Amalgamated Clothing and Textile Workers Union of South Africa v Veldspun (Pty) Ltd

• Jurisdiction: South Africa

Amalgamated Clothing and Textile Workers Union of South Africa v Veldspun (Pty) Ltd
1994 (1) SA 162 (A)

1994 (1) SA p162

Citation	1994 (1) SA 162 (A)
Case No	97/92
Court	Appellate Division
Judge	Corbett CJ, SMALBERGER JA, EKSTEEN JA, GOLDSTONE JA and KRIEGLER AJA
Heard	September 20, 1993
Judgment	September 30, 1993

Flynote : Sleutelwoorde G

Arbitration — The award — Finality of — Where parties refer matter to arbitration, unless submission provides otherwise, they implicitly abandon right to litigate in courts of law and accept that they will be finally bound by arbitrator's decision — Courts should in no way discourage H parties resorting to arbitration — Courts should deprecate conduct by party to arbitration who fails to do everything in his power promptly and in good faith to implement arbitrator's decision.

Arbitration — The award — Review of — Grounds for review — Court empowered I to intervene only in cases falling within provisions of s 33(1) of Arbitration Act 42 of 1965 — Grounds upon which Court will set award aside thus very narrow

Arbitration — The award — Review of — Grounds for review — Misconduct by arbitrator — Word 'misconduct' not extending to bona fide mistake by arbitrator as to fact or law — Only where mistake so gross or manifest as J to evidence misconduct or partiality that Court might

1994 (1) SA p163

A move to vacate award — Even gross mistake insufficient to warrant interference unless it establishes mala fides.

Labour law — Relationship between trade union and employer — Referral of disputes to arbitration — Where matter referred to arbitration, unless submission provides otherwise, parties implicitly abandon right to B litigate in courts of law and accept that they will be finally bound by arbitrator's decision — Such course especially commendable in labour field — Advantageous to all parties and in interests of good labour relations to have binding decision speedily and finally made — Courts should in no way discourage parties resorting to arbitration — Courts should deprecate C conduct by party to arbitration who fails to do everything in his power promptly and in good faith to implement arbitrator's decision.

Arbitration — The arbitrator — Parties referring to arbitrator question 'whether (he) can arbitrate on introduction of closed shop agreement' — Since very question as to his jurisdiction referred to arbitrator, parties D bound by his finding that he had such jurisdiction.

Labour law — Labour Relations Act 28 of 1956 — Unfair labour practice — What constitutes — Closed shop agreement — Prior to introduction of para (j) in definition of 'unfair labour practice' in s 1 of Act by s 1(h) of Labour Relations Amendment Act 83 of 1988, even 'hard' form of closed shop E not contrary to common law — Such agreement also sanctioned by s 24(1)(x) of Act and not contrary to public policy — Introduction of para (j) to such definition not having effect of making closed shop agreement covered by its terms contrary to public policy — Closed shop arrangement not as matter of principle contrary to public policy. F

Labour law — Labour Relations Act 28 of 1956 — Unfair labour practice — What constitutes — Act intending industrial court to have exclusive jurisdiction to determine what constitutes unfair labour practice — Industrial court in so doing determining not a question of law or fact but passing a moral judgment on combination of findings of fact and opinion — G As issue whether practice an unfair one would not come before Court of law save on review, Court of law should refrain from deciding whether any agreement or conduct an unfair labour practice unless strictly necessary for decision of dispute before it — Award in arbitration providing for introduction of closed shop agreement — Even if award constituted unfair labour practice, such would not be struck down by Court unless inevitable H that industrial court would do so — As industrial court not necessarily obliged to do so, not inevitable that it would do so.

Labour law — Labour Relations Act 28 of 1956 — Closed shop agreement — Implementation of — Validity of — Closed shop agreement introduced in I terms of award in arbitration between employer and trade union — Implementation thereof necessitating employer contravening certain provisions of Basic Conditions of Employment Act 3 of 1983 — Employer entitled to approach Minister under s 34(1) of Act for exemption — J Employer having duty to do all it reasonably could to implement award.

1994 (1) SA p164

Headnote : Kopnota

A Where parties agree to refer a matter to arbitration, unless the submission provides otherwise, they implicitly, if not explicitly, abandon the right to litigate in courts of law and accept that they will be finally bound by the decision of the arbitrator. There are many reasons for commending such a course, and especially so in the labour field where it is advantageous to all the parties and in the interests of good labour relations to have a binding decision speedily and finally made. The Courts should in no way discourage parties from resorting to arbitration and B should deprecate conduct by a party to an arbitration who does not do all in his power to implement the decision of the arbitrator promptly and in good faith. (At 169F-H.)

The basis upon which a Court will set aside an arbitrator's award is a very narrow one. It is only in those cases which fall within the provisions of s 33(1) of the Arbitration Act 42 of 1965 that a Court is empowered to intervene. If an arbitrator exceeds his powers in making a determination outside the terms of the submission, that would be a case falling under s 33(1)(b). As to misconduct, it is clear that the word does C not extend to bona fide mistakes the arbitrator may make whether as to fact or law. It is only where a mistake is so gross or manifest that it would be evidence of misconduct or partiality that a Court might be moved to vacate an award. Even a gross mistake would be insufficient to warrant interference unless it establishes mala fides or partiality. (At 169B, C-E.)

In December 1988 a proposal by the appellant that the respondent agree to implement a closed shop covering all weekly paid employees was referred to D arbitration. The arbitrator's terms of reference were, inter alia, 'whether (he) can arbitrate on the introduction of a closed shop agreement and, if so, whether a closed shop agreement should become binding on the parties in the event of the union representing 80% or more of the company's weekly paid employees by 31 March 1989'. The arbitrator's award was to the effect that (a) it was competent for an arbitrator to arbitrate on the introduction of a closed shop agreement, and (b) that 'in the event E of the union becoming representative of 80% or more of the company's weekly paid employees by 31 March 1989, the company shall not continue to employ any weekly paid employee who, while being eligible for membership of the union, does not become a dues-paying member of the union within 90 days of 31 March 1989 or within 90 days of his commencing employment with the company (whichever is the later) unless such employee authorises the company to deduct from his weekly wage an amount equivalent to the dues F payable by union members from time to time and such amount is, upon deduction, paid over by the company to a charity agreed upon between the company and the union'.

The respondent's appeal to a Full Bench against the dismissal of its application in a Local Division to have the arbitrator's award set aside succeeded. In a further appeal, it was argued for the respondent that (a) the arbitrator had exceeded his powers by making provision for an arrangement not covered by the submission; and (b) that the arbitrator had misconducted himself in relation to his duties by making an award which G would (i) constitute an 'unfair labour practice' as defined in s 1(j) of the Labour Relations Act 28 of 1956 (inserted into the Act by s 1(h) of the Labour Relations Amendment Act 83 of 1988 and subsequently deleted by s 1(a) of the Labour Relations Amendment Act 9 of 1991); (ii) be contrary to public policy; (iii) in its implementation require the employer to commit a criminal offence by contravening s 18 or s 19 of the Basic Conditions of Employment Act 3 of 1983. As to whether the arbitrator had exceeded his powers, it was argued by the respondent that the term 'closed H shop agreement' in the submission to arbitration had been a reference only to a 'hard' closed shop, whereas the arbitrator's award had provided for a 'soft' closed shop.

Held, that the parties had referred to the arbitrator the very question as to his jurisdiction to make a determination on a closed shop and that they were bound by his finding that he had the power to do so. (At 169E.)

Held, further, that it was clear from both South African and foreign literature that the term 'closed shop' was a generic one and that there I were various forms of closed shop. (At 171E.)

Held, therefore, that, on the plain meaning of the words, the reference to a closed shop agreement in the submission to arbitration had not been limited to the 'hard' as opposed to the 'soft' variety of closed shop; and that on this ground alone the appellant's contention had to fail. (At 171E/F.)

Held, further, that, even if it were found that the term 'closed shop agreement' was ambiguous, it was clear from the negotiations which had J preceded the submission

1994 (1) SA p165

A to arbitration that the type of agreement referred to in the award had been contemplated by the parties: in fact, the only reason advanced by the appellant trade union, during the negotiations, for wishing to have a closed shop had been in order to deal with the problem of the 'free rider'. (At 171F-G and H-I.)

Held, accordingly...