South African Local Government Bargaining Council and Others v Municipal Workers Retirement Fund and Others (770/2023) [2025] ZASCA 120 (21 August 2025)
REPORTABILITY SCORE: 81/100 Collective Agreements — Lawfulness — Retirement Fund Collective Agreement — The validity of the Retirement Fund Collective Agreement (CA) was challenged by various retirement funds on the grounds that it unlawfully regulated pension funds and imposed accreditation requirements that fettered the independence of fund trustees. The CA was concluded by the South African Local Government Association and two trade unions, aiming to standardize retirement fund arrangements across the local government sector. The high court found the CA to be unlawful and set it aside, ruling that it exceeded the parties' authority and violated the provisions of the Pension Funds Act. The Supreme Court of Appeal upheld the high court's decision, confirming that the CA was invalid due to its illegality and failure to comply with statutory requirements.
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Case Note
Case Name: South African Local Government Bargaining Council and Others v Municipal Workers Retirement Fund and Others
Citation: (770/2023) [2025] ZASCA 120
Date: 21 August 2025
Reportability
This case is reportable due to its significant implications for the interpretation of collective agreements within the context of pension fund regulations in South Africa. The judgment addresses the legality of a collective agreement that sought to impose an accreditation regime on retirement funds, raising critical questions about the boundaries of collective bargaining and the statutory powers of bargaining councils.
Cases Cited
- Municipal Workers Retirement Fund v South African Local Government Bargaining Council and Others [2023] ZAGPPHC 98
- Municipal Employees Pension Fund and Another v SAMWU National Provident Fund and Another [2019] ZASCA 42
- Johannesburg Municipal Pension Fund and Others v City of Johannesburg and Others 2005 (6) SA 273 (W)
- Sasol Limited v Chemical Industries National Provident Fund [2015] ZASCA 113
- AMCU v Chamber of Mines of South Africa [2017] ZACC 3
Legislation Cited
- Labour Relations Act 66 of 1995
- Pension Funds Act 24 of 1956
- Promotion of Administrative Justice Act 3 of 2000
- Municipal Systems Act 32 of 2000
Rules of Court Cited
- None specified in the judgment.
HEADNOTE
Summary
The Supreme Court of Appeal addressed the validity of the Retirement Fund Collective Agreement (CA) concluded by the South African Local Government Bargaining Council. The court found that the CA was unlawful as it imposed an accreditation regime on retirement funds, infringing upon the statutory rights of those funds and their members. The court ultimately upheld the high court's decision to set aside the CA.
Key Issues
The key legal issues included: - Whether the CA constituted a valid collective agreement under the Labour Relations Act. - The legality of the accreditation scheme imposed by the CA. - The implications of the CA on the independence of pension fund trustees and the rights of fund members.
Held
The court held that the CA was invalid and unenforceable due to its illegality, as it sought to regulate pension funds in a manner inconsistent with the Pension Funds Act and the principles of collective bargaining.
THE FACTS
The case arose from challenges to the Retirement Fund Collective Agreement, which aimed to standardize retirement fund arrangements across the local government sector. The agreement was concluded by the South African Local Government Association and two major trade unions, representing a significant portion of local government employees. Various retirement funds contested the legality of the CA, arguing that it overstepped the bounds of collective bargaining and infringed upon their statutory rights.
THE ISSUES
The court had to decide whether the CA was a legitimate collective agreement under the Labour Relations Act, whether it unlawfully imposed an accreditation regime on retirement funds, and whether it violated the independence of pension fund trustees.
ANALYSIS
The court analyzed the nature of the CA, concluding that it did not merely concern terms and conditions of employment but sought to regulate the retirement fund industry, which is outside the scope of collective bargaining. The court emphasized the importance of maintaining the independence of pension funds and the fiduciary duties of their trustees, which the CA undermined.
REMEDY
The court dismissed the appeals with costs and upheld the cross-appeal, setting aside the CA on the grounds of illegality. The court ordered that the Retirement Fund Collective Agreement signed on 15 September 2021 be reviewed and set aside, with costs awarded to the applicants.
LEGAL PRINCIPLES
The judgment established key legal principles regarding the limits of collective bargaining in relation to pension fund regulations, emphasizing that collective agreements must not infringe upon statutory rights or the independence of pension fund trustees. The court reaffirmed the necessity for compliance with the Pension Funds Act and the importance of protecting the interests of all stakeholders, including pensioners and non-unionized employees.