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Majoritarianism and collective agreements on retrenchments: Do minority trade unions have a right to be consulted? by Lizanne Visser

In a recent judgment the Constitutional Court (by a 5-4 majority) decided that a collective agreement on retrenchments between an employer and a majority trade union also binds a minority union.

In Association of Mineworkers and Construction Union and Others v Royal Bafokeng Limited and Others [2020] ZACC 1 the court upheld the constitutionality of sections 23(1)(d) and 189(1) of the Labour Relations Act 66 of 1995 (the “LRA”) which effectively allows an employer to conclude a retrenchment agreement with a majority union that will be extended to all employees, including members of a minority union. This means the collective agreement will bind minority trade unions without the employer having consulted with their individual members.

Sections 23(1)(d) and 189(1) of the LRA respectively holds that:
23 (1) A collective agreement binds –
(d) employees who are not members of the registered trade union or trade
unions party to the agreement if –
(i) the employees are identified in the agreement;
(ii) the agreement expressly binds the employees; and
(iii) that trade union or those trade unions have as their members the majority of employees employed by the employer in the workplace.

189(1) (1) When an employer contemplates dismissing one or more employees for reasons based on the employer’s operational requirements, the employer must consult –
(a) any person whom the employer is required to consult in terms of a collective agreement;
(b) if there is no collective agreement that requires consultation –
(i) a workplace forum if the employees likely to be affected by the proposed dismissals are employed in a workplace in respect of which there is a workplace forum; and
(ii) any registered trade union whose members are likely to be affected by the proposed dismissals;
(c) if there is no workplace forum in the workplace in which the employees likely to be affected by the proposed dismissals are employed, any registered trade union whose members are likely to be affected by the proposed dismissals; or
(d) if there is no such trade union, the employees likely to be affected by the proposed dismissals or their representatives nominated for that purpose.

The application was brought by AMCU, one of the minority trade unions at the Royal Bafokeng platinum mine, following a retrenchment of 174 of its members. AMCU challenged these dismissals in the Labour Court (“LC”) and later in the Labour Appeals Court (“LAC”), on the basis that a collective agreement on a retrenchment process which excludes minority unions but purports to extend the agreement to the minority union members was unconstitutional. Their arguments were rejected by the LC and the LAC, which held that the principle of majoritarianism was a policy adopted by the legislature to facilitate orderly collective bargaining, to minimise proliferation of unions and ultimately to democratise the workplace.

In the Constitutional Court the applicants argued that such an exclusion from the consultation process required by section 189(1) limits their right to fair labour practices and also that an interpretation of section 23(1)(d) that would allow a retrenchment agreement to be extended to parties who were not afforded the opportunity to participate in its conclusion was unconstitutional.

On section 189(1) the court ruled that not consulting with employees that belong to a minority union when a collective agreement on retrenchment is concluded, does not limit the right to fair labour practices and, even if it did that, the limitation would be justifiable. The court’s reasons for this decision were that section 23(1) of the Constitution does not expressly or by implication guarantee a right to individual consultation; and because a decision to retrench is not based on individual conduct there is no need for individual consultation. Additionally, the right to consultation is afforded by the LRA and is not a fundamental right deriving from the Constitution. Accordingly, section 189 is a codification of fair procedure for dismissal on the basis of operational requirements, which involves an inquiry into objective factors and differs from the procedure dismissal for misconduct or incapacity which requires an individual enquiry.

Froneman J, who delivered the majority judgment, wrote that a requirement for parallel and individual consultations would undermine the very point of collective bargaining.

‘An individual employee, or even a group of individual employees, has or gave scant bargaining clout, particularly whether the employer is preoccupied with processing dismissal for operational requirements. A majority union, by contrast, wields coercive power, by immediate or future threat of industrial action. It is this power that may sway an employer to agree to benefits on retrenchment, or better yet, fewer or no dismissals.’

On the constitutionality of section 23(1)(d) both judgments agreed that the Constitutional Court had already held that section 23(1)(d) is a constitutionally valid limitation of the right to strike and that the same reasoning apply in this instance. It was also not shown that the extension of collective agreements under section 23(1)(d) infringed the rights of minority union members, because there is still a range of remedies at their disposal. The challenge to section 23(1)(d) was therefore dismissed.

This judgment establishes an important principle in South African labour law: that a majority-driven collective bargaining process on retrenchments complies with Constitutional rights and values. The court accepted that the majoritarian principle protects employees and concluded that “the choice made for the “pre-eminence of collective bargaining in section 189 is not only rational: it is sound, it is fair and it is based on international practice and standards.” It follows that there is no right to further individual or dual consultation in addition to the requirements set out in section 189(1).

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