Many Employers find themselves on the receiving end of an Arbitration award made against them at the CCMA or other Bargaining Council. What’s even worse is that an Arbitration award can and most probably will be made against a person or Company if they do not attend proceedings. This kind of award is known as an award issued in default. What is important to keep in mind is that any party involved in a matter is entitled to apply for an award to be rescinded and/or set aside within 14 days from the date of the award or 14 days from the date that party became aware of the award. To properly understand variations and rescissions of awards one must first understand the effect of an award.
EFFECT OF ARBITRATION AWARD:
An Arbitration award issued by a Commissioner is a final and binding award and may be enforced as if it were an order of the Labour court. If a party fails to adhere to the terms of the award, say for instance in a case where an award orders the performance of an act, eg. re-instatement, the aggrieved party may approach the Labour court and request the award be enforced by way of contempt proceedings. If a party fails to adhere to the terms of an award in the case where an award orders payment of a sum of money, the Director of the CCMA will need to be approached and requested to certify the award as if it were an order of the Labour court. In this instance the Director of the CCMA will certify the award and then a writ of execution must be obtained from the Labour Court. This is done in terms of Section 143 of the Labour Relations Act. Awards for monetary payment earn interest from the date of the award in terms of the Prescribed rate of Interest Act, 1975, unless the award stipulates otherwise.
VARIATIONS AND RESCISSIONS:
Section 144 of the Labour Relations Act deals with the rescission of arbitration awards/rulings and sets out that any award may be varied and/or rescinded by the Commissioner who issued the award or by any other Commissioner appointed by the Director to do so. A party applying for a rescission can do so in the following instances:
- If the award was erroneously sought or granted in the absence of any person affected by the award;
- If an award contains an ambiguity or an obvious error or omission;
- If an award was granted as a result of a mistake common to both parties to the proceedings.
It is important to note that an award can be rescinded merely on the basis that it was issued in the absence of a party to proceedings. The party requesting that the award be rescinded will have to prove that they were not in wilful default and that they have good prospects of success in continuing or defending the matter. A Commissioner however does not under any circumstances have the power to substitute the award with an entirely new one.
HOW TO APPLY FOR A VARIATION AND/OR RESCISSION OF AN AWARD
If a party intends varying and/or rescinding an award, he/she must institute an application for variation/rescission by way of notice to all parties involved in the matter. Parties to rescission proceedings will usually be the Applicant, Respondent, and the CCMA or Bargaining Council who made the award. The application for rescission must contain the following:
- The case number and details of the parties in the matter;
- The address of the party making the application and the relief sought by that party;
- Information on how and when a party to proceedings may oppose the application;
- An affidavit in support of the application for rescission which sets out the material facts on which the application is based, together with all annexures which support the averments made in the affidavit.
A party may oppose an application for rescission by serving an answering affidavit on all parties involved in proceedings within 14 days from the delivery of the application for rescission. If an answering affidavit is received the Applicant may respond by delivering a replying affidavit within 7 days of receiving the answering affidavit. Once this is done the application for rescission will be sent to a Commissioner to be dealt with either by considering the papers and making a decision, or by setting the matter down for hearing and argument. The Commissioner will then make a ruling which is final and binding and has the effect of an Arbitration award.
INTERESTING FACTS ON RESCISSIONS:
- Rescissions can be heard on an opposed or unopposed basis, neither of which affects the actual merits of the matter
- An application for rescission can be made after the 14 days in terms of the rules lapses, provided that a party requests and includes an application for condonation in their application for rescission and gives valid reasons as to why their application has been brought late;
- If an award has been made and the successful party requests that award be certified as an order of the Labour court (Section 145 application) during the time an application for rescission has been made, the application for rescission must first be dealt with before the Section 145 application can be entertained;
- An award may be rescinded for the mere fact that the award was granted in a parties absence even if a party does not give a satisfactory explanation for their absence/default.
Relevant legislation and Case law:
Section 144 of the Labour Relations Act
Section 143 of the labour Relations Act
CCMA code of good practice
Rule 31 and 32 of the Rules for the conduct of proceedings before the CCMA
Foschini Group (Pty) Ltd. V CCMA (2002) 23 ILJ 1048 (LC)