A Critical discussion of the Collective Bargaining piovisions in Labour Relations Act 66 of 1995 by Grant Brett Marinus submitted in partial fulfilment of the ~equirements for the degree Masters of Laws \ \ \ ( in the Faculty of Law at the University Of Cape Town Supervisor Prof. Clive Thompson March 1996 Universit of Cape TownThe copyright of this thesis vests in the author. No quotation from it or information derived from it is to be published without full acknowledgement of the source. The thesis is to be used for private study or non-commercial research purposes only. Published by the University of Cape Town (UCT) in terms of the non-exclusive license granted to UCT by the author. University f Cape TownTABLE OF CONTENTS 1. INTRODUCTION 2. THE PAST (ACT 28 OF 1956) AND THE FUTURE (ACT 66 OF 1995) 3. RATIONAL FOR CHANGE - PROBLEMS AND PROSPECTS 3.1 CORPORATISM __, 4 COLLECTIVE BARGAINING - A NEW APPROACH 4.1 PROBLEMS WITH THE PRESENT SYSTEM 4.2 BARGAINING MODELS _ 4.3 THE DUTY TO BARGAIN PROBLEMS WITH A LEGISLATED DUTY TO BARGAIN 4.4 RESPONSES TO THE NEW APPROACH - 4.5 POSSIBLE PROBLEMS WITH THE NEW APPROACH 4.6 THE COMMISSION FOR CONCILIATION, MEDIATION AND ARBITRATION 4.7 THE ACT'S IMPACT ON MARGINALISED INDUSTRY THE FARMWORKERS SCENARIO ~ 5 CENTRALISED BARGAINING A REVIEW OF RECENT EVENTS ? 5al PROBLEMS OF THE PAST AND REASONS FOR CHANGE 5.2 THE ACT AND CENTRALISED BARGAINING BARGAINING COUNCILS AND THE EXTENSION OF AGREEMENTS TO NON-PARTIES 5.3 STATUTORY BARGAINING COUNCILS 5.4 CENTRALISED BARGAINING AND THE R.D.P THE ADOPTED GERMAN MODEL - CHANCES OF SUCCESS? 5.5 WAGE BARGAINING - SOLVING OR CREATING PROBLEMS 5.6 OTHER OPTIONS 5.7 PROSPECTS FOR THE FUTURE 5.8 SOLUTIONS 6 CONCLUSION BIBLIOGRAPHY 1 1. INTRODUCTION� The Labour Relations Act of 1995, hailed as an achievement to rank in importance alongside the Industrial Conciliation. Act of 1924, remains the legal punchbag of the nineties. Despite its hurricane passage through NEDLAC and Parliament, the criticism generated by its predecessor (the Draft Bill) remains for the most part unanswered. It would appear that the drafter·s optimism, epitomised by the kind fashionable, rhetoric that has become equally synonymous with this the age of co-operation and reconstruction, will have to suffice. 1 \At the hear·t of the debate lies the complex issue collective bargaining. In one brief instant the drafters believed they had seen the future, most notably the direction labour/management relations] is clearly reflected in virtually the entire the Act. The new Commission for Conciliation, This vision composition of Mediation and ensuring that (organizational Arbitration will hold centre stage, whilst the main body of bargaining legislation rights, collective agreements, workplace forums, statutory and bargaining councils, and the new to strike) are complied with. Here the drafters hope right the interconnecting system of checks and balances will promote a new kind of industrial order. This dissertation will foccis almost exclusively on those areas of the A.ct dealing with collective bargaining, with particular emphasis on the lack of a bargaining duty _ and the controversial adoption of the centralised bargaining mo4el. By way of introduction it is necessary to briefly contrast the old (Labour Relations Act 28 of 1956) with the new (Labour Relations Act 66 of 1995). 1 A number of thQ Acta prov�s�ons are a1raady �n £ores. Saa Government Gazette NO 16880. 22 December 1995 I \ 2 t{ 2. THE PAST . 8 tame unions" and labour bureaucrats The decision by bargaining in the reality and drove structure. Only "Cosatu~s call for Cosatu to vigorously pursue centralised eighties made industry wide strikes a employers to call for a more decentralised the recent NEDLAC compromise has" dulled a compulsory centralised bargaining structure. Even so it would be unwise to suggest COSATU have put away their arms on this issue2 1 ; NEDLAC should be seen more as a compromise then a consensus. It would appear that the ver.v na tu.re of collective bargaining excludes neut1'ali ty. Such entrenched positions are merely a reflection of the self interest nature of collective bargaining and prove to show the new ethos in this particular ar•ea anyway, to be illusionary at best. Just how the drafters envisage the new process taking off remains to be seen. The absolute reliance on voluntarism, however, makes for hard digestion. On the up-side many large firms have already, of their own initiative, gone way beyond the reco1mnendations in the Act. Important exceptions, perhaps. Minister Mboweni believes they demonstrate that the apartheid workplace can be transformed in line with the overall democratisation of society. 22 Given the nature of the Act~s bargaining provisions and the I limitation of workplace forums to industries with a required work~r/ threshold it would appear that the which might conform to tne minieter s vision only workp.1.aces are the large ones. 21 Ray t1 & Toerien 11 " Unions on the outside J.ooking in " The Shopateward. August/September l.996 at l.6. 22 Mboweni T " A foundation for labour rel.ati.ons in the 21st Century "Appropriation Bil.l.: National. Asaembl.y. 22 June l.996 9 4. COLLECTIVE BARGAINING - A NEW APPROACH . l 4.1 PROBLEMS WITH THE PRESENT SYSTEM Whilst accepting that an underlying commitment to corporatism has shaped the overall structure of the Bill, the collective bargaining provisions are best examined by reflecting on the state of our cur~ent bargaining institutions. The apartheid labour market policies were supported by an industrial relations system collective bargaining and trade unions. Black workers that provided for centralised organizational rights for white were, until 1979, excluded from the system. The present structures of bargaining are inherited from the dualism spawned by the exclusion of black workers from the industrial council system and the breakdown of that system. Excluding black workers from the Act had two effects. Firstly, the trade unions organising black workers developed a system of collective bargaining outside the formal system, namely at the level of the workplace in the form of recognition agreements. It was here that the spartan nature of the unions initiated the development of the duty to bargain. Secondly, the racially exclusive trade unions that participated in industrial councils tended to organise around skill and occupational grades.23 These distortions are reproduced in the structures of bargaining craft trade unions still sit on industrial councils with representation out of all proportion to their membership; industrial trade unions have tended to be recognised in respect of manual workers only; the diffusion of the recognition strategy of the black trade union movement has led to a proliferation of bargaining units based on occupational criteria; many of the industrial councils no 23 Op Cit Note 22 longer reflect modern economy; cover more than industry, others adding to this 10 the nature of the division industrial councils have been of sectors in a established that one industry, some that apply to a part of an that involve a single employer; and courts of bargaining workplace.24 units fragmentation at levels even bargaining by recognising smaller than the single The Bill suggested further factors that influenced the drafters in adopting the new collective bargaining strategy. The fundamental problem with the old law (Act 28 of 1956) governing labour relations was the lack of conceptual- clarity as to the structure and functions of collective bargaining. The industrial court, under a very wide discretion given to it by the definition of the unfair labour practice, developed a jurisprudence all of it's own, the results of which can be seen in the haphazard manner in which the court adjudicated" similar type " disputes. The development of a duty to bargain at plant level (in certain instance's this was extended to industrial level disputes) created as much shadow as light in this not9riously 'uncertain domain of labour law. Despite unanimous agreement that such a duty did exist, the courts persistently held that it was not their task to determine its outcome. What was particularly disturbing about this jurisprudence was the court's determination of bargaining units. Although the broad thrust of collective bargaining centred around the single employer or the plant, the industrial court saw fit to define bargaining units on grounds of race, and often took the somewhat idiosyncratic view that even individual workers had the right to bargain collectively; the' one man one bargaining unit , approach. 24 O:i:;, Cit Nota 22 11 Since the right to bargain in South Africa was not tied to majoritarianism, situations arose whereby smaller unions, many of which were totally incapable of bargaining effectively, where granted bargaining rights commensurate with their larger counterparts. This allowed employers to circumvent meaningful bargaining by protracted discussions and separate conditions being afforded to different recognition agreements. Cosatu and its affiliates do not like this as decentralisation weakens their power base.25 Furthermore, uncertainty has long prevailed over when parties can legitimately disengage from· the process and resort to economic muscle. The court's intrusion into the bargaining arena by pronouncing on the nature and conduct of parties to negotiations only accentuated this uncertainty. By declaring on premature resort to industrial action the court could have unknowingly prolonged so-called ·· sham bargaining " in the form of getting good faith bargaining back on track. The results of these developments led the drafting team to conclude that the existing statutory framework was unable to properly accommodate or between bargaining at the of the workplace. 4.2 BARGAINING MODELS facilitate an orderly relationship level of industry and at the level In their deliberations on a revised collective bargaining strategy the task team gave consideration to three competing models. Firstly, a system of statutory compulsion in which the duty to bargain is underpinned by a statutory determination of the levels at which bargaining should take place and the issues over which parties are compelled to bargain. The second model was described as being not entirely 2 5 Benjamin p " Reforming Labour- . _ _ 1.;;.eeons fr-om the lJ. S. A " South African Labour Bulletin. Vol. 19. n 2. May 1995 12 dissimila~ from the first, by relying on judicial intervention to determine the appropriate levels and subjects of bargaining it resembles the unfair labour practice jurisprudence of the Industrial Court. / ! The final model, unanimously adopted by the drafters, allows the parties through the exercise of economic power to determine their own arrangements. This exercise of power is furthermore given statutory impetus by the organizational rights and the right to strike. provision of T-he task team argued that in a changing economic environment it is best to leave bargaining ( including the level at which this takes place and the identity of the parties to collective bargaining) to the parties themselves to sort out, without imposing a statutory duty on them to do so. As a result the~most notable feature-·-orthe Act is the absenc..e. ·----------------------------,----of a statutory duty to bargain. The corporatist model gives the workers, on whom the ANG-led government relies significantly for support, the greatest say in their working lives. It is, probably the only means by which a bridge can readily be built between the races in the workplace.26 4.3 THE DUTY OT BARGAIN PROBLEMS WITH A LEGISLATED DUTY TO BARGAIN In the debates that preceded the drawing up of the draft Bill the task team noted that until the enactment of the unfair labour practice definition in 1979, collective bargaifing structures were voluntarist in the sense that whilst the 1law encouraged collective bargaining on an industry wide scale, no party could be compelled to bargain other than by means of exercise of economic power. During the 1980~s the court, 26 Braasey 11 & Brand J " Fla.wa and Fantasies - a conceptual ana.lyaia of the Bill." Empl.oyment Law. March l.995. Vol. l.l.. N 4 13 acting in terms of provisions designed ostensibly to protect individual rights, assumed jurisdiction to intervene in collective disputes, via the creation of a duty to bargain. In their attempts to by-pass the statutory compulsion model the drafters pointed to the problems inherent in that system. One of the primary concerns of statutory compulsion is the rigidity that it introduces and the assumption that there is a right answer to appropriate levels of bargaining and bargaining topics. What are these rigidities that the drafters referred to? In simple bargaining selling of terms this means state regulations and collective agreements exist which regulate the buying and labour power, and it's use within the capitalist labour process.27 That regulation may produce rigidities goes without saying, not so the fact that rigidities are always undesirable. The true question, never satisfactory answered by the drafters, is whether the cost of these rigidities is justified by the attendant benefits to the system. The drafters also failed to consider the legal mechanisms which could be set in place to minimise rigidity. John Appollis believes that whilst regulations do exist, which place some obstacles in the path of the employer, they are in most cases very inadequate. Whilst it is possible to set clear guidelines regarding unfair dismissal in certain instances, it remains controversial whether the same can be done for the duty to bargain. - It was suggested that the duty to bargain could be defined in some deta-il in statute, which in turn could be developed by a legitimate labour court. The question then becomes one of substance, what exactly would go into the statute? 2 7 Appol.l.is .:J ,,. ThEI r,e.;r L.&.bour- REll.ations Bil.l. and e:Gontr-a.l.ised bargaining" South Af:r-ican Labou:r- Bul.l.etin. Vol. l.9 No 2. May l.995 14 The varied nature of our previous collective bargaining system, with its range of bargaining units and levels, the co-existence of the all-comers and majoritarian approaches coupled with political divisions between unions would certainly have complieated the task. Such injudicious guidelines could have set South 'Africa on a similar course to that of the United Kingdom where the legislated duty to bargain was such a failure that it~s repeal in 1980 encountered little opposition. 2 8 What the drafters also feared was that, under a system by which the structure of bargaining is regulated eeonomic outcomes could be imposed upon parties which often bear little, if any, relation to the needs of the parties or the power they are capable of exercising. Objections like this are easy to refute in that, under a reg'ulated bargaining structure economic outcomes cannot be imposed upon parties as their obligation is to negotiate and not to arrive at any specific outcome. The old adage, the duty to bargain does not entail a concurrent duty to agree, holds true to dispel such concerns. The objection tends to hide the more important issue of the type of structur·e within which parties bargain and the obvious influence it can have not only on tl1e specific substantive outcomes but also on the effect of such 2'utcomes. Clearly, agreements reached at industry level have the ~otential to effect a wide range of oma~-3:-e~-'-----3:.~s recent reluctance to interfere in prescribing levels of bargaining_30 How are employers to be identified and how are agreements going to be reached? If it is legally difficult, if not impossible, to compel the establishment of bargaining structures and processes at industry level then giving the courts a general discretion to impose a duty to bargain will have a decentralising effect, and government supports industry bargaining. Addressing the National Assembly during the June Budget Vote, Minister Mboweni pointed out that, 31 29 Du Toit and Bosch " Size doaa Cot.int " Waakly Mail. 2 March 1995. The Authors have argued that r-al.ianca on this point b"!,-• the task team ia unconvincing. se saa BAUJ .,,. Timas t1Godia [unrapor-tad J in Thompson C " DL1ty to Barga.in Ra-examined" Employment Law 1993 31 Op cit note 18 16 the natural home of the statutory duty to bargain that identifies the collectively is in a labour market policy single employer bargaining." as the primary 4.4 RESPONSES TO THE NEW APPROACH site for collective The lack of compulsory centralised bargaining is in line with the Nee-liberal capitarist approach to industrial relations.32 Despite the obvious necessity for increased productivity and competitiveness, by making it one of the pivotal structures for the foundations of the bargaining dispensation, the draft team attracted widespread union criticism. For them the objectives of the Act merely provide space and effect for the dictates of capitalist accumulation via a capitalist law of the jungle approach. The exaggeration of the dualist nature of bargaining could see the 30%/ 70% divide in the workplace become reality. This, according to the unions, will only perpetuate the growing wage differential with only a few elite workers receiving substantial salaries. It should be borne in mind that the duty to bargain was pronounced upon by the industrial court in the mid-1980's at a time when there was uncertainty over many issues which we today take for granted. One can well recall the days when employers engaged in debate about the necessity of even recognising trade unions. "Much water has passed under the bridge since.then. "33 Although the Industrial court's pronouncements in relation to 32 Appol.1.ia J " " South Afr·ican Labour- Bul.1.etin. Vol. 1.9. n z. t1.ay 1.996 33 Op cit note 2. 17 .the duty to bargain may have been confused, this should not be surprising. Its pronouncements in many instances depended upon the specific factual nature of the case at hand. Furthermore, there tends to be a gap in relation binding effect of industrial law judgments. Courts to the dealing to act with labour law regard themselves as free independently. As a result there has always been uncertainty about the precedental value of industrial court decisio~s. Notwithstanding all the problems referred to above, certain broad and consistent approaches in the application by the courts of the duty to bargain did emerge. This tended to encourage bargaining between employers and representative employees, whilst at the same time facilitating dispute resolution and thereby avoiding unnecessary industrial action. Crucially, the new Act has attempted to by-pass these problems by the process of codification. The task team believed the problem of establishing limits bargaining levels, units, agents and topics to be the central cause for the rejection of the statutory compulsion model. There arguments are hard to justify if one considers that the goal of the Act is to achieve a separat.ion between the struggle for wages and working conditions on the one hand and the actual business of production on the other. Only industrial action whereby workers demand bargaining or the changing of the material results of bargaining will be deemed procedural. Issues involving the actual business of production (the way the company operates), restructuring and productivity will, the Act hopes, become matters for co-dete~mination. This effectively means that strikes over what are currently known as rights disputes, (or what , the Act calls justiciable disputes) are no longer permissible or protected. The Act provides for numerous justiciable disputes, including disputes concerning freedom of association, matters of decision making by workplace forums, subject to joint dismissals and 18 disciplinary equality.3 4 action, severance pay, and workplace In a sense then, the Act has already bargaining subjects/topics and limited accordingly. drawn a framework for the right to strike Given that the duty to bargain does not entail a corresponding duty to .agree, it would seem that a legally enforceable bargaining provision could only be of use to those unions that are powerful enough to force employers to make meaningful changes. Unions that are unable to force collective bargaining will not be able to force employers to offer the type of improvements in wages and working conditions that their workers want. Benjamin points to the United States example, where only one-third of the unions that are recognised actually go on to achieve first agreements. Basically, the duty to bargain cannot guarantee either effective bargaining or a fair agreement, so why have it? Benjamin~s argument seems logical enough, but one needs to question the assumption that weaker unions who are unable to make inroads into managerial decision making will not benefit from a bargaining duty. Indeed, the opposite seems true. Those powerful unions that are able to force employer cooperation on worker demands will not require such a duty as existing relationships will probably continue to exist, and where not, the protection given to workers striking over distributive matters means that worker·s will probably be able to force the issue. However, in order to foster negotiations at small and medium enterprise level a bargaining obligation acquires renewed impetus, particularly since it is at this level that 34 Empl.oymant Law. Sapte.mbar 1996. Vol. 12. N 1. 19 labour law exists for the most part as a,dead letter." So, the critics say, now that there is no longer a need for industrial action on the right to negotiate workers will merely strike on the material outcome of bargaining! Is there a difference? In light of both the aims of the draft Bill and the constant reference by the Labour Ministry to the creation of a New Ethos, and given that the workplace forums provisions exclude the lions share of the economy it is suggested that the difference is quiet substantial. If the idea is for increased productivity via greater worker / management co-operation then it seems obvious that the greater the ambit of negotiating forums and topics the better.s5 4.5 POSSIBLE PROBLEMS WITH THE NEW APPROACH Despite the drafter~s resistance to the statutory compulsion model it remains government policy to promote collective bargaining at industry level. 36 In order to give effect to this policy, the question of statutory debate. Is compulsion inevitably becomes a central it entirely feasible to attempt to topic of promote collective bargaining without a legally enforced bargaining duty; the more so in a country in which labour/management relations are undemocratic and authoritarian?37 35 Note that the Dunl.op commission in the United States concluded that ther-e ia overwhelming. evidence th.s.t empl.oyea participation and l.abour management cooperation are good for workers, firms and the national economy. The Twenty First Century Workplace requires greater participation and cooperation." These views are eimil.ar to those e:,..."Pressed in the explanatory memorandum in the draft bil.l.. 36 Mboweni T " A foundation for Labour· Rel.ationa in the 21st cant'l.lry "Appropriation Bil.l.: National. Aaaembl.y. Budget Vote 22 June l.996 37 t1boweni T " A Foundation For Labour Relations In The 21st. Cantury " Appropriation Bil.1: National. Assembly 22 ,June- l.995. * the Minister described the position a.a .•• " in the factories, the farms • thia hotial.s, the mines and in the officas, apartheid :is al.ii;ria and well •.• " Having recogn:ieed this- l.a.ck of transition -thia drafters w:iliingness to embracia a vol.untariat, co-operative model. ie puzzl.:ing. 20 The question confronting unions now (probably only smaller unions) is not what improvements will result from the division of the fruits of labour, but whether there will be bargaining in the first place. Employers could willy-nilly pull out of existing bargaining relationships or point blank refuse to bargain with a representative union. Notwithstanding the ANC's and the Bill's stated commitment to protecting existing bargaining arrangements, it is conceivable that employers could compel unions to fight a new struggle every year to secure bargaining relations. Such uncertainty and insecurity within the collective bargaining arena gives employers a powerful instrument with which to enforce worker compliance. This, according to Appollis is the way the Act hopes to ensure that the South African economy adapts to the requirements of world capitalist competition by eliminating so-called rigidities. Another possible result of the absence of a duty to bargain is that disputes will become issues of interest and this will lead to increased industrial unrest. 38 More importantly, this will mean that many weaker and smaller unions will not be able to gain recognition and collective bargaining as their members will not be able to win these trials of strength. As has already been mentioned, unions that might have secured bargaining agreements previously could find themselves fighting entirely new recognition disputes. As the recent SPAR dispute so aptly illustrates, a resort to power on matters of structure seldom provides a union or employer with clear-cut gains.s9 Spar workers, acting through their unions demanded a 38 Ben,1 am.in p " Re for-ming La.bo'l.lr- . . • . • . J.asaona fr-om tha U. B. A " Bo'l.lth Afr-ican Labour- B'l.lJ.J.etin. Vol. J.9 n 2. May J.995 39 Br-and J. Br-asaey t1. " Comments on tha Dr-a.ft Nagotiating Document in BiJ.J. For-m ( The New Labour- ReJ.ations Act) 21 centralised system of bargaining in which a standard set of te1'ms of employment could be fixed. Spar employers, speaking through their franchiser, preferred bargaining to be at shop level so that terms of employment could be fixed locally. Following months of wrangling the workers went on a strike that lasted many violence-marred weeks. Employers countered by dismissing some two thousand workers and the strike collapsed. More importantly, from the action the workers won nothing for themselves, so the goal of upliftment was frustrated; effective collective bargaining within the company remains non-existent so levels of frustration are intense. Despite the extent of loss suffered by both parties during the dispute no effective outcome was reached. Stalemates like this do little to enhance the credibility of the new legislation which suggests that such displays could become commonplace. Clearly, what the drafters hoped to achieve is a situation in which both parties recognise the importance of the relationship that has to exist between them if they are to survive; whether the parties are mature enough to abide by the new rules remains to be seen. Benjamin believes that this line of criticism fails to take account of the impact of the Act on recognition battles as an area of dispute. The recognition battles of the 70's and 80's were most often disputes over basic rights like access by union officials to company premises, stop order facilities and the recognition of shopstewards. These rights were usually only won following protracted disputes, much like the SPAR example, during which both sides sustained needless loss. Furthermore, management often used this process to extract ~ their pound of flesh ,_ by insisting on the recognition of managerial prerogatives, preparing excessively detailed dispute procedures and where possible delaying the start of wage bargaining. These basic organisational rights will now be in the new Act and can be claimed by any union achieving a threshold level of membership. The need for the "old style" recognition dispute thus falls away. 22 Unfortunately many unions still need to be convinced that they will no longer be required to win some form of "recognition battle" in order to initiate wage bargaining. Despite the fact that trade unions can submit a demand to the employer for improved wages and conditions of employment -they can do this whether or not they have claimed organizational rights and regardless of the size of membership - the Act's provisions mean that the chanqes of successful negotiation will depend upon the employers assessment of the union's power; here lies the crux of the matter. Unions who have achieved these "new style recognition rights" will feel they have nothing more than a hollow shell without effective bargaining procedures. Just as recognition battles previously were waged over basic organisational rights, the emerging unions will now have to focus their attention on the bargaining relationship and the material gains that can be achieved. 4 0 Instead of contemplating measures aimed at reconciling the hostile and suspicious nature of parties to one another, the drafters merely accepted the fact that voluntary co-operation was the only viable way forward. In a climate of uncertainty the need for institutions which will enforce and uphold legitimate industrial practices becomes paramount. By leaving the matter to the parties themselves, the drafters have run the risk of sabotaging the very foundations of the system they hope to exploit. 4.6 THE COMMISSION FOR CONCILIATION, MEDIATION AND ARBITRATION Enter the Commission for Conciliation, Mediation and Arbitration (hereafter referred to as the Commission), one of the most ambitious but critical elements of the Act. 40 " Unions on the outside l.ooking in " August/September 1995 at 17. The Shopsteward. 23 The Commission, so the drafters hope, will play a pivotal role in ensuring that the aims and recommendations of the Act are carried out. Amongst the wide range of functions ascribed to it, the Commission must attempt to resolve a vartety of disputes through conciliation or arbitration. Conciliation, in terms of the Act (sl34) is given a very wide meaning. Dispute resolution can be undertaken in a number of ways including mediation, fact finding, recommendations or any other manner the Commissioner deems appropriate. Should conciliation fail the Act provides that disputes of certain classes be resolved by arbitration. These awards are final and binding, subject only to review on limited grounds by the Labour Court. It would appear that the Commissioner will be expected to play a far more interventionist role in the conciliation of disputes than a mediator typically plays at present. Allegations of distrust and bias could be further exacerbated by the fact that the parties will not have a choice in the selection of the Commissioner appointed to hear their case.4 1 The drafters hope that by extending the power of the Commission into nearly every area of the Act will encourage parties to become accustomed to dispute resolution as an effective means of reaching consensus. Furthermore, with seasoned professionals available to advice both parties to disputes the belief is that industrial action will be curtailed and more cooperative relationships established. Coupled with an increase in the range of 4.1 Vs.n Niekerk A " Dispi.1.t ... R&sol.ution, current Labour Law l.995 at 43 justiciable disputes, Prac:tic:a and Procedure " :l.rL 24 the absence of an appeal procedure and restrictions placed on the parties right to legal representation, is the issue of personal. Will the type of labour specialists required to effectively staff the Commission be forthcoming? If the Commission is to be recognised as a powerhouse of industrial expertise, an essential prerequisite to its ultimate success, then the role of the Commissioner is of paramount importance.42 If the Commission does not function effectively and enjoy the trust of both management and labour, it will suffer all the defects of the system it has set out to remedy. 4.7 THE ACT'S IMPACT ON MARGINALISED INDUSTRY THE FARMWORKERS SCENARIO The impact of the Act's bargaining provisions on marginalised industry is best examined by viewing the plight of the farmworkers.43 It has been suggested that the inclusion of farmworkers under a unified labour law holds little comfort for those workers who will rely on voluntarism in order to achieve collective bargaining. In the new South Africa with it's new Labour Relations Act, most farmworkers will remain extremely poor and for the most part voiceless at work. 44 Critics of the Act have voiced their opposition at the inability of the drafters to make suitable provision for small business. The situation facing farmworkers highlights this problem. Firstly, the Act's workplace forums will only be a 42 "Dispute Resol.ution" in Employment Law. September- 1995. Vol. 12 N 1 43 The variety o:f pr-ob1ems :facins farmwor-ktar-s r-equir·as a more detailed ana1ysis then is offer-ad hare. Navar-thalass the impact of the Act-s bar-sainins provisions war-rant a brief excursion into this area. 44 Op cit note 32 25 viable option in some 76 farms countrywide; that out of a total of some 62000. To expect small businesspeople to show enthusiasm for joint discussion would be naive: to expect small businesspeople who are geographically isolated to somehow show more enthusiasm for voluntary negotiation and co-determination than their reluctant urban counterparts would be \ preposterous. The same holds true for collective bargaining. Even with greater organizational rights available to them through statute, and the right to strike without the fear of dismissal, these groups of workers will not be able to force their employers to bargain with them. If the intention of the Act is to encourage collective bargaining by facilitating the capacities of the potential collective bargaining partners to bargain, then what is needed is the introduction of legislation that extends theoretical collective bargaining rights under the conditions obtaining in agriculture, to real rights. In other words, the absence facilitate collective compensation. If this is in agriculture of conditions which bargaining requires legislative not done, rights which can be utilised by workers in other sectors of the economy will continue to be rights in theory rather than in practice for the vast majority of workers in agriculture. Despite the very real benefits of a legislated duty to bargain in the farming sector, the Act cannot be expected to perform functions that a1'e probably beyond the capacity of any labour system. Many urban, industrial unions will run into recalcitrant employers with little or no chance of collective bargaining agreements. Some might argue exclusion of these smaller business's from the arena is necessary for productivity to continue constant" hiccuping" over inconsequential issues. attaining that the bargaining without 26 Murphy suggests that the problem farmworkers must overcome first is organisation. Factors like the great dispersion of farmworkers, the extraordinary high rate of casual employees and the lack of a favourable legislative environment, makes any attempt at unionisation extremely difficult. In order to be successful a farmworkers union will need a base of at least some 10000 workers. These workers will have to be located in a central district and at present only 18 out of a possible 90 districts could be considered viable options to fulfil that role. Adding to the equation the need for skilled and committed organisers and the problems are further compounded. There is already a shortage of staff in the industrially-based urban union environment, and there is every reason to that the workload confronting the rural organisers will greater than that experienced by his or her urban part. 46 expect be far counter-One possible result is that younger, less experienced organisers might be forced into representing workers who for the first time will be attempting to make headway against a largely uncooperative body of employers. Whether such organisers could successfully mobilise from a low base with sufficient dynamism and momentum to establish a stable and loyal constituency in anything more than the short term is questionable. Without any real industrial experience levels of education the norm in most and predominantly of these.areas, low the chances of parties being mature enough to handle themselves in the manner the Act deems a necessity, are slim. In response to this Benjamin suggests that when debating the duty to bargain it is imperative to separate the role of the trade union movement from that of Labour Law in achieving collective bargaining. The trade union movement has been 45 Murphy M " South A:frican farmwor·kes: Is trade union or•g.anisation possibJ.e•? " South African Labour Bulletin. July 1995 Vol l.9. No 3. a-e 24 27 unsuccessful in organising many groups of employers most notably those in small enterprises, farmworkers and particularly domestic workers. It has been suggested that improvements in the lives of these workers is more likely to result from the extension of a modernised Wage Act and the stricter enforcement of the Basic Conditions of Employment Act. However, whether this will help farmworkers remains to be seen. The SAAU has been advised by the Zimbabwean commercial farmers that President Mugabe's minimum wage legislation was" the best thing that ever happened to them A very low minimum, which was not revised regularly worked to the positive advantage of farmers in Zimbabwe. 4 6 Other options include persuading the government to adopt policies that will encourage farmers and small business managers to improve working conditions and negotiate with unions; acceptable labour practices could exist as a kind of prerequisite for loans and other means of assistance. Interestingly enough, for the past year, farmworkers and their unions have had the benefit of both the unfair labour practice definition and compulsory arbitration in interest disputes to win basic rights and improve conditions of employment. It is since full use of the easy to conclude from the results that opportunities available have been approach might be required. neglected a different The successful organization of these workers will require the use of different strategies and types of approaches from those that currently serve the industrial, commercial and mining industries. Murphy suggests that instead of attempting to organise all farmworkers, a Cosatu farmworkers union 4 6 t1ur-phy M " South African far-mwor-k.er-e: I a tr-a.de union organisation possible ? " South African Labour- Bulletin. Vol l.9 No 3 .July 1995. 28 initiative would be better advised to seek to occupy a core position within agriculture. A union with a stabilised membership of 50 - 60 000 workers, focused primarily on 10'.r~ of the permanent workforce located on the farms with over 500 employees would be in a powerful position to become the acknowledged voice of the farmworkers." Rather than trying to mobilise on a large, but diffuse scale, Cosatu will ultimately serve the interests of the farming community far better if successful negotiation and bargaining is seen to be taking place. Indeed, even if Cosatu could manage large-scale mobilisation the chances of achieving meaningful negotiations would be slim. Scattered pockets of union resistance would be incapable of making any sort of significant achievements. The absence of a legislated duty to bargain suggests that any extension of rights will have to depend on workers organised power, rather than employer generosity or government intervention. CONCLUSION Collective bargaining remains one of the few ways that unions ..../.=-~~~~~--~----------------q&n ensure that workers living standards are maintained and advanced. The non-inclusion of the duty to bargain in the Act has introduced a completely new dynamic for the organised ,:•------------------------···- ---working class. The losers are likely to be isolated employees, workers in small and medium enterprises and those unions -~-'=--'<-<----=--• ~----·. .... -,.<,•----== _._. ·------=-,-,-,. __.. .. trying to make headway against powerful and recalcitrant =--,.._--.....,-.--,...-=.,.-- r· •,-•••••-•·•••F_____.-, ~•-•, employers and the labour judiciary. Anti-union businesses with poorly organised work forces will also gain, since the Act _______________ ,_,~---- ·-··-will assist them in engineering a union-fr·ee environment. 47 47 Op cit note 1 5. CENTRALISED BARGAINING A REVIEW OF RECENT EVENTS 29 As a pretext to discussing the new bargaining councils and the role of centralised bargaining it is necessary to review recent events. The position adopted by Cosatu centralised bargaining) must be (the call for compulsory climate of uncertainty with the ANC. 4 B Since seen which hovers as a re sponsE? to the · over their relationship the early nineties the question facing the trade union movement has been its new role in a democratic / South Africa. With the demise of the National\ party government, the trade union movement lost its visible enemy and with it the need and legitimacy for overt militancy. 49 The shift in ANC economic policy prompted by the organizations like the World Bank and International Monetary Fund, together with pressure from potential First World investors, spelt certain doom for the heavy Socialist rhetoric of the preceding years. The new model was to be competitive and pro-investment. Into this environment was thrust an anxious labour movement, still intent on maintaining a sa~~ in the macro-economic issues of the day. With talk of a sell-~ut making the possibility of \ I a new Workers Party a distinct 'reaTity labour settled for a place in the NEF. Despite the renewed assurance from the ANC of it's commitment to labour the positions adopted in the ' final Act (particularly those dealing with collective bargaining) point towards a need, primarily for growth and competitiveness, before redistribution. Taking into account recent industrial events and the nature of the governments response, often coming from the very pinnacle of the ANC 4 8 Ds.spi ta th.;. consensus reached at NEDI.AC. COSATU atil.l. pr·opagatE1s compulsory industry bargaining. 49 von Holdt K " The LR.A agreement Wor-ker victor-y or m:1.serable compromise" South Afr:1.can Labour bulletin. Vol 19 no 4. Sept 1995 30 hierarchy 50 labours fears of being pushed out into the cold seem justified. Cosatu made it·s position clear, it has to be part of the restructuring of the economy in order to ensure that attempts to increase productivity and competitiveness do not force labour into an uneasy compliance. order for true reconstruction Labour must remain strong in to be achieved. The current strategy adopted by Cosatu - independence, via pursuit of own interest objectives - must be viewed as an attempt to counter the inherent threats of corporatism and their lack of faith in an ANC government. In order to maintain a strong macro-economic position Cosatu finds itself forced to opt for as strong a central structure as possible; hence the recent country wide mass action on compulsory centralised bargaining and the demands for the closed shop that followed the initial Bill. The more - --------------------decentralised the bargaining structure the less influence C9satu wields, as workplace agreements undermine centralised . -- --- ·---- ·-- ---------------------ones and central power as well.51 Despite the fact that Cosatu is not the federation it used to be, it still constitutes a large proportion of the ANC,s voting constituency.52 The presence of a powerful Workers Party would only serve to weaken the ANC majority, a matter that could be highly significant in the attempt to reach a two-third majority. For the sake of keeping the," alliance" intact the ANC was forced to accommodate Cosatu and the demands it made on 50 nur-ses sae Tha Cape Times "News September 8 1995 Go back to Work - Mandel.a tel.l.s 51 Hs.rtfor-d D" Cantral.iaed Bar-gaining under- thr-eat "South Afr-ican Labour Bul.l.etin. Vol. 17. N 2. 1.993 52 Brassey M. Br-s.nd J " Fl.awe s.nd Fantasias - a conceptual. s.nal.ysis of the Bil.l." Employment Law. t1a.r-ch l.995. Vol. 11. N 4 31 tripartite structures like NEDLAC.- although it would probably be unrealistic to have expected any form of wholescale denial as has occurred elsewhere in Africa.53 Cosatu·s initial demands were for compulsory centralised bargaining forums, the need for requirements on the extension of bargaining agreements thus falls away as all employers would be party to an industrial council of sorts. 54 With Cosatu engaged in country wide mass action to force it·s proposals, Labour Minister Mboweni announced government sentiment, the extent to which the ANC would compromise.· Compulsory centralised bargaining was again emphatically rejected. The government had gauged the extent of union power and shown how far it was prepared to go. The new proposals highlighted the governments policy of promoting centralised bargaining whilst at the same time conceding that " ... if collective bargaining is more efficient at decentralised levels, the decentralisation process must be allowed by agreement."55 Government's primary aim in promoting centralised bargaining is to get business and labour to forge consensus on the bigger issues facing the economy, it is not aimed at securing sector-wide agreements on minimum wages and working conditions. 56 The new position adopted by the government of national unity is best illustrated by their response to the wave of strike action in the nursing profession. Despite government sympathy 53 See amongst other. Cron1.n J " Workers party plays into Nat hands " The Waekly Mail. Vol 9. N 2. 1993 , Hoffo.'iee F " Work.are party j1.miping the gun" The Weakly Ma1.l. July 23 1993 54 " Cosatu·s stand on the draft L.R.A." The Shopsteward. April/May 1996 55 " T:i to· a cle~•er compr·om1.se " The F:inancial Mail. J1.lne 31:L 1995. 56 Op c1.t note 24 with the position of nurses, if wage increases were given the effect would be destroyed by increased interest rates and inflation. "We would get ourselves into a negative economic cycle. "57 Once again government had demonstrated its co1mni tment to national economic concerns. issues rather than individual labour 5.1 PROBLEMS OF THE PAST AND REASONS FOR CHANGE Presumably the problem with the current industrial council system is that it suffers from the weakness of it's structures being either too rigid or extreme. They operate through the a pure all-comers" system or through a pure majoritarian system; neither structure is flexible nor wholly democratic, since neither adequately represents the inter•ests of people in the industry. Add to this the problem in the voting structure of the current system (it gives minority unions to much power) and the manner in which the industrial court has undermined centralised bargaining (the court has in the past set it·s ' face against majoritarian decision-making) and what remains is a formula which according to the drafters will not accommodate the proposed changes.BB Sectoral bargaining, the drafting team decided, has a very important role to play in our society. According to the Labour Ministry, as industries are faced with reduction in tariffs and re-entry into the global economy they are going to have to change. That change is going to have to be managed. In his 57 Cs.mer-en B " Stra.1.ght-,1 ae:k.eted d1.;.•1.a1.cna · no longer ae:c:eptabl.a -Business Report. September 27 l.995 at l.B ... an interview with Al.ec Erwin. 58 Al.bert;,-n C " Industry BArgaining " Em:i;,l.o-:,nnant Law. Vol. 7. N Jul.y 91 6. 33 view industry level bargaining arrangements are particularly well suited to assist in the transition and the adjustment that will inevitably occur. For this reason industrial councils should be given the function of on industrial policy for the particular level bargaining performs a crucial developing proposals industries. Industry role in the orderly transition from a protected and inefficient economy to a competitive one. Furthermore, it provides an efficient mechanism for the provision of the social wage, particularly where there is pressure on the state to provide social pensions, medical aid etc. 5.2 THE ACT AND CENTRALISED BARGAINING BARGAINING COUNCILS AND THE EXTENSION OF AGREEMENTS TO NON-PARTIES The Act has made provision for the continuation of industry bargaining in the form of bargaining councils. The primary function of bargaining councils is to r . enforce collective agreements. In the first c,ouncil's collective agreement will bind only it. The controversial ·--··Tssue relating ___ -to ,/ conclude and instance, a the parties to extension of ag:reeni.ents to rion=t:.ia.1.--t'les· ···is more s-n7111gently regulated under the new Act. They will automatically b~ extended where the -~~- ·--·-- ~~ --~-~-.. trade union has more than 50% membership in the industry and the --e-mployer .. association . employs ·at'-·- least 50% of the ··-·-··- ---·--·••--·- -·~---·-workforce. ( s32 .1) Before the agreement can be extended the Act provides for the establishment of an independent body to grant exemptions to non-parties. The agreement must contain a list of fair criteria that promote the primary objectives of the Act, and must not discriminate against non-parties.(s32.3e-g) The minister can also ~xtend the agreement if the parties to the collective agreement are sufficiently representative 34 within the registered scope of the bargaining council, and he/she believes that the failure to extend the agreement may undermine collective bargaining at sectoral level.(s32.5a,b) Despite the Act's attempts to bolster the position of small enterprise, the fear that increased minimum wage levels might retard however, growth that in the this sector remains. Research has shown vast majority of exemption applications received by industrial councils in the past were granted.59 The pr·oblem appears to be neither the complexity of exemption procedures nor, in other instances the obdurate nature of the councils, but rather the unwillingness of employers to go through the formality of actually applying. If this is the case, then the conventional argument that SMME employers are the most seriously prejudiced by industrial council agreements needs review. Du Toit feels that workers deprived of wage increases, benefits on mere application party to suffer the most. better working by: the employer The fact that conclitions and might be the the Act makes provision for sectoral bargaining without any alternative mechanism for enticing reluctant employers to the bargaining table, and that the proposed wor·kplace forums will exclude the lion's share of the economy 60 gives this argument a measure of credibility. An alternative proposal has been put ~ / , Iorwaro. by Baskin s 1 who, whilst still working on the assumption that flexibility 5 9 du Toit D " Smal.1 Enterprises. Induatr-ia1 Ra1ations and the RDP " Industrial. Law Journal.. Vol. 1.6. part 3 1.996 60 The proposed workpl.ace for-tuns wil.1. be avail.a.bl.a onl.y: in workpl.aces where more than 1.11>0 workers are empl.oyed. Thia excl.udes more that 74% of the workforce in sectors that contribute 58% of the GDP. whera a majority union requests it establishment. Be,-,,•enty -five p"=e•~c•C"•-•- - .. & ..,_.,_ • ·""'" aY--=.-...-..>....-.~~----...-.~ ...... ........, . ...,~ .. C •~• ,,__.,...,~~•• ••• _,.,, -' ~ "'".._...0-7•-,, ••~,..,.,,, ... ..--country in which the central problem is unemployment the -----,;------------------- .. ------------ ··-------- . addiction to centralised bargaining structures will lead to the unavoidable trade off between the rate at which wages and __ _ ~------ ..... ··-·-·----- - •·· •··-- ••-· ·- -· -· ······ - -·-- ---· -----·- - - .... -·-------- ··•·· other _emrlgyment costs increase and the rate at which unempl9yment rises . . . -- --~·-The German system of centralised bargaining coupled with the huge legal strike threat leads to one of two outcomes: more strikes or greater concessions being made by employers in order to buy labour peace. The latter and is nowhere better illustrated metalworkers strike. has occurred in Germany than in the recent German metal workers union, IG Metall, went on strike in Bavaria. When they threatened to take the strike countrywide nationwide"· '·, employers started making concessions. Eventually a strike was warded off by a series of compromises, including '"-pay hikes and a shorter work week, resulting in an effective wage increase of ten percent being phased in over a year. That effectively put pay to the increases in productivity that German manufacturers had achieved over the past year. 70 69 Rautanbach F" Sand Labour back to the drawing board "The Weak1y t1a.i1. June 9 1995 70 Op Cit Note 7-4 I 40 Results like this unfortunately matter because, by failing to reduce unit labour costs while more competitive countries like the United states, Hong Kong, Taiwan and Singapore manage to do so, Germany has weakened its position as a global competitor. The price paid is reflected in the growing unemployment figures. @_ost importantly in terms of . this debate is the fact that South Africa is much weaker than Germany in terms of education productivit~? and skill levels, co-operation and 5.5 WAGE BARGAINING - SOLVING OR CREATING PROBLEMS In a country in which some 50% of the workforce is unemployed, the very existence of the RDP is dependant on optimal economic growth from whatever quarter. Cosatu~s initial demands for centralised bargaining structures were criticised as being unaffordable" 7 :i.. The Pl'.'oblems is a simple one. South Africa cannot afford rigid wage levels at a time when the lowering of tariff barriers and cheaper imports have forced local business into global j ~~~petition; a situation made even more acute due to South ~ica·s lack of expertise in this area. I I 1e r·epercussions of such a scenario could actually force usiness to shed more workers in order to maintain profit I mo.rgins. There is the risk of labour becoming a problem in / terms of efficiency and thereby pricing itself out of the I market. Le Roux points to the possibility of a return to the I capital .intensive policies of the past, ~~g __ in .more. machinery and cutting_ b'!c

Collective bargaining and Section 197 transfers.

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Collective bargaining and Section 197 transfers.

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