On April 17 2014, more than a year after the Free Market Foundation (FMF) filed the legal challenge to the Labour Relations Act (LRA) 1995 the Minister of Labour finally responded to the Court. Unfortunately it is clear from the substance of her affidavit, that she has misconceived both the gist and detail of the case and therefore her answers do not address the legal challenge we have presented. Given the delays, requests for extensions and failure to comply with deadlines by all of the respondents including the Minister, regretfully we conclude that this is yet another tactic to thwart the course of justice for unemployed South African citizens and to flout the rule of law. On May 20, the FMF lodged the final affidavits with the Court and is seeking a date for the hearing.
In March 2013, the FMF led by chairman Herman Mashaba, launched an application in the Pretoria High Court challenging the constitutionality of S32 of the LRA. This is the clause that compels the minister to automatically extend bargaining council main agreements to all parties in an industry irrespective of whether they were party to the negotiations, subject to a degree of representivity.
This affects mainly SME firms who typically cannot afford the wage rates and employment terms and conditions set by the larger firms who take part in the negotiations. It has a direct and devastating impact on existing jobs, which are lost and new ones that are not created.
FMF chairman Herman Mashaba said, “This delaying tactic only serves to strengthen our resolve in pursuing this important national matter. I fail to understand why the Minister of Labour, as an executive tasked with the responsibility to protect our constitution, is part of this delaying exercise. I cannot wait for the day in an open court of law to hear the minister defending this piece of legislation and by this action, disregarding the plight of our almost eight million unemployed South Africans. Why does the minister not want to be given the authority to apply her mind before extending these agreements? It is inexplicable.”
In her affidavit, the minister says, “The precise grounds of the constitutional challenge are at times difficult to discern”. That the FMF’s founding affidavit went to great lengths to explain what the challenge is not about and to set out the grounds for the challenge appears to have been overlooked.
We believe that this dismal failure to appreciate the grounds of the legal challenge explain not only the minister’s very late response but also lies behind the vitriolic and threatening speech we have experienced from unions and Cosatu affiliates. Bargaining councils, unions, Cosatu and the minister have all missed the point. If they take care to properly digest the lodged papers, perhaps they might agree with us.
To repeat, this case is not about collective bargaining or the merits of centralised collective bargaining; it does not argue against the system by which collective agreements are extended to bind members of parties to the agreement nor does it attack the system whereby agreements are extended to non-parties. It is about the legal identity of the body with the power to extend such agreements and in whose interests they serve. By forcing the minister to extend all main agreements, S32 allows private parties acting in their own self-interest to impose their will on non-parties and make it legally binding yet the bargaining councils, not being or directed by an organ of the State, have no constitutional right to do so.
At the moment the legal body is the bargaining council which makes requests to the minister to extend main agreements that she cannot refuse.
In his affidavit, Mr Mashaba said, “It is extraordinary to discover, in a democratic state framed by a justifiable constitution, that the State should be willing to defend the abrogation of powers properly residing in it.”
We are making the case to change one word in the Act: “must” to “may”. This simple action would have the effect that collective agreements will only be extended under circumstances where they have already been agreed by a true majority and the minster is satisfied that the extension of the agreement is in the interests of the wider economy. Put another way, the minister will only extend agreements if they promote the stated objectives of the LRA, one of which is economic development.
Note to the editor
The 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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