When can a CCMA award be set aside?

In terms of section 145 of the LRA, a party may apply to the Labour Court on the basis of an alleged defect with a commissioner's rulings or awards. The party who alleges such a defect must apply to the Labour Court to set aside the award within six weeks of the award being served.

A defect means:

• that the commissioner committed misconduct in relation to the duties of the commissioner as arbitrator;
• that the commissioner committed a gross irregularity in the conduct of the arbitration proceedings;
• that the commissioner exceeded his powers; and
• that the award was improperly obtained.

The above criteria refer to misconduct and irregularities, including, but not limited to:

• Taking into account evidence that was not put before the arbitrator;
• Refusing to allow valid and relevant evidence to be brought;
• Ignoring statutory requirements or legal principles;
• Unduly assisting one or other party with his/her case;
• Delivering a biased award;
• Taking a bribe; and
• Failure to apply his/her mind to the facts in evidence.

It is important to note that the review is not an appeal, and therefore it is not related to the merits of the matter but to the commissioner's conduct. The Applicant must show cause (based on factual and legal grounds) why the decision or proceedings should not be reviewed and corrected or set aside.

The test for the review of arbitration awards involves the court determining whether the decision reached by the arbitrator was one that that a reasonable commissioner could not reach, given the oral evidence led on the material facts in dispute.

Thus, where an arbitrator commits misconduct in relation to his/her duties or there is a gross process-related irregularity in the arbitration, this is not - in and of itself - a sufficient ground to warrant interference by our courts on review. The irregularity must be of such a nature that it renders the decision reached unreasonable in the circumstances.

In terms of recent case law, it is not good enough for employers or employees wishing to review an award based on one of the procedural defects provided for in section 145(2)(a), to only establish the existence of the defect, i.e. misconduct by an arbitrator in relation to his/her duties, a gross irregularity committed by the arbitrator in the conduct of the arbitration proceedings or the arbitrator exceeding his powers.  It is now also necessary to show that the defect caused the ultimate result of the award to be unreasonable. Thus, the two stage test adopted by the LAC in such instances is:

a.     Was there a section 145(2)(a) defect?; and

b.     If so, can the defect be said to be such that resulted in the decision reached being unreasonable (in the sense that it was one that a reasonable arbitrator could not have reached)?

In the absence of these criteria, it will not be possible to successfully prosecute review applications in the Labour Court.

Licensing of computer software – warning to software developers.

The Supreme Court of Appeal recently handed down a judgment in the case of Attachmate Corporation v Minister of Water and Environmental Affairs (20 May 2015), providing lessons for those  involved in the licensing of computer software.

Attachmate, a US company, signed a software licence agreement authorising the Department of Water and Environmental Affairs (DWE) to download certain software at a heavily discounted rate, based on 300 computers on which the software was to be installed.

DWE went to town and installed the software on 1000’s more computers. DWE refused to pay Attachmate the regular licence fee on the additional unauthorised copies, and Attachmate sued DWE to pay Attachmate the “applicable licence fee” for unlicensed copies. The court had to decide what compensation Attachmate was entitled to.

The judge found that the installation of the extra, unauthorised software was “not that [DWE] was trying to avoid payment of licence fees, but that its affairs were in such disarray that it could not determine the number of unlicensed copies involved”.

Attachmate couldn’t prove the existence of more than 1564 unlicensed copies. However, what was the “applicable licence fee”?

The court found that Attachmate “…only has itself to blame … if it wanted to stipulate for its list price or its standard price or some other penalty in the situation contemplated by clause 11, I can think of nothing which prevented it from doing so.”  The judge concluded that “... Once a licence fee had been determined through negotiation between Attachmate and the licensee involved, I do not think the fee applicable to that licensee can be determined without any reference to the negotiated fee.”

Software companies must thus ensure that if they want the non-compliant licensee to pay a penalty, they must stipulate this in their contracts. Also, allow for audits, to determine the software numbers downloaded.

PAIA and a banks’ refusal to say why it declined vehicle finance.

A client asked me to advise if she had any recourse against a bank for refusing to provide reasons why it declined her application for vehicle finance.

I told her that in terms of the Promotion of Access to Information Act (PAIA), the bank could withhold that information and that her only recourse would be to apply to court, to challenge the decision.

What follows is a very brief summary of PAIA. For a more detailed summary, in plain language, see http://www.mpumalanga.gov.za/paia/plainlanguagePAIA.pdf.

The purpose of PAIA is:

·        to give effect to the constitutional right of access to any information held by the state, as well as information held by another person that is required for the exercise or protection of any right;

·        to foster a culture of transparency and accountability both in public and private bodies and to promote a society in which the people of South Africa have effective access to information to enable them to more fully exercise and protect all their rights.

Who does the Act apply to?

·        The Act applies to all records held by public (i.e. State) or private bodies (or their contractors).

·        The Act does not apply to records that are being used in criminal or civil proceedings.

·        The Act does not apply to Cabinet Ministers and committees, members of parliament or of the provincial legislature, courts (in their judicial capacity) and certain investigative tribunals.

What are public and private bodies?

Public bodies are generally government departments, bodies created by Constitutions such as Parliament or the Gender Commission, or institutions set up by law which perform services for the public such as universities or Telkom. Private bodies are those that have no connection with the government and which are privately owned and controlled, i.e. any person who runs a business, or trade or profession, or a partnership or any juristic person, like a company or a CC. It doesn’t mean a person as a private individual, but only their records as they relate to their business, trade, profession, etc.

Who can ask for records?

Anyone can ask for records from a private body, but the record must be needed for the exercise or protection of a right. A requester must use the form that has been printed in the Government Gazette. It must contain enough so that it is clear what records are wanted and who the requester is. The form must explain how the requester wants to get access to the record (by post, fax, email, by hand, telephone, etc.). The requester must identify the right that he or she wishes to exercise or protect and explain why the record is needed for the exercise or protection of that right.

When can a request be refused?

·        If a requester asks for information that would disclose personal information about a third party, the request must be refused (to protect the privacy rights of other people and to make sure that these rights are not infringed upon by requests under the Act). This may not apply if the third party whose privacy is affected consents, or if the information has been made publicly available, when it may be disclosed.

·        If someone asks for information that would disclose certain commercial information about a third party, the request must be refused. Commercial information includes trade secrets, financial, technical or scientific information. It also includes information which has been supplied in confidence by the third party and which may place them at a disadvantage in negotiations or commercial competition.

·        A private body must refuse a request for information if disclosing it could threaten the life or physical safety of other people, safety and security of buildings, equipment or any other property. It may also be refused if its disclosure would prejudice or impair a system or plan for the protection of individuals, the public or property.

·        A request for a record that can’t normally be used as evidence in a court case, because it is privileged, must be refused. An example of this would a letter written by a lawyer to the private body during a court case, discussing a settlement of the case.

·        If someone asks a private body for information that would disclose certain commercial information about that body, the request may be refused. Commercial information includes trade secrets, financial, technical or scientific information, which, if disclosed, could harm that body’s financial interests. It also includes information which, if disclosed, could place the private body at a disadvantage in negotiations or commercial competition.

What steps must a requester take if the information he seeks is refused?

If a private body makes a decision to refuse a request, the requester may go to court to challenge this decision. The application to court must be made within 30 days of being informed of the decision. There is no system of internal appeal with respect to the decisions of private bodies.

FLISP assists first-time homeowners and homebuyers

If you are a first-time homebuyer, did you know that you may qualify for a subsidy to buy your first home and save thousands over the period of the loan, by reducing the monthly repayments? The benefit applies to homeowners who have already taken transfer.

What is FLISP ASSISTANCE?

Finance Linked Individual Subsidy Programme – FLISP

FLISP is the drive by the Department of Human Settlements to provide a subsidy to allow aspiring home owners to purchase a home, supporting your application to a bank for finance to buy your own home.

If you earn too little to qualify for mortgage finance to buy your own home, or you earn too much to qualify for the Government’s free basic house under their RDP Housing Subsidy Scheme, you may apply for the FLISP subsidy.

The once-off FLISP subsidy amount ranges between R20 000 and R87 000, depending on monthly income. The less you earn, the higher the subsidy. FLISP may be used for the following: - Buy an existing, new or old, residential property; Buy a vacant serviced residential-stand; or Build a residential property.

To qualify for the FLISP subsidy, you must meet certain criteria determined by the Department as well as the banks. It is available to all first-time residential homeowners (who have already taken transfer) or homebuyers (whose home loan has been approved by your bank) who earn between R3501 and R15000 a month.

The price of a property that can be financed through FLISP is determined by the joint household income, of not more than R15k per month.

Check out their website to find out more.

What happens to your assets if you die without a will and any living relatives?

A client advised that a friend died without leaving a will. His assets include a townhouse, two cars and a few bits of furniture. Who inherits?

The common law provides that, in this case, the State acquires the whole estate as bona vacantia. The matter is now regulated by sections 35(13) and 92 of the Administration of Estates Act 66 of 1965. The procedure is that where the intestate heirs cannot be identified or if there are no intestate heirs, the executor must sell all the assets in the estate (in this case, the townhouse, etc.) and, after payment of the estate’s debts, pays the residue into the Guardian’s Fund. If nobody can prove that they have a claim to the estate as an intestate heir of the deceased, then after 30 years have elapsed after payment of the funds into the Guardian’s Fund, the money accrues to the State.

You will find a really useful overview on the distribution of an estate of a person dying with or without a will, here: http://www.justice.gov.za/juscol/news/201106_intestate-and-testate-succession.pdf