The recent judgment of the Labour Appeal Court (LAC) in Mbeje and Others v Department of Health: KwaZulu-Natal and Others (DA33/2022) [2024] ZALAC highlighted the role, and binding nature of, pre-arbitration minutes in labour disputes.

The court was seized with an appeal against the judgment and order of the Labour Court (LC or the court a quo). The LC dismissed the review of the arbitration award that found the employees’ dismissal to be fair.

Facts

The appellants (the employees) were employed by the KwaZulu-Natal Department of Health in its Emergency Medical Services Unit and performed an essential service. Notwithstanding that essential services may not strike, the employees engaged in an unprotected strike, for which they were dismissed.

Prior to their dismissals, the employees were given a first and then second ultimatum to return to work, together with a notice to attend a disciplinary hearing. The employees who complied with the second ultimatum were given final written warnings. However, the employees who failed to heed the employer’s demands to return to work, were dismissed. The second group of employees referred alleged unfair dismissal disputes to the relevant bargaining council.

Pre-arbitration minute

The employees were represented by the National Union of Public Service and Allied Workers at arbitration. The parties agreed in their pre-arbitration minute that the dispute exclusively concerned “the harshness of the sanctioning in relation to the nature of the offence”.

In other words, the issues before the bargaining council at arbitration were limited to only the appropriateness of dismissal as a sanction in the circumstances.

Arbitration

However, notwithstanding the scope agreed to in the pre-arbitration minute, the employees raised a new issue before the arbitrator. The employees alleged that the employer had applied discipline inconsistently by dismissing them while the striking employees who returned to work received final written warnings. This, the employees claimed, was because they had not received the ultimatums or the notice to attend the disciplinary hearing and therefore could not have complied with them. The arbitrator entertained such evidence despite the content of the pre-arbitration minute.

Notwithstanding such evidence, the arbitrator found that the violence and the damage which arose from the unprotected strike meant that the actions of the employees “were of such a serious nature that they warrant a sanction of dismissal”.

LC review and LAC appeal

On review of the award by the union, the LC upheld the arbitration award. That said, the dispute before the LC concerned the receipt of the ultimatums and the consistency of discipline and not the appropriateness of the sanction, being the agreed sole issue in dispute in terms of the pre-arbitration minute.

On appeal to the LAC, the LAC held that deviation from the pre-arbitration minute by the employees, in raising the issue of inconsistency, was impermissible. The LAC dismissed the appeal and found that the outcome reached by the arbitrator was reasonable.

The importance of pre-arbitration minutes

In terms of Rule 20(1) of the Rules for the Conduct of Proceedings before the Commission for Conciliation, Mediation and Arbitration, parties must hold a pre-arbitration conference when they are represented, when they agree to do so, or when they are directed to do so. The purpose of this conference is to reach consensus on, inter alia, the facts that are agreed and that are in dispute, the issues to be decided by the arbitrator, and any other issues set out in Rule 20(3).

In terms of Rule 20(4) read with Rule 20(5), the parties must draw up and sign a pre-arbitration minute setting out the facts on which the parties agree or disagree and may also include any other matter listed in Rule 20(3). Accordingly, the parties are not obliged to enter into a pre-arbitration minute except in one of the above three scenarios, and the minute needs to only set out, at a minimum, the facts which are agreed or disputed.

In Mbeje, the LAC confirmed the position in our law that the pre-arbitration minute is a document that binds both the parties and the arbitrator to the issues embodied in the document. This involves an important and highly beneficial narrowing of the scope of issues from those already pleaded, if any.

The obvious benefit of a pre-arbitration minute is to identify the substantive and procedural matters that are common cause and to limit the issues in dispute. This prevents a party from going on a fishing expedition by introducing a litany of issues at the arbitration proceedings to secure some sort of relief.

A pre-arbitration minute assists a party in the following ways:

• in deciding how to prepare a defence;
• in identifying and limiting the witnesses to be called; and
• in the preparation of cross examination.

A significant risk of not having a pre-arbitration minute is that a party may go into the proceedings without certainty of what to defend. As a result, the scope of the dispute may become intractably wide as the parties may go into a hearing without even agreeing on what the issues are or what the nature of the dispute is.

Conclusion

The importance of a pre-arbitration minute cannot be understated. This judgment by the LAC emphasises the status and the binding effect of the pre-arbitration minutes on the parties and on the arbitrator. The pre-arbitration minute can make an immense difference in saving time and costs occasioned by protracted and potentially unnecessary proceedings by limiting the issues to be decided by the arbitrator from the very first step. This will allow the parties to direct their preparation based on the key issues and to place themselves in the best position for putting forward a successful case

Written by Professor Hugo Pienaar, Director and Denzil Mhlongo, Candidate Attorney at Cliffe Dekker Hofmeyr