Extension of MEIBC Main Agreement: Exercising of discretion can never be a tick-box approach: An Open Letter to Minister Nxesi by Gerhard Papenfus


18 October 2022

Mr. Thulas Nxesi
The Minister of Employment and Labour

Dear Minister


In a recent letter addressed to the Chief Executive of NEASA, purportedly in response to our letter titled EXTENSION OF MAIN AGREEMENT WILL BE IRRESPONSIBLE.”, you made a number of statements that bears scrutiny.

Firstly, you stated that “we are a constitutional democracy and governed by the rule of law”.

This statement is of course correct in a general sense but seemingly does not apply to the world of collective bargaining. The collective bargaining framework, as set out in the Labour Relations Act (LRA), and in particular, those provisions dealing with the extension of agreements, are not based on the principle of majoritarianism, which is a cornerstone of any democratic dispensation. The framework is in fact based on a contrived “coverage” principle where credence is given to the numbers of employees employed by the employer parties to a bargaining council to determine if the Minister must extend an agreement based on the provisions of section 32(3) of the LRA.

It is important to note that it is the figures of the parties to the Council, and not to the agreement to be extended, that are counted. Therefore, the “coverage” argument does not even hold true, as a number of parties to the Council are not party to the agreement and, consequently, cannot form part of the initial determination of coverage of the agreement.

This, effectively, constitutes a double-voting system in terms of which employer parties to a bargaining council, which does not support a particular agreement, are simply swept aside by virtue of the fact that their own figures are used against them and that employee figures are used twice, once on the side of trade unions and a second time on the side of employers. The percentage of employers in the Industry who in fact supported the agreement, in this case less than 20%, are simply ignored. That is certainly not democracy.     

This conundrum is further compounded by the fact that the MEIBC Main Agreement was extended in terms of section 32(5) of the LRA, a section which contains no inkling of democratic principles. This is effectively an ‘if all else fails’ provision which determines that if there is no other option, the Minister may in any event extend an agreement if the parties to the Council are sufficiently representative within the registered scope of the Council.

However, the term “sufficiently representative” is not defined in the Act. It is trite that it does not mean the majority of employers in the Industry; a decision in this regard is simply subjected to your preferences, which leaves those who do not agree with your ideologies entirely vulnerable. This, Minister, is not democracy.

The second portion of your statement, that we are governed by the rule of law, is seemingly only applied when it suits your office. NEASA has on numerous occasions pointed out to you that the request and the Agreement do not comply with the requirements of the LRA as it, among others, do not contain any exemption criteria and contain clear and obvious, impermissible, discriminatory provisions. Both of these are issues that must be adhered to if the Minister wants to extend. Seemingly, these have simply been ignored, in clear contravention of the rule of law.

Another statement in your letter is that “there was no reason why the powers, granted in terms of the law, should not be exercised to extend the Consolidated Main Collective Agreement”.

Minister, this statement is indicative of your office’s approach to collective bargaining and the extension of agreements. The question is not whether there exists a reason why the powers to extend should not be exercised, but rather whether all the legal requirements have been met and secondly, if they have been met, whether the Agreement should be extended. The same powers that allow you to extend, also permit you to decide not to extend an agreement. It is a discretion under section 32(5) to extend, not an obligation.

Furthermore, section 32(5) permits you to extend if you are satisfied that failure to extend will undermine collective bargaining. We are certain that this factor weighed heavily in your decision to extend the Agreement. However, the extension of unaffordable, unsustainable agreements, supported by a very small minority of employers, in itself will lead to more and more employers becoming disillusioned with any benefit that collective bargaining may still hold for them, which will simply lead to the eventual collapse of the system.

NEASA listed a number of socio-economic reasons as to why the Agreement should not be extended, including unaffordability, the massively high unemployment rate, which will only be compounded by the extension, the uncompetitiveness of the Sector, the barrier to entry for both employers and employees etc.

A decision by a minister to extend an agreement constitutes administrative action, which requires the decision to be reasonable. It is, therefore, not for you to hide behind a single factor, and ignore all other considerations, when determining whether an agreement should be extended. What is required is a proper application of the mind to all relevant factors in order to come to a reasonable conclusion.

It seems that, taking into account all factors, your decision to extend cannot be said to have been reasonable and is, at the very least, irresponsible.         

The above, and other issues, will be the subject of litigation in the Labour Court and, if necessary, beyond that.

Yours faithfully,

G.C. Papenfus
Chief Executive