Bargaining councils are paramount in South African Labour law as bargaining councils give effect to industry-level centralised bargaining, inclusive of matters of mutual interest and wage negotiations that are governed by such collective agreements.
As discussed in our previous article of this month’s theme, The Role of Collective Bargaining Systems in South Africa’ – E. Masupye, section 32 of the Labour Relations Act (LRA) permits the extension of collective bargaining agreements concluded at a sectoral level to persons not directly involved in the collective negotiations and not a party to the agreement concluded in the relevant bargaining council. In terms of sections 32(1) and (2) of the LRA, the Minister of Labour “must” extend the agreement where the following parties voted in favour of such an extension:
- One or more registered trade unions whose members constitute the majority of the members of the trade union that are party to the bargaining council; and
- One or more registered employers’ organisations, whose members employ the majority of the employees employed by the members of the employers’ organisations that are party to the bargaining council.
The extension envisaged in section 32 relates to collective agreements concluded at a bargaining council and which require the endorsement of the Minister for them to be extended to an entire sector. However, this sounds easier than done in some instances as the extension by the Minister is regarded as an administrative act that is subject to review in the South African courts. Such a challenge of an extension can be seen in the new Bargaining Council for the Food Retail, Restaurant, Catering and Allied Trades. On the 21st of January 2021, this council was able to get their Main Agreement extended by the Minister, whereby said agreement’s period of operation had been extended until the 31st of December 2021 to all parties in the industry.
On the 2nd of March 2021, Business Insider published an article stating that the restaurant industry struck a legal blow against a costly set of new rules for staff pay, which would have included mandatory pay hikes, December bonuses and weekly payments to clean uniforms.
In January 2021, the rules were gazetted as part of a controversial collective agreement for the restaurant and fast-food sector. However, some employers in the industry, with support from industry body Restaurant Collective, applied for an urgent interdict by the Labour Court to stay the extension of the agreement to non-parties. The court found that employers who were not part of the Bargaining Council for Fast Food, Restaurant, Catering and Allied Trades could not be forced to comply with the collective agreement. In January 2021, Labour Minister Thulas Nxesi confirmed that the collective agreement applies to almost all employers in the food service sector, with exceptions extended to hotels and service stations. This urgent interdict, which was granted without much of a challenge, is confirmation that restaurants won’t have to comply with the stringent new rules.
This means that the collective agreement will now be reviewed, and the Department of Employment and Labour must prove that the bargaining council represented the majority of restaurants in South Africa. Therefore, many employers in this industry are relieved from complying with the unreasonable increases due to the current pandemic having a direct effect on the sector.
Another example of an extended Main Collective Agreement that is challenged is at the National Bargaining Council for the Private Security Sector (NBCPSS), which extended their agreement on the 20th of February 2020. This agreement was negotiated and reached right before the global COVID-19 pandemic. As such, this agreement has become unaffordable for employers, especially relating to the benefit of Security Officer Premium Allowance in terms of clause 4 of said agreement.
Parties to this agreement that extended this agreement to the industry sought an exemption which has been granted to only them on the 16th of March 2021. However, it leaves many non-parties in the industry at dismay and will have to apply for exemption individually. Some employers have spoken out over the council’s unjustifiable manner in which it exercises its collective agreements, which is an indication that the council’s woes have just begun in defending the extension of its collective agreements.
In the judgment in Workforce Group (Pty) Ltd v Motor Industry Bargaining Council and Others (20076/2014)  ZASCA 66 (the 15th of May 2015), in which the court accepted that a matter concerning an extended agreement which had expired was unresolved. The parties agreed that the dispute over the validity of the agreement was uncertain. As far as it can be determined from this judgment, the disputed provision in the agreement concerned restrictions on the use of temporary employment services, and it is not apparent how any declaration that the agreement was a nullity could have had any practical consequences for parties that might have been in breach of those restrictions in the past.
In Khumalo & another v MEC for Education, KwaZulu-Natal (2013) 34 ILJ 296 (LAC), the Labour Appeal Court also held that: ‘In reviewing and considering whether to set aside an administrative action, courts are instilled with a discretion and may in the exercise thereof refuse to order the setting aside of an administrative action, notwithstanding substantive grounds being present for doing so.
In conclusion, the Minister is obliged to extend a collective agreement concluded under the auspices of a bargaining council if the preconditions set out in section 32(3) have been complied with. Please note that non-members of a bargaining council can apply for exemption from the extended agreement. Non-members can also challenge a council’s decision not to exempt them from the extended agreement in court. It is, however, clear that parties to a council need to ensure that an extended collective agreement can stand the test of outside parties challenging and contesting the agreement as it is clear that the Minister of Employment and Labour easily extends a collective agreement if the parties comply on the face value of section 32.
Article by: Natasha Govender
Dispute Resolution Official / Collective Bargaining Co-Ordinator – Pretoria