Employers may not be aware that their business activities may fall within the scope of a bargaining council’s main agreement, or they may already be registered as an employer under the auspices of a specific bargaining council.


Bargaining councils include, inter alia: the Metal Engineering Bargaining Council (MEIBC), the Road Freight and Logistics Bargaining Council (NBCRFLI) and the Motor Industry Bargaining Council (MIBCO).


Should some or all of an employers’ business activities fall within the scope of application of the bargaining council’s main agreement, the specific employer might receive a compliance order from the bargaining council which indicates that their business should register with the council. In effect, this would lead to the employer having to pay bargaining council levies or fees, contribute to a provident fund and comply with the applicable wage schedule of the bargaining council.


What can an employer do if he or she is of the opinion that the business activities do not fall within the scope of application of the bargaining council main agreement?


Section 62(1) of the Labour Relations Act 66 of 1995 reads as follows:

Any registered trade union, employer, employee, registered employers’ organisation or council that has a direct or indirect interest in the application contemplated in this section may apply to the Commission in the prescribed form and manner for a determination as to –

  • whether any employee, employer, class of employees or class of employers, is or was employed or engaged in a sector or area.


In terms of section 62(1) of the Labour Relations Act, an employer with a direct or indirect interest in the matter may apply – by way of referring a demarcation dispute to the Commission for Conciliation, Mediation and Arbitration (CCMA). The referring party or his representative will complete an LRA Form 3.23 in which they will indicate under which bargaining council the business falls or allegedly falls, a description of the issues in dispute, the demarcation sought and the motivation for the determination that they are seeking.


By lodging a demarcation dispute in terms of section 62(1) of the LRA, the referring party alleges that their business or part of the business does not fall within the scope or ambit of the said bargaining council’s main agreement and that the CCMA should make an award to that effect. The onus is on the employer to show that their business activities do not fall under the scope of the bargaining council whether by way of calling witnesses, arguments or documentary evidence.


Awards made by Commissioners in demarcation disputes have a great impact on the specific sector and the parties thereto. Therefore, section 62(7) of the Labour Relations Act states that if the Commission believes that the question is of substantial importance, the Commission must publish a notice in the Government Gazette stating the particulars of the application or referral and stating the period within which written representations may be made and the address to which they must be directed.


This will give all parties that may have a direct or indirect interest in the matter referred, the opportunity to submit written representations to the Commission regarding the dispute that has been lodged.


Section 62(9) of the Labour Relations Act also states that before making an award, the commissioner must consider any written representations that are made, and must consult NEDLAC. And in terms of section 62(10) of the LRA, the commissioner must send the award, together with brief reasons, to the Labour Court and to the Commission and the registrar must amend the certificate of registration of a council in so far as is necessary in light of the award.


A demarcation dispute is a very specific process which can be very technical in nature and may have profound consequences on a specific sector.


Taking all of the above into account, it is clear that demarcation disputes are not to be lodged without assistance from your employers’ organisation.


Article by: Meghan Louw

Dispute Resolution Official – Port Elizabeth