Arbitration awards and what you need to know

An arbitration award is a legally binding decision issued and handed down by a commissioner in either the Commission for Conciliation, Mediation and Arbitration (CCMA), or a Bargaining Council.  These awards usually specify the outcome of the dispute and are issued after the parties have concluded their arbitration proceedings at the CCMA or Bargaining Council. For the commissioner to conclude the matter the parties must state their cases and produce all their evidence relevant to the matter during the arbitration proceedings. It is critical to understand that these awards are binding on all parties to the proceedings and can be legally executed in the event of non-compliance.

When the arbitration award is issued

Once process is concluded the arbitration award will be issued within a couple of weeks and, if the employee was successful the award will contain remedial action against the employer such as to pay the employee compensation, or to re-instate or re-employ the employee.

After the award has been issued and the employer has not complied with the award, the employee may elect to enforce the award against the employer to secure compliance with it.

Enforcing an arbitration award

Section 143 of the Labour Relations Act, Act 66 of 1995 as amended (LRA), provides an effective and accessible way to enforce an arbitration award if the award has not been complied with. The LRA allows a certified award to be enforced as if it was an order of the Labour Court in respect of which a writ has been issued, unless it is an advisory arbitration award.

Arbitration awards can be referred to the director of the CCMA for certification and this is done on application by the party seeking enforcement. The process to certify the arbitration award changes the award into an executable legal document, which allows for enforcement through the court system.  Therefore, without certification the award cannot be enforced as an order of the court.

Non-compliance

Employers should note that non-compliance with arbitration awards can be very risky. Once certified, the arbitration award can be enforced in the same manner as an order of the Labour Court, or Magistrate’s Court. Essentially enforcement methods can include a writ of execution for the attachment of property, garnishee orders, or contempt of court proceedings.

In cases where a written undertaking, or a compliance order, has not been honoured by either party against whom the order has been issued, an application or request may be made to the CCMA to make the undertaking, or compliance order, an arbitration award in terms of sections 68(3) or 73(1) of the Basic Conditions of Employment Act, Act 75 of 1997 as amended (BCEA).

In terms of section 143(5) of the LRA an arbitration award that orders the payment of a sum of money, is to be enforced or executed as if it is an order of the Magistrate’s Court. Where an arbitration award orders the performance of an act other than the payment of money (e.g. reinstatement), any party to the award may, without further order, enforce it by way of contempt proceedings instituted at the Labour Court.

It is of paramount importance for employers to ensure that they are present at the arbitration itself and present their case to the best of their ability.  If an award is issued against the employer, it is of vital importance that the employer get advice from a labour advisor on the award, so that they can look at options to challenge the award, or alternatively to ensure they comply with the award within the specified time period to avoid any further repercussions for non-compliance.

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