Employers cautioned against ignoring [and/or not complying with] arbitration awards

​​​​​In a recent judgment,* the Labour Court made scathing remarks about an employer's failure to abide by a certified arbitration award ordering the reinstatement of a dismissed employee. The Labour Court ultimately found the employer in contempt of court.

Mr Moyo referred a dispute to the Commission for Conciliation, Mediation and Arbitration (CCMA) after an allegedly unfair dismissal from Super Spar Polofields (Spar). The Commissioner found that Mr Moyo's dismissal was unfair and awarded an order of reinstatement. When Mr Moyo reported for duty, Spar refused to reinstate him. Mr Moyo accordingly applied to the CCMA to have the arbitration award certified, a process by which the Director of the CCMA or a delegated commissioner of the CCMA certifies that an award is in fact an award issued by a commissioner of the CCMA.

Despite the certification of the award and multiple requests from Mr Moyo and his union representative, the director of Spar, Mr Loubser, refused to reinstate Mr Moyo. Mr Moyo's representative from the Entertaining Catering Commercial Allied Workers Union of South Africa (ECCAWUSA) informed Mr Loubser that if he did not comply with the certified arbitration award and reinstate Mr Moyo, contempt of court proceedings would be launched. Mr Loubser still refused to reinstate Mr Moyo and consequently, ECCAWUSA instituted contempt of court proceedings.

In terms of section 143 (1) read with section 143(3) of the Labour Relations Act 66 of 1995 (LRA), a certified arbitration award may be enforced as if it were an order of the Labour Court in respect of which a writ has been issued. Section 143(4) of the LRA goes further to provide that if a party fails to comply with a certified arbitration award, any other party to the award may enforce it by way of contempt proceedings instituted in the Labour Court.

The Labour Court restated the following requirements to prove contempt:

  • the existence of the order;
  • the order must be duly served on, or brought to the notice of the contemnor;
  • there must be non-compliance with the order; and
  • the non-compliance must be wilful and in bad faith.

The court also reiterated the position held in Pheko v Ekurhuleni Municipality (No 2) 2015 (5) SA 600 (CC) that "contempt of court does not consist of mere disobedience of a court order, but of the contumacious disrespect of judicial authority". Simply, the conduct must be a deliberate and intentional violation of the court's dignity, repute, and authority.

The Labour Court did not accept the defences raised by Spar, which it believed to be technical in nature and flimsy. Spar tried to argue that the arbitration award had not been adequately brought to its attention, and Mr Loubser claimed that he only became aware of the arbitration award when the contempt application was served on him. The court rejected this version, finding that there was undisputed evidence that he had been aware of the arbitration award since Mr Moyo first tried to return to work.

Spar also tried to argue that the person who would have been aware of the arbitration award was a human resources officer who had since resigned. The court also found this explanation to be unconvincing and unacceptable and noted that as a director, Mr Loubser bore the responsibility to ensure that Spar as a legal entity complied with legal requirements.

The Labour Court was satisfied that the four requirements for an order of contempt of court had been satisfied, stating that Spar and Mr Loubser had been "contumacious and disobedient" and had treated the arbitration award with "recalcitrance". Moreover, they could not put forward avalid reason why there had been no compliance.

Stating that their conduct suggested harassment of Mr Moyo, who had been in possession of a valid and enforceable order, the court found the defences raised by Spar and Mr Loubser to be vexatious and tantamount to abuse and ordered costs against them. In addition, the court found Mr Loubser guilty of the civil offence of contempt of court and imposed on him a fine of R1 million, which was wholly suspended on condition that Spar complied with the arbitration award within 30 days.

This case highlights the importance of complying with certified arbitration awards. It shows that the Labour Court will not hesitate to make findings against employers who treat arbitration awards with disdain. The Labour Court will also not hesitate to hold individual directors in contempt of court if, by their act or omission, they aid and abet an employer to be in breach of an arbitration award against the company. Employers must be cautioned that a contempt of court finding may not only attract a fine but imprisonment too.

*ECCAWUSA obo Moyo v Super Spar, Polofields and Another (J547/22) [2023] ZALCJHB 330 (1 December 2023)


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