This article was written by Abongile Swana , a Candidate Attorney at Norton Rose Fulbright South Africa
Bargaining councils have a long history in South African labour law and industrial relations. They play a significant role in collective bargaining, especially with regards to matters of mutual agreement such as wages which affect the vast majority of employees and employers.
Section 32 of the Labour Relations Act 1995 (LRA) permits the extension of collective bargaining agreements concluded at sectoral level to persons not directly involved in the collective negotiations and not 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.
Section 32(5) of the LRA further allows the Minister to extend a collective agreement if:
- The parties to the bargaining council are “sufficiently representative” within the registered scope of the bargaining council;
- The Minister is satisfied that the failure to extend the agreement may undermine collective bargaining at sectoral level or in the public service;
- The Minister has called for comment by publishing a notice in the Government Gazette;
- The Minister has considered all comments received.
The extension of bargaining council agreements has come under scrutiny in Free Market Foundation v Minister of Labour & Others  ZAGPPHC 266. The Free Market Foundation sought an order, declaring section 32 of the LRA unconstitutional and in conflict with the Constitution to the extent that it allows private actors such as bargaining councils, the power to impose binding obligations on employers and employees who are not members of the council. The Foundation also challenged the constitutionality of section 32 on the basis that it does not afford the Minister any substantive discretion to disallow an application to extend collective agreements.
The court concluded that section 32 is not unconstitutional and that the constraints and judicial supervision set out in the LRA, read with other legislation or the constitutional principle of legality offered parties adequate protection. The court accordingly refused to replace the word “must” in section 32(2) with the word “may”.
Although the case was dismissed on the basis that the Foundation’s argument was ‘wholly wrong’ and ‘fundamentally misconceived’, the judgment provides some clarity on ways in which an extended bargaining council agreement can be challenged by parties who are not party to the collective agreement. The court found that there is the possibility that bargaining council decisions can be reviewed on the grounds set out in the Promotion of Administrative Justice Act, or on legality grounds. The court also confirmed 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.