FMF's legal challenge to S32 of the Labour Relations Act 1995 (LRA)

 "Just let me work": The voice of the unemployed

Ten months after the FMF filed papers challenging S32 of the LRA, the Minister of Labour's lack of response is in contempt of the rule of law 

Nearly one year after the FMF launched our legal challenge to S32 of the LRA, we have yet to received answering affidavits from the Minister of Labour and other key respondents. This lack of response is a direct abrogation of state responsibility to help its citizens, "said FMF Chairman Herman Mashaba. 

"From the beginning the process has been hampered by requests for extensions, delays and lack of response, which is frustrating justice and shows contempt for the rule of law. The Minister of Labour, despite indicating her intention to respond, has ignored three extended deadlines and her silence on such a key matter attacks at the heart of our constitution which ministers must uphold and protect. These delays show a serious disregard for the judicial process and the decay of proper administrative process. While she dithers, millions of unemployed South Africans suffer in poverty and hardship. It is unacceptable and the minister must be held to account".

Reaction from some unions has been intimidating with threats of violence and talk of "taking to the streets" and "preventing this action at all costs". Mr Mashaba, "Is this what we fought the struggle against Apartheid for? To be silenced from helping fellow South Africans who are still struggling today?"

On 05 March 2013, the FMF launched an *application in the Pretoria High Court challenging the constitutionality of section 32(2) of the Labour Relations Act (LRA) 1995.

The court case cited the Minister of Labour, the Minister of Justice and 47 Bargaining Councils as respondents.

S32 deals with how collective agreements may be extended to employers who were not part of the Bargaining Council's negotiations on wages and terms and conditions.

Members of the bargaining councils which includes union representatives and employers, usually the larger employers, meet and negotiate the terms and conditions of employment including wages of that sector.

These council members or "parties" who conclude the agreement at the bargaining council have their own interests at mind and not that of the wider economy.

Yet, subject to certain conditions of representivity, the bargain council can compel the minister to extend this agreement to all employers in the sector without their agreement and without being able to consider or "apply her mind" to the wider economic considerations especially the impact on jobs and social justice. She has no room for manoeuvre.

This means that all employers in that industry, large, small and those who may be thinking about starting up an enterprise, are forced to pay the wages and offer employment conditions which have been negotiated in their absence, without their input and which many cannot afford. Also, they are compelled to pay levies to the bargaining council.

Empirical evidence shows that extending these agreements directly causes unemployment. It has a particular impact on smaller firms which tend to be more labour intensive. Jobs are lost and new hires are fewer. Potential start-up firms are deterred from entering the industry. Existing jobs and union membership are protected at the expense of the unemployed.

The FMF legal challenge seeks to have the LRA amended so that the Minister of Labour has discretion on whether or not to extend bargaining council agreements.

Section 32 says the minister "must" extend the agreement. The FMF wants to the court to change "must" to "may" which will give the minister the discretion to "apply her mind" and consider all factors involved including the wider economy, the impact on small firms in the sector and the potential consequences for existing and potential jobs. 

Over a six month period from March to September, to ensure fairness and that all views would be recognised and to be cooperative in the best interests of the country, the FMF agreed to grant three extensions of deadlines to allow respondents further time to file answering affidavits. 

During that time, Cosatu and Numsa entered the fray despite not being cited as respondents. Initially the FMF agreed to allow both to be part of the process however we now see that their real intention was to thwart and delay proper legal process. This is apparent by their failure to file answering affidavits in the time allowed by the extensions. 

The FMF is opposing both applications and very shortly will approach the court for a hearing date. We undertake to keep the media fully informed. A Q&A paper is available also a detailed timeline which charts the course of the application and various responses. Please contact the FMF media office below. 

Editorial Notes

1. The Basis of the FMF's Legal Challenge

The FMF argues that S32 of the LRA is unconstitutional* because:

Under the Constitution only government has the power to legislate. Yet S32 delegates this power to non-government bodies because it allows a BC to impose "legal" terms and conditions of employment on all employers in a sector. 

S32 allows a party (a Bargaining Council), which is not truly representative of the industry or sector and is therefore a minority, to impose conditions on "non parties", those outside of the bargaining council, i.e. the majority. 

2. Responses

Current Status

Despite indicating an intention to oppose, the Minister of Labour has not filed opposing papers. 
The Minister of Justice has said he would not oppose.
17 Bargaining Councils have filed opposing papers. 
Two applications to intervene have been filed (COSATU and NUMSA). Both applications have being opposed.

3. Extensions Granted

Over a six month period from March to September, t the FMF agreed to grant three extensions of deadlines to allow respondents further time to file answering affidavits. 

Extension 1: July 31 2013
Extension 2: August 31 2013
Extension 3: September 30 2013

The Free Market Foundation

The FMF is an independent public benefit organisation founded in 1975 to promote and foster an open society, the rule of law, personal liberty and economic and press freedom as fundamental components of its advocacy of human rights and democracy based on classical liberal principles.

Statement issued by Jayne Boccaleone, Free Market Foundation, February 12 2014

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