FMF delighted by historic High Court judgement in LRA constitutional challenge

4 May 2016

The Free Market Foundation (FMF) is delighted by the judgment handed down today and welcomes the court’s finding that extension of Bargaining Council Agreements (BCAs) to non-parties should not be automatic and mandatory. It is bad news for advocates of compulsion by narrow vested interest and good news for eight million destitute job seekers, thousands of small, marginal and prospective employers, and all compassionate South Africans.

The FMF is surprised by the reaction of Cosatu and Numsa who regard the judgement as their victory. It is a Pyrrhic victory, which is one which leaves the ‘victor’ worse off. They clearly do not understand the FMF’s motives or the judgement. The ruling is a fatal blow to their view that they should have the power to force the minister to extend self-serving contracts that discriminate against their rivals and victims.

The court’s view, as argued by the FMF, is that the rights of vulnerable workers and employers, and the country as a whole, must be respected. The FMF’s objective can be achieved, without the need to change S 32* of the LRA, by subjecting labour law to administrative justice. In terms of the judgement, the extension of BCAs is subject to the administrative justice clause in the constitution and the Promotion of Administrative Justice Act (PAJA).

It is now clear that the implications of extending BCAs must be considered at three stages instead of only one as requested by the FMF. Instead of merely permitting the Minister of Labour to consider her actions before extending BCAs, the court’s view is that, the agreement, the request to extend it to non-parties and the minister’s decision to grant the extension are all subject to PAJA.

The FMF’s concern has always been that automatic and compulsory extension of BCAs victimises non-parties and harms the economy. The court shares this concern in a judgment that might have implications for labour relations exceeding what the FMF sought.

At every step, parties opposed to the application sought to delay, prevent and undermine the case. A Cosatu affiliate threatened blood in the streets and Cosatu itself resorted to other means of intimidation to “compel” the FMF to withdraw, including picketing FMF offices and intimidating private companies. The FMF hopes that misplaced enthusiasm for the judgment means that Cosatu will henceforth refrain from revealing its disrespect for the courts, due process, the constitution and the rule of law.

The FMF derives significant comfort from the judgement, even if, in technical terms, the judgement it sought was not granted. The FMF will reflect on whether it is necessary to take it on appeal to achieve greater certainty for unemployed South Africans desperate for hope of a job.

Note to the Editor

* In 2013, the FMF challenged the constitutionality of section 32 of the Labour Relations Act 1995 (LRA), which forces the minister of labour to impose private bargain council agreements on non-parties. The FMF sought to change “must” to “may” to allow ministerial discretion to apply her mind to the wider socio economic circumstances prevailing in a sector.

Note

The FMF is an independent, non-profit, public benefit organisation, created in 1975 by pro-free market business and civil society national bodies to work for a non-racial, free and prosperous South Africa. As a policy organisation it promotes sound economic policies and the principles of good law. As a think tank it seeks and puts forward solutions to some of the country’s most pressing problems: unemployment, poverty, growth, education, health care, electricity supply, and more. The FMF was instrumental in the post-apartheid negotiations and directly influenced the Constitutional Commission to include the property rights clause: a critical cornerstone of economic freedom.

The FMF has a wealth of information in papers, articles and opinion pieces available on the website which can influence the public debate and present alternative policies to the people of South Africa. Please look at our website www.freemarketfoundation.com. Also see Facebook and Twitter.