Employee Relations - Collective Bargaining
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The Collective Bargaining Blueprint will discuss the following items:
- Collective Bargaining
- Freedom of Association
- Trade Unions
- Organisational Rights
- Access to Organisational Rights
- Collective Agreements (Sections 22 – 24)
- Agency Shop Agreements (Section 25)
- Closed Shop Agreements (Section 26)
- Bargaining Councils
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The rights and the role of trade unions started its development in the Industrial Court under the auspices of the previous Labour Relations Act 28 of 1956. In this regard, reference is made to Mbobo & Others v Randfontein Estate Gold Mining Co (1992) 13 ILJ 1485 (IC) where it was held as follows:
“Union security has become an important issue in the field of collective bargaining. Employers’ and workers’ organizations are encouraged to bargain collectively and union security is regarded as a method to promote the process of collective bargaining more effectively. “
With the advent of the new Labour Relations Act 66 of 1995, specific provision was made for the first time, in legislation, for guaranteed organizational rights for trade unions and the agreements concluded with trade unions pursuant to bargaining between such unions and employers.
The most fundamental right of any trade union is to engage in collective bargaining with the employer. This right exists irrespective of whether a trade union qualifies for organizational rights, or the number of its members. Therefore even though a registered trade union does not qualify for any rights they still have the right to bargain collectively. In essence their collective bargaining power will be less as they have fewer bargaining agents in terms of employees.
In National Union of Metalworkers of SA & Others v Bader Bop (Pty) Ltd & Another (2003) 24 ILJ 305 (CC), the Constitutional Court had regard to this issue, and held as follows:
“In s 23, the Constitution recognizes the importance of ensuring fair labour relations. The entrenchment of the right of workers to form and join trade unions and to engage in strike action, as well as the right of trade unions, employers and employer organizations to engage in collective bargaining, illustrates that the Constitution contemplates that collective bargaining between employers and workers is key to a fair industrial relations environment.”
That means that one of the basic fundamental rights of any trade union is to engage in collective bargaining, and ultimately, to engage in strike action to enforce such bargaining. According to the LRA 28 of 1956, there was a corresponding obligation from the employer to engage in collective bargaining. A “duty to bargain”.
Under the current LRA there is, however, no absolute obligation to bargain. The law can therefore not force an employer to bargain but the union then has recourse to strike should the employer refuse to bargain.
Does this mean that we should not bargain with trade union? The short answer is no. Trade unions are unfortunately often seen by employers as the enemy. However, as will be discussed hereunder that is not necessarily the case. Employers are also afraid of trade unions as they are unaware of what exactly the powers and functions of trade unions are. A strong majority trade union can be an ally and can, in fact, be useful to an employer. All of these issues will be addressed hereunder.
Freedom of Association
According to section 4 of the LRA every employee has the right to freedom of association.
(1) Every employee has the right:
(a) To participate in forming a trade union or federation of trade unions; and
(b) To join a trade union, subject to its constitution.
(2) Every member of a trade union has the right, subject to the constitution of that trade union-
(a) To participate in its lawful activities;
(b) To participate in the election of any of its office-bearers, officials or trade union representatives;
(c) To stand for election and be eligible for appointment as an office-bearer or official and, if elected or appointed, to hold office; and
(d) To stand for election and be eligible for appointment as a trade union representative and, if elected or appointed, to carry out the functions of a trade union representative in terms of this Act or any collective agreement.
(3) Every member of a trade union that is a member of a federation of trade unions has the right, subject to the constitution of that federation-
(a) To participate in its lawful activities;
(b) To participate in the election of any of its office-bearers or officials; and
(c) To stand for election and be eligible for appointment as an office-bearer or official and, if elected or appointed, to hold office.
Should there be a dispute in terms of the above rights a party may refer the matter for conciliation and thereafter to the labour court for adjudication.
Definition of a trade union according to Section 213 of the LRA: “means an association of employees whose principal purpose is to regulate relations between employees and employers, including any employers’ organisations”.
The primary purpose and function of any trade union is thus to regulate and determine the employment relationship between the employer and its employees. This is achieved by way of collective bargaining. For a trade union to fulfill its duties the LRA sets the following requirements (S95 LRA):
- The trade union must be registered with the Department of Labour;
- Each trade union must have a constitution approved by the Department of Labour that regulates its affairs and conduct;
- The trade union functions through officers elected in terms of its constitution, and must be independent;
- If a trade union no longer functions in terms of its constitutions and objectives envisaged by law, it can be deregistered in terms of Section 106 of the LRA.
Guaranteed organizational rights have been afforded to two categories of trade unions: sufficiently representative trade unions, and majority trade unions. It must be remembered that for the purposes of this discussion, “trade union” could mean more than one trade union acting jointly.
The LRA unashamedly advances the principle of majoritarianism. A majority trade union represents 50% plus 1% of the employees in the workplace of the employer. Majority unions are given the most beneficial organizational rights. Reference is made to Kem-Lin Fashions CC v Brunton & Another (2001) 22 ILJ 109 (LAC), where it was held as follows:
“The legislature has also made certain policy choices in the Act which are relevant to this matter. One policy choice is that the will of the majority should prevail over that of the minority. This is good for orderly collective bargaining as well as for the democratization of the workplace and sectors. A situation where the minority dictates to the majority is, quite obviously, untenable. But also a proliferation of trade unions in one workplace or in a sector should be discouraged.”
The rule of thumb for sufficiently representative trade unions is 30%. The following can also be used to determine whether a union should be afforded sufficiently represented rights:
- According to a collective agreement.
- The nature of the workplace (LRA definition of workplace)
- The nature of the one or more organizational rights that the trade union seeks to exercise.
- The nature of the sector in which the workplace is situated.
- The organizational history at the workplace has to be considered;
- In terms of Section 21(8)(a), an important consideration is also to minimize the proliferation of trade union representation and to minimize the financial and administrative burden or requiring an employer to grant organizational rights to more than one registered trade union;
- Bargaining unit should also be considered. Representivity may be dependent on a particular bargaining unit or structure within the company and not the company as a whole.
The following rights are given to Sufficient as well as majority trade unions:
Section 12: Trade union access to workplace
- Any office-bearer or official of a representative trade union is entitled to enter the employer’s premises in order to recruit members or communicate with members, or otherwise serve members’ interests.
- A representative trade union is entitled to hold meetings with employees outside their working hours at the employer’s premises.
- The members of a representative trade union are entitled to vote at the employer’s premises in any election or ballot contemplated in that trade union’s constitution.
- The rights conferred by this section are subject to any conditions as to time and place that are reasonable and necessary to safeguard life or property or to prevent the undue disruption of work.
Section 13: The right to trade union subscription deduction
- The employer is required to, on a monthly basis, give the trade a list of the persons on whose behalf deductions were in fact made for the trade union subscription, and thus the duty to keep a record in this regard is thus on the employer.
- It must, however, be remembered that employees individually have the right to revoke this right.
- No later than the 15th of every month.
It is important to note that section 12 and 13 rights are also given to parties of a council irrespective of their representation percentage.
The following additional rights are then also afforded only to majority trade unions:
Section 14 The right to elect trade union representatives (shop stewards)
- Shop stewards elected in terms of this Section is also given certain rights, being to assist and represent employees in grievance and disciplinary proceedings;
- To monitor the employer’s compliance with the workplace-related provisions of the LRA or any law regulating terms and conditions of employment and any collective agreement binding on the employer and to report any alleged contravention of such provisions to the employer-union or relevant authority.
- Subject to reasonable conditions, shop stewards are entitled to take reasonable time off with pay during working hours to perform the functions of a trade union representative and to be trained in any subject relevant to the performance of the functions of a trade union representative.
- Section 14(2)(a-e) regulate the number shop stewards that may be elected.
Section 15 Leave for trade union activities
- An employee who is an office-bearer of a representative trade union, or of a federation of trade unions to which the representative trade union is affiliated, is entitled to take reasonable leave during working hours for the purpose of performing the functions of that office.
- The representative trade union and the employer may agree to the number of days of leave, the number of days of paid leave and the conditions attached to any leave.
Section 16 Access to information
In terms of Section 16, an employer must disclose to a trade union representative all relevant information that will allow the trade union representative to perform his or her functions effectively, and the employer must disclose to the trade union all relevant information that will allow the trade union to engage effectively in consultation or collective bargaining with the employer.
- It is clear from this general right and duty that virtually all information is covered by this provision. It is therefore entirely feasible that a trade union may demand what would be considered to be confidential information, such as supplier lists, marketing reports, management accounts or a business plan. As long as the trade union contends the information is needed for effective collective bargaining, the employer is under a duty to disclose the same;
- The information must however be relevant to a process such as a wage negotiation or a retrenchment.
- Should the employer not wish to disclose the information he must prove it is not relevant or falls under one of the following exclusions. It must be remembered that the employer has the onus in this regard (Robbertze v Marsh (SA) (Pty) Ltd (supra)):
- legally privileged
- contravening a prohibition imposed on the employer by any law or order of any court
- that is confidential and, if disclosed, may cause substantial harm to an employee or the employer. Financial statements may be viewed as confidential until they are published.
- that is private personal information relating to an employee, unless that employee consents to the disclosure of that information.
- It is sufficient to allow the union to view the information on the Company premises (see National Entitled Workers Union & Others v Mintroad Saw Mills (Pty) Ltd (1998) 19 ILJ 95 (LC)).
- Disputes about whether information should be disclosed or not must be referred to the CCMA for ultimate determination by arbitration (Section 16(6) to (14)).
- The Commissioner will then determine the dispute through a balance of harm. Will the employer be more harmed by disclosing the information or will the trade union lead more harm if they do not receive the information.
Access to Organizational Rights
A trade union cannot simply gain access to their rights by informing the company of their employee numbers. Even if a trade union is a majority or sufficiently representative trade union, it can only obtain organizational rights if it complies with due process in section 21 of the LRA. This process is a jurisdictional fact, which means that it is not complied with, the trade union cannot demand the rights. Section 21 of the LRA sets out the following process in order to gain organizational rights:
- Any registered trade union may notify an employer in writing that it seeks to exercise one or more of the rights conferred by this Part in a workplace.
- The notice must be accompanied by a certified copy of the trade unions certificate of registration and must specify-
- the workplace in respect of which the trade union seeks to exercise the rights;
- the representativeness of the trade union in that workplace, and the facts relied upon to demonstrate that it is a representative trade union; and
- the rights that the trade union seeks to exercise and the manner in which it seeks to exercise those rights.
- Within 30 days of receiving the notice, the employer must meet the registered trade union and endeavor to conclude a collective agreement as to the manner in which the trade union will exercise the rights in respect of that workplace.
- If a collective agreement is not concluded, either the registered trade union or the employer may refer the dispute in writing to the Commission. Should it remain unresolved either party may request the matter to be resolved through arbitration.
Collective Agreements (Sections 22 – 24)
A collective agreement is defined in the LRA as a written agreement concerning terms and conditions of employment or any other matter of mutual interest concluded by a registered trade union on the one hand and an employer on the other hand.
The main purpose of collective bargaining is to achieve a collective agreement. Trade union activity and bargaining conduct may then be determined by the agreement. This view is confirmed by SA Police Union & Another v National Commissioner of the SA Police Service & Another (2005) 26 ILJ 2403 (LC), where it was held as follows: “Labour relations in our system are regulated primarily through collective bargaining, minimum standards legislation and contextually sensitive dispute resolution which takes account of the policy prescriptions and values of a constitutionally sanctioned pluralist model, underpinned by organizational rights, majoritarianism and a preference for negotiated solutions and outcomes.”
Below are listed the most salient aspects of a collective agreement:
- A collective agreement must be in writing.
- It does not have to be signed by both parties, and it is sufficient if the content of the agreement for example is confirmed in correspondence.
- A collective agreement will bind all parties to the agreement for as long as the agreement lasts. A trade union member will therefore be bound by the agreement even if such member joins after the agreement is concluded or resigns from the union.
- A collective agreement varies from individual contracts of employment of employees, and may exclude certain provisions of the Basic Conditions of Employment Act 75 of 1997.
- According to Section 23(1)(d) a collective agreement can even bind parties that are not even members of the union, or other union members, provided the agreement is concluded with a majority union, and certain procedural requirements are met.
- Section 23(4)) stipulates that the agreement may be cancelled by either party upon giving reasonable notice in writing.
- A collective agreement can be enforced by way of arbitration in the CCMA (Section 24).
Agency Shop Agreements (Section 25)
An agency shop agreement may only be concluded with a majority union (or more than one acting jointly). This is usually done where non-union members (free riders) enjoy the same benefits as union members due to the trade union’s actions. An agency shop agreement requires the employer to deduct an agreed agency fee from the wages of employees identified in the agreement who are not members of the trade union but are eligible for membership thereof.
- An agency shop agreement is binding only if it provides that-
- employees who are not members of the representative trade union are not compelled to become members of that trade union;
- the agreed agency fee must be equivalent to, or less than- the amount or percentage paid by other employees. Should there be 2 or more registered trade unions part of the agreement, no more than the highest subscription that would apply to an employee.
- An employer or employers’ organisation that alleges that a trade union is no longer a majority trade union in terms of subsection (1) (section 25) must give the trade union written notice of the allegation, and must allow the trade union 90 days from the date of the notice to establish that it is a representative trade union.
- If, within the 90-day period, the trade union fails to establish that it is a representative trade union, the employer must give the trade union and the employees covered by the agency shop agreement 30 days’ notice of termination, after which the agreement will terminate.
Closed Shop Agreements (Section 26)
A closed shop agreement is an agreement in terms of which all employees to whom such an agreement is extended are required to be members of the union party, and only union members may be employed by the employer parties to the agreement. In order for a closed shop agreement to be concluded the following must occur:
- The union is a majority union
- A ballot has been held of the employees to be covered by the agreement;
- Two-thirds of the employees who voted have voted in favour of the agreement;
- There is no provision in the agreement requiring membership of the representative trade union before employment commences; and
- It provides that no membership subscription or levy deducted may be- paid to a political party as an affiliation fee; contributed in cash or kind to a political party or a person standing for election to any political office; or used for any expenditure that does not advance or protect the socio-economic interests of employees.
The effect of a closed shop agreement is that employees may be dismissed if they do not become or cease to be members of the union. To discourage abuse, the LRA provides that employees who lose their jobs because they are refused membership of or are expelled from a union party to a closed shop agreement, may approach the Labour Court for relief. The court is empowered to inquire into the fairness of the refusal or expulsion and, if the union is found to have acted unfairly, it may be ordered to compensate the affected employee on the same basis and to the same extent as an employer would have been liable for an unfair dismissal.
- Employees to whom a closed shop agreement has been extended are not precluded from joining or remaining members of another union, if that union permits dual membership.
- Employees at the time a closed shop agreement takes effect may not be dismissed for
- refusing to Join a trade union party to the agreement; and
- Employees may not be dismissed for refusing to join a trade union party to the agreement on grounds of conscientious objection.
A closed shop agreement is terminable by the majority of the employees who voted for it at inception.
One or more registered trade unions and one or more registered employers’ organisations may establish a bargaining council for a sector and area by- adopting a constitution that meets the requirements of section 30; and obtaining registration of the bargaining council in terms of section 29.
The State may be a party to any bargaining council established in terms of this section if it is an employer in the sector and area in respect of which the bargaining council is established. If the State is a party to a bargaining council in terms of subsection (2), any reference to a registered employers’ organisation includes a reference to the State as a party. A bargaining council may be established for more than one sector.
- The powers and functions of a bargaining council include the following-
- To conclude collective agreements;
- To enforce those collective agreements;
- To prevent and resolve labour disputes;
- To perform the dispute resolution functions referred to in section 51;
- To establish and administer a fund to be used for resolving disputes;
- To promote and establish training and education schemes;
- To establish and administer pension, provident, medical aid, sick pay, holiday, unemployment and training schemes or funds or any similar schemes or funds for the benefit of one or more of the parties to the bargaining council or their members;
- To develop proposals for submission to NEDLAC or any other appropriate forum on policy and legislation that may affect the sector and area;
- To determine by collective agreement the matters which may not be an issue in dispute for the purposes of a strike or a lock-out at the workplace; and
- To confer on workplace forums additional matters for consultation;
- To provide industrial support services within the sector; and
- To extend the services and functions of the bargaining council to workers in the informal sector and home workers.
- As soon as a bargaining council is formed it takes on certain binding powers:
- The parties to the bargaining council who are also parties to the collective agreement;
- Each party to the collective agreement and the members of every other party to the collective agreement in so far as the provisions thereof apply to the relationship between such a party and the members of such other party; and
- The members of a registered trade union that is a party to the collective agreement and the employers who are members of a registered employers’ organisation that is such a party, if the collective agreement regulates- terms and conditions of employment; or the conduct of the employers in relation to their employees or the conduct of the employees in relation to their employers.
- A bargaining council may even be extended to non-parties subject to section 32.
In the case of dispute resolution a bargaining council will enjoy jurisdiction over the CCMA for the parties to the agreement. According to section 51, the following key aspects will apply:
- The parties to a council must attempt to resolve any dispute between themselves in accordance with the constitution of the council.
- A party to a council includes the members of any registered trade union or registered employers’ organisation that is a party to the council.
- Any party to a dispute who is not a party to a council but who falls within the registered scope of the council may refer the dispute to the council in writing.
- The party who refers the dispute to the council must satisfy it that a copy of the referral has been served on all the other parties to the dispute.
- If a dispute is referred to a council in terms of this Act and any party to that dispute is not a party to that council, the council must attempt to resolve the dispute:
- Through conciliation; and
- If the dispute remains unresolved after conciliation, the council must arbitrate the dispute if-
- This Act requires arbitration and any party to the dispute has requested that it be resolved through arbitration; or
- All the parties to the dispute consent to arbitration under the auspices of the council.
- If one or more of the parties to a dispute that has been referred to the council do not fall within the registered scope of that council, it must refer the dispute to the Commission.
- A council may enter into an agreement with the Commission or an accredited agency in terms of which the Commission or accredited agency is to perform, on behalf of the council, its dispute resolution functions in terms of this section.