Labour Court rules on requirements for extension of a collective agreement to non-parties

Once the Minister has received the request for extension from the bargaining council, the Minister must, within 60 days of receiving the request, extend the collective agreement if the requirements listed in Section 32(2) have been met.

However, Section 32(5) vests the Minister with discretion to extend a collective agreement if (1) the parties to the bargaining council are sufficiently represented within the registered scope of the bargaining council and (2A) the Minister is of the view that a failure to extend the agreement will undermine collective bargaining at a sectoral level or the public service as a whole.

The recent Labour Court case of the National Employers' Association of South Africa and Others vs Minister of Labour and Others [2012] 2 BLLR 198 (LC) deals, in depth, with the prerequisites for extension of the collective agreement to non-parties within the registered scope of the bargaining council.

Agreement regulating employment-related matters

On 18 July, 2011, trade unions and employers' organisations falling within the registered scope of the Metal and Engineering Industries Bargaining Council (MEIBC) concluded an agreement regulating employment-related matters in the sector until the year 2014. The National Employers' Association of South Africa, Plastic Converters Association of South Africa and Riverpark Crane Hire CC, (the applicants) did not sign the collective agreement. They were thus not party to the agreement. On 22 July, 2011, the MEIBC, in terms of Section 32(1), wrote to the Department of Labour, requesting that the Minister extends the collective agreement to the non-parties (the applicants) within the MEIBC's registered scope. Importantly, in its correspondence the MEIBC enclosed a certificate issued by the Registrar of Labour stating that the MEIBC was "a representative council".

On 23 September, 2011, by way of a Government Gazette, the Minister extended the collective agreement to the non-parties in terms of Section 32(2). In deciding to extend the agreement, it appears that the Minister relied solely on the certificate of representivity issued by the Registrar. The applicants approached the Labour Court and argued that the Minister's decision to extend the collective agreement to non-parties was invalid for lack of compliance with the provisions of Section 32 (b) and (c). In terms of these sections, the Minister to be satisfied that:

• The majority of all the employees who, upon extension of the collective agreement, will fall within the scope of the agreement, are members of the trade unions that are parties to the bargaining council.
  
• The members of the employers' organisations that are parties to the collective agreement, be found to employ the majority of all the employees who fall within the scope of the collective agreement.

The court, per Judge Van Niekerk, agreed with the applicants and held that requirements of Section 32 (3) (b) and (c) were not met when the Minister decided to extend the collective agreement to non-parties. The Minister was required, the court remarked, to make an assessment of representivity within the scope of the collective agreement upon extension, and not within the registered scope of the council. The Minister (in extending the collective agreement) relied on the certificate of representivity. The court held that this certificate was irrelevant for the purposes of the requirements of representivity established by Section 32 (3) of the LRA. Therefore, the Minister had before her neither the information regarding the number of employer organisations to the council nor that pertaining to the number of employees who upon extension would be found to be the members of the trade union parties to the council, the court concluded.

In the result, the court reviewed and set aside the Minister's decision to extend the collective agreement to non-parties. However, the court suspended its order for a period of 4 (four) months in order to afford the Minster an opportunity to consider whether or not to make a decision to extend the collective agreement to non-parties in terms of Section 32 (5) of the LRA.

Subsequent to the above judgement, the Minister has, by way of a Government Gazette notice dated 1 February, 2013, invited "potentially affected parties" to make submissions relating to the possible extension of the agreement to non-parties in terms of Section 32 (2) read with Section 32 (5) of the LRA by no later than 15 February, 2013.