A costly lesson for those who wilfully defy the legal bindings of an Arbitration Award.

The act of contempt may manifest itself in various forms by parties during the processes of the CCMA and Bargaining Councils. However, contempt is not limited to conduct during the process, as parties may still find themselves in contempt should they wilfully refuse to comply with an Arbitration Award issued against them. The Labour Relations Act (LRA) in Section 143(1) and (3) provides that any Arbitration Award issued by a Commissioner and certified by the CCMA Director is final and binding.

Section 143(4) of the Labour Relations Act provides that: “If a party fails to comply with an Arbitration Award certified in terms of subsection (3) that orders the performance of an act other than the payment of money, any other party to the award may, without further order, enforce it by way of contempt proceedings instituted in the Labour Court.”

The case of ECCAWUSA obo Kelvin Moyo v Super Spar – Polofields and Magnus Loubser (J547/22) [Delivered 4 August 2023] (LC) provides a valuable answer to the question that often arises as to what happens when a Commissioner has awarded reinstatement to the Applicant and the Respondent wilfully refuses to comply. Honourable Judge Moshoana emphasised the importance of compliance with certified Arbitration Awards with a stern contempt of Court order.

In this matter, the second Respondent, Mr Loubser, received an Arbitration Award on 08 March 2022, ordering the reinstatement of the Applicant, Mr Moyo. On 09 March 2022, as per the Arbitration Award, the Applicant tendered their services, but the Respondent refused to reinstate them. The Applicant’s representative informed Mr Loubser of the existing Arbitration Award that the Applicant tendered their services and was refused to return to work. The representative thus demanded the Respondents comply with the certified Arbitration Award, failing which contempt proceedings would be launched.

The Respondents’ continued refusal to comply with the Arbitration Award and the demands of the Applicant’s representatives led to contempt proceedings being pursued at the Labour Court. The Labour Court had a duty to determine:

(a) If there is an exciting order.

(b) The order must be duly served on or brought under the notice of the contemnor.

(c) There must be non-compliance with the order.

(d) The non-compliance must be willful and mala fide.

When assessing the evidence before the Court, the Judge found that Mr Loubser was informed of the existing Arbitration Award before the proceedings commenced. Mr. Loubser was already aware of the award a year before the Court’s proceedings and yet failed to ensure that the Applicant was reinstated. This conduct was found to suggest harassment of the Applicant. The Judge further found that the Respondent's opposition to the compliance proceedings was frivolous and vexatious as an unsubstantiated defence was tantamount to an abuse of Court processes.

The Court held that Mr. Loubser, as the director of SuperSpar – Polofields, was guilty of the civil offence of contempt of Court by their conduct of continuously failing to ensure that the Arbitration Award to reinstate the Applicant was complied with. The order held the Respondent liable for the costs of the application and further imposed a fine of R1 000 000.00 (One Million Rand) payable to the Registrar of the Court. The fine was wholly suspended on the condition that Mr Loubser ensures that SuperSpar – Polofields complies with the Arbitration Award within thirty (30) days of the order.

The Court’s judgement reinforces the legal bindings of an Arbitration Award and the costly consequences employers may suffer if they fail to comply with an Arbitration Award issued against them. Notably, the Respondents in this case did not challenge the Arbitration Award by lodging a Review application at the Labour Court. 

Article by:

Christie de Villiers | Dispute Resolution Official at Consolidated Employers Organisation (CEO SA)
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