The term collective agreement stems from ‘collective bargaining’ and is defined in Section 213 of The Labour Relations Act as amended being a written agreement concerning terms and conditions of employment or any other matter of mutual interest concluded by one or more registered trade union(s) on the one hand and on the other hand, one or more employer(s), registered employers’ organisation(s), and employers and one or more registered employers’ organisation(s).


In essence, collective agreements are concluded once collective bargaining takes place, which entails negotiations between parties to reach common ground. The various levels of bargaining are as follows:


Centralised bargaining level

This happens when many unions establish centralised bargaining forums. Centralised bargaining forums allow unions to negotiate with all employers in the sector or industry. Bargaining councils make and enforce collective agreements, solve labour disputes, establish various schemes and make proposals on labour policies and laws.



Negotiations can also happen at the company level. Shop stewards are elected and mandated from the different workplaces of a company. They would then form a negotiating team.


Plant level

This is when negotiations happen at a single workplace, but negotiations at plant level can also happen at another level. For example, centralised bargaining at the national level could establish a framework of minimum standards which workers might seek to improve at a plant level.


A collective agreement binds the parties to the agreement; the members of every other party to the agreement insofar as the provisions of the agreement are applicable; the members of a registered trade union that is party to the agreement; and the employers who are members of a registered employers’ organisation that is party to the agreement. Employees who are not members of the registered trade union that is party to the agreement are bound by the agreement if the employees are identified in the agreement; the agreement expressly binds the employees, and the trade union represents the majority of the employees in the workplace.


The various issues that are regulated by Collective agreements are the terms and conditions of employment, for example, overtime and leave; Wage agreements; working conditions, union rights, maternity and paternity leave. Mainly it involves negotiations. However, mediation, arbitration, strike and lock-out actions can be part of the process.



The current position is that a bargaining council may request the Minister of Labour in terms of s 23(1)(d) and section 32 of the LRA to extend a collective agreement concluded in a bargaining council to non-parties that fall within the scope of the bargaining council. Such non-parties must be identified in the request made to the Minister as follows:

  • one or more registered trade unions whose members constitute the majority of members of the unions that are party to the bargaining council have voted in favour of such extension at a meeting of that bargaining council; and
  • one or more registered employer organisations, whose members employ the majority of the employees employed by members of the employer organisations that are party to the bargaining council, have likewise voted in favour of such extension at that bargaining council meeting.


In recent years there have been a number of cases where employers have challenged the validity of such Ministerial extensions, for example:

In Valuline CC v Minister of Labour (2013)34ILJ 1404 (KZP), where the Minister failed to rely on objective evidence to test the level of representivity of the employer parties to the collective agreement that was sought to be extended.


In Free Market Foundation v Minister of Labour & Others (2016)8 BLLR 805 (GP) where the High Court held that such extensions to non-parties were not unconstitutional but a request to extend constituted reviewable administrative action in appropriate circumstances.


In the decision of the court in AMCU v Chamber of Mines of South Africaiu4ejCT87/16 [2017] dealt with the extension of collective agreements in terms of section 23 (1) (d) of the LRA and the “knock on effect” on the right to strike. It demonstrated that the impugned section 23(1)(d) of the LRA could withstand constitutional scrutiny, especially when considered in conjunction with the policy of majoritarianism embedded in the LRA. A challenge to the provision is also a challenge to the legislative policy chosen by the legislature, and this has a far-reaching effect as it involves the whole scheme of the Act and not just section 23(1)(d). In any case, the union that sought to attack the principle wanted to rely on its majority representation in some mines of the employer. This is, therefore, a self-defeating exercise. The judgment has also highlighted the constitutional importance of this provision. It has shown that section 23(1)(d) ensures that employees whose trade union operates outside a bargaining council can still exercise their right to collective bargaining effectively. The note has considered the significance of the right to strike but that it is not absolute, and the limitation imposed upon it is merely collateral and justifiable in an open and democratic society.


In conclusion, the effect of the extension collective agreements provide for the application of minimum wages amongst other pertinent matters. When these agreements are extended to non-parties, these non-parties are obliged by law, to implement these minimum wages as set out in the relevant collective agreement, which may not be favourable to all employers in the industry.


Article by: Natasha Govender

Dispute Resolution Official / Collective Bargaining Coordinator – Pretoria