There are various Bargaining Councils that a business may or may not fall under. These Councils could be the Road Freight Bargaining Council, Motor Industry Bargaining Council, Metal Engineering Bargaining Council, Chemical Bargaining Council, etc. Some of these Councils are compulsory and some are voluntary.

What recourse will an employer have if they receive a compliance order from a Bargaining Council or multiple Bargaining Councils claiming that the business now falls under the jurisdiction of that Bargaining Council and the business must now comply with the main agreement with regards to wages, provident fund, levies, etc? This could place a heavy financial burden on the employer. Can the employer dispute the compliance order if he feels that the business does not fall within the scope of such a Bargaining Council and how can the employer go about doing this?

The scenario above will give rise to a demarcation dispute. In ‘’National Manufactured Fibres Employers Association and another v Chemical Workers Industrial Union and others’’ the court considered the very meaning of demarcation and said: “The word ‘demarcation’ is not used in the Act. However, it is useful word to describe the function which is performed by an appropriate body when that body decides whether an employer and employees of a Bargaining Council or statutory Council are engaged in activities which fall within a section, i.e. an industry or service, and an area.”

Section 62 of the Labour Relations Act provides that any employer, union, employee, employer’s organisation or anyone with a direct or indirect interest may refer a dispute to the CCMA to determine the matter with regards to demarcation of a Bargaining Council in a specific business. The CCMA must appoint a Commissioner to hear the application and decide on the matter. Prior to making an award the Commissioner must consider any written representations made and must consult National Economic Development and Labour Council (NEDLAC). Should the Commission feel that the nature of the award is of substantial importance it may publish the award in the Government Gazette.

Should any party not be satisfied about the award section 145 of the LRA with regards to review of arbitration awards will still apply.

It is therefore vital that employers use the services of competent and well-trained employers organisations prior to lodging any dispute at the CCMA as demarcation disputes could be a lengthy process.


Article by: Ryan Chetty

Dispute Resolution Official – Durban