A victory of common sense over legalism – 20 September 2013

Note on the judgment of the Supreme Court of Appeal in CCMA v Law Society, Northern Provinces
(005/13) [2013] ZASCA 118 (20 September 2013)

 At the end of October 2012 the Gauteng North High Court handed down a judgment that caused some sensation in labour law circles: CCMA rule 25(1)(c), restricting the right to legal representation in arbitration hearings dealing with unfair dismissal based on conduct or capacity, was declared unconstitutional.

In the first place, Judge Tuchten found, the rule was “irrational” and “arbitrary” in singling out these two categories of dispute. Furthermore, it was found to be in conflict with section 3(3)(a) of the Promotion of Administrative Justice Act (PAJA), which states that an “administrator” [1] should have discretion to allow legal representation in “serious or complex” administrative proceedings.

Rule 25(1)(c)

What does rule 25(1)(c) say? First, it excludes legal representation in misconduct or incapacity cases. However, it gives a commissioner discretion to allow legal representations in two situations:

• If the commissioner and all other parties consent; or
• the commissioner concludes that it is unreasonable to expect a party to deal with the dispute without legal representation, after considering —

o   the nature of the questions of law raised by the dispute;

o   the complexity of the dispute;

o   the public interest; and

o   the comparative ability of the opposing parties or their representatives to deal with the dispute.

By providing only for the “complexity” of the dispute as a criterion, Judge Tuchten decided, Rule 25(1)(c) falls short of the standard set by section 3(3)(a) of PAJA, which states that the “seriousness” of the proceedings must also be a criterion; and is dismissal not always a “serious” matter for the employee?

Reasons for rule 25(1)(c)

In reaching his decision the judge was not impressed by the evidence of the Director of the CCMA, Nerine Kahn, explaining the reasons for rule 25(1)(c): in essence, the fact that some 80% of the CCMA’s caseload consists of misconduct and incapacity disputes, that these disputes normally turn on simple factual questions (e.g., did the employee do it or not?) rather than technical legal issues, and that part of the idea behind the CCMA was to give dismissed employees a quick and accessible way of challenging their dismissal if they believe it was unfair.

Nor was he impressed by the explanation provided in the Explanatory Memorandum that came with the first draft of the LRA in 1995:

“Lawyers make the process legalistic and expensive. They are also often responsible for delaying the proceedings due to their unavailability and the approach they adopt. Allowing legal representation places individual employees and small businesses at a disadvantage because of the cost.” [2]

The appeal

Even though Judge Tuchten suspended the order of invalidity for 36 months to enable the parties to consider and promulgate a new sub rule, the implications were fairly obvious. Commissioners, knowing that sub rule 25(1)(c) had in principle been found invalid, would be less inclined to apply it and more inclined to allow applications for legal representation. This meant that the already overstretched resources of the CCMA would come under additional pressure as more and more dismissal and incapacity cases were argued by lawyers – at least, on behalf of employers and trade unions who can afford it.

So seriously did the CCMA view the situation that – apparently for the first time in its 17-year history – it took the matter on appeal to the Supreme Court of Appeal – where, in a unanimous judgment handed down on 20 September 2013, the order made by Judge Tuchten was set aside with costs.

The question of rationality

The SCA analysed all the issues that had been argued in the High Court and found, in essence, that the High Court had been incorrect in dismissing the rationale behind rule 25(1)(c). Far from being irrational and arbitrary, the SCA considered it to be well-founded and unassailable:

“The history of the subrule and the nature of the historical compromise reached show that the bulk of cases referred to the CCMA involve unfair dismissals for incapacity and misconduct. The legislature identified these matters as the appropriate category where the policy considerations underlying the need to exclude legal representation should find application. The courts cannot interfere with rational decisions that have been made lawfully on the ground that they consider a different decision preferable.” [3]

Lawyers’ right to practise their profession

The SCA also dealt with the Law Society’s reliance on section 22 of the Constitution, which guarantees every citizen “the right to choose their trade, occupation or profession freely”. It noted that the Law Society’s attack on rule 25(1)(c) was not motivated by any alleged benefit that litigants (for whose protection legal representation is intended) would gain from an unlimited right to legal representation in dismissal matters. Indeed, it was found,

“there is not the slightest suggestion in its papers that the restriction on the right to legal representation causes hardship to or has operated to the prejudice of those affected by it. Nor is there any suggestion that the major parties concerned with labour disputes – employers’ organisations and trade unions – support the application of the Law Society. The sole concern of the Law Society in bringing this litigation is that the subrule denies work to its members.” [4]

Because the sub-rule in no way restricts the right of entry to the legal profession, but merely limits the right of appearance in a particular forum (for good reason), this argument was dismissed.

Does PAJA apply to CCMA proceedings?

Perhaps most importantly, the SCA found that the application of section 3(3)(a) of PAJA to CCMA proceedings was misplaced. Even though CCMA proceedings might be classified as “administrative action”, it was pointed out, it does not follow that administrative action is regulated solely by PAJA. Other statutes, such as the LRA, may also provide for the conduct of specialised administrative proceedings within their area of application. Noting that the Constitutional Court had found that PAJA did not apply to review applications in terms of the LRA, since the LRA has created a “self-contained regime for reviews of arbitration awards”, [5] the SCA found that the LRA had equally created a “separate regime… for the fair conduct of arbitrations by the CCMA”.  [6]   PAJA can therefore not overrule the provisions of the LRA, including rule 25(1)(c), in this regard.

To this it could be added that section 210 of the LRA provides, in cases of conflict between the LRA and other legislation “relating to the matters dealt with in this Act”, that the provisions of the LRA must prevail. It can be argued that on this basis the rules drawn up by the CCMA in terms of the LRA should trump competing provisions in other legislation.

Conclusion

The judgment of the SCA may be seen as a victory for common sense and the idea of a fair and user-friendly labour law dispensation which the LRA set out to implement. It is painfully obvious that this ideal has by no means been achieved yet and that there are many shortcomings in the framework as well as the application of the LRA (some of which are addressed by the Labour Relations Amendment Bill of 2012, currently before the National Chamber of Provinces). [7]  But a judgment such as this is an encouraging sign that the second-highest court in the land is well aware of the special nature and challenges of labour dispute resolution which will hopefully send a message to all lower courts and tribunals to avoid excessive legalism when dealing with employment disputes.

[1] I.e., a commissioner. The Constitutional Court has decided that, since the CCMA is not a court of law, decisions of CCMA commissioners amount to “administrative action”: Sidumo v Rustenburg Platinum Mines Ltd [2007] 12 BLLR 1097 (CC).

[2] Published in (1995) 16 Industrial Law Journal at p 319.

[3] Paragraph 22 of the judgment.

[4] Paragraph 3 of the judgment.

[5] Sidumo & another v Rustenburg Platinum Mines Ltd & others 2008 (2) SA 24 (CC).

[6] Paragraph 20 of the judgment.

[7] Interestingly, the Bill reinforces section 115(2A)(k) of the LRA, in terms of which rule 25(1)(c) was drafted, by expressly authorising the CCMA to make rules for “the regulation or limitation of the right to be represented” in arbitration proceedings.