March 19, 2020 Issue: March 2020

SOUTH AFRICA - The Continued Omnipotence of the Principle of Majoritarianism in South Africa Labour Law

By: Ludwig Frahm-Arp

The South African Constitutional Court in Association of Mineworkers and Construction Union and others v Royal Bafokeng Platinum Limited and others recently again grappled with the question of whether a section of the Labour Relations Act, 1995, which is based on the principle of majoritarianism, was unconstitutional. The Court, split 5-4, found that it was.

The section under scrutiny was section 189(1), which sets out a hierarchy of parties with whom an employer, when contemplating dismissing employees based on the employer’s operational requirements (that is, retrenching them), is required to consult before a final decision to dismiss the employees is taken.

The hierarchy established by the section is the following:

(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 dismissal are employed in 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 are 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 challenge was to the first subsection, namely an instance where there was a person the employer was required to consult in terms of a collective agreement. Royal Bafokeng Platinum Limited had concluded a collective agreement with two trade unions who represented the majority of the employees in the workplace, being the National Union of Mineworkers (NUM) and UASA. That agreement provided that the mine was required to consult with NUM and UASA when contemplating dismissing any employees based on its operational requirements.

The mine contemplated dismissing more than 100 employees and so it commenced consultations with NUM and UASA. This consultation process happened to the exclusion of all other employees who were not members of NUM and UASA, regardless of whether they were members of any other union recognised in the workplace.

In the consultation process, NUM and UASA consulted on the possible dismissal, not only of their members, but of all the possibly affected employees in the workplace and they reached an agreement with the mine in terms of which 103 employees were to be dismissed. Included in that number were a number of employees who were members of another trade union, AMCU. Those employees were subsequently dismissed without being consulted and without being given the opportunity to make representations to the mine on the issues relating to the proposed dismissals that section 189 required the mine to consult on. This gave rise to the challenged before the court.

The argument advanced by AMCU was that the hierarchy in the consultation process impinged on the employees’ constitutional right to fair labour practices in that it denied them the right to be consulted individually in respect of their possible dismissal based on the mine’s operational requirements.

Section 23(1) of the Constitution of South Africa provides that every worker has the right to fair labour practices. The Labour Relations Act is a codification of that right and provides in section 185 that every employee has the right not to be unfairly dismissed. Section 188 then provides that a dismissal will be fair if it is for a reason related to the employee’s conduct or capacity, or based on the employer’s operational requirements, and the dismissal was effected in accordance with a fair procedure.

Section 189 sets out the procedure an employer is required to follow when contemplating dismissing employees based on its operational requirements. In short, this requires the employer to consult with the parties set out in section 189(1) over measures to avoid the dismissals, to minimise the number of dismissals, to change the timing of the dismissals, and to mitigate the adverse effect of those dismissals, as well as the selection criteria to be applied in selecting the employees to be dismissed and the severance pay to be paid to them.

The majority in the Constitutional Court found that the constitutional right to fair labour practices does not give rise to a right to individual consultation. Therefore, the fact that the procedure set out in 189(1) of a hierarchy of parties to be consulted has the potential of denying an individual the right to be consulted individually before being dismissed based on an employer’s operational requirements does not breach a constitutional right.

This hierarchy has been accepted by the Labour Court and Labour Appeal Court in a number of judgments over the past twenty year, and is an expression of the majoritarian principle underpinning South Africa’s labour laws and collective bargaining structures. That principle recognises that the employer can elect to engage only with that union that represents that majority of the employees in the workplace.

The other issue before the court was whether the extension of a collective agreement to cover non-parties, in terms of section 23(1)(d) of the Labour Relations Act in the context of a retrenchment agreement, was constitutionally permissible (the Constitutional Court had already found in Association of Mineworkers and Construction Union v Chamber of Mines of South Africa section 23(1)(d) was constitutionally permissible in relation to the extension of collective agreements regulating terms and conditions of employment).

On this point the court was unanimous in finding that there was no basis for a constitutional challenge and that the principle of majoritarianism was constitutionally sound. Section 23(1)(d) permits an employer and a majority union to extend the terms of their agreement to other employees in the workplace who are not parties to the agreement. In other words, to the employees who are members of another trade union or those employees who are not members of a trade union at all.

Importantly, the court’s finding in this regard is that the agreement concluded merely addresses the procedural aspect of the dismissal, in the sense that the agreement will reflect that a fair procedure has been followed. However, it does limit the right of a party covered by the agreement to challenge the fairness of the reason for their dismissal. Furthermore, the right to challenge the extension of the agreement by means of a review is also retained.

Within this context, the court concludes that there is no infringement of the constitutional right to fair labour practices. It was not before the court to determine whether the dismissals were for a fair reason. Therefore, that challenge, should AMCU seek to mount such a challenge, remains to be determined.

    Fasken, Johannesburg, South Africa