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Kenya Law / Blog / Case Summary: A Collective Agreement BindingNon-party Workers to it in Various Locations Constituting a Single Workplace is Constitutionally Valid.

A Collective Agreement BindingNon-party Workers to it in Various Locations Constituting a Single Workplace is Constitutionally Valid.

A Collective Agreement Binding Non-party Workers to it in Various Locations Constituting a Single Workplace is Constitutionally Valid.

Association of Mine workers and Construction Union and Others v Chamber of Mines of South Africa and 6 others

Constitutional Court of South Africa

Case CCT 87/16

Nkabinde ACJ, Cameron, Froneman, Jafta, Madlanga,Zondo, Mhlantla JJ and Mbha AJ

February 21, 2017

Reported by Linda Awuor & Faith Wanjiku

Download the Decision

Constitutional Law-Bill of Rights-labour relations-right to bargain collectively, right to strike and the right to freedom of association-whether section 23(1) (d) of the LRA unjustifiably limited the 1st Applicant’s members’ rights to fair labour practices, right to bargain collectively, right to strike and the right to freedom of association thereby being constitutionally invalid contrary to section 23 of the Constitution of the Republic of South Africa-The Constitution of the Republic of South Africa,1996, section 23

Labour Law-collective bargaining-collective agreements-trade unions-non-members-whether the collective agreement under section 23 (1) (d) of the Labour Relations Act bound the 1st Applicant’s members, who were non-parties-Labour Relations Act No. 66 of 1995, section 23 (1) (d)

Brief Facts:

In 2013, the Chamber of Mines of South Africa (1st respondent), acting on behalf of its members in the gold mining sector including Harmony Gold Mining Company Limited (2nd Respondent), AngloGold Ashanti Limited (3rd Respondent) and Sibanye Gold Limited (4th Respondent), began negotiations about wages and working conditions. The unions with which it negotiated represented the majority of workers in the sector: National Union of Mineworkers (NUM) (5th Respondent), Solidarity (6th Respondent) and United Association of South Africa (UASA) (7th Respondent).

The 1st Applicant was invited to join the negotiations and did but on September 9, 2013 it rejected the offer in which they culminated. The 5th, 6th and 7th Respondents accepted that offer. On September 10, 2013, the 1st Respondent, acting on behalf of the mining companies, and those three unions concluded a collective agreement, the one that was at issue before the Constitutional Court. Though the collective agreement had expired, the same parties concluded another that was materially identical. The agreement expressly made itself applicable to all the companies’ employees, even those not members of the party unions.

The 1st Applicant not being a party to the agreement did not regard itself as bound. On January 20, 2014, it notified the three companies (2nd to 4th Respondents) that its members would strike from January 23, 2014. In response, the 1st Respondent urgently applied to the Labour Court to interdict the strike and succeeded. On January 30, 2014, the Labour Court granted an interim interdict against the 1st Applicant and its members. On the return day, that Court confirmed the interdict. The 1st Applicant,having sought unsuccessfully to appeal directly to the Constitutional Court, then with the leave of the Labour Court appealed to the Labour Appeal Court. Its appeal failed and it then sought leave to appeal to the Constitutional Court.

Issues:

i.  Whether the collective agreement under section 23 (1) (d) of the Labour Relations Act (LRA) bound the 1st Applicant’s members, who were non-parties.

ii. Whether section 23(1) (d) of the LRA unjustifiably limited the 1st Applicant’s members’ rights to fair labour practices, right to bargain collectively, right to strike and the right to freedom of association thereby being constitutionally invalid contrary to section 23 of the Constitution of the Republic of South Africa.

iii. Whether using section 23 of the LRA to extend a collective agreement to non-parties, including minority unions entailed the exercise of public power.

iv. Whether the principle of majoritarianism under section 23 (1) (d) of the LRA failed to achieve social justice for minority workers.

v. Whether the term workplace as defined in section 213 of the LRA applied to section 23(1) (d) (iii) of the same Act.

Relevant Provisions of the Law

The Constitution of the Republic of South Africa, 1996

Section 23-Labour Relations

Every worker has the right—

(a) to form and join a trade union;

(b) to participate in the activities and programmes of a trade union; and

(c) to strike.

Labour Relations Act No. 66 of 1995

Section 23-Legal effect of collective agreement

(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.

Section 65-Limitations on right to strike or recourse to lock-out

(1) No person may take part in a strike or a lock-out or in any conduct in contemplation or furtherance of a strike or a lock-out if-

(a) that person is bound by a collective agreement that prohibits a strike or lock-out in respect of the issue in dispute;

(3) Subject to a collective agreement, no person may take part in a strike or a lock-out or in any conduct in contemplation or furtherance of a strike or lock-out-

(a) if that person is bound by-

(i) any arbitration award or collective agreement that regulates the issue in dispute; or

(ii) any determination made in terms of section 44 by the Minister that regulates the issue in dispute;

Section 213-Definitions

“Workplace”-

(c) in all other instances means the place or places where the employees of an employer work. If an employer carries on or conducts two or more operations that are independent of one another by reason of their size, function or organisation, the place or places where employees work in connection with each independent operation, constitutes the workplace for that operation;

Held:

1. The Constitutional Court had jurisdiction as constitutional rights were at issue. The legal questions concerning the interpretation of workplace and the extension of collective agreements raised arguable points of law of patent public significance. The 1st Applicant’s contentions were considerable and leave to appeal had to be granted.
2.Two things were immediately notable about the way the statute defined workplace. The first was its focus on employees as a collectivity. The second was the relative immateriality of location. Both signaled that workplace had a special statutory meaning.
3. Workplace was not the place where any single employee worked like that individual’s workshop or assembly line, field, desk or office. It was where the employees of an employer, collectively, worked. The statute approached the concept from the point of view of those employees as a collectivity. That accorded with the role the term workplace played in the LRA. That saw workers as a collectivity, rather than as isolated individuals. And that in turn squared with the statute’s objects. The promotion of orderly bargaining by workers, collectively, was one of the statute’s express primary objects.
4. Location was not primary but functional organisation was. The definition encompassed one or more place or places where employees of an employer worked. That meant that the place or places where workers worked could have constituted a single workplace. That entailed the intrinsic possibility of locational multiplicity for a single workplace. Right at the outset that eliminated any notion, which the ordinary meaning of workplace might have encouraged, that each single place where a worker worked was a separate workplace.
5. The proviso in section 23 (1) (d) determined not so much whether separate physical places of work were separate workplaces, but rather whether independent operations, however geographically dispersed, were separate workplaces. The pivotal concept was independence. If there were two or more operations and they were independent of one another by reason of their size, function or organisation then the place or places where employees worked in connection with each independent operation, constituted the workplace for that operation. That was a test of functional organisation.
6. The Constitutional Court interpreted the provisions of the LRA to protect the organisational rights of minority unions. The Court underscored the importance of freedom of association as it emerged from international instruments that were pertinent to interpreting the LRA. It noted that, although those instruments and the values they embodied did not require trade union pluralism, in contradistinction to majoritarianism, a majoritarian system could operate fairly only in accordance with certain conditions. It had to allow minority unions to co-exist, to organise members, to represent members in relation to individual grievances and to seek to challenge majority unions.
7. The LRA, though premised on majoritarianism, did not make it an implement of oppression. It did not entirely suppress minority unions. Its provisions gave ample scope for minority unions to organise within the workforce and to canvass support to challenge the hegemony of established unions. Majoritarianism was functional to enhanced collective bargaining which was internationally recognised. Promotion of collective bargaining was so deeply rooted a principle of internationally recognised labour dispensations that unions required merely adequate or sufficient representivity for enforcement against non-members, and not necessarily majority representation.
8. The limitation a section 23(1) (d) agreement imposed on the right to strike was strictly circumscribed in both ambit and time. A collective agreement extended to non-parties did not apply to them indefinitely. It applied only for the duration of the agreement and regarding the specific issues it covered. Section 23(1) did not countenance indefinite or far-reaching extension. It directly tied the limitation of the right to strike to the outcome of the collective bargaining. It was narrowly tailored to the specific goal, orderly collective bargaining. Given the carefully circumscribed ambit of the limitation and the importance of its purpose, it was reasonable and justifiable.

9. When legislation authorised private parties to exercise public power the question was thus how to ensure a rational relationship between their exercise of power and the attainment of legitimate legislative ends. If the invocation of the powers section 23(1) (d) conferred was public, then its exercise had to comply with the principle of legality and from there a range of review mechanisms was available to a party claiming to be unfairly affected. The actual exercise of the power the provision conferred on private parties could never have occurred lawlessly.

10. Determining whether a power or function was public was a notoriously difficult exercise. There was no simple definition or clear test to be applied. Instead, it was a question that had to be answered with regard to all the relevant factors, including:

(a) The relationship of coercion or power that the actor had in its capacity as a public institution;

(b) The impact of the decision on the public;

(c) The source of the power; and

(d) Whether there was a need for the decision to be exercised in the public interest.

None of those factors would necessarily have been determinative; instead, a court had to exercise its discretion considering their relative weight in the context. Public function and public power had been defined to encompass the above in a minority judgment in Chirwa.

11. The decision by private parties to have invoked the power section 23(1) (d) afforded them to extend their collective agreement to parties entirely alien to it had a coercive effect: it bound non-parties to the agreement, regardless. The statute empowered contracting parties to do that with just about industry-wide effects. The extension of the agreement also had extensive implications for members of the public. For its duration, non-member employees were bound. Even more, they forfeited the right to strike if the collective agreement regulated the issue in dispute. All that pointed distinctly to a power more than private in nature. It was public.

12. The conclusion of a collective agreement triggering a statutorily licensed extension under section 23(1) (d) was in its effects and substance an exercise of legislatively conferred public power. Features pointing to public were:

(a) The decision was rooted in legislation and its effects were circumscribed by the statute;

(b) The effect of the decision was mandatory on non-parties and coercive on their constitutional entitlements;

(c) The decision resulted in binding consequences without those parties’ acquiescence; and

(d) The rationale for extension was a plainly public goal, namely the improvement of workers’ conditions through collectively agreed bargains.

13. The 1st Respondent and the mining houses it represented, together with the workplace-majority unions party to the agreement, were not governmental actors. Nevertheless their conduct had a sufficiently public character, and entailed sufficient public consequences, to make what they did the exercise of public power. That their exercise of power entailed public law consequences did not mean that it was administrative action. That was because the decision to conclude an agreement that the statute, upon fulfilment of the conditions it specified, extended to non-parties, was not of an administrative nature. The parties were not administering policy or statutory powers; they were agreeing amongst themselves. Their agreement had wide-ranging public consequences. Their conduct in concluding it was public, but not administrative, in nature.

14. There was the important consequence that the conclusion of an agreement under section 23(1) (d) was subject to judicial scrutiny. An agreement concluded under the provision was reviewable under the principle of legality. The principle required that all exercises of public power, including non-administrative action, conform to minimum standards of lawfulness and non-arbitrariness. Invoking the statute’s enormous clout by using a statutory power could not have occurred irrationally or arbitrarily. The facts and the ambit of the parties’ arguments before the Constitutional Court did not require a speculative quest for instances of in-practice (as opposed to facial) irrationality. It was enough to note that parties extending agreements in terms of section 23(1) (d) could not have irrationally exercised the power the statute conferred.

Leave to appeal was granted; the appeal was dismissed.

Relevance to the Kenyan Situation

Article 41 of the Constitution of Kenya, 2010 under the Bill of Rights, provides for labour relations. Sub-article (2) (d) provides that every worker has the right to go on strike and in sub-article (5)that every trade union, employers’ organisation and employer has the right to engage in collective bargaining.

The International Labour Organization has conventions on collective bargaining and Kenya has ratified the Right to Organise and Collective Bargaining Convention, 1949. Article 4 provides that measures appropriate to national conditions shall be taken, where necessary, to encourage and promote voluntary negotiation between employers or employers’ organisations and workers’ organisations, for regulation of terms and conditions of employment by means of collective agreements.

The Labour Relations Act No. 14 of 2007 provides for collective agreements in part VII. Section 59 (1) (b) provides for the legal effect of a collective agreement which binds various parties to the agreement. The Act does not provide for non-parties to an agreement being bound.

The above South African case clearly sets out a scenario where a union with a majority of workers in various locations constituting a single workplace by virtue of functional organization can still be bound by a collective agreement as a non-party and be restricted from taking part in the trade unions activities for example, strikes. It also addresses the labour law issues and the Constitutional law issues arising from the same.

It will be an important precedent in Kenyan in relation to labour law as collective bargaining is recognized internationally as a fundamental right of trade unions.

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