The Free Market Foundation announces significant updates to their High Court labour law challenge amid growing support to change the process of Collective Bargaining Council agreements.
7 August 2013
As top business leaders make demands on government to improve business conditions including changes to the labour laws, and following Reserve Bank governor Gill Marcus’ strong comments on bargaining councils, the Free Market Foundation (FMF), led by Chairman Herman Mashaba, announces significant updates to their legal challenge to the Labour Relations Act. The Minister of Labour and 27 bargaining councils have filed notices to oppose while various requests for extensions from other parties have been received. On the deadline to respond, 31 July, Cosatu filed an application to intervene as a respondent in the application.
On 4 March 2013, the FMF filed a constitutional challenge in the Gauteng North High Court to Section 32 of the Labour Relations Act 1995. This clause allows collective agreements on wages and conditions to be extended to employers who were not party to the negotiations and is a significant factor in preventing job creation especially among small and medium enterprises.
Last week, speaking at the Johannesburg labour law conference Ms. Marcus warned that reducing unemployment is arguably the single most important economic objective and that South Africa’s labour laws needed to change so that collective bargaining also meets the needs of small and medium-sized businesses which create the most jobs. Ms Marcus said that South Africa’s centralised bargaining regime favoured big business over small- and medium-sized firms.
Representing the FMF, attorney Craig Kirchmann said that 50 respondents were cited including the Minister of Labour, Minster of Justice and Constitutional Development and the 48 bargaining councils in South Africa. He said “In terms of the rules of the High Court, a respondent intending to oppose the application is obliged to file a notice of opposition within 10 court days of service of the application and thereafter file an answering affidavit within 20 court days after service of the notice of opposition. This means that respondents were obliged to file their answering affidavits at various times during April/May 2013. Answering affidavits became due on different dates because the application was filed on the bargaining councils on various dates since they are spread around the country”.
The Minister of Labour and 27 bargaining councils have filed notices of opposition and the Minister of Justice and Constitutional Development has advised that he will not be opposing the application.
Kirchmann said, “Since receiving the notices of opposition, we have had various requests for an extension of time, in which to file answering affidavits, and in the interests of fairness and cooperation in the best interests of the country, we agreed to grant all respondents up to 31 July 2013 to file answering affidavits”.
“By the 31 July deadline, none of the respondents had filed answering affidavits” says Kirchmann. “However, we have received a request from two attorneys, who between them represent seven bargaining councils, asking for a further extension to 31 August 2013.
Chairman Herman Mashaba said “Obviously the FMF would like to have this matter heard as soon as possible. Nevertheless, so that we can afford them every opportunity to have their views properly known and to rule out any potential future arguments about late filing, the FMF has agreed to grant those respondents up to 31 August 2013 in which to file answering affidavits”.
Mashaba also said that on 31 July 2013 COSATU filed an application to intervene as a respondent in this application and that the FMF is in the process of taking legal advice and considering its position on COSATU’s application. “A decision will be taken during the course of this week and we will inform the media accordingly, he said.
National Employers Association of South Africa CEO Gerhard Papenfus has also joined the calls for the labour laws to be changed. He said the government would have to make it much more attractive for companies to employ people by opening up collective bargaining processes. In an interview with Business Day on Monday 05 August, Mr Papenfus called for changes to the Labour Relations Act. "If you change section 32 … in order for the minister to be compelled to take into consideration the interests of small business at the collective bargaining council before extending an agreement, the whole ball game will be changed."
Commenting on the latest unemployment figures out last week which show that 4.7-million people are actively looking for work, Herman Mashaba said that this does not include the 2.3 million discouraged from seeking jobs or the 2.1 million under-employed South Africans. These figures show a much more serious scenario especially the catastrophic tragedy of youth unemployment. Currently only 12% of those between ages 15-24 have a job.
Note to the editor
The Free Market Foundation (FMF) is an independent, non-profit, public benefit organisation, created in 1975 by pro-free market business and civil society national bodies to work for a non-racial, free and prosperous South Africa. As a policy organisation it promotes sound economic policies and the principles of good law. As a think tank it seeks and puts forward solutions to some of the country’s most pressing problems: unemployment, poverty, growth, education, health care, electricity supply, and more. The FMF was instrumental in the post apartheid negotiations and directly influenced the Constitutional Commission to include the property rights clause: a critical cornerstone of economic freedom.
The FMF has a wealth of information in papers, articles and opinion pieces available on the website which can influence the public debate and present alternative policies to the people of South Africa. Please look at www.freemarketfoundation.com.
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