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May 5, 2016




A huge victory for orderly collective bargaining


Bargaining Council’s and trade unions are apparently jubilant about the Pretoria High Court’s dismissal yesterday of the Free Market Foundation’s constitutional challenge. Should they study the judgement carefully, they will realise that there’s nothing to be jubilant about“, Gerhard Papenfus, Chief Executive of NEASA said.


This judgement, however, has brought a huge amount of clarity to a number of issues which NEASA has been arguing for years.


This judgement has brought an end to the slip-shod manner in which bargaining councils, and the MEIBC in particular, have forced administrative issues, especially with regard to the extension of agreements, through Council processes. This was extremely harmful to SMMEs in particular and are currently the subject of review processes.


In his judgement Judge Murphy brought complete clarity to the issue by finding that, when a bargaining council extends a collective agreement to non-parties, it does so either as an organ of state or as a juristic person exercising a public power or performing a public function under legislation or an empowering provision, and therefore that the Promotion of Administrative Justice Act (PAJA) applies, with all the checks and balances accompanying it.


“This remark by the High Court has brought about a complete change in the world of bargaining councils and NEASA will henceforth scrutinise each and every act of all councils, in particular the MEIBC, in order to ensure that the requirements of the rule of law and the rule of administrative justice is complied with“, Papenfus said.


This is a very positive development which empowers NEASA in its fight for a sustainable dispensation for SMMEs, increased employment and economic growth.


For this we thank the Free Market Foundation.


In future newsletters, we will deal with at least two very positive remarks by Judge Murphy regarding:-


  • the conduct by the Minister in extending agreements, and
  • the fact that the right to seek an exemption from the provisions of an agreement, is limited to non-parties.


The FMF has lost the case because, in his view, Judge Murphy found that there is sufficient protection under PAJA. That, in our view, is a huge victory for collective bargaining in South Africa.


We are also of the respectful view that this is an extremely good judgement.


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