This is an appeal against the whole judgment of the Labour
Court dismissing an application for review of a decision of the National
Employment Council for the Leather Industry (“NEC”). The NEC declined to hear
the appellant's application for an exemption from the terms of an arbitral
award in favour of the second respondent on the basis that it lacked
jurisdiction.
The facts of this matter are largely common cause.
The employers in the tanners and shoe manufacturing
industry, of which the appellant was a member, had a wage dispute with
employees in the industry who are affiliated to the second respondent. The
dispute related to the wages for the period 1 July to 31 December 2010. The
conditions of employment for the employees were governed by the Collective Bargaining Agreement: Leather and Shoe, Sports Equipment,
Animal Skin Processing and Taxidemy, Leather Goods, Travel and Canvas Goods
Manufacturing Industries, SI 246/1993 (“CBA”). Collective bargaining
negotiations were held under the chairmanship of the first respondent, NEC, and
ended in a deadlock. The result was that the NEC, following an agreement
jointly signed by and on behalf of the employers' and employees' representative
associations, referred the matter for voluntary arbitration. A panel of two
arbitrators, one appointed by the employers' association and the other by the
second respondent, duly heard the matter and made an award in terms of which
they ordered the employers to effect a 9.1 per cent wage increase across the
board in respect of their employees for the relevant period. Pursuant to this
award, the NEC issued a wage increase notice for the said period which was to
be observed by all employers.
On 11 November 2010, the appellant purported to file a
written application with the NEC, in terms of section 2 of the Collective Bargaining Agreement: Leather and Shoe, Sports Equipment,
Animal Skin Processing and Taxidemy, Leather Goods, Travel and Canvas Goods
Manufacturing Industries, S.I.246 of 1993, seeking exemption from
implementing the stipulated wage increase. The basis of the application was
given as the lack of financial capacity to comply with the award. Proof of such
incapacity was furnished together with the application.
The matter was considered by a sub-committee of the NEC
which, upon failing to reach agreement, referred it to full Council. The Council
met on 1 March 2011 and, without going into the merits of the dispute, issued a
decision to the effect that they had no jurisdiction to consider an application
requiring them to interfere with an arbitral award. The appellant then
approached the court a quo with an
application for review of the NEC's refusal to entertain the matter on the merits.
The court dismissed the application, having reasoned as follows;
“The bottom line in this case is that the NEC simply said
that it had no jurisdiction. The applicant agreed that indeed that is a
question of law. With due respect this is where the case ends. There is nothing
grossly irregular about an authority saying that in the circumstances of a
particular case it has no jurisdiction at law. Any party that is not in
agreement with such a view should simply appeal on a point of law as provided
for in the law…,.”
The appeal raises the following issues:-
1. Whether or not the parties agreed to be bound by the
arbitral award?
2. Whether or not the court a quo
erred at law when it held that the decision of the NEC, declining to hear the
matter on the basis that it had no jurisdiction, raised a point of law and was
therefore appealable and not reviewable.
3. Whether the NEC and the Labour Court had jurisdiction to
hear this matter.
The parties, through their authorized representatives,
agreed, in writing, to submit the dispute in question to voluntary arbitration.
They further agreed to be bound by the award resulting from such arbitration.
Specifically, the agreement concerned included a declaration on its last page,
which read in part as follows after the citation of the two parties;
“…..,. Do hereby declare that the Parties shall be bound
with the award from the Arbitration Panel.”…,.
It cannot therefore be disputed that the parties freely and
voluntarily subjected themselves to voluntary arbitration. It was not a term of
the arbitration agreement between them that the award would form an integral
part of the relevant CBA, S.I.246 of 1993, nor that the unsuccessful party would seek
exemption in terms of section 2 of the Collective Bargaining Agreement: Leather and Shoe, Sports Equipment,
Animal Skin Processing and Taxidemy, Leather Goods, Travel and Canvas Goods
Manufacturing Industries, S.I.246 of 1993. It is pertinent in this
respect to note (and counsel for the appellant properly concedes the point),
that the arbitral award was not statutorily incorporated into or made a part of
the Collective Bargaining Agreement: Leather and Shoe,
Sports Equipment, Animal Skin Processing and Taxidemy, Leather Goods, Travel
and Canvas Goods Manufacturing Industries, S.I.246 of 1993. There,
thus, was no basis for relying on the terms of the CBA to seek an exemption
from a provision of the voluntary arbitral award. The two were separate and
distinct in terms of character and effect. The assumption can therefore safely
be made, that it was in the contemplation of both parties that the arbitral
award would not only be final in its effect, but that it would also bind all
employers and employees in the Tanners and Shoe Manufacturing Industry.
The effect of an award of this nature is authoritatively
stated in the case of Zimbabwe Educational Scientific
Social and Cultural Workers Union v Welfare Educational Institutions Employers
Association SC11-13;
“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.”
Indeed, so high is the standard that the only court vested
with jurisdiction, and limited at that, to interfere with a voluntary
arbitration award, is the High Court. It derives this authority from the
Arbitration Act [Chapter 7.15], in particular, Article 34
of the Model Law which provides as follows in its introductory part -
“ARTICLE 34
Application for setting aside as exclusive
recourse against arbitral award
(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
-…,.”…,.
My reading of the provision cited above suggests that
recourse to the High Court is to be made only in cases where one party seeks to
have the arbitral award, or part thereof, set aside, and on the specific
grounds set out therein. It follows from this that unless one seeks to have the
award, or any part thereof, set aside, the award will, for all intents and
purposes, be assumed to have final effect.
In casu, the appellant did not seek to have the
award, or any part thereof, set aside. It sought exemption from the provision
that obliged it to effect the pay rise in question. This is clearly not the
type of 'exclusive relief' envisaged in Article 34 of the Model Law cited
above. The appellant, in any case, did not file its application before the High
Court.
Against this background, I find that the decision by the
NEC, to the effect that it had no jurisdiction to interfere with the arbitral
award, cannot be faulted. It also becomes evident that the court a quo was handicapped in the same way as the NEC, and could
not have properly heard the matter, either as an appeal or an application for
review….,.
Consequently, while the correctness of the dismissal by the
court a quo of the application is beyond
dispute, that decision was nevertheless based on the wrong premise. The option
of an appeal against the NEC's decision was not one that was open to the
appellant. A misdirection on the part of the court a quo is therefore manifest.
It appears to me that the parties, and the court a quo for that matter, misguidedly expended valuable time
on an irrelevant issue of whether the decision made by the NEC was reviewable
or appealable. This appears to have diverted attention from the real dispute,
which simply was whether a voluntary arbitral award was appealable or could
otherwise be interfered with, by any court, given the circumstances of the
case.
In the result, the appeal was found to lack
merit, hence the order of this court to dismiss it with costs. 