant so elects, it maybe (sic) referred to the Labour Court."

Functus officio is Latin for ‘having performed his office' and means that, in this case, the CCMA retained no legal authority because its duties and functions had been completed.

The Applicant took this ruling on review to the Labour Court and argued that to the extent the Second Respondent relied on the content of the Certificate as the basis for the jurisdictional ruling, she committed a reviewable irregularity in the form of a material error of law.

In the Labour Court, Van Niekerk J agreed with the Applicant. He noted firstly that the Second Respondent came to a decision on the basis only of the submissions made by the parties in respect of the points in limine raised by the First Respondent and that there had been insufficient evidence before her to come to such a conclusion. More importantly, van Niekerk J held that a certificate of outcome only requires that the commissioner states that, as at a particular date, the dispute referred to the CCMA remains unresolved. The judge held that even though the Form 7.12 provides for an indication by the commissioner regarding the rights of recourse available to an applicant should the dispute remain unresolved, the only outcome of any legal significance is the fact of non-resolution of the dispute.

Van Niekerk J emphasised that "any other views expressed by a commissioner, even if cast in directory language, amount to little more than gratuitous advice" and held that "the principle is that a referring party is not bound by a commissioner's classification of a dispute or any directive as to its destiny".

Van Niekerk J reasoned that if some legal significance were to be attached to the commissioner's categorisation of a dispute in a certificate, then by electing the forum in which the dispute is to be determined the commissioner denies the referring party the freedom to pursue his rights as he chooses. The commissioner would in most cases be making such a categorisation on the basis of very limited information provided at the conciliation stage and most likely without the evidence necessary to make a determination about the actual nature of the dispute. In other words, it is not for the commissioner to dictate to the litigants how they should frame their disputes or in which forum to bring such disputes. Indeed the parties may consent to the CCMA's jurisdiction and continue arbitration proceedings before the CCMA even where the dispute could have been referred to the Labour Court.

No doubt both applicants and respondents before the CCMA have placed reliance on the content of certificates of outcome, thus the Labour Court's clarification of the applicable principle is welcome.

It should be noted in any event that a CCMA arbitration is a hearing de novo, requiring a full rehearing of the merits and an investigation into the fairness of the procedure followed by the employer. As the judge put it, the parties must stand and fall by the claims that they bring to arbitration.

Interestingly, van Niekerk J suggests in a footnote to his judgment that the CCMA should consider amending the Form 7.12 to make it absolutely clear that the commissioner's categorisation of the dispute and suggestions regarding the avenues of recourse available to the Applicant are not binding on the parties. Watch this space for any future developments in this regard.

Written by: Umunyana Rugege, Associate at Webber Wentzel