Section 23(1)(d) of the Labour Relations Act, 1995 (“LRA”) enables an employer and a trade union (or trade unions acting jointly), that enjoy majority support in the employer’s workplace, to conclude a collective agreement and to extend the collective agreement to employees who are not members of the trade union that concluded the collective agreement. This extension can take place even if the employees are members of another union that refused to conclude the collective agreement or was not party to the collective bargaining process preceding its conclusion.
This section provides utility to the employment relationship but also impacts on the rights of the trade unions that are not party to the collective agreement as well as the rights of their members. The most important of these rights is the right to strike in that, because they become bound by the collective agreement, they cannot strike in respect of a matter regulated in that agreement. This restriction on the right to strike is even more evident if the collective agreement contains a “peace clause” that prohibits all strikes on economic issues during the period that the collective agreement is in force.
The Constitutional Court in Association of Mineworkers and Construction Union ("AMCU") and Others v Chamber of Mines of South Africa and Others found that the policy objective of promoting orderly collective bargaining, and the policy of majoritarianism, underpinned section 23(1)(d) and therefore constituted a valid justification for the limitation of the constitutional right to strike. The premise of the court’s finding is that the will of the majority is favoured over the will of the minority in serving the legislative purpose of advancing labour peace and democratisation of the workplace.
This decision took place in the context of a wage agreement that limited a minority union’s right to strike through a collectively negotiated and agreed upon peace clause. However, 23(1)(d) has also been utilised in other contexts, such as in the decision in Association of Mineworkers and Construction Union and Others v Royal Bafokeng Platinum Limited and Others. This dealt with a collective agreement regulating the retrenchment of employees concluded at the end of a consultation process in terms of sections 189 and 189A of the LRA. This agreement was extended to employees who were members of a union that had not been party to the consultation process. This extension not only impacted upon their right to strike but also on the right of employees to challenge the fairness of their dismissals. It was nevertheless upheld by the Labour Appeal Court.
In National Union of Metalworkers of South Africa (“NUMSA”) obo Members v Transnet Soc Limited and Others, a collective agreement as envisaged in section 198B(2)(c) (which permits an employer to employ employees on fixed-term contracts for periods exceeding three months without the provisions of section 198B becoming applicable), was concluded and extended in terms of section 23(1)(d). The Labour Court upheld the validity of this extension.
In Glencore Operations South Africa (Pty) Ltd and Others v National Union of Metalworkers of South Africa (“NUMSA”), the Labour Court considered a wage agreement concluded at industry level between the Chamber of Mines (now named the Minerals Council of South Africa) on behalf of certain of its members, including Glencore, and various unions. This agreement had been extended in terms of section 23(1)(d) to cover all the employees employed by Glencore falling within a specified bargaining unit. NUMSA, which was not party to the collective agreement, then sought to negotiate with Glencore on certain issues not covered by the collective agreement. The Chamber of Mines, acting on behalf of its members, and the majority unions that had originally entered into the collective agreement, then concluded an addendum to the collective agreement, which inserted a peace clause into the original collective agreement. The peace clause was also extended in terms of section 23(1)(d), thus preventing NUMSA from striking on these issues.
These examples illustrate the potential importance of section 23(1)(d) extensions in various contexts and the potential for depriving minority unions of important rights. In the Chamber of Mines decision, the Constitutional Court accepted that section 23(1)(d) could be abused and confirmed that the constitutional principle of legality would be a safeguard to provide some assistance to minority unions.
The principle of legality states that it is a requirement of the rule of law that a public power should not be exercised arbitrarily. Decisions must be rationally related to the purpose for which the power was given or they are in effect arbitrary. Extensions in terms of section 23(1)(d) are subject to this requirement.
The precise contours of the application of the principle of legality to section 23(1)(d) extensions still have to be determined by the courts. However, two recent decisions seem to indicate that the scope for a legality review is narrow. The question is: was the decision to extend the collective agreement rationally related to the purpose for which the power to extend was granted or was it exercised for some ulterior motive? In other words, was the decision to extend the collective agreement consistent with the majoritarian objective of promoting orderly collective bargaining?
In Association of Mineworkers and Construction Union v Minister of Labour and Others, the minority union contended that, because a collective agreement extended to it did not address its demands, it was irrational. The Labour Court found that the extension ensured uniformity of working conditions for the duration of the agreement and that there was therefore a rational connection between the exercise of the power and the purpose for which it was granted. The legality review failed.
In the Royal Bafokeng decision mentioned above, the minority union contended that the extension of the retrenchment agreement was irrational because its members were not consulted prior to its conclusion. The Labour Appeal Court disagreed and found that consultation with a minority union is not a necessary pre- cursor to the extension of a collective agreement in terms of section 23(1)(d). On the contrary, consulting with a minority union before extending an agreement would be subversive to the collective bargaining process and to the principle of majoritarianism underpinning section 23(1)(d). The legality review accordingly failed.
The above cases highlight the significant hurdle that an applicant in a legality review must overcome. It must demonstrate an irrational relationship between the power (to extend) and the purpose for which the power was granted (the policy objective of majoritarianism). The tricky part is that collective bargaining (being the process preceding and giving rise to the exercise of the power) is not necessarily a rational process. It is the process of compromising the conflicting positions between employers and employees. The result of collective bargaining is something that parties can live with, not one that parties normally consider perfect.
Therefore, while the legality review is a safeguard that can be invoked to protect minority employees against possible abuses of section 23(1)(d), there appears to be little else that a minority party can do about an agreement that is extended to it where the extension does not reach the threshold of irrationality.