As the saying goes, “an arbitrator has the right to be wrong”. However an adaptation is required when it comes to CCMA arbitration. As the landmark Sidumo case (Sidumo v Rustenburg Platinum Mines Ltd & Others [2007] 12 BLLR 1097 (CC)) tells us, a commissioner has the right to be wrong, but not unreasonably so. At least notionally, this also applies to material errors of law.

So it could be argued that while a commissioner, for example, misinterpreted the Labour Relations Act (LRA), her decision was not so wrong as to be unreasonable. But to allow this would be to saddle the losing party with an award which is wrong in law and thus, in effect, unlawful.

In two recent unreported judgments of the Labour Appeal Court (LAC), the question arose whether, in order to succeed with a review against an award based on an error of law, the applicant must establish that the result was unreasonable. In the first case, Democratic Nursing Organisation of South Africa (DENOSA) obo Du Toit and another v Western Cape Department of Health and others [2016] JOL 36183 (LAC), the LAC found it unnecessary to make a final decision on the issue. But Davis JA gave a strong indication (at para 22) that a material error of law is, in itself, a basis for review without the Sidumo test having to be met: “… a material error of law committed by an arbitrator may, on its own without having to apply the exact formulation set out in Sidumo, justify a review and setting aside of the award depending on the facts as established in the particular case.” 

In the second case, Macdonald’s Transport Upington (Pty) Ltd v Association of Mineworkers and Construction Union (AMCU) and others [2016] JOL 36184 (LAC), the LAC was less ambivalent, with Sutherland JA finding (at para 30):  
“… there is much to be said for the proposition that an arbitrator in the CCMA or in a bargaining council forum who wrongly interprets an instrument commits a reviewable irregularity as envisaged in section 145 of the LRA, i.e. a reasonable arbitrator does not get a legal point wrong. If so, the reasonableness test is appropriate to both value judgments and legal interpretations. If not, ‘correctness’ as a distinct test is necessary to address such matters. However, on either basis, the ruling in this case must be set aside.” 

In effect, the LAC here hedged its bets – either an error of law is per se unreasonable or, if not, an error of law should be subjected to correctness review (as errors of jurisdiction, powers and procedural fairness are).

The finding that an error of law may be subject to correctness review is not controversial, because parties to CCMA arbitration have the right to administrative action that is lawful, which constitutional standard has been found – like reasonableness – to suffuse section 145 (Arends v South African Local Government Bargaining Council [2015] 1 BLLR 23 (LAC) at para 19). An award based on a material error of law probably cannot be lawful, and could thus be reviewed as a gross irregularity (as suffused by the constitutional standard of lawfulness). A comparable approach was adopted in Herholdt v Nedbank Ltd (Congress of South African Trade Unions as amicus curiae) [2013] 11 BLLR 1074 (SCA) at para 25, where the SCA expanded the meaning of a gross irregularity to cover unreasonableness. By parity of reasoning, it can be expanded to cover unlawfulness.          

Accordingly, there is no need to resort to reasonableness in order to review an award based on an error of law. But if this was considered necessary, such an award would be unreasonable on the following basis. The law recognises a variable standard (or sliding scale) of reasonableness review, with it being arguable that the standard of reasonableness applicable to questions of law equates to correctness. Seen in this way, an incorrect award based on a material error of law is unreasonable. This is not a test distinct from reasonableness (as found in MacDonald’s Transport), but is instead the standard of reasonableness that applies to errors of law. In short, a CCMA award based on a material error of law is unreasonable.

In line with this, there is Canadian authority for the fact that an incorrect interpretation of a statute (constituting an error of law) is unreasonable. As the court stated, “it seems incompatible with the rule of law that two contradictory interpretations of the same provision of a public statute, by which citizens order their lives, could both be accepted as reasonable” (Altus Group Ltd v Calgary (City) 2015 ABCA 86 at para 24).   

But irrespective of the ground upon which an award based on a material error of law stands to be reviewed, we can expect further controversy as courts grapple with which errors of law are material and which are “mere errors of … law [which are] not enough to vitiate the award” (Head of the Department of Education v Mofokeng [2015] 1 BLLR 50 (LAC) at para 32).                 

This is one dimension of an area of law that is complex and variable. Given that review applications constitute the bulk of the work of the Labour Court it is useful to take stock and assess what the law relating to reviews is and how it might be developed in future.

A new legal title from LexisNexis South Africa addresses these proceedings. Reviews in the Labour Courts provides excellent guidance for labour practitioners and is a must-have manual for all labour lawyers, advocates, judges, CCMA commissioners, bargaining council arbitrators, unions, HR/IR practitioners, in-house counsel, lecturers and post-graduate students. Published by LexisNexis South Africa, the book Reviews in the Labour Courts is authored by Anton Myburgh and Craig Bosch. This and other titles are available through the LexisNexis online bookstore.

Written by Anton Myburgh and Craig Bosch, Lexis Nexis