A default award is one that is made by a CCMA arbitrator despite the fact that one of the parties to the dispute failed to attend the arbitration hearing. Arbitrators have the power to make default awards under certain conditions, and overturning such awards is very difficult.
The Labour Relations Act (LRA) provides two ways of going about setting aside an arbitration award; via a Labour Court review or via a rescission application.
In a Labour Court review the party who is unhappy with the award asks the Labour Court to set the award aside on the grounds that the arbitrator, in making the award, ‘misconducted himself/herself’. That is, the review application is not an appeal against the award decision but rather a claim that the arbitrator:
- Committed misconduct in relation to his/her arbitration duties
- Committed a gross irregularity in the conduct of the arbitration proceedings
- Exceeded his/her powers or
- Made the award improperly
The above criteria refer to misconduct and irregularities including, but not limited to:
- Taking into account evidence that was not put before the arbitrator
- Refusing to allow valid and relevant evidence to be brought
- Ignoring statutory requirements or legal principles
- Unduly assisting one or other party with his/her case
- Delivering a biased award
- Taking a bribe
- Failure to apply his/her mind to the facts in evidence
A party may, within 14 days of becoming aware of the arbitration award, apply to the arbitrator to rescind (cancel) the award on the grounds that the award:
- Was erroneously sought or made in the absence of any party affected by it
- Contained an ambiguity (i.e could mean two different things) or an obvious error or omission
- Was granted as a result of a mistake common to the parties
- Was made in the absence of any party, provided that good cause is shown.
The grounds for rescission are very narrow and such applications are most commonly brought when one party has not attended the arbitration hearing and the award has been made in that party’s absence. Where the party who has failed to attend the hearing has an excuse for his/her absence he/she may apply to the arbitrator to rescind the award so as to allow a new arbitration hearing to be set down. Typical circumstances where rescission applications are normally granted include:
- The rescission application is made within the 14-day deadline and
- Valid proof is submitted of illness of the absent party, or of failure of CCMA/bargaining council to serve the notice of set down on the party concerned.
However, employers are warned that the CCMA requires valid reasons, thorough explanations for the absence of parties and proof of these reasons/explanations. In the case of Shoprite Checkers vs CCMA & others (2005, 8 BLLR 816) the employer party failed to attend the arbitration hearing. The arbitrator held the hearing in absentia and granted an award in favour of the employee. The employer then applied for a rescission on the grounds that the assistant of the person in charge of the matter had mis-diarised the date of the arbitration. The CCMA turned down the rescission application.
The employer, therefore, took the matter on review to the Labour Court. The Court upheld the CCMA’s decision saying that a negligent error by the employer is not grounds for rescission. The Court ordered the employer to pay the employee’s legal costs expended on defending the Labour Court review application.
In Sebati vs Rens Security Services cc (2009, 11 BALR 1170) the CCMA turned down a rescission application where the employer failed to explain how the notice of hearing had failed to reach the relevant employer official.
Parties are therefore advised to:
- Exercise extreme care in attending to notifications of CCMA hearings
- Ensure that they attend all CCMA meetings and hearings
- Get advice from a reputable labour law expert before applying for rescissions and lodging applications at the Labour Court
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Source: www.labourlawadvice.co.za | by