MALABA DCJ:
At the end of hearing argument for both parties the court allowed the appeal
with costs. It was indicated at the time that reasons for the decision would
follow in due course. These are they.
On 29 September 2010, the Labour Court allowed an
appeal by the respondent from a voluntary arbitration award on the ground that
the arbitrators had seriously misdirected themselves.
The appellant and the respondent are, in the welfare and educational
industry. They are members of the National Employment Council for Welfare
and Educational Institutions. The appellant is the registered Trade Union
representing the interests of workers whilst the respondent represents the
interests of the employer institutions. The parties were unable to
reach an agreement in a collective bargaining over minimum wages and allowances
payable to employees in the undertaking for the period 1 May to 31 August
2009. They agreed to submit the dispute to arbitration.
An arbitration agreement signed by the parties included clause 8 which provides
that:
“8. The award issued by the Arbitrator(s) shall be final
and binding on the parties and shall form an intergral part of the Collective
Bargaining Agreement for the Welfare and Educational Institutions – except
Independent Hospitals and International and Local Humanitarian NGOs”.
According to the arbitration agreement the
arbitrators were to be chosen by the parties. The two arbitrators were
appointed. They inquired into the matter of dispute between the parties
and on 19 June 2009 handed down their award. The respondent was dissatisfied
with the award. It noted an appeal on 30 June 2009. On 10 July an
application for review of the award was made to the same court. The
respondent applied for an interim order suspending the implementation of the
arbitral award pending the outcome of the appeal. The application was
granted.
The appellant raised a point in limine to the effect that voluntary
arbitration proceedings are not appealable. The learned President
of the Labour Court held that the court a quo had jurisdiction to hear the
application for review and the appeal. Taking the view that the matter
could not be decided on technicalities, she allowed the appeal. It is
against that decision that the appellant has appealed to this Court.
The particulars of the grounds of appeal were stated as follows:
“1.
That the judgment appealed is grossly irregular to the extent that whilst the
parties were heard in limine and the court retired to consider the points
in limine, the judgment grants substantive relief on the issues and
sets no basis for such relief.
2.
The court a quo further erred in assuming jurisdiction in respect of a
matter which was a subject of voluntary arbitration proceedings and so erred in
exercising a power which it does not have under the Labour Act.
3.
The court a quo further erred in entertaining a matter in respect of
which the agreement referring it to arbitration indicated that the award by the
arbitrators would be final and binding and would not be appealable. It so erred
in dealing with such a matter notwithstanding absence of proof that the
arbitrators had departed from the strict standard of honour in making their
award.”
There is no doubt that the procedure adopted by the
respondent in the court a quo was irregular. Neither the Labour Act
[Cap. 20:28] or the Arbitration Act [Cap. 7:15] has any provision granting a
litigant in voluntary arbitration proceedings a right of appeal against an
arbitral award granted in those proceedings. Both statutes do not provide
for the remedy of an application for review of such an arbitral award to the
Labour Court. The respondent sought to rely on ss 89 (1) and 89(1)(d1) of
the Labour Act [Cap. 20:28].
Section 89(1) of the Labour Court provides:
“89 Functions, powers and jurisdiction of
Labour Court:
(1)
The Labour Court shall exercise the following functions—
(a)
hearing and determining applications and appeals in terms of this Act or
any other enactment; and
(b)
hearing and determining matters referred to it by the
Minister in terms of this Act; and
(c)
referring a dispute to a labour officer, designated agent or a person
appointed by the Labour Court to conciliate the dispute if the Labour Court
considers it expedient to do so;
(d)
appointing an arbitrator from the
panel of arbitrators referred to in subsection (6) of section ninety-eight
to hear and determine an application;
(d1)
exercise the same powers of review as would be exercisable by the High Court in
respect of labour matters;
(e)
doing such other things as may be assigned to it in
terms of this Act or any other enactment.”
There was confusion on whether the court dealt with an appeal or review.
Mrs Nyakabau for the respondent believed it was an appeal. The
confusion arose from the fact that the judgment of the court a quo at
one point refers to the same person as the appellant and the
applicant. In the end the judgment says that “the appeal therefore
succeeds”. One is left wondering whether the court is dealing with an
appeal or an application for review.
The question for determination is therefore whether s 89 provides for the
hearing of an appeal from a voluntary arbitration award. The words “in
terms of this Act or any other enactment” limit the powers of the exercise of
the functions of hearing and determining to grounds raised in an application
and appeal made or noted in the exercise of a right given under the Act or any
other enactment. There should be a provision in the Act or any other
enactment giving the party the right to make the application or note the appeal
to the Labour Court before it can exercise the power to hear and determine the
matter as an application or appeal.
The Labour Court has the power to hear and determine an appeal from a
compulsory arbitration award because the appeal would have been noted in
accordance with the right of appeal given by s 98(10) of the Act. The
Labour Court would be exercising the power of hearing and determining an appeal
validly placed before it in the exercise of a right of appeal given by the
Act. A right to appeal is a statutory right which must be created by the
statute by which a court is established or by any other enactment.
In NRZ v Zimbabwe Railway Artisans' Union &
Ors 2005(1) ZLR 341 (S) ZIYAMBI JA at 346F-347D said:
“There is, I think, judging from the cases which have come
before us, a misconception generally held by the Labour Court, namely, that it
is, in terms of s 89 of the Act, endowed with jurisdiction to entertain all
applications brought before it.....Thus before an application can be
entertained by the Labour Court, it must be satisfied that such an application
is an application “in terms of the Act or any other enactment. This necessarily
means that the Act or the other enactment must specifically provide for
applications to the Labour Court, of the type that the applicant seeks to
bring; see PTC v Chizema S-108-04...thus the application and the
remedies obtainable thereby must be authorised in the Act...nowhere in the Act
is the power granted to the Labour Court to grant an order of the nature sought
by the respondents in the court a quo...”
The observation made in respect of applications
having to have been made in terms of rights given by the Act or any other
enactment applies to appeals. An application or appeal to a court or
tribunal is a remedy which exists because there is a statutory right to use it
to seek relief. For the court to exercise the right to review a decision
of the Arbitrator as provided by S 89(1) (d)(1) there has to be a valid
application for review in terms of the Act or any other enactment as provided
by s 89(1).
Consistent with the meaning of s 98(1)(a) of the Act,
s 98(10) provides that an appeal on a question of law shall lie to the Labour
Court from any decision of an arbitrator appointed to hear and determine a
dispute referred to him or her for compulsory arbitration. The fact that
s 98(10) of the Act gives a limited right to appeal on a question of law
underscores the fact that a right of appeal is a statutory creation and its
ambit will depend on the terms of the statute creating it.
If the words “in terms of this Act...” as used in
s 89(1)(a) of the Act did not mean an appeal noted in the exercise of a
right of appeal under the provisions of the Act s 98(10) would have no
bearing on the question of the validity of the exercise of the power to hear
and determine an appeal from a decision of an arbitrator in compulsory
arbitration proceedings. The provisions of s 98(10) become relevant in
the determination of the question of the validity of the hearing and
determination of the appeal because in terms of the provision there is no right
of appeal against a decision of an arbitrator in compulsory arbitration
proceedings on a question of fact.
Voluntary arbitration proceedings cannot thus be
subjected to either an appeal or review under the Labour Act. Voluntary
Arbitration proceedings are governed by the Arbitration Act. In McKelvey v
Abrahams & Anor 1989 (2) ZLR 251 (SC) GUBBAY CJ at 264C-D
said:
“The object of arbitration, as expressed in para 13 of the
Schedule to the Act, is to arrive at an award that is final and binding on the
parties. Thus an award is not subject to appeal. It may be set aside on any of
the four grounds. First, that it does not fall under para 13 as not being “made
in terms of the Submission”. Second, if the arbitrator has misconducted the
proceedings, as envisaged in s12 (2) of the Act. Third, where it has been
improperly procured (vide the same subsection). Fourth, where the arbitrator's
mistake is so gross and manifest that it could not have made without some
degree of misconduct.”
see McKenzie NO v Basha 1951 (3) SA 783 (N)
at 786A-B.
The parties agreed that the award would be
final. The award would not be final if any of the parties had a right to
appeal. In Ropa v Reosmart Investments (Pvt) Ltd & Anor
2006 (2) ZLR 283 (S) GWAUNZA JA at 286B-C said:
“In addition to this, I found to
be persuasive the submission made for the respondent, that the effect of the
arbitral award is to bring to finality the dispute between the parties. The
respondent relied for this submission on the following passage set out in Butler
and Finsen “Arbitration in South Africa; Law & Practice” at p 271:
“The most important legal
consequence of a valid final award is that it brings the dispute between the
parties to an irrevocable end; the arbitrator's decision is final and there is
no appeal to the courts. For better or worse, the parties must live with the
award, unless the arbitration agreement provides for a right of appeal to
another arbitral tribunal. The issues determined by the arbitrator become res
judicata and neither party may reopen those issues in a fresh arbitration
or court action”.
This position applies with equal force in Zimbabwe.”
See also Monticello (Pvt) Ltd v Edgerton
1981 ZLR 292 (GD).
It is trite that where parties make submissions to
arbitration on the terms that they choose their own arbitrator(s), formulate
their own terms of reference to bind the arbitrator and agree that the award
will be final and binding on them, the court of law will proceed on the basis
that the parties have chosen their own procedure and that there should not be
any interference with the results. See Zesa v Maposa
1999(2) ZLR 452(SC). Even in cases of misconduct of proceedings by the
arbitrator, the court would be reluctant to interfere, save in certain limited
instances in which an award is against public policy. The standard is
high.
What public policy entails has been subject to judicial
comment. In ZESA v Maposa it was held that:
“An award would be contrary to public policy if –
(a)
It was induced by fraud or corruption;
(b)
A breach of natural justice occurred. The substantive effect of an award
may also make it contrary to public policy, if, for example, it endorsed the
break up of a marriage or some criminal act.
It was held, further, that the approach to be adopted is to construe the public
policy defence, as being applicable to either a foreign or domestic award,
restrictively in order to preserve and recognise the basic objective of
finality in all arbitrations, and to hold such defence applicable only if some
fundamental principle of the law or morality or justice is violated. An award
will not be contrary to public policy merely because the reasoning or
conclusions of the arbitrator are wrong in fact or in law. Where, however, the
reasoning or conclusion in an award goes beyond mere faultiness or
incorrectness and constitutes a palpable inequity that is so far reaching and
outrageous in its defiance of logic or accepted moral standards that a sensible
and fair minded person would consider that the conception of justice in
Zimbabwe would be intolerably hurt by the award, then it would be contrary to
public policy to uphold it. The same consequences apply where the arbitrator
has not applied his mind to the question or has totally misunderstood the
issue, and the resultant injustice reaches the point mentioned.”
The Arbitration Act is clear that the only court that has
jurisdiction in those limited circumstances is the High Court, not the Labour
Court, and expressly grants jurisdiction to the High Court. Article 34 of
the Model Law provides recourse against voluntary arbitration awards. It
provides as follows:
“(1) Recourse to a court against an arbitral award may be
made only by an application for setting aside in accordance with paragraphs (2)
and (3) of this article.
(2) An
arbitral award may be set aside by the High Court only if—
(a)The party making the application
furnishes proof that—
(i)
A party to the arbitration agreement referred to in article 7 was under
some incapacity; or the said agreement is not valid under the law to which the
parties have subjected it or, failing any indication on that question, under
the law of Zimbabwe; or
(ii)
The party making the application was not given proper notice of the appointment
of an arbitrator or of the arbitral proceedings or was otherwise unable to
present his case; or
(iii)
The award deals with a dispute not contemplated by or not falling within
the terms of the submission to arbitration, or contains decisions on matters
beyond the scope of the submission to arbitration, provided that, if the
decisions on matters submitted to arbitration can be separated from those not
so submitted, only that part of the award which contains decisions on matters
not submitted to arbitration may be set aside; or
(b)The High Court finds, that—
(i) The
subject-matter of the dispute is not capable of settlement by arbitration under
the law of Zimbabwe; or
(ii)
The award is in conflict with the public policy of Zimbabwe.
(3)
An application for setting aside may not be made after three months have
elapsed from the date on which the party making that application had received
the award or, if a request had been made under article 33, from the date on
which that request had been disposed of by the arbitral tribunal.
(4) The High Court,
when asked to set aside an award, may, where appropriate and so requested by a
party, suspend the setting aside proceedings for a period of time determined by
it in order to give the arbitral tribunal an opportunity to resume the arbitral
proceedings or to take such other action as in the arbitral tribunal's opinion
will eliminate the grounds for setting aside.
(5) For
the avoidance of doubt, and without limiting the generality of paragraph (2)
(b) (ii) of this article, it is declared that an award is
in conflict with the public policy of Zimbabwe if—
(a) The
making of the award was induced or effected by fraud or corruption; or
(b)
Breach of the rules of natural justice occurred in connection with the making
of the award.”
It is clear that the court a quo did not have jurisdiction to
entertain the appeal and application for review of the award made in voluntary
arbitration proceedings.
For these reasons the appeal was allowed and the
following order given:
1.
The appeal succeeds with costs.
2.
The judgment of the court a quo is set aside and substituted with the
following order.
3.
“Both the appeal and application for review are dismissed with costs.”
ZIYAMBI JA:
I agree
GOWORA
JA: I agree
Messers Gonese & Majome, appellant's legal
practitioners
Messers Gill Godlonton & Gerrans,
respondent's legal practitioners
