Can a CCMA Settlement Agreement be set aside by the Labour Court?

As many employers and employees know, many employment disputes are settled at the CCMA or Bargaining Council through a process called Conciliation. During such process the parties will informally raise their grievances and then negotiate to find an amicable resolution to the dispute. This often entails the concluding of a settlement agreement mediated by the Commissioner and signed off by the parties to the dispute.

In many ways I find that Conciliation, though an informal and without-prejudice process, to be more intimidating that arbitration as it is here where parties have the opportunity to raise its narrative without having to provide any evidence to the effect. It is during this process whereby both employer and employee try to strong arm the other party, to raise fear and loopholes in a potential arbitration as well as trying to sway the other party to settle, or not.

Commissioners typically plays a mediatory role and try to guide the process. Even though impartial, they also do understand the legal processes and often try to sway a party if they feel a good deal is on the table. I remember fairly recently whereby a Commissioner told an employee that he strongly recommend the employee take the three months of settlement offered as should the employer lose at arbitration, they will simply, and in all probability file a review at the labour court. This process can often take up to two/three years, expensive lawyers get involved and there is always the possibility of the arbitration award been overturned.

Even though our right to enter into contracts and agreements must be protected, hence it is rather difficult to get out of agreements, such as settlement agreements. Is it possible and if so, under what circumstances can this be done?

It needs to be noted that it is highly unlikely that a person pursuing a settlement agreement concluded at the CCMA to be overturned at the Labour Court, simply because the environment at the CCMA is typically unbiased, interpreters are available, the terms and conditions of the agreement is properly explained, hence it will be very difficult for any party to be able to prove that he or she entered into the agreement in circumstances where a material misrepresentation was made or be coerced into signing the agreement.

However, in Kipersad vs the CCMA (2003), Kipersad sought the Labour Court to set aside the Conciliation proceedings, including the certificate of outcome, the settlement agreement and the remission of the dispute to the CCMA for Conciliation afresh.

The legal basis for such relief is found in Section 158 (1)(g) of the LRA, whereby the Labour Court, subject to Section 145 are empowered to review the performance of any function provided for in the LRA on any ground that is permissible in law.

One of the key challenges of reviewing Conciliation proceedings is that a Commissioner is not obliged to keep recordings as prescribed for arbitration and as such is by its nature confidential. This approach to Conciliation is underpinned by rules 7(3) and 7(4) of the rules of the CCMA, which provide:

“7(3) Conciliation proceedings are private and confidential and are conducted on a without prejudice basis so that no party may make reference to statements made at conciliation proceedings, unless the parties have agreed so in writing.

7(4) Neither the Commissioner dealing with the Conciliation nor anybody else attending the Conciliation hearing may be called as a witness during any subsequent proceedings to give evidence about what transpired during the Conciliation process.”

The court found that the prohibition against reference to statements made at the Conciliation and the prohibition against the Commissioner or any other person testifying about the Conciliation process conflicts with the right of the applicant to administrative justice and the power of the Court to review the performance of any function by the CCMA. The CCMA rules, as subordinate legislation, must therefore yield to the LRA and to the Constitution.

Considering there are typically no record or response by the Commissioner in a review application it may prove difficult for the Court to determine what transpired during Conciliation.

In this case however, the Commissioner did respond to the application by affidavit and the applicant and the Court agreed that the application must be determined on the basis of the Commissioner’s affidavit. Given the fact that the application was about the conduct of the Commissioner, what she said was just as important as how she said it.

In casu, the applicant argued that the Commissioner was not impartial, but she pressurized and bullied him into agreeing to withdraw the dispute. In her affidavit, the Commissioner did agree of having told the applicant that he merely had a 50/50 chance of success, that it would take up to three years before the matter would be heard by the Labour Court and that he may have to pay for legal representation, and if he lose, the employer’s costs.

However, she also told him that it was his decision to proceed with the case or not. She did, however deny having told him to withdraw the case. The Court found that besides the issue about having a 50/50 case, the other scenarios are negative and that she did not advise him of the possible outcome should he be successful.

It was clear that the employee acted on what he believed was her advise. It should be noted that the function of a Commissioner is to steer the parties towards a mutually agreed outcome. As such, Commissioners need to have flexibility to apply appropriate techniques to guide the parties to consensus. Different techniques have been developed for different disputes and personalities involved during Conciliation.

The court highlighted that guideline 9 of the CCMA Guidelines requires Commissioners to be impartial. Commissioners must conduct themselves in a way that they avoid any inference of bias being drawn. The court found that by the Commissioner only sketching the four possible outcomes, she manifested bias against the employee. Considering the Commissioner elected to use the technique of scenario sketching, she should have presented fully all the consequences of proceeding with and withdrawing the case.

Even though the Commissioner did not advise her to withdraw the case, her conduct indeed had this effect. The Commissioner should not have made statements or conducted herself in such a manner that resulted in the employee drawing the reasonable inference that the Commissioner was advising him to withdraw the case.

The court found:

“In the quest to clock up high settlement rate scores, Commissioners should remember that successful mediators are those who always remain acceptable to the parties. Research has shown that employers and trade union officials agree that mediators should have such qualities as honesty,

integrity, trust, fairness, impartiality, general reliability, patience and persistence, be physically fit, have the ability to grasp ideas and be good listeners, be tactful, persuasive, self-controlled, dignified, respectful, intelligent, to have a sense of humor, firmness of action and originality of ideas, be sympathetic, modest and to "be one of us". (Mark Anstey at 257 - 258.).”

The Court ruled that the Settlement Agreement to be reviewed, set aside and referred back to Conciliation.

What we learn from this case is that Commissioners has a duty to be impartial in the manner they conduct Conciliation proceedings. In doing so, they will use various techniques to have parties reach an agreement. In the current case if the Commissioner used a technique of scenario sketching, then the Commissioner ought to sketch a complete scenario of may or may not transpired out of the dispute.

?It is advisable for employers to ask for the assistance of a professional Labour Relations Specialist when facing employment law difficulties. Tobie Nel is the Managing Director for Effectus Harmony (Pty) Ltd and has over 15 years’ experience in Labour Law. You can contact him, by phone: 0824479512, by email: [email protected]

visit: www.effectusharmony.co.za