Innstaff Swaziland v Swazi Economic Improvement Workers Union and Others (632/2017) [2018] SZHC 35 (08 March 2018);

Search Summary: 

Civil Procedure-review of arbitrator’s award finding that Union had reached                         fifty percent threshold of unionisable workers at the employer’s                                            establishment. During conduct of verification count, arbitrator added and or                 deleted certain names in list provided by the employer-manner and reasons                  for so deleting and or adding names opaque-no record of proceedings filed-                        reason for not filing record given as the nature of the proceedings.

 

 

 

 IN THE HIGH COURT OF SWAZILAND

JUDGMENT

                                                                    CASE NO: 632/17

HELD AT MBABANE                                                                    

In the matter between:

INNSTAFF SWAZILAND (PTY) LTD                                            APPLICANT

And

SWAZI ECONOMIC IMPROVEMENT WORKERS’

UNION                                                                                             1st RESPONDENT

NOMCEBO SHONGWE N.O.                                                      2nd RESPONDENT

CONCILIATION MEDIATION &

ARBITRATION COMMISSION                                                  3rd RESPONDENT

 

Neutral Citation: Innstaff Swaziland and Swazi Economic Improvement Workers                                      Union & 2 Others [632/17] [2018] SZHC 35 (8 March 2018)

Coram:               LANGWENYA, J.

Heard:                 8 November 2017, 19 January 2018

Delivered:            8 March, 2018

Summary:     Civil Procedure-review of arbitrator’s award finding that Union had reached                         fifty percent threshold of unionisable workers at the employer’s                                              establishment. During conduct of verification count, arbitrator added and or                         deleted certain names in list provided by the employer-manner and reasons                      for so deleting and or adding names opaque-no record of proceedings filed-                reason for not filing record given as the nature of the proceedings.

                        Issue for determination-Section 42 (5) of the Industrial Relations Act (IRA)                           2000-arbitrator misconceived nature of enquiry-Section 42 (5) of IRA calls                          for a two-pronged approach to wit-whether Union met fifty percent threshold                     of unionisable workers at employer’s workplace- and whether the workers                             were fully paid up members of the Union-Award reviewed, corrected and                                     set aside-matter sent to third respondent to start de novo before a different                     arbitrator.

 

Introduction

[1]     The applicant, Innstaff Swaziland (Pty) Ltd (the employer) approached this           court in terms of section 19 (5) of the Industrial Relations Act to review and     set aside the  arbitration award of the second respondent (the arbitrator) made       under case number SWMB 402/16 dated 5 April 2017. In terms of the   arbitration award, the arbitrator directed the applicant to grant the first          respondent the Swazi Economic Improvement Workers’ Union (SEIWU) (the      trade union) recognition as a collective employee representative with effect from 5 April 2017 in accordance with section 42 (9) & (10) of the Industrial Relations Act 2000 (IRA) (as amended).

 

Ad Jurisdiction

[2]     As indicated above, the application is brought in terms of section 19 (5) of the           Industrial Relations Act, 2000 which provides the following:

                   ‘A decision or order of the Court or arbitrator shall at the request of                                                any interested party, be subject to review by the High Court on grounds                                           permissible at common law’.

 

[3]     The import of the above provision is that it arrogates exclusive jurisdiction to this Court to review an arbitrator’s award in terms of the IRA and on grounds           ‘permissible at common law’. Doubtlessly, the present proceedings relate to     the review of an award issued in terms of the IRA. I am of the view that the matter is properly before this court because all the jurisdictional issues and facts that bring this matter within the ambit of the IRA have been met; for that    reason, this court is properly placed to consider the merits of the application   for review.

 

Background

[4]     On 7 November 2016, the first respondent (the Union) reported an unfair           labour practice dispute of non-recognition by the applicant (the employer).       The dispute was conciliated at the Conciliation Mediation and Arbitration      Commission (CMAC) but was unresolved. In terms of section 42 (9) of the         Industrial Relations Act (IRA)[1], the matter was referred to automatic          arbitration for determination.

 

[5]     On 8 February 2017 the parties presented themselves before the second           respondent (the arbitrator) for a pre-arbitration meeting. It was at the pre-          arbitration meeting that the Union lamented that despite meeting the fifty           percent threshold, the employer was refusing to grant it recognition. In    rebuttal the employer argued that the Union did not meet the fifty percent   threshold requirement.  As a result of the dispute, it was agreed that the arbitrator should conduct a verification head count of all the employees of the        applicant. It was agreed that the head count would take place on 17 February      2017 in terms of section 42 (6) of the IRA. Following the usual haggling and   dilatory pattern in such matters, the head count was held on 28 February 2017.

 

[6]     Consequent to the conduct of the verification count exercise, the arbitrator           found that:-

                   ‘The verification count proceeded without any glitches and the results                                              were as follows: the respondent (the applicant in the present                                                             proceedings) has a staff compliment of 462 (four hundred and sixty-                                     two) employees. Of the 462 employees, 293 (two hundred and ninety-                                          three) employees supported the Union and this translated to 63.42% of                                                the employees in favour of the Union’.

 

[7]     Dissatisfied with the award, on 3 May 2017 the applicant approached this           court seeking a review, correction and or setting aside of the arbitration award on the following grounds:-

  1. That the arbitrator’s award was reached arbitrarily, capriciously and or mala fide because she relied on an outdated list of applicant’s employees to conduct the verification count; the arbitrator also added names to the list by hand.

 

  1. That the arbitrator misconceived the nature of the discretion conferred upon her and took into account irrelevant considerations or ignored relevant ones through rushing to conduct a head count when she was aware that the stop order forms had proven that the Union had less than fifty percent membership within the applicant’s establishment.

 

  1. The arbitrator did not apply her mind as she failed to consider that the Union was irrelevant to the hospitality industry as the first respondent does not operate in the hospitality sector.

 

 

[8]     In rebuttal, the first respondent argued that the arbitrator did not act           capriciously as she followed a clear process which all parties had agreed to in           conducting the verification count. What the clear process which all parties           agreed to is, is unclear as there is no record of proceedings. It was the      contention of the first respondent that the arbitrator correctly determined that           the Union had 63.42% membership within the establishment of the applicant;       that the figure of 63.42% membership was not arrived at arbitrarily as   calculations were done by each party on 3 March 2017 and not by the       arbitrator alone. The Union averred that the arbitrator added names of certain     employees that were omitted in the list she was given by the applicant. There was therefore no malice on the part of the arbitrator but to ensure that the       names of the workers reflected in a stop order form were also reflected in the           list submitted by the applicant.

 

          Absence of Record of Proceedings on Review

[9]     Through a notice of motion, the applicant approached this Court to have the           award made by the second respondent reviewed, corrected and or set aside.      The applicant asked that the second and third respondents be directed to file and serve the applicant with a record of arbitration proceedings. It is the latter    request that I will deal with briefly.

          Review proceedings are regulated by Rule 53 of the High Court which     requires:

                   ‘…the presiding officer…to dispatch…to the Registrar the record of                                      such proceedings sought to be corrected or set aside together with such                                        reasons as he by law required or desires to give or make, and to notify                                           the applicant that he has done so[2]’.

 

[10]   The second and third respondents had to make available to the Registrar the           record of the arbitration proceedings for purposes of review. Rule 53, in my           view is aimed at promoting uniformity and consistency in practice and    procedure as it sets the guidelines on standards of conduct expected of those who practice and litigate at the High Court on review of administrative and      other tribunals. In the case of review proceedings from the third respondents, Rule 53 promotes the statutory imperative of expeditious dispute resolution.      The Rules of the High Court are binding and should be adhered to and they   are not to be adhered to or ignored by parties at their convenience.

 

[11]   In the present matter, the record of arbitration proceedings was not filed and    no reasons were given for not filing same. This Court had to make an order directing the second and third respondent to file the record before an         explanation was proffered by the second respondent. The explanation was by      way of a confirmatory affidavit deposed to by the second respondent and filed    in Court on 30 January 2018. In it the second respondent states as follows:

                   ‘This affidavit is filed for purposes of giving light to the court as to the                                              conduct of proceedings in the said matter as no electronic recording                                                was done due to the nature of proceedings’.

 

[12]   The effect of the arbitrator’s explanation is that no record of proceedings was   filed for purposes of this review. The grounds of review are not confined to     the conduct of the verification count as the appellant complains that the      arbitrator was aware that the stop order forms of employees in applicant’s      employer were below the fifty percent threshold. This is information that may     or may not have been canvassed at the pre-arbitration meeting. There is no        explanation why the record of the pre-arbitration proceedings was not      compiled particularly because the arbitrator makes passing reference to same in her award.

 

 

 

          Reliance on Outdated List to Conduct Verification Exercise

[13]   The applicant complains that the decision of the arbitrator was reached   arbitrarily as the process leading to her decision was marred by numerous      irregularities[3]. The first irregularity is that the arbitrator relied on an outdated list to conduct the verification exercise. The list contained names of          employees who had since left the applicant’s employ and therefore ought not        to have been counted during the verification exercise. When the anomaly was brought to the attention of the arbitrator by the applicant, the former ignored     the complaint[4]. Added to the mix and compounding the matter is the fact that      the arbitrator also added names of employees who were in the list already and           others who had left the applicant’s employ; the arbitrator’s explanation was    that the employees had been omitted from the list she was using[5].

 

[14]   The applicant, it would appear provided the so called outdated list on the basis           of which the verification count was conducted. At the pre-arbitration meeting   the arbitrator states that she requested the applicant to supply her with an excel     list so that she could arrange the names in an alphabetical order. The Human Resource Operations Site Manager who is the deponent to the applicant’s    founding affidavit could not provide same as, he is said to have explained that        the list would have to be sourced from their head office in South Africa. Why        the applicant could not, in due course secure a current list from its head office     in South Africa is unclear. What is clear is that the arbitrator was not    responsible for providing the list of employees-the applicant was. If the applicant did not furnish the arbitrator with a current list, it has itself to blame.           In my view, the applicant’s complaint about an outdated list while not lacking in ingenuity is utterly without merit.

 

[15]   The applicant laments further that the arbitrator acted in a capricious and           arbitrary manner when, during the verification exercise she added names of           employees who were already in the list and others who had left the applicant’s           employ resulting in the double counting of some of the employees. The           arbitrator’s explanation in this regard is that the Union complained about a           number of employees whose names did not appear on the list supplied by the           applicants. After comparing and cross-referencing the names of the          employees as reflected in the stop order forms, the arbitrator added the omitted        names to the list. Where the parties pointed out that there was a duplication of          names of employees, those names were deleted from the list and not double- counted. In support of the arbitrator’s version, the Union states that the     verification count was conducted in accordance with a clear process agreed to by all parties. The Union points out that the arbitrator only added employees’     names which did not appear on the list but were reflected in the stop order        forms.

 

[16]   In the award, the arbitrator states as follows:

                   ‘From documents contained in the file it remains clear and undisputed                                             by the respondents [the applicants in the current proceedings] that the                                             applicant union [the first respondent in the current proceedings] meets                                            the statutory requirements the only glitch is with regards to the validity                                       of some of the stop order forms (signatures)[6]’.

 

[17]   This Court is of the view that the arbitrator committed an irregularity to conclude that the Union met the statutory requirements while at the same time       acknowledging that some of the stop order forms had questionable signatures.       The fact that the arbitrator added and or deleted some of the names from the   list casts doubt on the whole process because it is not stated whose name(s)    were added or deleted from the list; how many such names were added and or         deleted from the list and whether the parties met and agreed on the           computation of the numbers. It is also not helping that there is no record of     proceedings against which the assertions by the parties can be weighed.

 

[18]   It may well be the case that the parties agreed to a procedure to be followed      in the conduct of the verification exercise; that certain names of the employees      were for one reason or another added and or deleted from the list; that the   reasons for adding and or deleting the said names of the employees were          (in)valid; that there was no malice or caprice on the part of the arbitrator when       adding and or deleting certain names from the list but all these issues cannot      be assessed by a reviewing court in the absence of a record of proceedings. In my view, whatever procedure was followed in the conduct of this matter was          both opaque and not discernable from the award.

 

[19]   Notably in her award, the arbitrator makes no reference to the complaint of           adding names to the ‘outdated’ list she used for the conduct of the verification           exercise. The explanation from the arbitrator comes late in the day when the           applicant cannot respond to or rebut same- in response to an order of this Court           dated 19 January 2018[7]. The explanation of the arbitrator is contained in a           confirmatory affidavit filed in this court on 30 January 2018 and she says the           following:

                   ‘[11] Notably, after the results were issued, the respondent raised                                                    objections with regards to the list of employee names that they issued                                               which was used for the head count claiming that the list was outdated.                                             At the pre-arbitration meeting I had requested that they supply us with                                            an excel list so that I could sort it alphabetically so as not to waste time                                 when conducting the exercise and the response I got from the                                             respondent’s managers being the Human Resources Operations site                                           manager, one Andile Mciza, and Ms. Nomabizo Mthethwa, the                                                       respondent’s site manager, in the presence of Union officials was that                                                 it would not be possible to obtain one at that time as they would have                                               to request it from their Head office in South Africa.

                   [12] I was taken aback when the results were announced that they                                                   started disputing the validity of the list which was supplied by Innstaff                                               Swd (Pty) Ltd and they only questioned its legitimacy after the results                                           were issued when both representatives were present during the head                                         count and made no objection to the fact that we were counting against                                          the total number of employees on the list as supplied by themselves.

                        [13] Further, I wish to clarify that the Union had raised an issue of a                                               number of employees whose names did not appear on this list. After                                                 having satisfied myself that in respect of their stop order forms their                                      names were added by myself on the list. Where however, the parties                                             pointed out that there was a duplication, those names were deleted from                                       the list’.

 

[20]   The first respondent’s answer to the applicant’s lamentation is that the           verification count was based on the so-called ‘outdated’ list supplied by the           applicant. It is the first respondent’s contention that during the verification           count the applicant added names of employees who were omitted on the list.    The first respondent avers further that:-

                   ‘[13.4]…May I further submit that the (sic) employee that were                                                        handwritten by arbitrator were in fact available in the list and just that                                             at the time of conducting the head count she could not locate the names.                                        The fact that they do appear on the list was pointed out to the arbitrator                                        by the applicant on the 3rd of March, 2017 and figures were adjusted                                              accordingly[8]’.

 

[21]   In the absence of a record of proceedings of the arbitration it is difficult to say           whose version is correct. When the application to have the matter reviewed      by this Court was initiated, the applicant requested that the second and third           respondents be directed to file the record of proceedings. Instead of the record           being filed, the second respondent filed a confirmatory affidavit stating that      ‘no electronic recording was done due to the nature of the proceedings[9]’. On what law this is premised, is unclear.

 

[22]   What is clear is that there is a dispute about the list of employees and the           manner the verification count was conducted. A record of proceedings could           have gone a long way to clear the matter. The failure to produce a record of           proceedings before the arbitrator is, in my respectful view irregular.

 

          Arbitrator’s Failure to apply her Mind

[23]   The applicant complains that the arbitrator misconstrued the nature of the           discretion conferred upon her by taking into account irrelevant considerations and ignoring relevant ones. This, the arbitrator did by rushing to conduct a    head count when she was aware that the stop order forms had proven that the          Union had less than fifty percent membership within the applicant’s establishment. Put differently, the applicant argues that relevant information          that is favourable to the applicant was given less weight and that which was         not favourable to the applicant was given high and undue weight. However a weighty issue this might be to the applicant, this contention does not add any weight to the applicant’s case.

 

[24]   In my respectful opinion, it is up to the arbitrator who knows what she desires           to achieve to decide what information to collect and what weight of           importance and relevance to put on each information or facts placed before       her when deciding. Accordingly, it would be unjustifiably presumptious for   the Court to prescribe to the arbitrator what information to collect in the decision making process and what weight of importance and relevance to        place on each piece of information collected. If the Court did that, it would     not only be appropriating to itself powers it does not have but it would also be    overstretching-without justification the Court’s power to control the      arbitrator’s decision making. This, the court will be loath to do.

 

          Dispute Determined by Arbitrator

[25]   An arbitrator is required to determine the true dispute between the parties. To that end, it is necessary to establish the relevant facts and construe the category       of the dispute correctly. An arbitrator must make an objective finding about      what is the dispute to be determined[10].

 

[26]   What is a ‘dispute’ per se, and how one is to recognise it, demands scrutiny.           Logically, a dispute requires, at minimum, a difference of opinion about a           question. A dispute about non-recognition of a trade union requires, at    minimum a difference of opinion about: whether or not the trade union has    attained fifty percent membership of the employees in respect of which it     seeks recognition; and whether such employees are fully paid up for the trade    union to be granted recognition[11].

          Section 42 (5) of the IRA states as follows:-

                   ‘The employer shall recognise a trade union or staff association                                                       that has been issued with a certificate under section 27 if;

  1. Fifty percent of the employees in respect of which a trade union or staff association seeks recognition are fully paid up members of the organisation’ (my emphasis).

          Section 46 (6) of the IRA states as follows:-

                    ‘For purposes of determining whether a trade union or staff association                                           represents fifty percent of the employees in respect of which it seeks                                     recognition, a stop-order form duly signed by the employee shall be                                             sufficient proof that the employee is a full member of the Union, and in                                              the case of any disagreement a head count shall be conducted’.

 

[27]   In a dispute concerned with recognition of trade unions within an employer’s           establishment, section 42 of the IRA is the guiding light. A union that seeks           organizational rights must fulfill the requirements of section 42 (5) that is, it     has to have fifty percent of members within the employer’s company and such       members must be fully paid up. Absent satisfaction of the requirements of    section 42 (5) of the IRA, there can be no recognition of the Union[12].

 

[28]   A dispute of non-recognition of a trade union requires that the question of fifty           percent membership and that of fully paid up members be decided by the           arbitrator. Section 42 (5) calls for a two-pronged enquiry namely; whether the           Union met the fifty percent threshold of unionisable workers at the employer’s           workplace, and whether the workers were fully paid up members of the Union.           With due respect, in the present matter, and in her stating the issue for           determination, the arbitrator does not seem to have appreciated the double-          barrel nature of the enquiry.

 

[29]   In stating the issue for determination, the arbitrator says she is required to           determine ‘whether the applicant union meets the fifty percent threshold     specified by the statute’. The arbitrator ends there. She does not enquire into          whether the workers are fully paid up. It is my respectful view that the    arbitrator misconceived the nature of the enquiry in the manner she articulated       the requirements of section 42 (5) of the IRA on the question of non-   recognition of trade unions. It is trite that once an arbitrator misconceives the     nature of the enquiry, the conclusions reached by the arbitrator cannot by all accounts be reasonable and fall to be set aside.

 

[30]   The reviewability of the award is not one where this Court should substitute     its decision for that of the arbitrator. The irregularities that have been presented before this Court are procedural in nature. Another arbitrator should     address the dispute afresh, give the parties a fair trial and prepare a record of        the proceedings.

 

Order

[31]   In light of the above, the following order is made:

  1. The arbitration proceedings presided over by the second respondent on 5 April 2017 under Case No. SWMB 402/16 are hereby reviewed, corrected and set aside.
  2. The matter is referred back to the third respondent to start de novo before a different arbitrator.
  3. There shall be no order as to costs.

 

___________________

M. LANGWENYA

JUDGE OF THE HIGH COURT

 

For the Applicant                  :          Mr. C. Bhembe

For the first Respondents      :          Mr. A. Ndwandwe

 

[1] Industrial Relations Act, 2000.

[2] Rule 53 (1) (a) of the High Court, 1969

[3] Applicant’s Founding Affidavit, Paragraph 10.1.

[4] Applicant’s Founding Affidavit, Paragraph 10.2.

[5] Applicant’s Founding Affidavit, Paragraph 10.2.1

[6] Page 24 of the Book of Pleadings, Para 5.3 of the arbitrator’s award.

[7] The Court ordered the second and third respondents to file in court and serve the applicant with a record of arbitration proceedings concerning the matter under consideration on or before Friday 2 February 2018 and thereafter to notify the Registrar that she has done so.

[8] Page 42, Book of Pleadings, First respondent’s answering affidavit, para 13.4.

[9] Second Respondent’s Confirmatory Affidavit, paragraph 4.

[10] Mouldings (Pty) Ltd (Wardlaw) (2007) 28 ILJ 1042 (LAC)

[11] Industrial Relations Act 2000, section 42 (5)

[12] This is because the section uses peremptory language.