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Cost awards - make them pay

Are more costs awards now being awarded against employees, consultants and unions that waste time with futile cases, or who are contemptuous of the process? The answer is no.  This despite changes.

Prior to the 2002 amendments of the LRA, a commissioner could only award costs if a party acted ‘frivolously and vexatiously’.   The 2002 amendments – obviously in the hope that this would encourage costs award, took away the onus for the party applying for costs to show cause, and gave the commissioner the power to make an award “according to the requirements of law and fairness”.  

It seems as if commissioners award cost in around 0.6% - 0.7% of cases, which bears little relationship to the extent of abuse of the system.   Where costs are awarded however, it is not a one way street.  Two thirds of the award go against the employees, but one third of the awards are against employers – which shows that their behaviour must have been outrageous in the extreme.

Anecdotally, it does appear as if the ‘ag shame’ syndrome operates in costs awards.  Many commissioners feel that it is unfair to award costs against someone who has already lost their job – or is poor in the first place – but this is way beyond the jurisdiction of the commissioner in the first place.  The law must take its course.

So, what you need to be doing, is arguing for costs as vigorously as you possibly can.

In the meanwhile, just for the sake of entertainment, here is a extract from one case, where the commissioner did award costs.

Can you guess who it was ………?

“7.  AWARD

I therefore have no hesitation whatsoever, on the evidence and argument presented to me, in finding for the Company, and dismissing the unions application.

However, the Company requested that I consider a costs award against the Union, not only because they alleged that the referral was vexatious, but also, due to the manner in which the union parties conducted themselves.

Section 138(10) of the LRA provides that the Commissioner may make an order as to the payments of costs according to the “requirements of law and fairness”.

Having considered the request in the light of the circumstances, I have decided that in this case a costs order is appropriate.  I have done so for reasons set down beneath, although I do not intend to canvass the behaviour of Mr. Mthembu exhaustively.

Mr. Mthembu is physically a large man, and has a dominant demeanor and voice.  From the moment of his entry to the room he sought to take charge of the proceedings and to dominate them with his voice and his personality.  Before I had even opened the proceedings or asked for opening statement he was arguing his case.

I had to repeatedly request him not to interrupt the proceedings, and in particular, not to speak in Zulu  to his colleagues, often over my own voice.  When an interpreter was brought into the room, she also  had difficulty with Mr. Shandu who would not allow her to finish her translation, or even at one time to translate at all before he began his dialogue again.

When I asked Mr. Shandu if he had completed his cross examination of the witness Bongi Hlongwa, he said that he had, but that now his shop steward, who was in attendance would start his cross examination, after which Mr. Mthembu himself would cross examine.  I explained that as he, Mr. Shandu was representing his member, I would not allow the shop steward to take part in the proceedings, especially as I had been told he was there as an observer.  As it turned out, he later became a witness as well.    I did however allow Mr. Mthembu to put questions,   Mr. Shandu would also, from time to time, interrupt the process and begin argument with the Company representative directly.

I did explain to him that an arbitration was not the equivalent of a wage negotiation, but was more controlled, and subject to the generally accepted rules of conduct, or to the nature of the process determined by the arbitrator.  I had on three occasions to explain to him the nature of contempt, and that whilst he might have no respect for me, he did need to respect the process.  By and large, it seemed to have little effect.

Of equal concern however, is the fact that the matter was brought at all.

It is specifically not a rule in dismissal arbitrations that costs follow the action, and there are many reasons why this is so.  Employees are entitled to their say, often where the case may turn on the subjective evaluation of what might constitute substantive fairness.  It is also a fact that some employee may lie in a hearing, but this too is not held to be automatic grounds for a costs award.  By and large the employee who lies, or the employer for that matter, does not help their case.  Lies are usually easily detected by an experienced arbitrator, and generally, the probabilities are quite clearly to be seen.

However, in this case, where the lies were so blatant, the version so improbable as to be such that there was no real possibility that the applicants version could have been correct, or that the argument could be sustained.

Under these circumstances it is my opinion that a costs order is warranted, when looking at the requirements of law and fairness.  It seems to me to be far removed from the public interest that employers should be compelled to incur significant expense and time in defending such hopeless cases, and indeed, that unions or employees should be a little more circumspect in referring such matters to the dispute resolving machinery.

I therefore award costs against the union SAEWU on the attorney and client scale, and refer this award to the taxing master in order to determine the bill of costs.”


Can you imagine the unalloyed pleasure you would have in reading one of these in your favour?

Cost awards - make them pay