The pursuit of the hopeless case – the Labour Court gets tough
In recent months the Labour Court has signalled on more than one occasion that its processes are not to be abused by litigants. The Court’s articulation of this principle comes in response to an increasing number of meritless disputes which are being pursued or defended at the Labour Court. Such ‘hopeless’ cases create unnecessary delays in the adjudication of disputes, negatively impact on the Court, its judges and other litigants and prevent genuine disputes from being resolved timeously in accordance with the principle of expeditious dispute resolution espoused by the Labour Relations Act 66 of 1995, as amended (“the LRA”). We set out some of the pertinent issues in this recent development as they are particularly relevant to attorneys.
The LRA and the CCMA
The problem articulated by the Labour Court does not, however, start there. Hopeless cases often have their origin in the noisy halls of the CCMA where the informal nature of the CCMA’s procedures and processes allows laypersons, often with little or no understanding of the law or the merits of their claim, to refer disputes with relative ease and without obtaining an informed, preliminary view of their prospects of success.
The LRA’s dispute resolution mechanisms were a conscious and laudable attempt to ensure easy, cheap and quick resolution of employment-related disputes. Those provisions were, presumably, drafted on the assumption that only persons who had genuine disputes would seek to invoke the provisions of the LRA. That was some 25 years ago and the general consensus amongst practitioners is that the CCMA is struggling to cope with the workload.
Employees have made good use of the LRA’s simple dispute resolution mechanisms. The CCMA’s Annual Report for 2017 records that 188 449 disputes were referred to the CCMA during the 2016/2017 year, representing an increase of 5% or an additional 745 new referrals every working day compared to the previous financial year. Given the recent amendments to our employment legislation, the CCMA’s caseload is also likely to increase substantially this year.
The LRA’s dispute resolution machinery is set out in section 135 of the LRA. It requires conciliating commissioners only to ‘attempt’ to resolve a dispute using a variety of techniques. In reality, many Commissioners approach conciliation in a mechanical fashion without much engagement with the merits, perhaps weary of the Labour Court’s warnings about overstepping the line in the well-known case of Kasipersad v CCMA and Others (2003) 24 ILJ 178 (LC).
Nevertheless, Commissioners are not empowered, in terms of the LRA, to dispose of meritless cases at the conciliation stage. They must instead rely on their ability to resolve disputes to prevent meritless cases from progressing any further than conciliation. While there are a number of techniques to adopt during conciliation proceedings, the resolution of a dispute is not always possible, even where cases have no merit. Of the figures cited by the CCMA, it is not clear how many of the disputes had any merit. The fact that 68% of those disputes were settled at conciliation may perhaps be an indicator, but this is certainly not definitive.
If the dispute cannot be resolved at conciliation, Commissioners will complete the LRA 7.12 form and the election to pursue the dispute further again falls to the employee. Notwithstanding the high number of settlements at conciliation stage, there are still a substantial number of disputes which progress to the Labour Court, either for adjudication or, eventually, as a review of an arbitration award.
The Court has recently commented that ‘a significant number’ of the disputes on the Court’s motion roll are ‘unarguable or hopeless cases’. The Labour Court has found that when those disputes reach the Court and the litigants are represented by attorneys, advocates, union officials or representatives from employers’ organisations, an obligation not to pursue meritless litigation falls on them.
The Labour Court intervenes
While notoriously soft when it comes to making costs orders against unsuccessful litigants, the Labour Court appears to have drawn the line in the sand. A host of cases have emerged in recent months where the Labour Court has come down harshly on litigants (and their legal representatives) who have sought to advance hopeless cases. The focus in these cases has primarily been on the conduct of the legal representatives who assisted the parties in pursuing such meritless litigation.
In Mashishi v Mdladla & Others (2018) 39 ILJ 1607 (LC) the Labour Court was faced with a review application which was filed some five years late. The employee had failed to explain the delay and his prospects of success were non-existent, having been dismissed by his employer after admitting to seven counts of unauthorised payments to suppliers. The Labour Court made it clear that it is improper for persons with right of appearance in the Labour Court, including attorneys, advocates and officials from Unions and Employers’ Organizations, to act for a client or member in respect of a claim or a defence which is hopeless on the facts or in law. In this matter, the Court found that as a matter of professional ethics and conduct, the attorney should have declined to file the application, regardless of the employee’s instructions.
While not referring to the dispute as a hopeless case, the Labour Court in Kabe v Nedbank Ltd (2018) 39 ILJ 1760 (LC) nevertheless reiterated the importance of costs orders as a tool to deter frivolous and vexatious disputes. The employee had been dismissed for poor work performance but sought to suggest that her dismissal was automatically unfair because she had made a protected disclosure or had exercised her right to refer an unfair labour practice dispute. The Court found that there was no evidence to reach such a conclusion and granted absolution from the instance. In deciding to award costs against the employee, the Court indicated that the pursuance of frivolous disputes negatively affects the administration of justice and the business of the Court and its judges.
In Sepheka v Du Point Pioneer (Pty) Ltd (unreported, J267/18, 9 October 2018) the Labour Court reiterated that legal practitioners are part of a profession that demands “complete professionalism, honesty, reliability and integrity from its members” and that an Order of costs de bonis propriis conveys the Court’s displeasure when these objectives are not adhered to. The Court found that these objectives inherently demand that legal practitioners comply with their ethical duties toward the Court by refraining from prosecuting or defending hopeless cases in the pursuit of, presumably, pure financial gain.
In Ntombela & 49 Others v UNTU & Others (unreported, D1724/18, 6 November 2018) the Labour Court again advocated the expeditious resolution of employment disputes and reiterated that cases without merit would be “visited with adverse consequences”. In this case, the Court attributed an ulterior motive to the conduct of the applicants in approaching the Court on an urgent basis whilst knowing that they had no prospects of success. The Court found that such conduct constituted an abuse of the Court’s process and violated the purpose and spirit of the LRA.
Similarly in the recent case of Petersen v Eskom Pension and Provident Fund (unreported, JS130/17, 14 February 2019) the employer unsuccessfully raised a special plea of waiver only some two days prior to the commencement of a five-day trial. This was in circumstances where the Pre-Trial Minute had recorded that there were no preliminary points to be taken. The Labour Court remarked that due to the limited resources available to it, special pleas should be dealt with timeously before the commencement of the trial. The conduct of the employer, in this case, had negatively impacted the expeditious resolution of disputes. The Court remarked that the employer’s special plea was “dressed up to look like something with substance, however being stripped of its dress, it [was] nothing but an opportunistic attempt by the Respondent to delay the trial proceedings”. Costs were awarded against the employer on a punitive scale. Subsequently, the employer filed an unsuccessful application for leave to appeal and unsuccessfully sought to petition the Labour Appeal Court.
It appears that the ceaseless tide of disputes being referred to the CCMA by disgruntled employees is unlikely to abate, absent a legislative amendment. Other than using their powers of persuasion to reach a settlement, there is, unfortunately, no effective tool for Commissioners of the CCMA to dispose of meritless disputes at an early stage.
Legal practitioners and others who have been granted a right of appearance in the Labour Court should neither encourage nor assist their clients or members in pursuing a claim or a defence which is frivolous, vexatious or hopeless. The warning sounded by the Labour Court in Mashishi is clear:- “… those who appear in this court should be aware that in future, the pursuit of the hopeless case will attract consequences”.
Published in Without Prejudice