From boardroom to courtroom: What chairpersons must learn from Mabona

The recent Labour Court judgment in Johanna Mabona v Exarro Ferroalloys (Pty) Ltd & Others (Case No: JR 590/23) offers a compelling examination of procedural fairness, conflict of interest, and the role of commissioners in arbitration proceedings. Acting Judge Lennox’s decision to set aside the arbitration award and order a hearing de novo underscores the importance of fair process and the duty of commissioners to actively manage hearings.

Legal implications

At the heart of the case was the dismissal of Ms Johanna Mabona for failing to disclose a conflict of interest. Her son and husband operated a business that subcontracted to a company doing business with her employer, Exarro Ferroalloys. Crucially, Ms Mabona worked in procurement and did not disclose this familial connection.

The Labour Court found that the arbitration proceedings were tainted by the commissioner’s failure to properly engage with a late attempt to introduce evidence regarding disciplinary consistency. This failure amounted to a gross irregularity, rendering the proceedings unfair and necessitating a rehearing.

The judgment reaffirms the principle from Naraindath v CCMA & Others that a failure to conduct arbitration fairly, especially where it prejudices a party’s ability to present their case, can constitute misconduct or a gross irregularity.

Key takeaways for legal representatives

• Founding affidavits must be substantive: The Court criticised the Applicant’s founding affidavit for being sparse and rushed. Legal representatives must ensure that review applications are well-founded and contextualised from the outset.
• Supplementary affidavits can rescue weak applications: While not ideal, the Court accepted that the supplementary affidavit provided sufficient grounds for review. However, this should not be relied upon as a strategy.
• Late evidence must be handled proactively: The commissioner’s passive approach to the introduction of new evidence was a key failing. Legal representatives should insist on clarity regarding the admissibility and relevance of such evidence.
• Consistency in discipline is a valid defence: The attempt to introduce a misconduct schedule was aimed at showing inconsistent disciplinary action. This is a legitimate line of argument and should be pursued rigorously when applicable.

Guidance for commissioners

Commissioners must actively manage proceedings and not merely observe debates between parties. When new evidence is proposed, they must:

• Determine its nature and relevance.
• Assess whether it constitutes new evidence.
• Decide on admissibility with reference to fairness and procedural integrity.

Failure to do so risks undermining the entire arbitration process and may result in the award being set aside.

Link to chairpersons in internal enquiries

The Mabona judgment offers critical lessons for chairpersons tasked with overseeing internal disciplinary enquiries. While the case was ultimately decided in the Labour Court, its implications began much earlier—at the internal enquiry stage. The fairness and integrity of that process can determine whether a dismissal withstands scrutiny in external forums such as the Commission for Conciliation, Mediation and Arbitration or the Labour Court.

• Understand the weight of procedural fairness. Chairpersons must ensure that disciplinary hearings are procedurally sound. In Mabona, the failure to properly consider evidence relating to disciplinary consistency was a key flaw. Internally, this means:
  • Allowing employees to present all relevant evidence, even if it emerges late.
  • Being flexible but firm in managing procedural timelines.
  • Documenting reasons for accepting or rejecting evidence.
  • A rigid or passive approach can later be interpreted as unfair, especially if it prejudices the employee’s ability to defend themselves.
• Consistency in discipline is not optional. One of the Applicant’s key arguments was that similar misconduct had been treated differently in the past. Chairpersons must:
  • Review past disciplinary outcomes for similar offences.
  • Be prepared to justify any deviation from precedent.
  • Ensure that disciplinary schedules or records are available and considered.
  • Inconsistent application of discipline can render a dismissal substantively unfair, even if the misconduct is proven.
• Maintain a clear and detailed record. The Labour Court noted the lack of context and detail in the founding affidavit. This record becomes vital if the matter escalates to arbitration or judicial review. Chairpersons should:
  • Keep comprehensive minutes of the enquiry.
  • Record the rationale behind findings and sanctions.
  • Ensure that all documentary evidence is properly referenced and stored.
• Be proactive, not passive. Just as the commissioner in Mabona was criticised for failing to intervene meaningfully, chairpersons must actively manage the enquiry. Passivity can be interpreted as bias or incompetence, undermining the credibility of the process. This includes:
  • Clarifying procedural issues.
  • Assisting unrepresented employees to understand the process.
  • Ensuring that the enquiry remains focused, fair, and efficient.

Final thoughts

The Mabona case is a cautionary tale for employers, employees, legal practitioners, and commissioners alike. It highlights the importance of transparency, procedural rigour, and active adjudication. In a labour law landscape where fairness is paramount, silence or passivity, whether by the employee or the commissioner, can have significant consequences.

Need guidance?

If you would like a copy of our Chairperson’s Checklist for Fair and Effective Disciplinary Enquiries, please contact Riona Kalua, head of our Labour and Employment team.