The South African Constitution protects the rights of every citizen in terms of section 18, which states that everyone has the right to freedom of association. In terms of section 23 of the Constitution, everyone has the right to fair labour practices; and every worker has the right to form and join a trade union. However, before a trade union may be recognised in a workplace, it should have attained certain organisational rights in terms of the Labour Relation Act, as amended (LRA).
Following the above, after a trade union has attained organisational rights, employers or employer’s organisations and trade unions may conclude either an agency shop agreement or closed shop agreement, as a form of recognition agreement.
Agency shop agreement:
Most employees join trade unions for better working conditions, and/or better salaries, however, in most instances, some employees do not want to be part of any union. Still, it should be noted that when the union successfully bargains with an employer and where an agency shop agreement is concluded, the non-union members will also benefit from the said agreement, or union activity, and therefore must pay an agency fee instead of a trade union membership fee. Section 25 of the LRA regulates agency shop agreements.
Section 25 of the LRA states that 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.
An agency shop agreement is binding only if it provides that employees who are not members of the representative trade union are not compelled to become members of that trade union; that the agreed agency fee must be equivalent to, or less than; (i) the amount of the subscription payable by the members of the representative trade union; (ii) If the subscription of the representative trade union is calculated as a percentage of an employee’s salary, that percentage; or (iii) If there are two or more registered trade unions party to the agreement, the highest amount of the subscription that would apply to an employee; that the amount deducted must be paid into a separate account administered by the representative trade union; and no agency fee deducted may be; (i) paid to a political party as an affiliation fee; (ii) contributed in cash or kind to a political party or a person standing for election to any political office; or (iii) be used for any expenditure that does not advance or protect the socio-economic interests of employees.
Despite the provisions of any law or contract, an employer may deduct the agreed agency fee from the wages of an employee without the employee’s authorisation. Despite the above, a conscientious objecting employee may request the employer to pay the amount deducted from that employee’s wages into a fund administered by the Department of Employment and Labour, whereby the auditor’s report thereof.
An employer or employers’ organisation that alleges that a trade union is no longer a representative trade union in terms of the LRA must give the trade union written notice of the allegation and must allow the trade union 90 (ninety) days from the date of the notice to establish that it is a representative trade union. If within the 90 (ninety) day period, the trade union fails to establish that it is a representative trade union, the employer must give the trade union and the employees covered by the agency shop agreement 30 (thirty) days’ notice of termination, after which the agreement will terminate. In the event that an agency shop agreement is terminated, the provisions, and funds are administrated by in terms of the LRA, until the funds in the separate account are spent.
In the LAC matter between Solidarity obo Members employed in Motor Industry & Automobile Manufacturers Employers organisation, Nissan SA (PTY)Ltd, Toyota SA (PTY)Ltd, Volkswagen of SA (PTY) LTD, Ford Motor Company of SA (PTY) Ltd, BMW SA (PTY) LTD, General Motors SA (PTY) LTD, Mercedes-Benz SA, National Bargaining Forum (Automobile Industry), NUMSA case nr: JA11/17 dealt with the lawfulness of the agency shop agreement. The union contended that the conclusion of the agency shop agreement null and void ab initio as it did not comply with section 25(3) of the LRA and that any fee deduction was unlawful. The parties to the agency shop agreement amended the collective agreement to comply with section 25(3). The union still contended that an agency shop agreement that does not comply with the LRA is void ab initio and cannot be amended to cure unlawful deductions made in terms thereof. The court held that the original collective agreement did not comply with section 25(3) of the LRA and was null and void ab initio and incapable of rectification. However, said agency shop agreement is a collective agreement which may be amended and not rectified. The rectification is a remedy designed to correct the failure of a written contract to reflect the true agreement between the parties to the contract, which was not the contention, but rather the enforceability. The National Bargaining Forum herein did not seek to rectify a clause of the collective agreement because it did not reflect the true intention of the parties. It amended the collective agreement to ensure enforceability by repealing the original version and substituting it retrospectively with a compliant version. The court finally dismissed the matter with costs, and the Labour Court judgment was upheld.
Closed shop agreements
In an instance that a trade union is a majority union in a workplace, some trade unions would want to conclude a closed shop agreement which will prohibit minority unions in the workplace to bargain with the employer and will be applicable to all the employees in the workplace. Furthermore, the only, and to some degree compelling, reason why an employer may agree to, and possibly welcome a closed shop agreement, is to limit on-site union rivalry, as the incumbent union, in essence, monopolises the employer’s employee’s union membership, via the closed shop agreement. Section 26 of the LRA regulates closed shop agreements.
Section 26 stipulates that a representative trade union and an employer or employers’ organisation 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. A closed shop agreement is binding only if a ballot has been held of the employees to be covered by the agreement; two-thirds of the employees who voted have voted in favour of the agreement; there is no provision in the agreement requiring membership of the representative trade union before employment commences, and it provides that no membership subscription or levy deducted may be; (i) paid to a political party as an affiliation fee; (ii) contributed in cash or kind to a political party or a person standing for election to any political office; or (iii) used for any expenditure that does not advance or protect the socio-economic interests of employees.
Despite the above, a closed shop agreement may be concluded between a registered trade union and a registered employers’ organisation in respect of a sector and area to become binding in every workplace in which; (a) a ballot has been held of the employees to be covered by the agreement, and; (b) two-thirds of the employees who voted have voted in favour of the agreement. No trade union that is a party to a closed shop agreement may refuse an employee membership or expel an employee from the trade union unless the refusal or expulsion is in accordance with the trade union’s Constitution; and the reason for the refusal or expulsion is fair, including, but not limited to, conduct that undermines the trade union’s collective exercise of its rights.
Furthermore, the LRA states that it is not unfair to dismiss an employee for refusing to join a trade union party to a closed shop agreement, who is refused membership of a trade union party to a closed shop agreement, in accordance with the LRA. The employees at the time a closed shop agreement takes effect, may also not be dismissed for refusing to join a trade union party to the agreement; and employees may not be dismissed for refusing to join a trade union party to the agreement on the grounds of conscientious objection. Said employees may be required by the closed shop agreement to pay an agreed agency fee, in terms of the LRA.
In the event that a registered trade union represents a significant interest in, or a substantial number of, the employees covered by a closed shop agreement may notify the parties to the agreement of its intention to apply to become a party to the agreement and, within 30 (thirty) days’ of the notice, the employer must convene a meeting of the parties and the registered trade union to consider the application. If the parties to that closed shop agreement do not admit the registered trade union as a party, the trade union may refer the dispute in writing to the CCMA for adjudication.
Article by: Ernest Masupye
Collective Bargaining Coordinator