LABOUR DISPUTE SETTLEMENT MECHANISM

UNDER ELRA AND LIA 2004

The two legislation provide for three methods of labour dispute settlement. These are
mediation, arbitration and adjudication. The Labour Institutions Act establishes the
organs which are responsible to settle labour disputes while the Employment and
Labour Relations Act provides for the procedure to be used in settling labour disputes.

The Institutions for Settling Labour Disputes

1. Commission for Mediation and Arbitration
This is established under s. 12 of the LIA as an independent department of the
government. Its composition is:
a) a chair person, appointed by the President who shall not be a member or
office bearer of trade union or employer’s association or an employee in
the public service
b) two commissioners representing the interests of the employees
c) two commissioners representing the interests of the employers
d) two commissioners representing the interests of the government (s.16)
NB: the chair person is appointed among list of three persons recommended by the
Council while the other commissioners are appointed by the minister upon
recommendation by the Council. The commissioners hold office for three years and are
eligible for re-appointment (s.17).

Its functions include:

a) To mediate any dispute referred to it under any labour law
b) To determine any dispute referred to it by arbitration where it is so required by
law or agreed by the parties or referred to it by Labour Court to be so determined
c) To facilitate the establishment of a forum of workers participation if so required.
(s. 14(1)

The Commission in performance of its functions has the following powers:

1
 a) power to appoint a director, mediators and arbitrators
b) power to assign mediators and arbitrators to mediate and arbitrate disputes in
accordance with the provisions of any labour law
c) power to establish offices
d) power to establish divisions of the Commission
e) power to make rules to regulate internal administration, practice and procedure
for mediation, practice and procedure for arbitration, practice and procedure of
essential services committee etc
f) power to publish the code of ethics for mediators and arbitrators
2. Labour Court
The Labour Institutions Act provides for the establishment of a labour division of the
High Court which shall consist of such number of Judges as the Chief Justice may
consider necessary and two panels of assessors appointed in terms of one panel
representing the interests of the employees and another panel representing the interests
of the employers (ss. 50, 53) .

The Labour Division of the High Court shall be duly constituted when a Judge sits with
at least two assessors one from either panel of assessors. The Labour Court shall have
exclusive jurisdiction over any matter reserved for its decision by the labour laws.

3. Essential service committee

This is an organ which is established within the Commission under s.29 of the LIA. The
organ comprises of 5 persons appointed by the minister in consultation with the
Council. The qualifications for these members include knowledge and experience in
labour law and labour relations. Among these members, the minister shall appoint a
chairperson of the committee (s.31). The tenure of the committee is three years but a
member may be reappointed at the end of his term of office.

The functions of the Essential Services Committee are: to designate essential services in
terms of the provisions of the ELRA, 2004; and to determine disputes about whether or
not an employee or employer is engaged in a designated essential service (s.30).
However, in the performance of its activities, the Committee has the following powers:

2
 a) It may summon any person for questioning where it considers that the
attendance of this person will assist in the performance of its functions;
b) It may summon any person believed to have the possession or control of any
book, document, or object relevant to the performance of its function to appear
for questioning and production of such a document;
c) It may administer an oath or accept an affirmation from any person called to give
evidence; and
d) It may question any person about any matter relevant to the performance of its
functions (s.32)
It should be noted that a person shall not be required to answer any question or furnish
any information, book, document or object if there is a lawful ground for not doing so.
Also the Commission shall pay the prescribed witness fee to each person who appear
before a mediator or arbitrator in response to a subpoena issued in this regard (ss. 32(2)
and (3)

4. The Labour Economic and Social Council

This is an organ established under s. 4(1) of the LIA as a Council for Labour, Economic
and Social matters. It is composed of a Chairperson and sixteen other members all of
whom are appointed by the Minister. Provided that a member, official or office bearer
of a trade union, employer’s association or federation or an employee in the public
service of the government of the URT shall not qualify to be appointed as a Chairperson.
The idea here is to avoid an interested person from acting as a chairperson because he
may be biased in his decisions. The sixteen other members are appointed by the
Minister are as follows:-
a) the permanent secretary and three other members to represent the interests of the
government
b) four members to represent the interests of the employers
c) four members to represent the interests of employees
d) four members appointed because of their expertise in labour, economic and
social policy formulation

3
It should be noted that the Minister appoints the representatives of trade unions and
workers associations from the list of members nominated by such trade unions.
Duration of membership into the Council is three years but a member may be re-
appointed (s.6)

The Council has the following functions among others. (s.5)

a) to advise the government through the Ministry on the matters of measures to
promote economic growth and social equity, economic and social policy,
promotion of a coordinated policy on labour economic and social matters.
b) To advise the Minister on national labour market policy, any proposed labour
law before it is submitted to the cabinet, any issue arising from the International
Labour Organisation,
c) To ensure employers and employees nominate assessors for appointment to
panels, members for appointment to governing board of the Commission and
individuals for appointment as members of the Essential Services Committee.
d) To survey and analyse social and economic affairs
e) To keep abreast of international development in social and economic policy etc
etc
For the purposes of performance of its functions, the Council may establish committees
to perform specific functions. The committees established shall be tripartite (comprising
the representatives from the trade unions, employer’s associations and the government).
The committee must also comprise at least three of the Council’s members (s.8).
However, despite the fact that the Council may establish committees, it may only assign
any of its functions to a committee, subject to the approval of the Minister. In addition to
this, the Council may assign such a functions on conditions it may deem necessary to
impose. Any function performed by the committee in these terms shall be deemed to
have been performed by the Council (s.8(3)

The Council shall operate by meetings. There shall be at least three meetings in a
calendar year, meetings of the council in accordance with its rules, and a special meeting
of the council all of which shall be summoned by the chairperson (s.9). The special
meeting of the council shall be either at the written and motivated request of four

4
members or at the request of the minister. The Chair person shall preside over all
meetings of the Council at which he is present and where he is not present the members
shall elect one of them to be a chairperson in that meeting. In the meeting of the Council
the quorum shall be constituted by the majority of the members provided that there is at
least one member representing the interest groups (ie. The employers, employees and
the government) and the decision of the majority members of the Council present in a
meeting shall be the decision of the Council. In case of a tied vote the presiding member
shall (chairperson in that meeting) shall have a casting vote (s. 9(6). The Council is
required to keep written record of its meetings.
The Council is required to submit an annual report of its activities in each calendar year
to the Minister before 30th June of the next year (s.11)

Other Institutions Established by LIA

There are other institutions which are established under this law which deal with the
labour matters. These are discussed below.

Wage Boards
These are ad-hoc boards established by the Minister in respect of a sector and area to
investigate remuneration and term and conditions of employment in any area (s.35(1)).
The members of these boards are appointed by the Minister. A board is made up of a
Chairperson, a member nominated by the Council who represents the interests of the
employees and a member nominated by the Council to represent the interests of the
employers (s.35(3)). The Minister publishes a notice in the gazette prescribing the names
of the members, and the terms of reference of the investigation. The terms of reference of
the investigation include the sector and area to be investigated, the categories and
classes of employees to be included as well as the matters to be investigated. A member
of a board remains in office until the Minister discharges the wage board or until he is
removed by the Minister due to misconduct, illness, bankruptcy, conviction of a crime
etc (s.35(4),(5). The functions of a wage board are to conduct an investigation on
minimum remuneration and other conditions of employment; to promote collective
bargaining between registered trade unions, employers and registered employer’s

5
associations; and to make recommendations to the Minister on a minimum wage and
conditions of employment.
Thus, board reports to the Minister on its findings and recommendations.

THE LABOUR COMMISSIONER AND LABOUR OFFICERS

The law entrusts the power to administer labour laws to the Labour Commissioner
(s.43(1). The term Labour Commissioner is defined under LIA to mean Labour
Commissioner appointed in terms of section 43(1) and in the absence of the Labour
Commissioner, the Deputy Labour Commissioner. However the Labour Commissioner
can delegate any of his duties, functions and powers to the Deputy Labour
Commissioner, Assistant Labour Commissioners or Labour Officers (s.44(1). The Labour
Commissioner as well as the Deputy Labour Commissioner are appointed by the
president while the Assistant Labour Commissioners are appointed by the minister. The
minister also appoints the Registrar of Organisations and Deputy Registrar who are
responsible for the regulation of trade unions, employer organisations and federations.

Functions of Labour Officers

The law provides that there shall be as many labour officers as are necessary to
administer and enforce the labour laws (s.43(4). Labour Officer is defined to mean a
labour officer stipulated in s.43(3) and it includes the Labour Commissioner or Deputy
Labour Commissioner. Thus, the Labour Commissioner and Deputy Labour
Commissioner are Labour Officers. Section 43(3) provides that the Minister shall appoint
Assistant Labour Commissioners to head the sections of Labour Relations, Labour
Inspection and Social Security. Given this cross reference it seems that Assistant Labour
Commissioner is also a Labour Officer. For the purposes of the administration of labour
laws, a labour officer with a prescribed certificate and at a reasonable time may enter
premises and:
a) require that premises or any part thereof shall not be disturbed during an
inspection;
b) search and examine any information books, document or object;
c) seize, make a copy of any information, book, document or object;
d) take sample of any object found;

6
 e) take measurements, readings recordings or photographs; and
f) question any person on the premises

In any other case he may:

a) order, in the prescribed form, any person to appear before him at a specified
date, time and place and to question that person
b) require any person who has control over any information, book, document or
object to furnish it and explain any entry in the information, book or document
or the object;
c) examine, make copy or seize any book, document or object

Categories of disputes under the ELRA, 2004

Disputes under the ELRA can be categorised into two:-
i) Complaints
ii) Disputes of interest

i) A complaint
This is defined as any dispute arising from the application, interpretation or
implementation of:
a) an agreement or contract with an employee;
b) a collective agreement;
c) the ELRA or any other written law administered by the minister for labour
d) Part VII of the Merchant Shipping Act, 2003 ( this part concerns engagement and
welfare of seafarers which encompasses things like wages, the property of the
deceased seafarer, safety, health, manning, qualification, civil liability as well as
offences by seafarers etc)

ii) Disputes of interest

The Act defines a dispute of interest as any other dispute which is not a complaint.
Thus, all other types of disputes which are not concerned with application,
interpretation or implementation of an agreement, the ELRA or other laws administered

7
by the minister for labour or part VII of the Merchant Shipping Act, 2003 (the
engagement and welfare of seafarers).

PROCEDURE
Under the ELRA, 2004 there are three dispute resolution methods namely Mediation,
Arbitration and Adjudication. Thus, the statute establishes a three-tier scheme that
commences with mediation and then follows with arbitration and ends up with
adjudication. Mediation and arbitration are supposed to be conducted by the
Commission for Mediation and Arbitration as established under section 12 of the Labour
Institutions Act.

a) Mediation
The word mediation is not defined in the ELRA, 2004 but there is a definition of the
word “mediator” who is defined as a mediator appointed under section 19 of LIA, 2004.
under s. 19 of LIA it is provided that the Commission shall appoint as many mediators
and arbitrators as it considers necessary to perform the functions of the Commission.
The Commission may appoint mediators on part time or full time basis and it shall be
the responsibility of the Commission to control and discipline the mediators and
arbitrators but the Commission shall not interfere with the independence of the
mediator or arbitrator in any dispute before such mediator or arbitrator.

However, in the dictionaries, mediation is defined as a private, informal dispute

resolution process in which a neutral third person, the mediator, helps disputing parties
to reach an agreement. The mediator has no power to impose a decision on the parties.

All disputes are supposed to pass through this stage of mediation.

Procedure in Mediation:
1) The dispute is referred to the Commission in the prescribed form by or on
behalf of the aggrieved party. The Commission must be satisfied that a

8
 copy of the referral has been served on the other parties to the dispute by
the party who refers the dispute to it. (s. 86)
2) On receiving the referral the Commission shall appoint a mediator to
mediate the dispute and decide the time, date and place of the mediation
hearing. It shall also advise the parties to the dispute on such
appointment and time, date and place of the hearing.
3) The mediator is required to resolve the dispute within thirty (30) days of
the referral or any longer period to which the parties agree in writing. But
if the dispute of interest is referred to the Commission, the mediator may
extend the period by a further 30 days if the employees or union fails to
attend the hearing arranged by the Commission or shorten the period of
30 days if the employer or employer’s association party to the dispute
fails to attend the hearing (s.87(1). The mediator has the mandate to
decide the manner in which the mediation shall be conducted and if
necessary may require further meetings within the stipulated 30 days.
Also, in the mediation proceedings a party may be represented by a
member or official of that party’s trade union or employer’s association
or advocate.
4) If the mediation is successful, the decision of the mediator may be
enforced in the Labour Division of the High Court as a decree of a Court
of competent jurisdiction.
5) Where the mediator fails to resolve the dispute within 30 days, a party to
the dispute has the following options depending on the nature of the
dispute. If the dispute is a dispute of interest, he may give notice of its
intention to commence a strike or a lockout in accordance with the
provisions of ELRA. And if the dispute is a complaint he may either refer
the complaint to arbitration or refer the complaint to the Labour Court.

However, despite the time limit of 30 days, the mediator may convene
meetings between parties to the dispute in order to settle the dispute at
any time before or during any strike, lockout, arbitration or adjudication
until the dispute is settled. This brings up uncertainty and confusion in

9
 the process. The first thing that comes out here is the fact that once a
matter has been referred to a mediator then the Mediator is seized with
that dispute until it is resolved one way or another and it is immaterial
who or how that dispute is resolved. This means despite the fact that the
dispute has moved on in the process the mediator can still intervene and
continue the efforts to resolve the dispute. This wholesale adoption of the
dispute by the mediator is certainly odd and one can say quite
impracticable, as it tends to set in motion two parallel dispute settlement
mechanisms at once. How will an Arbitrator or the Labour Court for that
matter function if the matter is still within the charge of the mediator?

The mediator may also dismiss the complaint if the party who referred
the complaint to it fails to attend a mediation hearing. The mediator may
also decide the complaint if the other party fails to attend the hearing and
his decision may be enforced in the Labour Court as a decree of a court of
competent jurisdiction. The Commission may reverse the decision based
on failure to attend by a party on application where it is satisfied that
there are good grounds for failing to attend hearing (s.87(5).

b) Arbitration
The ELRA, 2004 doesn’t define the word arbitration but it defines an arbitrator as an
arbitrator appointed under s. 19 of LIA, 2004. Like the mediators, the arbitrators are
appointed by the Commission and they are subject to the control of the Commission in
all aspects save for their independence in settling a dispute.

The dictionary meaning of the word arbitration is “ a process of dispute resolution in

which a neutral third party (arbitrator) renders a decision after a hearing at which both
parties have an opportunity to be heard.” The decision of the arbitrator is binding on the
parties to the dispute.

Under the ELRA, s.88 a dispute in respect to arbitration carries a special meaning. It
means a dispute of interest if the parties to the dispute are engaged in an essential

10
service or a complaint over either (i) the fairness or lawfulness of an employee’s
termination of employment or (ii) any other contravention of ELRA or any other labour
law or breach of contract in which the amount claimed is below the pecuniary
jurisdiction of the High Court or (iii) any dispute referred to arbitration by the Labour
Court under s.94(3)(a)(ii).

Arbitration under the ELRA may be invoked where mediation has failed to resolve a
dispute or even where the dispute has not been mediated at all depending on the
Commission’s discretion.

However, the notion of compulsory arbitration has been greatly watered down under
the statute. In the first place Employment and Labour Relations Act allows trade unions
and employers to opt out of compulsory arbitration by inserting a clause in the collective
agreement allowing them to refer their disputes to independent arbitrators under the
Arbitration Ordinance. Secondly even those working in essential services to whom
arbitration is compulsory before they contemplate strikes or lockout, may circumvent
this procedure if according to section 78 of the Employment and Labour relations Act
they have in place the Essential Services Committee has approved a collective agreement
providing for minimum services during strikes and this agreement.

Procedure
a) A dispute is referred to the Commission as in the case of mediation or in case of
failure of mediation a party to the dispute refers the matter to arbitration. In case
of failure of mediation, in order to apply arbitration the dispute must have been
a complaint because if it is a dispute of interest, a party to the dispute may give a
notice of its intention to commence a strike unless it is involved in essential
services in which arbitration is compulsory on failure of mediation.
b) The Commission appoints an arbitrator to decide the dispute, determine time,
date and place of the arbitration hearing and inform the parties on such
appointment and arrangements.
c) The arbitrator conducts the arbitration in a manner he considers appropriate in
order to determine the dispute fairly and quickly. The arbitrator deals with

11
 substantial merits of the dispute with the minimum legal formalities. The
arbitrator therefore has discretions as to the appropriate form of the proceedings
in terms of giving evidence, calling witnesses, questioning witnesses and
presentation of arguments. The parties to the dispute may be represented by a
member or official of that party’s trade union or employer’s association or an
advocate. Where the parties to the dispute consent, the arbitrator may suspend
proceedings and resolve the dispute through mediation (s.88(6).
d) The arbitrator is required to make an award with the reasons signed by the
arbitrator within 30 days of the conclusion of the arbitration proceedings. The
arbitrator has no mandate to make an order for costs unless a party or a person
representing a party acted in a frivolous or vexatious manner. (s.88(8). An award
made by the arbitrator is binding on the parties to the dispute and may be served
and executed in the Labour Court as if it were a decree of a court of law. (s.89)

Note:
i) An arbitrator has power to correct clerical errors, errors arising from any
accidental slip or omission made on an award, on application or suo moto.
ii) A party alleging a defect in any arbitration proceedings may under the
auspices of the Commission apply to the Labour Court for a decision to set
aside the arbitration award. Such application should be made within six
weeks of the date of the service of the award on the applicant unless it
involves improper procurement in which case the application should be
made within six weeks of the date that the applicant becomes aware of the
fact.
iii) The Labour Court may set aside an arbitration award on the ground that either
there was a misconduct on the part of the arbitrator or the award was
improperly procured. Where the award is set aside the Labour Court may
either determine the dispute in the manner it considers appropriate or
make any order it considers appropriate about the procedures to be
followed to determine the dispute.
iv) The parties may agree to submit their dispute to arbitration under the
Arbitration Ordinance.

12
c) Adjudication
The word adjudication is not defined in the ELRA, 2004 but the dictionary defines the
word as a legal process of resolving a dispute. It contemplates that the claims of all the
parties thereto have to be considered and set at rest. Normally the adjudication process
involves the courts of law and quasi judicial bodies. Under the ELRA, 2004 the
adjudicatory powers are conferred on the Labour Court in respect to the application,
interpretation and implementation of the provisions of the ELRA, 2004. The Labour
Court also is empowered to decide appeals from decisions of the Registrar made under
part IV; to decide reviews and revisions of arbitrator’s award and decisions of the
Essential Services Committee; to decide reviews of decisions, codes, guidelines or
regulations made by the minister; to decide complaints, other than those that are to be
decided by arbitration under the provisions of the ELRA; to decide any dispute reserved
for decision by the Labour Court under the ELRA; and to decide applications including
a declaratory order in respect of ELRA and injunction.

The Labour Court may do either or the following in respect to a dispute which has been
referred to it:-
i) it may decide the dispute, or
ii) it may refer the dispute to the Commission to be decided by arbitration
(s.94(3)(a)(ii)

However, the Labour Court may refuse to hear a complaint under certain circumstances.
These includes:
i) where the complaint has not been referred to mediation by the Commission
under s. 86; or
ii) where the provisions of section 86 have not been complied; or
iii) where the application is not urgent

d) Appeal

13
It is important to note that appeals from the Labour division of the High Court to the
Court of Appeal are restricted to those involving points of law only. In other words, a
decision of the Labour Court on matters of fact and procedure is final and one can only
appeal to the Court of Appeal if they dispute the determination of the Court on matters
of law. If it happens that there are conflicting decisions of the Labour Division of the
High on a point of law, the Labour Commissioner is specifically empowered to refer that
point to the Court of Appeal for a decision. He may do so where the parties to the
dispute have not preferred an appeal

14