An important decision by the Labour Appeal Court was made last week to finally determine the long-running dispute between the Association of Mineworkers and Construction Union (Amcu), the Chamber of Mines and major gold producers. In finding against the appellant Amcu, the court supported the primacy of majority unions who engage in collective bargaining at the workplace.

According to director in the employment practice at Cliffe Dekker Hofmeyr, Fiona Leppan, the decision finds favour with a provision in the Labour Relations Act (LRA) which allows collective agreements, concluded outside a bargaining council, between the employer and majority union at the workplace or at enterprise level, to be extended to bind non-unionized employees and any minority unions that are not party to such an agreement. These are known as s23 extensions.

Amcu argued that the gold producers' individual mines were separate workplaces. The Labour Court had held that the test is not whether a union has a majority or particular level of representivity at a specific mine within each gold producer, but focuses instead on "whether the operations carried on by the employer in different places are 'independent' of one another".  The Chamber contended all the mines of each gold producer constituted a '"single workplace" for centralized collective bargaining purposes. This was the result of rich historic, powerful bargaining patterns that served the purpose of ensuring parity in conditions of employment and hence labour stability could be achieved. The s23 extension impacted Amcu’s members as it curtailed their constitutional right to collectively bargain and strike at those specific mines where it had majority representation.

According to Leppan the Labour Appeal Court concurred that the Chamber is not a bargaining council and that Amcu's quest for Ministerial approval ahead of any extension of a collective agreement taking effect had no application.

“Amcu’s argument that it could not be bound by a wage agreement that it did not sign was found to be not sustainable, as it was, according to the Labour Appeal Court, contrary to the clear wording of s23 which does not require a signature to make such agreement binding by extension,” she says.

The Labour Appeal Court went further and held that Amcu's argument undermined collective bargaining and the policy of “majoritarianism” which had been carefully selected by the lawmakers when the LRA was first constructed. The fact that s23 limits a minority union's right to strike over wages, once the wage agreement is concluded with the majority union and is extended, was found to be a limitation that is reasonable and justifiable and not in conflict with the Constitution.

“Interestingly, Ireland requires the registration of a collective agreement by its Labour Court if it is to be extended, and only minimum wages and conditions of employment can be the subject of such extension. In some European jurisdictions one or both parties must request an extension as it is not automatic. In Germany, its Minister of Labour and Social Affairs can extend a collective agreement if that is deemed to be in the public interest,” notes Leppan, who believes this decision in SA may not be the last word on the matter.

The challenge is that the LRA does not address minority unions' complaint that private actors, outside a bargain council structure, are determining their fate in collective bargaining outcomes without their consent.

According to Leppan the Framework Agreement concluded by representatives of government, organized labour and business in the mining sector during October 2013 recognized that while majoritarianism has served South Africa's system of industrial relations effectively in the past, it appeared to be causing some unintended consequences in infringing upon the rights of minority unions.

It is important to place the decision in context, as in 1995 the drafters of the Labour Relations Act made a policy choice to discard the previous duty to bargain in favour of a system of voluntary collective bargaining, preferably at sectoral level, underpinned by the principle of majoritarianism with the aim to maintain industrial peace and the democratization of the workplace. Leppan explains that this has not always been achieved and the disruptions experienced in the mining and agricultural sectors in 2012 bear testimony.

It was apparent to the Labour Appeal Court that Amcu had accepted the legitimacy of such extensions but only took issue with s23 because it did not carry the ministerial oversight that applies when a collective agreement concluded in a bargaining council is extended to non-parties.

Submitted by Cliffe Dekker Hofmeyr