Naidoo v Liberty Holdings (JR558/16) [2019] ZALCJHB 56 (19 March 2019)

Principle:

The CCMA may have no jurisdiction to hear a dispute where the employee is contractually bound to refer the dispute to private arbitration.

Facts:

After the dismissal of a senior employee, he discovered that in terms of his employment contract, he was bound by the employer's terms of employment, which incorporates the employer's Employee Relations Handbook. The Employee Relations Handbook provides that dismissal disputes are to be dealt with via private arbitration. The applicant did not want to go the route of private arbitration, and instead claimed his right to refer his dispute to the CCMA. The CCMA ruled that it does not have jurisdiction to hear the matter, and that the applicant may elect to instead refer it to private arbitration.

On review of the CCMA's jurisdiction ruling at the Labour Court, the Applicant contended that he was never given a copy of the Employee Relations Handbook on commencement of employment with the employer; that he never agreed to dealing with disputes via private arbitration; and that never gave up his right to refer the matter to the CCMA. He claimed that private arbitration would mean automatic legal representation, withpossible arbitration costs.

The matter turned on an interpretation of s 147(6) of the LRA which gives a Commissioner a choice either to refer the dispute to private arbitration where that has been agreed, or to appoint a Commissioner to resolve the dispute.The Labour Court held that the CCMA has no jurisdiction to hear the matter, and that if the applicant wished to pursue an unfair dismissal dispute, such dispute must be dealt with by way of private arbitration as per the contract of employment read together with the Employee Relations Handbook.

Extract from the judgment:

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[10]   The applicant was a senior employee of the respondent and ought to have understood that signing a contract of employment that refers to conditions of employment contained in an Employee Relations Handbook means that he was agreeing to be bound by the terms in the Employee Relations Handbook.

[11]   The arbitrator's ruling relied on the agreement between the parties to deal with disputes via private arbitration; the respondent's evidence that it would cover the full costs of the arbitration thus there would be no financial prejudice to the applicant in this regard; that the arbitrator would have the same powers as a CCMA commissioner in that the rules of natural justice would apply, and held that the evidence was overwhelmingly in favour of the respondent.

[12]   Section 147(6) of the LRA states that:
  1. If at any stage after a dispute has been referred to the Commission, it becomes apparent that the dispute ought to have been resolved through private dispute resolution in terms of a private agreement between the parties to the dispute, the Commission may -

    1. refer the dispute to the appropriate person or body for resolution through private dispute resolution procedures: or
    2. appoint a commissioner to resolve the dispute in terms of this Act

[13]   The arbitrator correctly adhered to that the decision to actually refer the matter to private arbitration (or not to refer a dispute at all), lies with the applicant. Once the appropriate route is determined to be that of private arbitration, the CCMA steps aside and the aggrieved party has the recourse of private arbitration, if he so wishes to proceed with his dispute.

[14]   Having considered the evidence before the arbitrator, and his reasoning, I find that the arbitrator arrived at the correct ruling on the jurisdiction point - that the CCMA has no jurisdiction to hear the matter, and that if the applicant wishes to pursue an unfair dismissal dispute, such dispute must be dealt with by way of private arbitration as per the contract of employment read together with the Employee Relations Handbook.

[15]   In the circumstances, I make the following order:

Order:
  1. The review application is dismissed.
  2. There is no order as to costs.