THE SUPREME COURT OF NAMIBIA
NO: SA 73/2013
24 NOVEMBER 2015
the matter between:
NAMIBIAN ADMINISTRATORS (PTY) LTD............................Third
DAMASEB DCJ, SMUTS JA and CHOMBA AJA
19 October 2015
24 November 2015
JA (DAMASEB DCJ and CHOMBA AJA concurring):
This appeal concerns the nature and ambit
of a review of an arbitrator’s award under s 89(4) of the
Labour Act 11 of 2007 (the Act). The issue as to whether there had
been a tacit relocation of the appellants’ employment with the
third respondent is also raised in this appeal.
These issues arise in the following way.
The appellants were both employees of the third respondent. They were
dismissed by the third respondent on 28 May 2010 following separate
disciplinary proceedings instituted against each of them.
The appellants each had fixed term
contracts of employment with the third respondent. These ran from 1
April 2007 until 31 March 2010. Their employment with the third
respondent was however dependent upon the latter’s service
agreement to administer the medical aid scheme for public service
employees known as PSEMAS.
After the fixed term had come to an end on
31 March 2010, they continued to work for the third respondent and
were paid for the month of April 2010. On 10 May 2010, the appellants
received a notice dated 5 May 2010 from the third respondent seeking
to extend their contracts of employment until 31 May 2010. The
appellants were informed that the third respondent’s contract
to administer PSEMAS had been renewed and that all positions would be
advertised internally and externally and that the process of
recruitment would be completed by 31 May 2010.
In the meantime, the appellants received
notices of charges to be faced by each of them in disciplinary
hearings to be conducted on 20 May 2010. They both faced separate and
unrelated charges of poor performance and insubordination. They were
each found guilty of contravening those charges and were dismissed
from the service of the third respondent on 28
On 29 June 2010 and 3 August 2010
respectively, the first and second appellants each referred a dispute
of unfair dismissal to the office of the Labour Commissioner.
These referrals proceeded together to
arbitration. The arbitration proceedings were held on 27 November and
13 December 2010. The first respondent was the arbitrator in those
proceedings and made an award on 18 July 2011, finding that both the
appellants had been unfairly dismissed and ordered their
reinstatement to their employment with the third respondent as from 1
August 2011. The arbitrator also ordered the third respondent to pay
to each of the appellants specific amounts reflecting 12 months of
their respective remuneration.
On 17 August 2011 the third respondent
instituted a review application in the Labour Court, seeking to set
aside the award and substituting it for a finding that the
appellants’ dismissal had been fair. The appellants were cited
as respondents in the review application together with the Labour
Commissioner and the arbitrator. The latter two officials did not
oppose the review application. Nor did they oppose or take part in
The review application contains a number of
review grounds, not always stated with clarity or properly supported
by factual material. For the sake of completeness, they are all
referred to even though most were not raised in argument before this
court (or in the court below).
The first review ground raised is one which
is characterised as a gross irregularity. It is contended that the
arbitrator was confused as to the pleas of guilty in the disciplinary
proceedings, which the deponent to the founding affidavit states
occurred in respect of both hearings. It is further stated that, if
the arbitrator had applied his mind to the digital recording of the
disciplinary proceedings, which the deponent says was provided as an
exhibit in the arbitration proceedings, then the confusion would have
been prevented. This, it is stated, resulted in a gross irregularity.
It was conceded that the next ground raised
did not amount to misconduct or a gross irregularity on its own.
The point raised is that the award stated that the referral was in
compliance with ss 82(7) and 86(1)(a)
of the Act. These sections respectively refer to conciliation
and arbitration. It was contended that the reference to both sections
in the award demonstrates confusion on the part of the arbitrator and
the failure to apply his mind properly to the nature of the
proceedings. This point is however placed into its proper perspective
in the answering affidavit, as set out below.
The point is also taken that the
appellants’ employment with the third respondent would have
come to an end on 31 May 2010 and that the arbitrator failed to apply
his mind or exceeded his powers by awarding more than an additional
three days compensation, from the date of dismissal (on 28 May 2010)
to the end of the period of employment, as purportedly extended by
the third respondent (to 31 May 2010).
The third respondent also took a point
concerning the consideration of its heads of argument. In the award,
it is stated that the third respondent had not filed its heads of
argument on the due date and the award was prepared ‘in the
absence of the (third) respondent’s written arguments’.
In the review application, it is stated that heads of argument should
have been filed by no later than 23 December 2010. But it is also
stated that the arbitrator fell ill and that the parties did not file
heads of argument at the time. The third respondent’s heads of
argument were only filed on 5 July 2011. The point is taken that the
failure to consider those heads amounted to bias on the part of the
arbitrator and constituted a gross irregularity.
It was also contended in the review
application that the arbitrator committed a gross irregularity or
exceeded his powers by awarding compensation for a period of 12
months without taking into account that the dismissals took place on
28 May 2010 and that the arbitration proceedings were concluded on 13
December 2010 and that the award was only issued on 18 July 2011 as a
result of the arbitrator’s illness. The point was thus taken
that compensation could and should not have been for a period after
13 December 2010.
The review application concluded that the
arbitrator had acted ‘grossly irregular’ (sic)
as envisaged by s 89(5)(a) and
that the award should be set aside.
The review application was opposed by both
appellants. They filed answering affidavits. They took issue with a
number of factual averments raised in the third respondent’s
founding affidavit in support of the review application. They pointed
out that the reference in the award to ss 82 and 86 was standard
procedure as the arbitrator had first engaged in conciliation before
proceeding to arbitrate the dispute, as is expressly envisaged by the
As far as the heads of argument were
concerned, the appellants stated they filed theirs on time on 22
December 2010. They confirmed that respondent did not provide its
argument on the due date as required by a ruling of the arbitrator to
the effect that heads of argument were to be filed by 22 December
2010 (and not 23 December as stated in the founding affidavit). They
pointed out that the third respondent’s heads of argument were
filed some six months late and that no explanation was tendered for
the failure to have done so before then. Nor was a condonation
application filed. The appellants thus denied that there was any
irregularity on the part of the arbitrator in not considering the
third respondent’s heads of argument filed so hopelessly out of
The appellants also pointed out that the
review application was factually inaccurate by stating that both
appellants had pleaded guilty. The first appellant stated that he
pleaded not guilty. This is confirmed in the transcribed record of
proceedings before the arbitrator. It is furthermore pointed out that
even though the second appellant had pleaded guilty, her plea
explanation raised issues of an exculpatory nature. The chairperson
of the hearing proceeded to hear evidence and submissions on the
charges against her, as is reflected in the record he provided in the
arbitration proceedings and in his oral evidence.
The appellants also pointed out that the
compact disc comprising the digital recording of the disciplinary
proceedings, although referred to in evidence in the arbitration
proceedings, was never tendered as evidence in those proceedings or
handed in as an exhibit. This is also borne out by the transcript of
the oral proceedings in the arbitration.
The appellants also took issue with the
third respondent’s contentions concerning the extension and
subsequent termination of their fixed term contracts. The appellants
instead argued that there had been a tacit relocation of their
employment agreements when their fixed terms came to an end on 31
March 2010. They pointed out that they had continued to work for the
third respondent after 1 April 2010 and were paid for their services
for that month.
this factual matter having been placed squarely in issue by the
appellants and a genuine dispute of fact raised, the third respondent
failed to file a replying affidavit in the review application. The
well-established approach to
disputed facts in motion proceedings is to be followed. Given the
dispute of fact was not referred to in evidence (or even dealt with
in reply), the court is bound to accept the version of the
respondents in the review (now appellants) and the facts admitted by
them as contained in the third respondent’s founding affidavit.
decision of the Labour Court
The review application was heard by the
Labour Court on 13 August 2012. Judgment was promptly delivered on 23
August 2012. That court set aside the award in its entirety and
declared that the appellants’ employment agreements with the
third respondent had expired by effluxion of time on 31 May 2010. The
court found that the appellants’ employment had been extended
to that date and that it was not competent for the arbitrator to have
reinstated them for a subsequent period. The learned judge noted in
his judgment that the other review grounds raised in the application
had not been argued before him and thus found for the third
respondent on the point that the appellants could not be reinstated,
given that their contracts of employment would have already expired
(on 31 May 2010).
It would appear that the point was taken by
the appellants in the court below that the review application had not
been properly brought under s 89(4) and (5) of the Act in that the
third respondent had not established a defect in the proceedings as
contemplated by those sub-sections. But the Labour Court
dismissed this argument in the following way:
Labour Act, 2011 like all other Acts of Parliament is subject to the
Constitution. Article 18 of the Constitution enjoins administrative
bodies and officials to act fairly and reasonably. It provides that
persons aggrieved by unfair and unreasonable decisions shall have the
right to seek redress before a competent court.
89(5) of the Labour Act cannot be understood to whittle away the
provisions of Art 18 of the Constitution. It must live in harmony
with and subject to Art 18 of the Constitution. In my view, the
submissions based on s 89 of the Labour Act cannot be upheld.’
The appellants applied for and were refused
leave to appeal. This court granted their petition for leave to
appeal on the question as to whether there had been a tacit
relocation of the appellants’ employment contracts. Prior
to the hearing of this appeal, the parties were invited to file
supplementary written argument on the question as to whether the
review of the award had been properly brought under ss 89(4) and (5)
of the Act and, if not, whether it was open to the Labour Court to
set aside the award.
Counsel for both sides provided both
written and oral argument on this question. Mr Rukoro, for the
appellants, referred to each of the review grounds raised by the
third respondent in the founding affidavit and contended that they
were not only unsupported factually but that each did not amount to a
defect in the proceedings as contemplated by s 89.
Mr Hinda, SC, who appeared for the third
respondent, argued that the statement in the award by the arbitrator
that ‘nothing was placed before me to justify that indeed the
applicants committed these offences’ demonstrated the failure
on the part of the arbitrator to consider written submissions and the
evidence of the third respondent and thus amounted to a grossly
irregularity. He further contended that the arbitrator’s
approach in ordering the reinstatement of the appellants and making
an award for compensation of 12 months was one which no reasonable
court or tribunal could possibly make and thus amounted to a gross
irregularity and should be set aside.
89 and the statutory scheme
Section 89 is contained in Part C of
Chapter 8 of the Act. This Chapter deals with the prevention and
resolution of disputes. Part C in turn concerns the arbitration of
disputes. Section 89, entitled ‘appeals or reviews of
arbitration awards’, is to be considered within the overall
scheme of the Act and particularly the dispute resolution regime
envisaged by the Act.
Act brought about far reaching changes to the regime governing the
resolution of labour disputes. District labour courts were abolished
and the jurisdiction of the Labour Court became more confined. The
focus under the Act shifted to alternative dispute resolution through
conciliation and, where required, the arbitration of labour disputes
by specialised arbitration tribunals under the auspices of the Labour
Commissioner. Part C emphasises the need for the speedy determination
of those disputes and the need for finality. Arbitrators are enjoined
to determine matters fairly and quickly
and to deal with the substantial merits of disputes with a minimum of
C of the Act also restricts the participation of legal practitioners
in arbitration proceedings to instances where the parties agree to
that or where the arbitrator is satisfied that the complexity of the
matter justified their involvement and the other party would not be
prejudiced. As was stressed by the High Court
and recently adopted by this court in NAFINU
v Nedbank Namibia Ltd and another:
overriding intention of the legislature concerning the resolution of
disputes is that this should be achieved with a minimum of legal
formality and with due speed. This is not only laudable but
particularly appropriate to labour issues. I stress that it is within
this context that the Act places greater emphasis on alternative
dispute resolution and confines the issues to be adjudicated upon by
this court (in terms of) s 117’.
In keeping with this statutory intention,
the legislature decided to limit appeals in s 89 to questions of law
alone, noted within a period of 30 days after an award had been
served upon a party.
The legislature further determined to
confine reviews of arbitration tribunals to defects in the
arbitration proceedings as defined. Reviews are also to be instituted
within 30 days after an award had been served upon a party or, if the
defect involves corruption, within six weeks after it had been
discovered. A defect in arbitration proceedings is defined in s 89(5)
that the arbitrator –
committed misconduct in relation to the
duties of an arbitrator;
committed a gross irregularity in the
conduct of the arbitration proceedings; or
exceeded the arbitrator’s power; or
that the award has been improperly
It follows that a party seeking to invoke
the review jurisdiction afforded by s 89 is confined to the narrow
review grounds which constitute a defect in the proceedings, as
contemplated by s 89(5). Not only would a party need to
establish one or more of the defects in the proceedings as envisaged
by s 89(5), but it would be incumbent on that party to set out
the factual basis in a review application for contending that such a
defect occurred. The mere resort to labelling conduct of the
arbitrator as amounting to a gross irregularity or misconduct would
not suffice in the absence of a factual basis establishing a defect
in the proceedings.
Act furthermore provides that arbitration tribunals established in s
85 are tribunals for the purpose of Art 12 of the Constitution. As a
tribunal under Art 12, those proceedings would not, as a consequence
and by their nature as tribunals under Art 12, constitute
administrative action for the purpose of Art 18 of the Constitution.
This is because the Act envisages that the proceedings before an
arbitrator under s 86 would amount to those before a competent
tribunal affording redress as contemplated by Art 12. The exercise of
that adjudicative function of a court or tribunal under Art 12 would
not constitute an act of an administrative body or official under Art
18, just as legislative decision making of a deliberative elected
legislative body, whose members are accountable to the electorate,
would not constitute administrative action for the purpose of Art
18. Article 18 cannot thus
prize the confined review grounds stipulated in s 89 any wider. Mr
Hinda, on behalf of the third respondent, correctly conceded that Art
18 does not apply to proceedings before arbitrators constituted under
The question accordingly arises as to
whether the third respondent had established a defect as contemplated
by s 89(5).
is the case in all reviews, there is no onus on the decision maker –
in this instance the arbitrator – whose conduct is the subject
matter of the review to justify his conduct.
On the contrary, it is for the applicant in review proceedings under
s 89(4) to establish one or more in the category of defects in the
proceedings as contemplated by s 89(5).
of these principles to the facts
Mr Hinda on behalf of the third respondent
essentially only argued two of the review grounds, as outlined above.
Given the factual material raised in the answering affidavit
concerning the digital recording of the disciplinary proceedings and
the approach to disputed facts in motion proceedings, the review
ground, incorporating and based upon that issue as well as the claim
concerning pleas of guilty, was correctly not persisted with.
Mr Hinda also correctly accepted that there
could not have been an irregularity in the proceedings in failing to
take into account heads of argument filed so hopelessly out of time -
more than six (6) months out of time in the context of proceedings
which should be heard and finalised with expedition. The lateness of
those heads is compounded by the absence of any explanation or an
application for condonation directed to the arbitrator. Nor is this
(and other aspects) dealt with in reply. The assertion that the
failure to take into account those (very late) heads amounted to bias
on the part of the arbitrator was rightly not raised in either the
Labour Court or this court. Quite how that could amount to bias is
not explained. Unsupported claims of bias or impropriety are to be
discouraged and could even be visited by an adverse cost order in
Mr Hinda contended that the arbitrators’ statement in the award
- to the effect that ‘nothing’ had been placed before him
to justify the commission of the disciplinary infractions -
demonstrated an irregularity by failing to take into account the
version of the third respondent in the arbitration proceedings. That
statement in the award is to be considered in the context of the
award viewed as a whole and should not be viewed in isolation. The
award elsewhere refers to and deals with the third respondent’s
version. The arbitrator would appear to have taken that material into
account, despite his statement to the contrary relied upon by
counsel. But more importantly for the third respondent, this point
would rather be directed at arguing that the arbitrator had been
wrong in his evaluation of the evidence and thus be the subject
matter of an appeal and not a review. The fact that appeals are
limited to questions of law alone may explain why the third
respondent instituted review proceedings instead. But that cannot
elevate an argument directed at an evaluation of facts (raising in
essence the correctness of the decision) to a gross irregularity
amounting to a defect in the proceedings.
The other ground raised on appeal (and in
the court below) concerned the tenure of the appellants’
employment and that it was not competent to award reinstatement and
12 months’ pay on the grounds that their terms of employment
ran out on 31 May 2010.
Mr Hinda argued that the arbitrator had
adopted a wrong approach to the issue. This is also the language of
an appeal, as is demonstrated by the nature of the objection to the
finding. Even though the conclusion reached would appear to amount to
a question of law, the approach adopted by the arbitrator in reaching
it cannot be said to amount to a defect in the proceedings in any of
the senses as contemplated in s 89(5).
It would appear that the Labour Court was
alive to the third respondent’s predicament that not one of the
review grounds raised in the application amounted to a defect in the
proceedings as contemplated by s 89(5). Hence the reliance by that
court upon Art 18 of the Constitution to review and set aside the
award. As I have already set out, an arbitrator’s decision
would not amount to administrative action and Art 18 does not apply
to arbitration tribunals established under s 85 of the Act and cannot
be invoked to review those proceedings. The clear wording in s 89
confining reviews to the stipulated categories of defects must be
given effect to.
The review application, having failed to
establish a defect in the proceedings as contemplated by s 89(5),
should have been dismissed for this reason. The appeal against the
Labour Court’s decision to set aside the award on review thus
It follows that it is not necessary for
this court to consider the question as to whether there had been a
tacit relocation of the appellants’ contracts of employment.
appellants’ relief and the order of this court
Having concluded that the review challenge
to the arbitrator’s award should have been dismissed, the
question arises as to the nature of the order to be made by this
The arbitrator’s award directed that
the appellants be reinstated with effect from 1 August 2011 and that
they each receive a year’s pay in the sums of N$83
988 and N$105 233,40 (less PAYE) for the first and second appellant
appellants had been dismissed in May 2010, nearly five and a half
years before this appeal was heard. Their positions with the third
respondent would no doubt have been filled in the intervening period.
The Labour Court has declined to order reinstatement in cases of
delay, given that prejudice could result to innocent third parties
who have positions held by successful appellants.
Other factors to be taken into account in declining to order
reinstatement have been where the employment relationship has broken
down or trust irredeemably damaged.
These factors are not exhaustive. Plainly the remedying award is not
only to be fair to employees but also to employers. In this instance,
the delay of more than five years from the dismissals renders a
reinstatement impractical, inappropriate and unfair to an employer as
was understandably accepted by Mr Rukoro on behalf of the appellants.
The arbitrator’s award includes an
order directing the third respondent to pay each of the appellants 12
months’ pay. This would appear to have been at least partially
motivated by the length of time taken to hand down the award –some
7 months as opposed to the 30 day period provided for in s 86(18). In
the absence of exceptional circumstances, an award of that magnitude
(12 months’ pay) would seem to be at the outer range of awards
for pay to be made in arbitration proceedings under s 86. Despite the
size of the awards, no basis has been laid why this award should be
interfered with, especially in view of the fact that it would not be
practical or appropriate for the reasons set out to confirm the award
reinstating the appellants. On the contrary, the circumstances of
this matter warrant the exclusion of reinstatement from the award in
the order to be given by this court under s 19 of the Supreme Court
Act 15 of 1990, as well as justifying an order directing that
interest be paid on the sums payable in terms of the award.
The following order is made:
The appeal succeeds and the order of the
Labour Court is set aside and replaced with the following order:
application to review the arbitration award (No CRWK 50710) is
dismissed and no order is made as to the costs of the application.’
Paragraph 58(ii) of the award directing the
third respondent to pay the appellants 12 months’ salary in the
amounts of N$83 988 in the case of the first appellant and N$105
233,40 in the case of the second appellant is confirmed.
Paragraph 58(i) of the award reinstating
the appellants to their employ with effect from 1 August 2011 is set
Interest on the amounts set out in
paragraph 2 above at the legal rate from 31 July 2011 to date of
payment is to be paid by the third respondent to the appellants.
The third respondent is to pay the
appellants’ costs on appeal. These costs include the costs of
one instructing and one instructed counsel.
by Director: Legal Aid
RESPONDENT: G S Hinda, SC
by Tjituri Law Chambers
v Minister of Justice 2003
NR 11 (SC) at 21H; Rally
for Democracy & Progress & others v Electoral Commission for
Namibia & others 2013
(3) NR 664 (SC) para 99.
Diamond Corporation v Mineworkers Union of Namibia & others,
No LC 103/2011. As followed in Meatco
v Namibia Food & Allied Workers Union & others 2013
(3) NR 777 (LC) and Haimbili
& another v Transnamib Holdings Ltd & others 2014
(1) NR 201 (CC).
No SA 26/2015 on 19 August 2015 para 23.
Life Assurance Ltd & others v Greater Johannesburg Transitional
Metropolitan Council & others
(1) SA 374 (CC), followed by this court in Mbanderu
Traditional Authority & another v Kahuure & others 2008
(1) NR 55 (SC) para 21.
Traditional Authority & another v Kahuure & others, 2008
(1) NR 55 (SC),
46 and the authorities collected there.
NO & others v Bhettay & others
(4) SAA 860 (A) at 866E-F. Rose Innes Judicial
Review Administrative Tribunals at 14.
Stores (Namibia) Ltd v Olivier & others (LCA
67/2009)  NAHC 39 (18/06/2010); Shiimi
v Windhoek Schlachterei (Pty) Ltd NLLP
2002 (2) 244 NLC.
and Home v Majiedt & others (LCA
46/2011)  NALC 31 (22/08/2012) para 12.