This article is written with the backdrop of Mr N Strating’s article which was published on the CEO facebook page on 7 December 2015 titled “The right to Strike” (http://www.ceosa.org.za/the-right-to-strike-and-the-effects-the-labour-relations-act-has-thereto/?fb_ref=Default) as well as the increasing number of mutual interest disputes, within the essential services, being referred to Arbitration.

Section 74(4) of the Labour Relations Act states that these types of disputes need to be arbitrated by the CCMA.

The perception amongst employers who employ employees who fall under the auspice of essential services has been that, due to the fact that these employees do not have the right to legally strike, they have an “easy out” when it comes to wage or other substantive issue negotiations.

The reason for this perception is largely due to the fact that these employers assumed that they merely needed to present financial documentation at an Arbitration and if these documents show that the company is not in a financial position to accommodate the requested wage increase or other substantive issues (provident fund, medical aid, increased leave days ect.) it would be the end of it.

This is however not the case.

It is also a common misperception that these interest arbitration awards are seen as advisory awards which is not the case.  These awards will be binding on the parties when issued.

The Arbitrator during a Section 74(4) interest arbitration should decide on an award that will in all probability resolve the dispute in a manner reasonable to both parties.

In an article written by John Brand titled “The Potential for Interest Arbitration in South Africa” the following is suggested:

“the interest arbitrator is required to determine the dispute as it would have been determined if strike action had been permissible” and, particularly in non-final interest arbitrations, that “the arbitrator is required to determine new rights for the parties according to standards of fairness and equity.”

Brand goes further and states that when an interest arbitrator determines the criteria to be used the following should be taken into account:

“What the interest arbitrator is required to do is to supplement the collective bargaining process by striking a fair and equitable deal for the parties which they were unable to do for themselves.  For an arbitrators determination to be workable it needs to take serious account of the type of arguments parties make to one another during the collective bargaining process.  These arguments include for example the ability to pay, prevailing practice in the industry, cost of living indices, previous practice, competition, productivity, public interest, supply and demand and internal and external comparisons and equity.

No single criterion has universal application and arbitrators generally apply a combination of standards, which may vary from case to case.  Often the application of these criteria does not point in the same direction.  It is therefore necessary to weigh each factor and make a determination which is fair and equitable on balance.

The weight to be awarded to the particular criterion in any given case should be on the basis of the evidence tendered by the parties and the burden is on the parties to submit evidence which is both factual and material so that the arbitrator is not required to speculate.”

Conclusion

It is my advice that the in-house negotiation process is utilized to the fullest extent as the onus to prove that the rights/interests of the employer, outweighs the rights/interests of the employees, during an interest arbitration will not easily be achieved.

And agreement in-house would also remove the risk of an unknown and binding arbitration award.

When confronted with these types of disputes be sure to contact the employers organisation as soon as possible to ensure that all criteria is taken into consideration before completing in-house negotiations.

 

Article by: Jaundré Kruger

CEO Regional Manager – Bloemfontein