In 2011 the National Employer’s Association of South Africa (NEASA) and the Plastic Converter’s Association of South Africa (PCASA) challenged the Minister of Labour’s decision to extend the 2011 / 2014 Collective Main Agreement to non-parties.  The challenge by NEASA and the PCASA in the Labour Court matter was founded on the basis that the industry trade unions did not represent the majority of the employees who, on extension of the Main Agreement, fall within its scope.  The Minister’s original decision to extend the Agreement in terms of section 32(3) of the LRA requires the unions to represent the majority whereas, according to audited figures collected in 2010, they represented 49.47%.

 

On 12 Aril 2013 the Minister of Labour signed the 2011 / 2014 Main Agreement, which has been published under Government Notice R.268 in Government Gazette 36338 dated 12 April 2013 and came into operation on the same day.  The gazettal and extension of the 2011 / 2014 Main Agreement settlement agreement by the Minister of Labour, entered into between SEIFSA on behalf of the 27 federated employer associations and the industry’s six trade unions, vindicates a long-held view that agreements entered into between the majority of contesting parties (or a percentage which is considered to be sufficiently representative) must, through statute, become the basis on which employers throughout industry conduct their businesses.

In exercising her discretion, the Minister of Labour decided to extend the Main Agreement to non-parties in accordance with section 32(5) of the Labour Relations Act (LRA), on the basis that the parties to the bargaining council are sufficiently representative and that she is satisfied that failure to extend the Agreement may undermine collective bargaining.  This was done in accordance with a Labour Court judgment handed down in December 2012 (the latest Gazettal is a re-publication of the contents of Government Notice R.748 in Gazette No. 34613 of the 23rd of September 2011, which was declared invalid by the court).

The publication contains the terms of the 2011 - 2014 Settlement Agreement, which expires on 30 June 2014. The Gazette also now includes an explanatory note which deals with the alleged confusion regarding the rate A to H wage grade percentage spread.  There is now clarity, therefore, on the exact wage increase percentages for all grades across the board, from rate A to rate H, for all three years of the agreement.

It is important to note that the current review application lodged by NEASA against the Minister of Labour has no impact on the Minister’s decision, which remains binding, unless such decision is set aside on review. Until and unless a court of law sets the decision of the Minister aside as having no legal force or effect, the decision remains valid and binding. Until such decision is set aside by a court of law in proceedings for judicial review, it exists in fact and has legal consequences and is fully operational.

The 2011 / 2013 three-year wage kept its promise of maintaining industrial peace and stability over the last three years – a period that has been characterised as the most unstable and volatile period of industrial relations experienced in a very long time in our country.

Collective bargaining is not a perfect model and challenges will continue both against its appropriateness, and more importantly, on the constitutional question surrounding the custom and practice of extending agreements to non-parties.

However, companies which are not able to meet the requirements contained within the collective agreements need to remember that there are alternative remedies available, the most important of which is the exemption process.

In closing, SEIFSA supports centralised collective bargaining and the established practice of extending collective agreements to non-parties, in accordance with the relevant provisions of the LRA, and will continue to do so until a more satisfactory model can be devised.

As the voice of over 2 200 individual employers employing in excess of 200 0000 employees, SEIFSA is already preparing for the forthcoming round of annual wage and conditions of employment negotiations scheduled to commence early in 2014.