ASSIGNMENT A, B & C

by

SARVESH NAIR

Submitted in partial fulfilment of the requirements for the subject

Collective Employment Law (JML 503)

for the degree

MAGISTER LEGUM

in

LABOUR LAW

in the

FACULTY OF LAW

at the

NELSON MANDELA METROPOLITAN UNIVERSITY

September 2015

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Declaration by student:

I hereby declare the following:

This is my own work and I have not copied any parts thereof from anyone

else;

I have referenced all direct quotations and paraphrased explanations of

another’s work

I understand that plagiarism is a violation of the university disciplinary

code and that should I be guilty thereof that I will be subject to any

disciplinary steps that the university may institute against me,

S a r v e s h N a i r

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TABLE OF CONTENTS

QUESTION A…………………………………………………...….………...………….....4

1 1 Defining a Collective Agreement.........................……………….………5

1 2 Legal effect of a Collective Agreement.............................…………...…

7

1 3 Disputes about Collective Agreements...................………………….…9

1 4 Section 33A……………………............................……………………….9

1 5 Where an employer fails to comply with a collective agreement….

…..10

1 6 Section 23(4) of the LRA …..………………………........

……………….12

1 7 Minister of Safety and Security v Safety and Security Sectoral

Bargaining Council (2010) 6 BLLR 594

LAC.......................................12

QUESTION B……………………….……….....……….….……....................

…...........16

2 1 Extension of Collective Agreements concluded in

Bargaining Councils……………………………………...

……………….17

2 2 Arguments for and against Extensions..………………………..

……....19

2 3 The Constitutionality of Bargaining Council Agreements ……....

…….20

QUESTION C...........................................................................................................20

3

3 1 Essential Services…...........................................................................24

3 2 Essential Services Committee (ESC)……………………………...……

24

3 3 Minimum Services Agreements ……………………….......……………

26

3 4 Analysis, Challenges and Proposals………………...

………………….27

BIBLIOGRAPHY…….……………...…………......……………..…………........……..28

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1 Question A

One of the primary objects of the Labour Relations Act 66 of 1955 (hereafter the

LRA) is to provide a framework within which employees and their trade unions on

the one hand, and the employers and their employers’ organisation on the other,

can collectively bargain to determine wages, terms and conditions of employment

and other matters of mutual interest.1 Employers commonly enter into collective

agreements with a registered trade union with the aim of establishing uniform

conditions of service for all employees falling within the scope of the agreement. 2

Where non-compliance with a collective agreement occurs, a number of remedies

are available to the affected person. What follows is a definition of a collective

agreement, followed by the legally binding effects of same and finally the remedies

available to affected parties by non-compliance of collective agreements.

1 1 Defining a collective agreement

Section 213 of the LRA defines a collective agreement as a:

“written agreement concerning terms and conditions of employment or any other matter of

mutual interest concluded by one or more registered trade unions, on the one hand and, on

the other hand –

(a) one or more employers;

(b) one or more registered employers’ organisations; or

(c) one or more employers and one or more registered employers’ organisations.”3

1 Section 1 of the Labour Relations Act 66 of 1995 (hereafter the LRA)2 Modi “Interpreting Collective Agreements” (undated) http://www.bowman.co.za/News-Blog/Blog/INTERPRETING-COLLECTIVE-AGREEMENTS-Priyesh-Modi (Accessed 2015-08-12) 3 Section 213 of the LRA.

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According to Basson et al a collective agreement need not be signed by the parties

to be valid as all that is required is that the agreement must be in writing. 4

Furthermore, only registered trade unions can be parties to a collective agreement

as defined by the LRA.5 The definition also states which topics may be regulated by

a collective agreement viz: terms and conditions of employment or any other matter

of mutual interest.6 The former relates to those substantive provisions of the

employment contract such as working hours, remuneration and leave while the

latter is considered a much wider concept which boundaries are yet to be clearly

delineated by case law.7 Collective agreements typically take the form of

recognition agreements (rules of engagement in the relationship); substantive

collective agreements (normally concluded after the recognition agreement and is a

product of bargaining on wages, conditions of employment) and procedural

agreements which relate to disciplinary procedures, amongst others.

1 2 Legal effect of Collective Agreements

Section 23 of the LRA, entitled Legal effect of collective agreements, states as

follows:

(1) A collective agreement binds – a. The parties to the collective agreement;b. Each party to the collective agreement, in so far as the provisions are

applicable between them;

4 Basson, Christianson, Dekker, Garbers, le Roux, Mischeke and Strydom Essential Labour Law 5ed (2009) 278; Basson et al further contends that a collective agreement need not be contained in a single document as parties may confirm the contents of the agreement in separate correspondence.5 Basson et al Essential Labour Law 278; where an unregistered trade union concludes a collective agreement with an employer, the agreement merely falls outside the scope of the LRA and cannot be enforced by the LRA. 6 Basson et al Essential Labour Law 279; needless to say, there are, certain limits to the parties contractual freedom, i.e. the provisions agreed to in the collective agreement must be enforceable and not contra bona mores.7 Basson et al Essential Labour Law 279; The requirements of a valid collective agreement are therefore registration, a written agreement, product of agreement and “Terms and Conditions of employment or any other matter of mutual interest” which includes both narrow and broad interpretation.

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c. The members of a registered trade union and the employers who are members of a registered employers’ organisation that are party to the collective agreement if the collective agreement regulates –

i. Terms and conditions of employment; orii. The conduct of the employers in relation to their employees or

the conduct of the employees in relation to their employers;d. Employees who are not members of the registered trade union or trade

unions party to the agreement if – i. The employees are identified in the agreement;ii. The agreement expressly binds the employees; andiii. That trade union or those trade unions have as their members

the majority of employees employed by the employer in the work-place.

(2) A collective agreement binds for the whole period of the collective agreement every person bound in terms of subsection (1)(c) who was a member at the time it became binding, or who becomes a member of the registered trade union or registered employers’ organisation for the duration of the collective agreement.

(3) Where applicable, a collective agreement varies any contract of employment between an employee and employer who are both bound by the collective agreement.

(4) Unless the collective agreement provides otherwise, any party to a collective agreement that is concluded for an indefinite period may terminate the agreement by giving reasonable notice in writing to the other parties.8 (Own emphasis)

Collective agreements have a binding effect on both parties to the agreement as

well as members to such an agreement. Parties to the agreement are those entities

that concluded the collective agreement, viz: employers’ organisations and trade

unions. Members refer to members of trade unions or, in the case of employers’

organisations, to members of the employers’ organisation.9 A collective agreement

may also bind employees who are not union members if the following requirements

are met: firstly, the collective agreement must expressly state that it binds those

employees; secondly, the employees must be expressly identified and the trade

union(s) must represent the majority of employees working in the workplace. 10 The

legal effect of a collective agreement is that it will supersede the affected

employees’ individual contracts of employment and where a collective agreement is

concluded in a bargaining council for the industry, the Minister of Labour can, in

8 Section 23 of the LRA, own emphasis added. 9 Basson et al Essential Labour Law 279.10 Section 23(1)(d) of the LRA; Basson et al Essential Labour Law 279–280.

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certain circumstances, extend the terms of the agreement to non-parties.11 The

collective agreement is binding for the whole period of the collective agreement and

thus, even if a member of the trade union were to resign from the trade union, the

terms of the collective agreement would still apply to that person for the duration of

that agreement.12

1 3 Disputes about collective agreements

A dispute exists where the parties to the agreement disagree over the meaning of

particular provisions or where the parties disagree whether the agreement applies

to a particular set of facts or circumstances.13 A wider interpretation has also been

followed where it has been held that “a dispute about a collective agreement

applies to the situation where there is non-compliance with a collective agreement

and one of the parties wished to enforce its terms”.14

Where a person is affected by the non-compliance of a collective agreement the

LRA provides for a remedy. Section 24 of the LRA specifically requires that a

collective agreement (except for an agency15 and closed shop agreement16) must

provide for a procedure to resolve disputes about the interpretation and application

11 Modi “Interpreting Collective Agreements” (undated) http://www.bowman.co.za/News-Blog/Blog/INTERPRETING-COLLECTIVE-AGREEMENTS-Priyesh-Modi (Accessed 2015-08-12)12 Ibid.13 Grogan Collective Labour (2010) 132.14 NUCW v Oranje Mynbou en Vervoer Maatskappy Bpk 2000 2 BLLR 196 (LC).15 An agency shop agreement is defined in the LRA as “A representative trade union and an employer or employers’ organisation may conclude a collective agreement, to be known as an agency shop agreement, requiring the employer to deduct an agreed agency fee from the wages of employees identified in the agreement who are not members of the trade union but are eligible for membership thereof.” the employee must pay agency fee but doesn’t become a trade union member.16 A closed shop is where “A representative trade union and an employer or employers’ organization may conclude a collective agreement, to be known as a closed shop agreement, requiring all employees covered by the agreement to be members of the trade union.” all employees and new employees must become trade union members.

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of the collective agreement.17 The dispute procedure must first require the parties to

attempt to resolve the dispute through conciliation and, if the dispute remains

unresolved, to resolve it through arbitration.18 Where a collective agreement does

not contain a dispute resolution procedure, or if the procedure is not operative, the

dispute may be referred to the CCMA.19 This has traditionally been interpreted as

limited to interpretation or application of collective agreements. The process is one

of Conciliation and Arbitration.20

A dispute about the interpretation or application of a collective agreement may also

be referred to the CCMA if one of the parties has frustrated the dispute resolution

procedure contained in the collective agreement.21 Basson et al uses the example

of a party obstinately refusing to comply with the dispute resolution procedure

contained in a collective agreement and contends that such a dispute may not be

the subject of a strike or lock-out and the CCMA may charge an arbitration fee.22

1 4 Section 33A

Section 33A must be read with section 24.23 A bargaining council may monitor and

enforce compliance with its own collective agreement. As mentioned supra the

latter deals with the resolution of disputes concerning the interpretation or

application of a collective agreement and provides for such disputes to be referred

to the CCMA for conciliation and, if necessary, arbitration. Section 33A contains an

17 In the agency shop, employees are not compelled to be or to become members of a trade union while in the case of a closed shop all employees who are covered by the collective agreement must be or must become members of the trade union.18 Basson et al Essential Labour Law 280; Section 24 of the LRA.19 Van der Walt, Le Roux and Govindjee (eds) Labour Law in Context (2012) 193.20 See Van der Walt, Le Roux and Govindjee (eds) Labour Law in Context (2012) ch 14.21 Basson et al Essential Labour Law 283.22 Ibid.23 Of the LRA.

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exception and provides that despite any other provision in the LRA a council may

monitor and enforce compliance with its own collective agreements. The council

may adopt its own process24 or may also opt to incorporate the procedure provided

for in sections 33A(2)-(12). This process involves an agent of the council issuing a

compliance order in the event of non-compliance with an agreement of the council.

Any dispute regarding this may then be referred for arbitration by an arbitrator

appointed by the council.25 Where the non- complying party is not a party to the

council, it may object to the arbitrator appointed by the council and request that the

arbitrator should be appointed by the CCMA.26 An arbitrator has broad powers,

including the power to impose a fine, ordering compliance with the council’s

agreement and making an order of costs.27

A bargaining council may ask the minister to appoint an agent to help it enforce any

collective agreement. The agent has wide powers, including being able to:

Subpoena witnesses to give evidence; subpoena a person in control of a relevant

book, document or object to produce the item and to answer questions; enter and

inspect premises at any reasonable time after having obtained Labour Court

authorisation to do so; examine, demand to see and seize any relevant book,

document or object on the premises after having obtained Labour

Court authorisation to do so; and retain any relevant book, document or object for a

reasonable period of time. A receipt must be issued for any item which is seized

24 Section 33A(1) of the LRA.25 In practice the arbitrators are drawn from a panel of independent third party neutrals who are elected by the parties to the council to serve in the councils dispute resolution panel for a fixed term.26 In terms of section 33A(c)(ii) the arbitrator appointed by the CCMA conducts the process under the auspices of the council, and not the CCMA.27 Section 33A(8) of the LRA.

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and a subpoena issued by an agent must be signed by the director or acting

director of the commission for conciliation, mediation and arbitration.28 Any behavior

in these proceedings which would constitute contempt of court if it took place in a

court can be referred to the Labour Court for an appropriate order. The

consequence of section 33 and 33A is that bargaining councils may establish a

procedure for the compliance with bargaining council collective agreements.

Collective agreements of such bargaining councils may accordingly be enforced by

means of arbitration. It is required of a bargaining council to request the Minister of

Labour to appoint designated agents before this compliance procedure may be

used, and the arbitration procedure of section 33A to enforce compliance may be

resorted to.29

1 5 Where an employer fails to comply with a collective agreement

As referred to supra, industrial sectors generally contain bargaining councils

established in terms of section 27 of the LRA. Section 28 empowers the parties to

the bargaining council to draw up a collective agreement by which, in terms of

section 31, the parties to the council are bound by that collective agreement. 30 In

short, the collective agreement, drawn up and agreed to by the parties, prescribes

rules and regulations that apply to the industry in which the council has its scope

and jurisdiction.31

28 On a practical note, questions put to a person about a book, document or object are subject to the normal rules of a court of law.29 Prof A van de Walt and G van de Walt “Breach of a Collective Agreement Does the LRA provide a remedy in Section 24” 769-775.30 Of the LRA.31 See Van der Walt, Le Roux and Govindjee (eds) Labour Law in Context ch 14.

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The agreements also state that employers must deduct the employees’ share from

their wages and pay it over, together with the employer’s portion, to the relevant

council. The council, in turn, must pay the money to the relevant funds for which the

deductions were made. Some employers fail to comply with the provisions of the

collective agreement for their industry with many of them failing to pay over

deductions to the council.32

An employer may deduct a pension fund contribution from the employee, but fail to

pay it over to the council. The employee then loses out on his benefits and could

bring a civil lawsuit or criminal charges against the employer.33

As mentioned supra, should an employer simply refuse to register with the council

or refuse to make the required contributions, he will be issued with a compliance

order. Should the employer fail to comply with such an order, the council will

declare a dispute with the errant employer and, in terms of section 33A of the LRA,

refer the matter to arbitration either through the CCMA or via the council’s panel of

arbitrators.

The errant employer is summoned to appear before the arbitrator to answer the

allegation of non-compliance with the collective agreement. At this forum the

employer must provide good reasons why he failed to comply. The arbitrator must

hear evidence from the employer and the council’s representative

before making an arbitration award.34

32 This is a breach of the collective agreement and could have severe criminal and civil results for the errant employer.33 The deduction of money from an employee’s wage for the undue enrichment of the employer is a criminal act, making the employer liable for criminal prosecution.34 The award normally includes an instruction to pay the outstanding money to the council, and to pay a fine for non-compliance, together with interest calculated on the outstanding money, as well as a costs order.

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The employer must comply within 14 days of an award being made and if he

refuses, the council can enforce the award in terms of section 158 (1) (c) of the LRA

by having it made an Order of the Labour Court, as well as having a Writ of

Execution issued against the employer’s assets. Non-compliance with this court

order could mean contempt of court proceedings against him.

1 6 Section 23(4) of the LRA

Section 23(4) of the LRA provides that:

“Unless the collective agreement provides otherwise, any party to a collective

agreement that is concluded for an indefinite period may terminate the agreement

by giving reasonable notice to the other parties.”

An employer will only be entitled to cancel a collective agreement concluded for an

indefinite period on reasonable notice to the employee party.35 In determining what

a reasonable notice period is will be dependent on each individual case. The

Labour Appeal Court has held that a three months’ notice period was reasonable.36

1 7 Minister of Safety and Security v Safety and Security Sectoral Bargaining

Council (2010) 6 BLLR 594 LAC (hereafter Minister of Safety and Security)

The Labour Appeal Court (LAC) has determined, considered and curtailed the

application of section 24 as evidenced in the judgment of Minister of Safety and

Security.

Facts:

35 TAWUSA & Alliance comprising of STEMCWU v Anglo Platinum (2009) 5 BLLR 506 (LC).36 Edgars Consolidated Stores Ltd v FEDCRAW (2004) 7 BLLR 649 (LAC).

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For the sake of brevity, the facts and background may be summarrised as follows:

The employee, a member of the South African Police Service (SAPS) requested a

transfer from her office in Zwelitsha to Mount Road in Port Elizabeth. The Regional

Commissioner turned down the transfer and the employee thereafter referred a

dispute in terms of section 24 of the LRA to the Safety and Security Sectoral

Bargaining Council (SSSBC). At arbitration, the employee contended that SAPS

breached a collective agreement and failed to give proper or any consideration to

the employee’s interests.37 The arbitrator found in favour of the employee and

concluded that the Regional Commissioner acted illogically and irrationally and

accordingly his decision was invalid ab initio. The arbitration award was taken on

review to the Labour Court, but was essentially dismissed.38

LAC Judgment

SAPS appealed against this judgment to the Labour Appeal Court and argued that

the arbitrator lacked jurisdiction to determine the original dispute or, in other words,

they questioned whether the dispute had been correctly classified as a dispute

concerning the interpretation or application of a collective agreement as envisaged

in section 24 of the LRA.

SAPS further contended that, although the dispute was referred as a dispute

concerning the interpretation and application of a collective agreement, the real or

true issue before the arbitrator was in fact the “fairness” of the decision taken by the

Regional Commissioner to refuse the employee’s application for a transfer.

37 In casu the categorization of the dispute as a dispute about the interpretation and application of a collective agreement as envisaged in section 24 of the LRA was not placed in dispute at the arbitration proceedings38 The Labour Court corrected the award only to the extent that the arbitrator had declared the decision void ab initio, the rest of the award was not set aside.

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The court distinguished between a main dispute and an issue in dispute and

concluded that the dispute before the arbitrator in casu was the fairness of the

decision of the Regional Commissioner to refuse the request of the employee to be

transferred. The court accordingly concluded that the arbitrator had no jurisdiction

to deal with the refusal to transfer the employee as a dispute concerning the

interpretation and application of a collective agreement envisaged in section 24 of

the LRA. The appeal was accordingly upheld and the arbitration award was

consequently set aside. Learned authors such as van der Walt and van der Walt

contend that prior to the judgment supra, section 24 of the LRA adequately

provided for the resolution of interpretation disputes of collective agreements or, in

other words, the section adequately provided for application about whether or not a

collective application applies to a particular set of facts or circumstances.39

Furthermore, in the event of a breach or non-compliance with a bargaining council

agreement, such non-compliance may be referred to arbitration in terms of section

33A of the LRA, if the Minister of Labour has appointed a designated agent (s) upon

request of the bargaining council as envisaged in section 33A. Such a remedy is

not available in the case of breach of collective agreements not concluded at a

bargaining council, or bargaining council agreements where the council has not

requested the appointment of a designated agent or agents, or such request was

refused by the Minister of Labour.40

39 Van der Walt and Van der Walt “Breach of Collective Agreements: Does the PRA provide a remedy in Section 24? - Minister of Safety and Security Sectoral Bargaining Council (2010) 6 BLLR 594 LAC 2011 32.3 Obiter 769.40 Ibid.

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In the light of the different interpretations of the word “application” it was submitted

that, in order to achieve certainty, section 24 of the LRA be amended so as to

include disputes about “compliance” in addition to disputes about the

“interpretation” or “application” of a collective agreement. 41 Such an amendment, it

was successfully argued, will have the effect of granting an enforcement opportunity

of collective agreements in terms of section 24 in instances where section 33A does

not apply. Compliance with collective agreements by means of arbitration will

thereby be assured.

41 Van der Walt and Van der Walt “Breach of Collective Agreements: Does the PRA provide a remedy in Section 24? - Minister of Safety and Security Sectoral Bargaining Council (2010) 6 BLLR 594 LAC 2011 32.3 Obiter 772.

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2 Question B

Generally speaking, the Labour Relations Act 66 of 1995 (hereafter the LRA)

provides for registration of trade unions and employer organisations with the

Department of Labour. Registered unions are guaranteed organisational rights if

they can prove that they are “representative” and collective agreements between

registered trade unions and registered employers organisations are binding on

members.42

Bargaining council agreements are largely substantive agreements dealing with

wages and conditions of service but may also contain procedural items such as job

evaluations, grading systems and disciplinary procedures.43 Usually, the substantive

items in the agreements are wage rates which are renegotiated yearly. While the

Labour Relations Act of 1956 provided that industrial councils could deal with

certain specific matters, the Labour Relations Act of 1995 is mute on the subject.

Nonetheless, matters dealt with in the 1956 Act are still dealt with by the councils in

present day.44 Bargaining council agreements may contain a host of regulations

which may include, but are not limited to, hours of work, maximum working hours

per week and payment for overtime.45

42 Budlender Industrial relations and collective bargaining: Trends and developments in South Africa DIALOGUE (2009) 1 55 9; The binding effect of collective agreements are not limited to members as explained in Question A supra; see also section 23 of the LRA entitled Legal effect of collective agreements.43 Du Doit, Godfrey, Cooper, Giles, Cohen, Conradie and Steenkamp Labour Relations Law 6ed (2015) 320.44 These include but are not limited to: wage and salary scales, grading systems, piecework rates, payment to council levies, pension, insurance and sick fund contributions, provision for closed shop, prohibitions on contract work.45 Du Doit, Godfrey, Cooper, Giles, Cohen, Conradie and Steenkamp Labour Relations Law 6ed (2015) 230.

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It has been suggested that because these agreements deal with the regulation of

substantive conditions they may be regarded as basic-condition regulations for

particular industries or sectors and once gazetted, they supersede for instance the

Basic Conditions of Employment Act.46 Needless to say that because the

application of the agreements are general, they lack specificity with regards to

acute issues and circumstances. Moreover, they do not provide for employee

participation in the decision making function, however, employers are free to offer

wage rates and conditions which are more favourable than those agreed upon.47

2 1 Extension of Collective Agreements concluded in Bargaining Councils

Section 32 of the LRA regulates the extension of a collective agreement concluded

in the bargaining council to non - parties. Du Toit et al refers to both a mandatory

and discretionary extension of bargaining council agreements.48 Since one of the

main purposes of a centralised bargaining forum is to establish uniformity, section

32(1) allows the bargaining council to request the Minister of Labour, in writing, to

extend a collective agreement concluded in the council to any non-parties that are

within its registered scope and that are identified in the written request if one or

more registered trade unions whose members constitute the majority of the

members of the trade unions that are party to the bargaining council vote in favour

of the extension and one or more registered employers' organisations, whose

members employ the majority of the employees employed by the members of the

46 To the extent of the core conditions of the Basic Conditions of Employment Act; Bendix Industrial Relations in South Africa 10th ed (2010) 288.47 Du Doit et al Labour Relations Law 320.48 Ibid.

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employers' organisations that are party to the bargaining council, vote in favour of

the extension.49

Once the Minister has received the request for extension from the bargaining

council, the Minister must, within 60 days of receiving the request, extend the

collective agreement if the requirements listed in Section 32(2) have been met.

However, Section 32(5) confers the minister with discretion to extend a collective

agreement if (1) the parties to the bargaining council are sufficiently represented

within the registered scope of the bargaining council and (2A) the Minister is of the

view that a failure to extend the agreement will undermine collective bargaining at a

sectoral level or the public service as a whole.50

The Minister must then satisfy herself that parties voting in favour of the request for

extension represent the majority of employers and trade-union members, the

majority of employees within the scope of the extended agreement are members of

trade unions, the members of employer’s organisations employ the majority of

employees, the non-parties fall within the council’s scope, the council has an

effective procedure to deal with applications within 30 days by non-parties for

exemptions from the agreement, the agreement makes provision for an

independent body to hear and decide within 30 days any appeal brought against

the refusal of a non-party’s application for exemption or the withdrawal of such an

exemption, the agreement must contain fair criteria promoting the primary objects of

the LRA which must be applied by the independent body and lastly, the terms of the

agreement must not discriminate against non-parties.51

49 Section 32(1)(a)-(b) of the LRA.50 See Van der Walt, Le Roux and Govindjee (eds) Labour Law in Context ch 14.51 Section 32(3) of the LRA.

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2 2 Arguments for and against Extensions

Smaller employers argue that the extension of bargaining council agreements

bestows unwarranted powers of control and is contrary to the principle of freedom

of association.52 Smaller enterprises further argue that the agreements contain

provisions and levies that if complied with, threatens their economic viability and

existence. Employers and employees may object to these levies, yet are still

compelled to pay. Bendix states that the original purpose of extending agreements

was to prevent exploitation of non-unionised employees by establishing minimum

levels of wages and service conditions.53 Moreover, since legislation such as the

Basic Conditions of Employment Act now fills part of that lacuna, the minimum

wage-levels set by councils dominated by large employers are inaccurate54 and

renders the potential for certain agreements superfluous. While the author noted

supra appears skeptical in part, a robust argument is made. Basson et al however

maintains that small employers benefit from bargaining councils’ agreements as it

prevents unwarranted competition between same sized enterprises by

standardising production costs of goods.55 Cheadle points out more advantages,

inter alia that it is less costly than bargaining at every workplace; employers who

are bound to pay the same wage will have to compete by being more productive

and not compete by lowering wages; and that strikes are less often organised at

sectoral level.56

52 Bendix Industrial Relations in South Africa (2010) 29553 Ibid. 54 See Bendix Industrial Relations in South Africa (2010) 295. 55 Basson et al Essential Labour Law 299.56 Calitz “The Extension of Collective Agreements to Non-Parties” 2015 SAMLJ 27 1 1-31

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2 3 The Constitutionality of Extension of Bargaining Council Agreements57

Much ink has been spilt on authorising the extension of bargaining council

agreements to non-parties. The constitutionality of section 32 has previously been

unsuccessfully challenged by employers where an extended agreement prohibited

employers from making use of employees of temporary employment services

(labour brokers).58 In terms of the principle of constitutional avoidance, the court

succinctly held that the employers could not rely directly on the Constitution if they

can claim in terms of the LRA. The court then rightly pointed out that the applicants

could not rely on section 186(2) of the LRA dealing with unfair labour practices,

since the LRA does not provide for redress for the unfairness resulting from an

extension of a bargaining council agreement.59

Section 23(5) of the South African Constitution's Bill of Rights states that "every

trade union, employers' organisation and employer has the right to engage in

collective bargaining." Collective bargaining is cast as a right and the LRA provides

the organisational framework in terms of which that right is to be exercised. 60

According to Cheadle the right is composed of three elements: the freedom to

57 Since the amendments to s 32 have been adopted, the effect of National Employers’ Association of South Africa and Others (NEASA) v Minister of Labour and Others (2013) 34 ILJ 1556 (LC) and Valuline CC and Others v The Minister of Labour and Others (2013) 34 ILJ 1404 (KZP) judgments will be cancelled, as the requirements for the extension would be deemed to have been satisfied by the s 49 certificate of the Registrar; see also Calitz “The Extension of Collective Agreements to Non-Parties” 2015 SAMLJ 27 1 1-3158 Confederation of Associations in the Private Employment Sector andOthers v Motor Industry Bargaining Council (GPD) Case No. 464761/2011 (27 November 2013).59 Confederation of Associations in the Private Employment Sector andOthers v Motor Industry Bargaining Council (GPD) Case No. 464761/2011 (27 November 2013) at 28; see also Calitz “The Extension of Collective Agreements to Non-Parties” 2015 SAMLJ 27 1 1-31.60 Currie and De Waal The Bill of Rights Handbook 6ed (2014) 516.

21

bargain collectively; the right of one of the parties in the bargaining process to

exercise economic power against the opposing party (by a strike or lock-out); and

the possibility that the right imposes a duty to bargain collectively on both employer

and employee.61 The right and the exercise of the right may be threatened by the

extension of collective agreements to non-parties amounting to an imposition of a

standard as opposed to a standard arrived at through collective bargaining. 62

While it may be argued that by promoting sectoral bargaining the legislature is

limiting the right to engage in collective bargaining at plant level, according to Du

Toit et al section 23(5) of the Constitution does not spell out the level of bargaining

it protects.63 Moreover, the section64 further provides that national legislation may be

enacted to regulate collective bargaining to the extent that any limitation must

comply with section 36(1) of the Constitution. The learned authors’ further point out

that due to many ILO member states supporting centralised bargaining in some or

other form, any possible limitation of the right contained in the Constitution cannot

be said to be unjustifiable.65

More specifically, in discussing the constitutionality of section 32 of the LRA, the

following factors should be considered as reasonable and justifiable limitations of

the rights contained in the Constitution:

61 Currie and De Waal The Bill of Rights Handbook 6ed (2014) 516; see also H Cheadle Labour Relations in Cheadle et al South African Constitutional Law: The Bill of Rights 2002 365.62 Currie and De Waal The Bill of Rights Handbook 6ed (2014) 516; see also H Cheadle Labour Relations in Cheadle et al South African Constitutional Law: The Bill of Rights 2002 365.63 Du Doit et al Labour Relations Law 326.64 Section 23(5) of the Constitution.65 Du Doit et al Labour Relations Law 326.

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The extension of collective agreements is essential for the promotion of sectoral

collective bargaining which is a legitimate purpose of the LRA. If extensions are not

permitted centralised bargaining would be impossible unless every single employer

and employee within a sector belonged to employers’ organisations or trade unions

negotiate at sectoral level;66

Article 5(1) of Recommendations 91 of 1951of the ILO endorses extensions of

collective agreements and provides that “where appropriate…measure should be

taken to extend the application …of a collective agreement to all employers and

workers included within the industrial and territorial scope of the agreement”;

Section 32 of the LRA is in harmony with the constitutional framework and is

consistent with the extension of collective agreements to employees who are not

members to a majority trade union;67

And finally, employers who are unable to comply with an extended agreement may

apply for complete or partial exemption which in turn amounts to a removal of any

employers’ rights that may be limited.68

In summation, when determining the constitutionality of the extension of bargaining

council collective agreements the following should also be kept in mind. First, the

66 Ibid.67 Du Doit et al Labour Relations Law 326.68 The cumbersome process and unfair criteria that can be encountered when appealing against the decision of a bargaining council have been noted where an employer applied for an exemption in 2008 from a bargaining council, which decision was taken on review and ultimately decided in 2013. Calitz points out that the purpose for applying for an exemption was because the employer could not afford to pay the outstanding levies which needed to be paid before an exemption is granted; see Calitz “The Extension of Collective Agreements to Non-Parties” 2015 SAMLJ 27 1 1-31.

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Minister can only extend the binding force of a collective agreement if certain

requirements are met.69 Second, a collective agreement may not be made binding

on others who were not party to the negotiations and agreement unless further

requirements have been met.70 Third, the section also prevents the Minister from

extending the agreement to other workers and employers in a sector if the parties to

the bargaining council are not sufficiently representative within the registered scope

of the bargaining council and if the Minister is satisfied that failure to extend the

agreement may undermine collective bargaining at sectorial level or in the public

service as a whole.71

Cheadle points out that we can distinguish a range of rights and obligations in the

right to bargain collectively, all of which are given effect by the LRA, and endorses

the finding that there is no general constitutional duty to bargain.72

Addressing the constitutionality of the LRA's provision for the extension of

bargaining council agreements to cover non-parties, he submits that this is a

justifiable limitation of the right to engage in collective bargaining. Interestingly,

bargaining councils are in decline and endangered by government's intention to

exempt smaller enterprises from centralised bargaining. In support of Cheadle,

69 De Vos “The Free Market Foundation’s Quixotic Venture” (dated 2013-03-07) http://constitutionallyspeaking.co.za/2013/03/07/ (accessed 2015-09-07); The requirements are that the members of the majority trade union vote in favour of the extension and if the employers’ organisations, whose members employ the majority of the employees that are party to the bargaining council, vote in favour of the extension70 The requirements are that the majority of all the employees who will be bound by the extended collective are members of the trade unions that are parties to the bargaining council and if the employers’ organisations who are parties to the bargaining council agreement will employ the majority of all the employees who are bound by the extended collective agreement.71 De Vos “The Free Market Foundation’s Quixotic Venture” (dated 2013-03-07) http://constitutionallyspeaking.co.za/2013/03/07/ (accessed 2015-09-07)72 H Cheadle Labour Relations in Cheadle et al South African Constitutional Law: The Bill of Rights 2002 365.

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writer submits that this is gratuitous, given that there is already provision for

exemptions from bargaining council agreements.73

3 Question C

73 H Cheadle Labour Relations in Cheadle et al South African Constitutional Law: The Bill of Rights 2002 365.

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Strikes, all too often accompanied by violence, are common in essential services in

South Africa. Section 23(2) of the Constitution of the Republic of South Africa, 1996

and Chapter IV of the Labour Relations Act74 (hereafter the LRA) seek to

comprehensively regulate industrial action. While in most countries, industrial action

in essential services is restricted, strikes and lock-outs in South Africa have been

prohibited.75 In analysing the success of Minimum Service Agreement’s in the

South African context phrases such as ‘strike’, ‘essential services’, ‘essential

services committee’ and ‘minimum service agreements’ will be unpacked before

dealing with whether it is practical in South Africa to have certain employees strike

and not get paid, while others work and get paid. Challenges and proposed

solutions will be addressed throughout this assignment.

The definition of strike in the LRA is defined as follows:

“the partial or complete concerted refusal to work, or the retardation or obstruction of

work, by persons who are or have been employed by the same employer or by

different employers, for the purpose of remedying a grievance or resolving a dispute

in respect of any matter of mutual interest between employer and employee, and

every reference to "work" in this definition includes overtime work, whether it is

voluntary or compulsory”76

The right to strike is a constitutional right afforded to all employees however, the

LRA does contemplate restrictions on the right to strike in respect of those

74 66 of 1995 (Hereafter the LRA)75 Section 65 (1)(d) of the LRA.76 Section 213 of the LRA.

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employees who are engaged in essential services.77 From a practical perspective

striking, as a physical act, has seen individuals being thrown out of trains, trucks

and drivers/occupants burnt, dustbins and dirt emptied in streets, libraries and

property damaged, streets barricaded , councillors and members of public and

non-striking workers killed.

3 1 Essential Services

The LRA contains a broad definition of ‘essential services’ in accordance with the

ILO approach and creates a specialised body, the Essential Services Committee

(ESC) which oversees all aspects of essential services.78 Our law requires essential

services to be restrictively interpreted, and this means, that it is the service which is

essential, not the industry or the institution within which the service falls. 79 Only

those employees who are truly performing an essential service, may be prohibited

from striking and essential and non-essential service workers may be found working

side by side in the same institution.80

The LRA defines an essential service as

“ (a) a service the interruption of which endangers the life, personal safety or health

of the whole or any part of the population;

(b) the Parliamentary service;

(c) the South African Police Services”81

3 2 Essential Services Committee (ESC)

77 See Van der Walt, Le Roux and Govindjee (eds) Labour Law in Context ch 14.78 Du Doit, Godfrey, Cooper, Giles, Cohen, Conradie and Steenkamp Labour Relations Law 6ed (2015) 373; see section 70 of the LRA.79 See Van der Walt, Le Roux and Govindjee (eds) Labour Law in Context ch 14.80 SAPS v POPCRU (2010) 12 BLLR 1263 (LAC); (2010) 31 ILJ 2844 (LAC).81 Section 213 of the LRA.

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An essential services committee is established in terms of Section 70 of the LRA

and its primary mandate is to conduct investigations as to whether or not the whole

or a part of any service is an essential service.82 Moreover, the committee

concludes Minimum Service Agreements (MSA) for designated services and ratify

Bargaining Council Collective Agreements that provide for the maintenance of

Minimum Services83 while handling disputes on whether services are essential.

Needless to say the net effect of designation is to limit the right to strike.

3 3 Minimum Service Agreements

The LRA does not define a minimum service, but it is generally understood to be a

minimum service of an essential service or in other words the ambit of an essential

service is reduced to a minimum service. Put differently, ‘minimum service’ refers to

those specific activities which are indispensable for the preservation of life, personal

safety and health through the provision of a service that has been designated

essential.84 The effect of determining minimum services is that only those services

are regarded as essential and made subject to a compulsory dispute resolution

procedure.85 Du Toit et al uses the example of the intensive care unit (ICU) in a

hospital being regarded as a minimum service, while the office administration staff

of the same hospital may be excluded.86 The consequence is that industrial action

within the administration staff will be permissible.87 The LRA contemplates the

82 Section 71 of the LRA.83 Section 72 of the LRA.84 Section 72(3) of the LRA.85 Section 72(3) of the LRA.86 A minimum service agreement can contain the following detail: whether the service is essential in its entirety or only partially essential; whether the service is essential at reduced service levels; the minimum number of employees required to continue working during a strike, either expressed as a number or a percentage of the current workforce; the type of services which must be continued during strike action;minimum service levels associated with various functions and duties to be performed during strike action;waiver of a right to engage replacement labour to provide services in excess of the minimum services.87 Du Doit, Labour Relations Law 376.

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determination of essential services by collective agreement which must be ratified

by a panel of the ESC.

Section 72 of the LRA entitled Minimum Service Agreements states the following:

“The essential service committee may ratify any collective agreement

that provides for the maintenance or minimum services in a service

designated as an essential service, in which case:

(a) the agreed minimum services are to be regarded as an essential

service in respect of the employer and its employees; and

(b) the provisions of section 74 do not apply”.

One of the major obstacles in South Africa has been the inability of employers and

trade unions within essential services to conclude a collective agreement to be

ratified by the ESC.88 Legislation has attempted to overcome this obstacle by

adopting a two-pronged approach. Firstly, a panel of the ESC may order parties to

negotiate a minimum services agreement within a specified period of time, failing

which, permit either party to refer the matter to the Commission for Conciliation

Mediation and Arbitrations (CCMA) or bargaining council for arbitration.89 Secondly,

where the parties fail to conclude a collective agreement or, if same is not ratified,

the panel may itself determine the minimum services.90

3 4 Analysis, Challenges and Proposals

It is not entirely clear why any union would want to designate a minimum service as

it can seldom serve worker interests to have a service designated as such. The

88 Du Doit Labour Relations Law 377.89 Section 72(1)(a) and 72(1)(b) of the LRA.90 Section 72(2) of the LRA.

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right to strike would only apply to the workers who are non-essential, meaning that

a limited number of workers who are not needed to keep the essential service

running effectively would strike on behalf of the non-strikers. This would obviously

put very little pressure on the employer to settle and a strike would in all likelihood

fail. The fundamental right to strike is based on the functional importance of strikes

to collective bargaining and with an ineffectual strike, collective bargaining may

amount to collective begging.91

It may appear to make sense for workers to ballot in favour of interest arbitration as

otherwise they would have no alternative to their right to strike other than to hope

that the non-minimum service workers would have sufficient leverage while striking

to win benefits for them.92 According to Brand the prospect of this would, in most

cases, be very slim.93 Should they ballot in favour of arbitration then one has to ask

what the purpose would have been of determining a minimum service in the first

place, because in the absence of such a determination the parties would have a

right to interest arbitration in any event.94

Surprisingly to date, no minimum service agreement has been ratified by the ESC.

The reason for this may be twofold. The first is that very few minimum service

agreements have been negotiated as trade unions appear to have been

unenthusiastic about validating strike action that has the effect of dividing the

91 Brand “Essential Services and the Implications of Minimum Service Agreements in the Public Service” BLRC 2013 7.92 See Van der Walt, Le Roux and Govindjee (eds) Labour Law in Context ch 14.93 Brand “Essential Services and the Implications of Minimum Service Agreements in the Public Service” BLRC 2013 7.94 Ibid.

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workforce between those who must continue to work and get paid95 and those who

are allowed to strike. Adhering to the “no work no pay” principle, the latter would

then endure the full effects of the strike where it hurts the most – their back

pocket.96 At the risk of repeating the introductory paragraph, the reader is reminded

that “striking, as a physical act, has seen individuals being thrown out of trains,

trucks and drivers/occupants burnt, dustbins and dirt emptied in streets, libraries

and property damaged, streets barricaded , councilors and members of public and

none striking workers killed.”97 In South Africa’s toughened collective bargaining

arena, it is submitted that the reluctance of unions in validating strike action is

understandable when considering the aforegoing. There is however a tactical side

to trade unions preferring to pursue strike action across the entire bargaining unit

which includes essential service workers as this increases the pressure upon the

employer and so enables both essential and non-essential service workers to

leverage greater benefit from the strike.

Equally strategic, employers have also appeared not to have considered it

important to pursue the conclusion of minimum service agreements as in their

absence a larger proportion of public sector workers are precluded from striking.

According to Brand, once strikes have started public sector employers have shown

little willingness or ability to prevent strike action by essential service workers.98

95 Due to the fact that they are employed in essential services.96 Referring to their salaries or pay packets97 See introduction paragraph supra.98 Brand “Essential Services and the Implications of Minimum Service Agreements in the Public Service” BLRC 2013 7.

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The second reason why the ESC has not ratified any minimum service agreements

is that it has not been satisfied that the agreements would ensure the proper

maintenance of the essential service during a strike as ensuring no disruption is no

simple task in the South African context.99

It must be emphasised that if either party really wanted to conclude a minimum

service agreement it is entitled to make a proposal to the other side and if

negotiation fails, then the LRA and the bargaining council constitutions require that

the dispute (over the terms of the minimum service agreement to be concluded)

may be referred to conciliation100 and failing that to interest arbitration. The award of

the interest arbitrator would then have to be ratified by the ESC before coming into

effect. Notwithstanding complaints by some unions about the absence of minimum

service agreements, none of them has made use of the procedures available to

them in law to force conclusion minimum service agreements.101

From the aforegoing it appears apparent that South Arica has the legislative means

at its disposal yet little if any is fully utilised. The strike option appears empty and

inappropriate as a real solution to disputes in essential services especially where

certain employees strike and do not get paid, while others work and get paid.

99 Ibid.100Section 72(1)(a) and 72(1)(b) of the LRA.101 As at 2013; see Brand “Essential Services and the Implications of Minimum Service Agreements in the Public Service” BLRC 2013 9.

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BIBLIOGRAPHY

LEGISLATION

Basic Conditions of Employment Act 75 of 1997

Employment of Educators Act 76 of 1998

Labour Relations Act 28 of 1956

Labour Relations Act 66 of 1995

The Constitution of the Republic of South Africa, 1996

BOOKS

Basson, Christianson, Dekker, Garbers, le Roux, Mischeke and Strydom Essential

Labour Law 5ed (2009) Labour Law Publications Centurian

Bendix Industrial Relations in South Africa (2010) Juta & Co Claremont

Currie and De Waal The Bill of Rights Handbook 6ed (2014) Juta & Co Cape Town

33

Du Doit, Godfrey, Cooper, Giles, Cohen, Conradie and Steenkamp Labour Relations

Law 6ed (2015) Lexis Nexis Durban.

Govindjee and Vranken (eds) Introduction to Human Rights Law (2009) LexisNexis

Durban

Grogan Workplace Law 10ed (2009) Juta & Co Claremont

Martin and Law A Dictionary of Law 5ed (2002) Oxford New York

Rycroft and Jordaan A Guide to South African Labour Law 1992 2ed Juta & Co

Claremont

Van der Walt, Le Roux and Govindjee (eds) Labour Law in Context (2012) Pearson

JOURNAL ARTICLES

Brand “Essential Services and the Implications of Minimum Service Agreements in

the Public Service” BLRC 2013

Bhorat and van der Westhuizen “A Synthesis of Current Issues in the Labour

Regulatory Environment” 2008 DRPU 1

Calitz “The Extension of Collective Agreements to Non-Parties” 2015 SAMLJ 27 1

1-31

34

Van der Walt and Van der Walt “Breach of Collective Agreements: Does the PRA

provide a remedy in Section 24? - Minister of Safety and Security Sectoral

Bargaining Council (2010) 6 BLLR 594 LAC 2011” 32.3 Obiter 769.

TABLE OF CASES

Department of Justice v CCMA 2004 25 ILJ 248 (LAC)

Edgars Consolidated Stores Ltd v FEDCRAW (2004) 7 BLLR 649 (LAC).

National Employers' Association of South Africa and Others vs Minister of Labour

and Others (2012) 2 BLLR 198 (LC)

NEHAWU v University of Cape Town 2003 24 ILJ 95 (CC)

National Employers’ Association of South Africa and Others (NEASA) v Minister of

Labour and Others (2013) 34 ILJ 1556 (LC)

NUCW v Oranje Mynbou en Vervoer Maatskappy Bpk 2000 2 BLLR 196 (LC).

SAPS v POPCRU (2010) 12 BLLR 1263 (LAC); (2010) 31 ILJ 2844 (LAC).

TAWUSA & Alliance Comprising of STEMCWU v Anglo Platinum (2009) 5 BLLR

506 (LC)

Valuline CC and Others v The Minister of Labour and Others (2013) 34 ILJ 1404

(KZP)

WEBSITES

South African Legal Information Institute http://www.saflii.org (accessed 2015-09-

01)

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Modi “Interpreting Collective Agreements” (undated)

http://www.bowman.co.za/News-Blog/Blog/INTERPRETING-COLLECTIVE-

AGREEMENTS-Priyesh-Modi (Accessed 2015-08-28)

De Vos “The Free Market Foundation’s Quixotic Venture” (dated 2013-03-07)

http://constitutionallyspeaking.co.za/2013/03/07/ (accessed 2015-09-07)

36