The process of conciliation in respect of disputes is a mandatory process that seeks parties to a dispute to agree, on their own terms, as to how a dispute is to be settled. This tends to speed up the resolution of disputes, as parties do not have to wait 14 days for an award to be issued.
When a matter is set down for conciliation, the conciliating commissioner will encourage the parties to settle the dispute with a view to bringing the matter to finality. If a settlement is reached, the commissioner will assist the parties by preparing a written settlement agreement which is usually signed at the CCMA in the presence of the commissioner.
The Labour Court, in a recent judgment of Cindi v CCMA & 2 Others was required to assess the role that a commissioner plays in facilitating a settlement agreement at the CCMA. In this case, an employee referred an alleged unfair dismissal to the CCMA. During conciliation, the commissioner informed the employee that she had no prospects of success and that she should rather settle the matter. Because of the commissioner’s comments, the employee agreed to sign a settlement agreement at the CCMA.
The employee then approached the Labour Court with an application to review and set aside the settlement agreement in that she was of the opinion that the commissioner:
- Was not impartial;
- inappropriately persuaded her to sign the settlement agreement;
- unduly influenced her to sign the agreement; and
- exceeded his powers by giving her advice on the fairness of her dismissal.
Cited in her favour was the judgment in Kasipersad v CCMA & others (LC), where the conciliating commissioner had advised the applicant that his chances of success were “50/50” and warned him of the dire consequences of losing a case in the Labour Court. As a result, he had entered into a settlement agreement in which he dropped his claim. Pillay J held that the commissioner had exceeded her powers by providing legal advice; the advisory function of the CCMA is limited to procedural issues. Furthermore, by warning the applicant of negative consequences only, the commissioner had displayed bias against him.
The court found that the Commissioner exercised an improper influence in persuading the employee to withdraw his case.
A similar situation arose in Shortridge v Metal and Engineering Industries Bargaining Council and Others, where the Court was faced with having to review and set aside a settlement agreement. Similar to the Cindi v CCMA case, the settlement agreement in that case had not been made an arbitration award in terms of Section 142 of the LRA.
The Court in dismissing the applicant’s application, held that the settlement agreement which has not been made an arbitration award cannot be reviewed in terms of section 145 of the LRA.
The same approach was followed in Mavundla and Others v Vulpine Investment Ltd t/a Keg and Thristle and Others, where the court set aside the conciliation proceedings because the Commissioner had improperly allowed a consultant to represent one of the parties during the proceedings. It was for this reason that the certificate of outcome was set aside. The settlement agreement was, however, not set aside and in this regard the Court had the following to say:
“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.”
It is apparent from the above, that the fact that the conduct committed by a Commissioner during the conciliation process, is indeed reviewable, it does not necessarily vitiate the agreement consequent thereto.
In Malebo v CCMA, Lagrange J the court held that:
“Until 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.”
Thus, in Cindi v CCMA, the Labour Court, for the following reasons, refused to review and set aside the settlement agreement:
- The settlement agreement was not made an arbitration award and as such, could not be reviewed.
- A commissioner merely facilitates a settlement agreement and has no decision-making powers.
- A settlement agreement does not constitute a ruling or decision made by a commissioner.
- The role of a commissioner, through conciliation, is to procure an offer from the company that will ultimately be acceptable to the employee.
- The final decision to conclude a settlement agreement lies solely in the respective party’s hands and is not the commissioner’s decision.
The Court lastly held 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:
- Impossibility of performance;
- Duress and/or undue influence;
- Misrepresentation and/or fraud.
It is thus clear that a commissioner merely facilitates a settlement agreement and has no decision-making powers during the conciliation proceedings and negotiations of a settlement agreement.
Article by: Arlene Jacobs
Dispute Resolution Official – Bloemfontein