A rescission application is one way in which an arbitration award may be set aside. A rescission application may be rescinded 14 days from the date in which the party became aware of the arbitration award. The application is made to the same arbitrator who made the original arbitration award to rescind or cancel the award on the grounds that the award was made on any of the following grounds in terms of section 144 of the Labour Relations Act 66 of 1995 (“the LRA”).
In terms of section 144 of the LRA, any affected party may make an application, to vary or rescind an arbitration award or ruling which was:
(a) erroneously sought or erroneously made in the absence of any party affected by that award;
(b) in which there is an ambiguity, or an obvious error or omission, but only to the extent of that ambiguity, error or omission; or
(c) Granted as a result of a mistake common to the parties to the proceedings.
The grounds for rescission are very constricted and such applications are generally brought when one party has not attended the arbitration hearing and the award has been made in the absence of that party. The party who has failed to attend the hearing may apply to the arbitrator to rescind the award for any reason relating to illness, incarceration, breakdown of transport, traffic congestion and failure to receive the notice of set down. The award may be rescinded on the basis that it was made in the absence of a party, provided that the absence of that party at the arbitration was not intentional and willful default and the party has good prospects of success in continuing with the matter. In the case of Wimpy Game Centre v CCMA & Others (2001) 22 ILJ 1173 (LC), the CCMA had issued a default award against the employer and it applied for rescission of this award. The ruling not to rescind the award was taken on review and the Labour Court held that the test for good cause in an application for rescission involves the consideration of two factors, namely the explanation for the default and whether the applicant has a prima facie defence. The employer in this case claimed that it did not receive the notice of set down to attend the arbitration. The commissioner in his ruling found that the employer was notified of the arbitration date by means of fax which was successfully transmitted on 24 October 2005 and it was on this basis that the commissioner ruled that the award was not issued erroneously in terms of section 144 of the LRA.
The court held that an application for the rescission of a default judgment must show good cause and prove that he at no time denounced his defence, and that he has a serious intention of proceeding with the case. In order to show good cause he must give a reasonable explanation for his default, his explanation must be made bona fide and he must show that he has a bona fide defence to the plaintiff’s claim. The Court found that the commissioner erred in that the only issue that the commissioner concerned himself with was the issue of whether or not there was proper service. The court found that the commissioner did not apply his mind properly to the issue of whether or not the employer had shown good cause for not attending the arbitration hearing. The other issue which the commissioner failed to consider related to the prospects of success which, the court held, were good. The court rescinded the award and referred the matter back to the CCMA for arbitration.
The rescission application should include the applicant’s reasons for absence and the applicant’s prospects of succeeding with the case if the rescission is granted. In the case of Eskom Holdings v Fipaza (2010) 31 ILJ 470 (CCMA) , the commissioner found that the applicant’s explanation for not receiving the relevant documents at the time they were sent or until 19 January 2009 to be a perfectly plausible one. The commissioner found that he had no doubt that had the applicant received these documents timeously, it would have filed papers in opposition to respondent’s condonnation application and that, had it received the set down for 1 December 2008, the applicant would have attended the conciliation/condonnation proceedings on that date to oppose the respondent’s application for condonnation for the late referral. It did not do so purely because its legal department was by then not placed in possession of the relevant documents or notices as averred by the applicant owing to respondent having instructed CCMA to serve on applicant at a human resources fax line. The Commissioner found that that was an acceptable explanation for the applicants delay in lodging the rescission and for its default in attendance at the arbitration hearing on 1 December 2008 to oppose the respondent’s application for condonnation.
In Ceramic Industries Ltd v CCMA & Others (2005) 12 BLLR 1235 (LC), the Labour Court held that where a party intends at all times to defend proceedings and its default is not willful, then even though the party may formally have received notice of the proceedings, the granting of an award in that party’s absence may constitute an error sufficient to justify rescission. Even where no satisfactory explanation is given for the party’s default, other factors such as the strength of the defaulting party’s case should be taken into consideration.
In Northern Province Local Government Association v CCMA & Others (2001) 22 ILJ 1173 (LC), the Labour Court held that “axiomatically, in deciding whether a fax transmission was received, proof that the fax was sent creates a probability in favour of receipt but does not logically constitute conclusive evidence of such receipt…..”
In MTN South Africa v Van Jaarsveld & others (2002) 23 ILJ 1597 (LC), the court held that “as aptly illustrated in the facts of this case, the arrival of a document in the midst of a deluge of others handled by staff not inducted to divine, in the absence of some clue, who should be given the document nor how rapidly it should happen, may predictably lead to delay or misplacement or outright loss of document….”
It must be noted that the commissioner does not have the power to substitute the award with an entirely new one.
Process of applying for a rescission:
The rescission application must be brought on notice to all parties who have an interest in the application. The party applying for rescission must sign the notice of application. The application must contain the following:
a) The title of the matter;
b) The case number;
c) The relief sought;
d) The address of the party delivering the document i.e. where he or she will receive all notices and will accept service of all documents in the proceedings;
e) A notice to the other party that if he or she intends opposing the application, an answering affidavit must be delivered within five days and that failure to do so will result in the matter being heard in that party’s absence (default judgment);
f) A schedule listing all documents that are relevant or material to the application;
g) The application must be supported by an affidavit which must set out the details of the parties and addresses, a statement of the material facts on which the application is based, with sufficient details to enable a person opposing the application to reply and a statement of the legal issues arising from the material facts and the relief sought.
A party may oppose the application by serving an answering affidavit within five days.
The applicant may then, within 5 days, respond to the answering affidavit by way of a replying affidavit.
The matter will then be set down for hearing and the CCMA will notify the parties of the date, time and place thereof. A ruling is then made by a commissioner and the ruling will have the effect of a final order and be regarded as an arbitration award.
In Shoprite Checkers (Pty) Ltd v CCMA & others (2007) 28 ILJ 2246 (LAC), the Labour Appeal Court has ruled that rescission should be granted in terms of section 144 (a) where applicant shows good cause therefore, which requires of it to establish a satisfactory explanation for its default and that it has a bona fide defence to respondent’s unfair dismissal claim.
Should you have any queries relating to rescission of an award at the CCMA or any other query relating thereto, please feel free to contact the RA team on 011 612 3717 or fax us on 086 607 1867.