THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG

Not reportable
Case no: JR1841/18 

In the matter between:

AUDREY DIPUO MOTLHAMME                              	                      First Applicant

SARATEEL MOTOMA 	Second Applicant 

SEIPHITLHILE EVAH THOANE	          Third Applicant

SHADIKI AGNES NJINGA	          Fourth Applicant

MARTHA BOITUMELO MANYE	          Fifth Applicant

REUBE MMACHELELE RAMOIPONE	          Sixth Applicant

IGNATIA DIPUO KASTON	           Seventh Applicant

KHONJE LYDIA MSIZA	          Eighth Applicant 

POPPY FLORENCE MAHLANGU 	          Ninth Applicant 

MOKETI LEAH TSHOATLHANG	          Tenth Applicant 

PHIWE KIMMIE CAMANE	                      Eleventh Applicant 

CHRISTINE MOTAU	         Twelfth Applicant 

and

GOLD RUSH MORULA	        First Respondent 

COMMISSION FOR CONCILIATION
MEDIATION AND ARBITRATION	Second Respondent 

COMMISSSIONER SILAS RAMUSHWANA	        Third Respondent 
Enrolled: 21 July 2021	
Delivered:  21 July 2021 (In view of the measures implemented as a result of the Covid-19 outbreak, this judgment was handed down electronically by circulation to the parties' representatives by email. The date for hand-down is deemed to be 21 July 2021.)

JUDGMENT

PRINSLOO, J

Introduction

[1]	This matter was enrolled for hearing on 21 July 2021. In accordance with the provisions of Directive LC01/21 in respect of access to and conduct of proceedings in the Labour Court in light of the Covid-19 pandemic, effective from 18 January 2021, this matter was by agreement between the parties, disposed of without oral argument. 

This application

The Applicants’ case

[2]	The Applicants’ case is that they were employed on six months’ fixed term contracts with effect from 1 April 2017. The First Respondent (the Respondent) made an oral undertaking that their contracts would be converted into permanent appointments. The six month period of their fixed term contracts expired on 31 October 2017, but they continued to work for the Respondent, until they were dismissed in June 2018.

[3]	The Applicants’ case is that in June 2018 the Respondent indicated that there was a need to retrench staff, but they were not served with notices to consult, as contemplated in section 189(3) of the Labour Relations Act(LRA). Furthermore, the retrenchment was in fact a large scale retrenchment, as provided for in section 189A of the LRA. The Respondent did not appoint a facilitator and did not follow a fair procedure in terminating their contracts of employment. 

[4]	The Applicants subsequently referred an unfair dismissal dispute to the Second Respondent, the Commission for Conciliation, Mediation and Arbitration (CCMA) and the dispute was enrolled for conciliation on 27 July 2018. The Third Respondent (the arbitrator) was appointed to conciliate the dispute.

[5]	The arbitrator informed them that the conciliation process was not binding and that it was a platform for the parties to reach an amicable solution. The Applicants allege and are aggrieved by the fact that the arbitrator did not provide them with in-depth information pertaining to how the consultation process in terms of section 189A of the LRA should have unfolded, but instead he presented financial difficulties to them.

[6]	The Applicants and the Respondent signed a settlement agreement, under case number GATW8801-18 on 27 July 2018, in terms whereof the Respondent agreed to pay each of the Applicants an amount equal to one months’ salary by 3 August 2018. The settlement agreement was signed in full and final settlement of the dispute referred to the CCMA. 

[7]	The Applicants claim that the arbitrator induced them, by duress, to sign the settlement agreement, which is the subject matter of this review application. Furthermore, the arbitrator informed them that the Labour Court route is a protracted and costly route and he instilled fear in their minds by saying that they would be liable for the Respondent’s legal costs. The arbitrator stated that the Respondent’s offer of one month’s salary was reasonable, as they would only be entitled to a week’s salary for each completed year of service. The arbitrator left them with no option and concluded that it was the best offer and that they must sign the settlement agreement.

[8]	The Applicants objected to the settlement, but the arbitrator indicated that they either sign the settlement agreement or he issued a certificate of non-resolution. There was division amongst them and the Applicants were engulfed by the majority.

[9]	The Respondent added that those who did not sign the settlement agreement would not get any monies and would not be considered for possible future re-employment. The deponent to the Applicants’ founding affidavit stated that she was forced to sign the settlement agreement and would not have signed it, were it not for the pressure coming from the arbitrator and the Respondent, as well as some of her co-applicants.

[10]	The Applicants submitted that the settlement agreement is tainted with unlawfulness in that it was not made freely and voluntarily, but was induced by duress. Had it not been for the pressure and misinformation, the agreement would not have been entered into.

The Respondent’s case

[11]	The gist of the Respondent’s opposition is that this Court lacks jurisdiction to adjudicate an application to review a settlement agreement which has not been made an arbitration award in terms of section 142A of the LRA.  

Relief sought and analysis

[12]	Section 157 (1) of the LRA provides that subject to the Constitution and section 173, and except where the LRA provides otherwise, the Court has exclusive jurisdiction in respect of all matters that elsewhere in terms of the LRA or any other law are to be determined by this Court. What this requires is that a party referring a dispute to this Court for adjudication must necessarily point to a provision of the LRA or some other law that confers jurisdiction on this Court to adjudicate the dispute. 

[13]	It is thus incumbent on an applicant referring a matter to this Court for adjudication, to identify the provision in the LRA, or any other law, which confers jurisdiction on this Court to entertain the claim. What is required is a determination of the legal basis for the claim, and then an assessment of whether the Court has jurisdiction over it.

[14]	The Applicants have not identified any provision in the LRA, or any other law, in terms of which they approached this Court for the relief sought. In the notice of motion the Applicants evidently seek relief in the form of a review. The relief they seek is for the settlement agreement to be reviewed and set aside as void ab origine and for the matter to be remitted to the CCMA for conciliation, alternatively for the issuing of a certificate of non-resolution.

[15]	The Applicants filed heads of argument, wherein it was reiterated that the issue before this Court is an application to review and set aside a settlement agreement of 27 July 2018. 

[16]	There is thus no doubt that this is a review application. Section 145 of the LRA provides for the review of an arbitration award, section 158(1)(g) provides for the review of the performance of any action provided for in terms of the LRA and section 158(1)(h) provides for the review of any decision taken or act performed by the State in its capacity as employer. The Applicants have not identified the provision in the LRA they rely on for relief. 

[17]	Section 158(1)(g) of the LRA provides, subject to section 145, for the review of the performance or purported performance of any function provided for in the LRA on any grounds that are permissible in law. Consistent with the wording of section 158(1)(g) this Court’s powers under the said section are limited to the review of the performance or purported performance of statutory functions provided for in the LRA, undertaken by statutory bodies or functionaries, such as the CCMA, bargaining councils, Ministers etcetera.   

[18]	In my view section 158(1)(g) is not applicable as the conclusion of a settlement agreement between parties is not the performance of a function provided for in the LRA. Section 158(1)(h) is equally not applicable as the employer in casu is not the State. The only possible review that remains is one in terms of section 145 of the LRA and the obvious question which leaps out is whether a case for review in terms of section 145 of the LRA has been made out. 

[19]	There are numerous difficulties with the Applicants’ case.

[20]	I already alluded to the fact that the Respondent’s case is that this Court lacks jurisdiction to adjudicate an application to review a settlement agreement which has not been made an arbitration award in terms of section 142A of the LRA.  

[21]	In answer to the Respondent’s argument, Advocate Maswanganye on behalf of the Applicants, made bizarre submissions, not only disconnected from the Respondent’s opposition, but also disconnected from the legal position. I will deal with the submissions she made in turn.

[22]	Advocate Maswanganye recorded the Respondent’s case as follows: 

“The First Respondent is saying that the settlement agreement was not made an order of court, therefore it is not reviewable. Their further argument is that a settlement agreement is a contract between the parties and that the Third Respondent was merely a facilitator and is not a party to the proceedings.”

The status of a settlement agreement

[23]	Advocate Maswanganye submitted that a settlement agreement which has been complied with has the same status as a settlement agreement which has been made an order of the court in terms of section 142 of the LRA. 

[24]	This submission displays a spectacular misunderstanding of the Respondent’s argument as well as of the provisions of the LRA. Also glaringly absent from the submission, is any reference to authority in support thereof. The Respondent’s submissions, on the other hand, are supported by a number of authorities, which appears that Ms Maswanganye did not bother to read or to comprehend.

[25]	Section 142A of the LRA does no more than to provide for a settlement agreement in respect of any dispute that has been referred to the CCMA, to be made an arbitration award. It does not provide for making a settlement agreement an order of Court. Section 143 provides for the effect of an arbitration award and section 145 provides for the review of an arbitration award.

[26]	The Respondent’s case is certainly not that the settlement agreement is not reviewable because it was not made an order of court, as was understood by the Applicants’ representative. The obvious reason for this is because once a settlement agreement is made an order of Court, it becomes a Court order that cannot be subject to review, but which is subject only to appeal. 

[27]	The first and the most obvious difficulty in casu is that the Applicants seek the review and setting aside of a settlement agreement that was entered into between the parties. Review proceedings must be directed at the conduct or performance of statutory functions, provided for in the LRA, undertaken by statutory bodies or functionaries. 

[28]	In casu there is no arbitration award but a settlement agreement signed by the parties and recording the terms of their settlement. The settlement agreement did not come about as a result of a decision or ruling made by an arbitrator or other statutory functionary. In fact, it was entered into at the stage of conciliation.

[29]	In Malebo v Commission for Conciliation, Mediation and Arbitration and others, it was  held that: 

'[u]ntil the agreement is made an award it remains simply a settlement agreement. Any legal force it carries is derived from the ordinary binding power of a contractual arrangement between the parties. Even though the agreement may have come into being through the facilitation of the commissioner, his role in the conclusion of the agreement does not entail the exercise of any statutory decision-making powers on his part to make an award or ruling which is binding on the parties. The document embodying the settlement simply records what the parties to the dispute have agreed. The arbitrator’s signature on it confirming that he conciliated it adds no more legal force to the document, in my view, except insofar as it affords some evidence of a third party witnessing the conclusion of the agreement.

[30]	A settlement agreement that has not been made an arbitration award in terms of section 142A of the LRA cannot be reviewed and there is no basis upon which the settlement agreement entered into between the parties can be reviewed.

[31]	Ms Mawanganye further submitted that the law as it stands is that the conduct of an arbitrator in conciliation proceedings is not reviewable. Her argument is that if “the law is allowed to stand, then commissioners in conciliation proceedings will end up with more power which they can abuse to the detriment of employees. Labour matters are sui generis and the labour court should be allowed to step in and supervise the powers of commissioners in conciliation processes as well.”

[32]	This argument is absurd. Section 135 of the LRA provides for the resolution of disputes through conciliation and states that when a dispute has been referred to the CCMA, a commissioner must be appointed to resolve it through conciliation and if that fails, he or she must issue a certificate of outcome. Rule 16 of the Rules for the Conduct of Proceedings before the CCMA provides inter alia that conciliation proceedings are private and confidential and are conducted on a without prejudice basis and that no person may refer to anything said at conciliation proceedings in subsequent proceedings.

[33]	The LRA empowers an arbitrator to resolve a dispute through conciliation and if that fails, to issue a certificate of outcome. The arbitrator is not given any decision making powers during the conciliation process, nor is an arbitrator in a position to take any binding decisions. This is a position that had been respected and applied since the inception of the LRA and the Applicants’ argument that this Court should step in to ‘supervise’ arbitrators at the conciliation stage, is bizarre and not supported by any authority. 

[34]	In Mavundla  and Others Vulpine Investment Ltd t/a Keg and Thristle and Others the Court confirmed that:

‘The concluding of the settlement agreement was not an administrative act of the commissioner. She did not impose her will on the parties. The commissioner's role was to try and procure a meeting of the minds of the parties so that by agreement between themselves could be settled. The settlement agreement is not her decision, it is a recording of the parties' consensus over the manner in which they agree to settle their differences. The role of the commissioner in that settlement agreement was through conciliation to procure an offer from the company that would ultimately be acceptable to the applicants. The final decision to conclude the agreement lay solely in the respective party's hands. They had to decide of their own volition whether to accept or reject the offers made and put through the office of the commissioner. Mr van Zyl, a director of the company, proposed the settlement on behalf of the company, and Mavundla and Msweli accepted the proposal.’

[35]	An arbitrator can facilitate a settlement agreement, but he or she has no decision making powers in the process. 

[36]	A further difficulty is that the Applicants have not set out any grounds for review in respect of the agreement. Their case is that that they signed under duress and that the agreement was not entered into freely and voluntarily. Those are not grounds for review, but rather grounds to set the agreement aside. If the Applicants have a case and should they be entitled to relief, they are not so entitled by bringing a review application. The remedy available to the Applicants is to be found elsewhere, as was confirmed in Cindi v CCMA where the Court found that:

‘In my view, the third respondent is correct in its contention that the remedy in challenging the agreement that came into existence due to the alleged undue influence by the Commissioner, lies in the common law principles of contract. It is in this regard trite that the validity of an agreement in terms of the general principles of contract can be challenged under the following grounds:
o impossibility of performance.
o duress and/or undue influence.
o misrepresentation and/or fraud.

Declare the agreement void ab origine

[37]	The Applicants also, in prayer 4 of their notice of motion, seek an order for the settlement agreement to be set aside on the basis that it is void ab origine. 

[38]	The relief sought in prayer 4 of the notice of motion is problematic. The relief is not sought as an alternative to prayers 1 and 2, where the review and setting aside of the settlement agreement is sought and for the matter to be remitted to the CCMA. It is mutually destructive of the relief sought in prayers 1 and 2. The Applicants seek the review and setting aside of the settlement agreement, which relief is not possible or competent if the agreement is void, as it needs to exist in order to be reviewed and set aside. It appears as if not much thought was put into the formulation of the relief sought and the wording of the prayers, as per the notice of motion.

[39]	In short: the application filed by the Applicants has to fail for lack of merit.

Costs

[40]	The last issue to be decided is the issue of costs. 

[41]	In so far as costs are concerned, this Court has a broad discretion in terms of section 162 of the LRA to make orders for costs according to the requirements of the law and fairness. In my view this is a matter where the interest of justice will be best served by making no order as to costs.

[42]	In the premises I make the following order:

Order:

1.	The application is dismissed;
2.	There is no order as to costs.

Connie Prinsloo 
 Judge of the Labour Court of South Africa 

Representatives:

For the Applicant:			Advocate N P Maswanganye
Instructed by:			Makula Attorneys

For the First Respondent:            Mr A Patel from Cliffe Dekker Hofmeyr Inc Attorneys