Brief Summary

Labour Law — Collective Agreements — Extension of collective agreement to non-union members — Appeal by Association of Mineworkers and Construction Union (AMCU) against a Labour Court ruling binding it to a collective wage agreement concluded by other unions and employers — AMCU contending that individual mines constituted separate workplaces and that the agreement was not binding on its members — Court finding that the individual mines did not operate as independent workplaces and that the collective agreement was validly extended under section 23(1)(d)(iii) of the Labour Relations Act — Constitutionality of section 23 upheld, with the court affirming the principle of majoritarianism in collective bargaining as consistent with constitutional rights.

Comprehensive Summary

Summary of Judgment

Introduction

The proceedings were an appeal to the Labour Appeal Court against the whole judgment and order of the Labour Court (Van Niekerk J). The Labour Court had (a) held that the Association of Mineworkers and Construction Union (AMCU) and its members were bound by a collective wage agreement concluded between the Chamber of Mines of South Africa (acting for various gold-mining employers) and other unions, and (b) granted relief interdicting AMCU and its members from striking in respect of matters regulated by that agreement. The Labour Court also upheld the constitutionality of the impugned statutory provisions.

The parties on appeal were AMCU and the individual employees referenced in annexure “A” to the notice of motion (as appellants), and the Chamber of Mines of South Africa (acting in its own name and on behalf of Harmony Gold Mining Company (Pty) Ltd, AngloGold Ashanti Ltd, Sibanye Gold Limited and others) as first respondent, together with the National Union of Mineworkers (NUM), Solidarity, United Association of South Africa (UASA), the Minister of Labour, and the Minister of Justice and Constitutional Development as further respondents. The appeal was opposed principally by the Chamber (and represented employers) and NUM. The Minister of Labour opposed the appeal on the constitutional issue only.

The general subject-matter concerned the extension and binding effect of a collective agreement concluded outside a bargaining council, and whether AMCU (a minority union in the relevant “workplace” as alleged) could be bound by that agreement through section 23(1)(d)(iii) of the Labour Relations Act 66 of 1995 (LRA), thereby rendering strike action unprotected under section 65(3) of the LRA. A further central component of the dispute was AMCU’s constitutional challenge to section 23(1)(d) (read with section 65 and the definition of “workplace” in section 213), arguing that the majoritarian extension mechanism unjustifiably limited its members’ rights to strike and to engage in collective bargaining.

Procedurally, the dispute originated in urgent litigation. AMCU gave notice of a strike in January 2014 notwithstanding the existence of a wage agreement concluded in September 2013 between the Chamber and other unions. The Chamber then approached the Labour Court urgently for interim relief in terms of section 68(2) of the LRA to interdict the strike as unprotected, on the basis that AMCU was bound by the agreement as extended under section 23(1)(d). After interim relief was granted, AMCU launched a counter-application challenging the constitutionality of the relevant statutory provisions. The Labour Court confirmed the rule nisi and dismissed AMCU’s constitutional challenge. AMCU then appealed to the Labour Appeal Court.

Material Facts

During 2013 the Chamber, a registered employers’ organisation and collective bargaining agent for its members (including Harmony, AngloGold Ashanti, and Sibanye), negotiated with several unions including AMCU, NUM, Solidarity and UASA. NUM, Solidarity and UASA declared a dispute of mutual interest with the Chamber on 24 July 2013, which was referred to the CCMA and certified unresolved in late August 2013. The Chamber similarly declared and referred a dispute with AMCU on 29 July 2013, also certified unresolved during August 2013.

NUM embarked on a strike on 3 September 2013. Following a revised offer by the Chamber on 6 September 2013 (which AMCU rejected), the Chamber concluded a collective wage agreement with NUM, Solidarity and UASA. The agreement expressly recorded that it was concluded as contemplated in section 23(1)(d) of the LRA, that it settled disputes between the Chamber and parties bound by it, and that parties bound by the agreement would not strike or lock out in support of demands to amend wages and conditions of employment for the duration of the agreement. The agreement purported to bind not only members of the signatory unions but also other employees in the workplace(s) of the employers, including employees who were AMCU members.

It was common cause that each of Harmony, AngloGold Ashanti and Sibanye owned and operated more than one mine. It was also common cause that AMCU held majority membership at certain individual mines of these companies, but that AMCU did not have majority membership overall across most of the mines of each employer.

Notwithstanding the agreement, AMCU called for a strike over matters regulated by the agreement and on 20 January 2014 gave 48 hours’ notice. The Chamber brought an urgent application to interdict the strike as unprotected. The key factual and statutory hinge was whether, for each employer, the “workplace” for purposes of section 23(1)(d)(iii) comprised each individual mine (as AMCU contended), or whether the mines of each employer collectively constituted a single workplace (as the Chamber contended). If the workplace was each individual mine, AMCU argued the extension could not operate at mines where AMCU was the majority union; if the workplace was the employer’s integrated operations, AMCU was a minority and the extension would bind it.

On the workplace issue, the employers placed detailed affidavit evidence before the Labour Court describing centralised management and integration of operations across mines within each company. The evidence included that mining licences were held by the companies; production and financial planning occurred centrally; financial management was centralised; support services (such as HR, IT and procurement) were centralised; assets were owned by the companies and moved between mines; and gold produced by all mines was sold by the company rather than by mines individually. AMCU, in response, relied primarily on recognition agreements at certain mines and on the fact of mine-by-mine regulatory reporting (including Mining Charter compliance-related documentation) as indicating separate operations. The Labour Court struck out certain bulky annexures introduced by AMCU without specific reliance being placed on identified portions, and found that AMCU had not meaningfully engaged with the detailed factual averments showing integrated operations.

On appeal, AMCU sought to introduce further evidence consisting of affidavits from other proceedings in which deponents for AngloGold Ashanti had described each mine as a separate “workplace”. The Chamber responded with affidavits explaining that “workplace” had been used loosely in those contexts and not as a statutory reference to section 213 of the LRA. The Labour Appeal Court admitted this further evidence but considered it did not alter the outcome on the statutory workplace enquiry.

Legal Issues

The central legal questions were, first, whether the collective wage agreement was binding on AMCU and its members by virtue of section 23(1)(d)(iii) of the LRA, read with the statutory definition of “workplace” in section 213, and consequently whether AMCU was prohibited from striking by operation of section 65(3) (and related strike-limiting provisions) of the LRA.

Within that primary question, two major sub-issues arose. One was whether the agreement was in substance a sectoral agreement that could only be extended to non-parties through section 32 of the LRA by the Minister of Labour (as AMCU contended), as opposed to a collective agreement concluded outside a bargaining council and extended through section 23(1)(d) (as the Chamber contended). The other sub-issue was whether, on the facts, the individual mines of each employer were “independent operations” such that each mine constituted a separate statutory workplace under section 213, or whether each employer’s mines formed a single workplace.

The second main issue—arising only if AMCU was bound by the agreement—was whether section 23(1)(d) (read with section 65 and the definition of workplace in section 213) was unconstitutional for limiting AMCU members’ rights, particularly the right to strike and to engage in collective bargaining under section 23 of the Constitution, and other asserted constitutional rights (including dignity, freedom of association, and others).

In character, the workplace dispute was primarily an application of law to fact, because the statutory definition in section 213 turned the enquiry into whether operations were “independent” by reason of size, function or organisation. The section 32 versus section 23 dispute was a question of statutory interpretation and classification of the legal mechanism applicable to the agreement concluded. The constitutional challenge involved a value judgment and proportionality assessment under section 36 of the Constitution, informed by the LRA’s purposes and by international law considerations referenced in the judgment.

Court’s Reasoning

On whether the agreement required extension under section 32 rather than section 23, the Court reasoned that section 32 applies to collective agreements concluded in a bargaining council, whereas section 23 governs the legal effect and extension of collective agreements concluded outside bargaining councils, including at workplace or centralised levels. The Court rejected AMCU’s contention that the Chamber functioned “de facto” as a bargaining council. It emphasised that the Chamber was not registered as a bargaining council under the LRA and that the agreement in issue was concluded in the Chamber, not in a bargaining council. The Court treated the statutory distinction as decisive: section 32 was not triggered merely because bargaining was centralised or industry-wide in practice, and the LRA recognises collective bargaining outside bargaining councils.

The Court also rejected AMCU’s reliance on Transnet Soc Ltd v National Transport Movement and Others [2014] 1 BLLR 98 (LC), holding that AMCU’s reading of that decision was mistaken because the case did not interpret section 23(1)(d) in the manner AMCU suggested. The Court considered it “obvious” from the definition of “collective agreement” in section 213 and from section 23(1) itself that section 23 accommodates multi-party agreements and is not confined to a single employer and a single union.

On the meaning of “workplace”, the Court held that the statutory definition in section 213 applied in the context of section 23(1)(d), and that the context did not indicate otherwise. The definition was treated as clear: a workplace is the place or places where employees of an employer work, but if an employer conducts two or more operations that are independent of one another due to size, function or organisation, each independent operation constitutes its own workplace. The Court characterised the enquiry into “independent operations” as a factual question governed by the statutory criteria.

Applying these principles to the evidence, the Court endorsed the Labour Court’s conclusion that AMCU failed to establish that each individual mine was an independent operation constituting its own workplace. It accepted the employers’ detailed affidavit evidence of integrated operations, including centralised planning, finance, HR and support systems, central ownership of assets, and centralised sale of production. In contrast, AMCU’s reliance on mine-specific recognition agreements and regulatory reporting obligations did not, in the Court’s view, demonstrate operational independence for purposes of section 213. The Court treated recognition agreements as dealing with organisational rights or bargaining units rather than proving statutory workplace independence, and it noted that those recognition agreements also indicated that bargaining over wages and substantive conditions of employment would be centralised.

The Court upheld the Labour Court’s decision to strike out the bulky regulatory annexures attached by AMCU without specifying the particular parts relied upon, and it agreed that there was no genuine dispute of fact that required rejection of the employers’ version. The additional evidence admitted on appeal—affidavits in other proceedings using “workplace” to refer to mines—was treated as not materially advancing AMCU’s case because the Chamber provided an explanation that the term was used loosely and not as a statutory reference.

Having found that the statutory workplace for each employer comprised the employer’s operations across mines rather than each mine individually, the Court held that the agreement satisfied the requirements of section 23(1)(d). It addressed additional arguments by AMCU that the agreement did not properly identify employees intended to be bound (invoking Early Bird Farms (Pty) Ltd v Food and Allied Workers Union and Others [2004] 7 BLLR 628 (LAC)), that representativity had not been demonstrated, and that “no-variation” clauses in recognition agreements required AMCU to sign before being bound. The Court held that the agreement, read with annexure “A”, sufficiently identified the employees to be bound (including non-members of the signatory unions employed in specified recognition units in the workplace of each employer), and that naming each employee individually was not required. It treated the Labour Court’s factual finding—namely that the signatory unions represented the majority of employees employed by each employer in the workplace (and that the majority threshold was determined with reference to total employees rather than only those in a bargaining unit)—as not challenged on appeal. The Court rejected the contention that AMCU had to sign to be bound, reasoning that section 23(1)(d) expressly provides for binding non-parties if its statutory conditions are met, and that recognition agreement variation clauses were not applicable because the collective wage agreement was not a variation of those recognition agreements.

On the constitutional challenge, the Court described AMCU’s attack as diffuse and emphasised that AMCU bore the onus to show a constitutional infringement with clarity. The Court treated the core complaint as directed at the majoritarianism mechanism in section 23(1)(d), which (when read with section 65) may preclude minority unions from striking on issues regulated by a collective agreement extended to them. The Court held that there was nothing unconstitutional about majoritarianism as a policy choice, relying on authority such as Kem-Lin Fashions CC v Brunton and Another [2001] 1 BLLR 25 (LAC) and noting academic endorsement referenced in the Labour Court’s judgment.

In conducting the constitutional analysis, the Court emphasised that section 23(5) of the Constitution permits collective bargaining to be regulated by national legislation, subject to section 36. It referred to interpretive injunctions to consider international law, and it relied on international labour law material cited in the record, including ILO conventions and committee jurisprudence indicating that majoritarian systems are not incompatible with freedom of association provided minority unions may exist, organise, and represent members in individual grievances and contest representativity over time. The Court reasoned that extending collective agreements to minority employees is not contrary to international law in principle.

The Court accepted that the right to strike is important but not absolute, and it treated the limitation effected by section 23(1)(d) read with section 65 as temporary and issue-specific, lasting for the duration of the agreement and confined to matters regulated by it. It considered the purpose of the limitation to be ensuring effective and orderly collective bargaining and workplace peace, and found the means (extension to minorities based on majority representation in the workplace) to be rational, reasonable, and proportionate. The Court rejected AMCU’s argument that the absence of “safeguards” akin to section 32 rendered section 23(1)(d) unconstitutional, explaining that section 32 serves a different function because bargaining council agreements may be extended to an entire sector including non-party employers, whereas section 23(1)(d) operates within the employer’s workplace and cannot be extended to non-party employers. It further considered that ministerial involvement would be impractical and not a less restrictive means in this context.

The Court also rejected alleged infringements of other constitutional rights. It held that the dignity argument was not dispositive and that the real impacted right was the right to strike/collective bargaining; it found no demonstrated infringement of the section 22 right to choose a trade, occupation or profession, nor of freedom of association in the manner asserted. It dismissed the rule of law/public power argument, agreeing with the Labour Court that section 23(1)(d) does not confer public power but rather provides for legal consequences flowing from private conduct where statutory requirements are satisfied, and that such legislative arrangements are not inimical to the rule of law.

Outcome and Relief

The Labour Appeal Court dismissed the appeal in its entirety. It upheld the Labour Court’s conclusions that the collective agreement was validly extended to bind AMCU’s members under section 23(1)(d)(iii) of the LRA, that AMCU was consequently bound by the peace obligation in the agreement with the associated statutory consequences under section 65, and that the impugned statutory provisions were constitutional.

No order as to costs was made. The Court recorded that the parties agreed the appeal constituted an attempt to vindicate constitutional rights and that, consistent with the approach in such matters, there should be no costs order.

Cases Cited

Association of Mineworkers and Construction Union and Others v Chamber of Mines of South Africa and Others (JA103/2014) [2016] ZALAC 11; (2016) 37 ILJ 1333 (LAC); [2016] 9 BLLR 872 (LAC).

Chamber of Mines of South Africa (acting in its own name and obo Harmony Gold Mining Company Ltd and others) v Association of Mineworkers and Construction Union and Others [2014] 9 BLLR 895 (LC).

Transnet Soc Ltd v National Transport Movement and Others [2014] 1 BLLR 98 (LC).

South African Police Service v Public Servants Association 2007 (3) SA 521 (CC).

Union Government v De Jager 1946 AD 235.

Town Council of Springs v Moosa 1929 AD 401.

Swissborough Diamond Mines v Government of the Republic of South Africa 1999 (2) SA 279 (T).

Nature’s Choice Products (Pty) Ltd v Food and Allied Workers Union and Others [2014] 5 BLLR 434 (LAC).

Early Bird Farms (Pty) Ltd v Food and Allied Workers Union and Others [2004] 7 BLLR 628 (LAC).

Minister of Safety and Security v Sekhoto 2011 (5) SA 367 (SCA).

Phillips and Others v National Director of Public Prosecutions [2005] ZACC 15; 2006 (1) SA 505 (CC); 2006 (2) BCLR 274 (CC).

Investigating Directorate: Serious Economic Offences and Others v Hyundai Motor Distributors (Pty) Ltd and Others [2000] ZACC 12; 2000 (10) BCLR 1079 (CC); 2001 (1) SA 545 (CC).

Affordable Medicines Trust and Others v Minister of Health [2005] ZACC 3; 2006 (3) SA 247 (CC).

Chirwa v Transnet Ltd [2007] ZACC 23; 2008 (4) SA 367 (CC).

S v Makwanyane [1995] ZACC 3; 1995 (3) SA 391 (CC).

S v Manamela and Another (Director-General of Justice Intervening) 2000 (3) SA 1 (CC).

Kem-Lin Fashions CC v Brunton and Another [2001] 1 BLLR 25 (LAC).

Mzeku v Volkswagen South Africa (Pty) Ltd [2001] 8 BLLR 857 (LAC).

National Union of Metalworkers of South Africa and Others v Bader Bop (Pty) Ltd and Another [2002] ZACC 30; [2003] 2 BLLR 103 (CC).

CUSA v Tao Ying Metal Industries and Others [2008] ZACC 15; 2009 (2) SA 204 (CC); 2009 1 BLLR 1 (CC).

Nokotyana v Ekurhuleni Metropolitan Municipality 2010 (4) BCLR 312 (CC).

Legislation Cited

Labour Relations Act 66 of 1995.

Constitution of the Republic of South Africa, 1996.

Mineral and Petroleum Resources Development Act 28 of 2002.

Rules of Court Cited

No specific rules of court were cited in the judgment (the proceedings referred to statutory applications under the Labour Relations Act 66 of 1995, including section 68(2)).

Held

The Court held that the collective wage agreement concluded between the Chamber (representing the relevant employers) and NUM, Solidarity and UASA was a collective agreement capable of extension under section 23(1)(d) of the Labour Relations Act 66 of 1995, and not an agreement requiring ministerial extension under section 32 of the Act.

The Court held that, on the evidence, the individual mines operated by each employer did not constitute separate “workplaces” as contemplated in section 213 of the LRA. The appellants failed to establish that each mine was an independent operation by reason of size, function, or organisation; instead, the employers established integrated, centrally managed operations constituting single workplaces.

The Court held that the statutory requirements for extension under section 23(1)(d) were satisfied, including identification of the employees intended to be bound, express binding language, and majority representation by the signatory unions in the workplace. Consequently, AMCU members were bound by the agreement and were prohibited from striking over the issues regulated by the agreement in terms of section 65 of the LRA.

The Court held that the constitutional challenge to section 23(1)(d) (read with section 65 and the definition of workplace in section 213) failed. The majoritarian extension mechanism and its strike-limiting consequences were found not to be unconstitutional, and any limitation of the right to strike and collective bargaining was held to be reasonable and justifiable in terms of section 36 of the Constitution in the manner discussed in the judgment.

LEGAL PRINCIPLES

Section 23(1)(d) of the Labour Relations Act 66 of 1995 provides an extension mechanism for collective agreements concluded outside bargaining councils. Where the statutory conditions are met—namely that the targeted employees are identified, the agreement expressly binds them, and the signatory union(s) represent the majority of employees employed by the employer in the workplace—the agreement may bind employees who are not members of the signatory unions.

The determination of what constitutes a “workplace” for purposes of section 23(1)(d)(iii) is governed by the statutory definition in section 213 of the LRA, and whether multiple operations constitute separate workplaces depends on a factual enquiry into whether operations are independent of one another by reason of size, function, or organisation.

Section 32 of the Labour Relations Act 66 of 1995 is confined to the extension of collective agreements concluded in a bargaining council, and its ministerial extension mechanism does not apply to collective agreements concluded outside bargaining councils under section 23. Collective agreements under section 23 cannot be extended under section 32; section 23 contains its own extension mechanism.

The principle of majoritarianism in collective bargaining, as embodied in section 23(1)(d), is not in itself unconstitutional. The majoritarian extension of collective agreements may limit minority unions’ and employees’ ability to strike on regulated issues during the agreement’s currency when read with section 65, but such limitation may be justified under section 36 of the Constitution given the LRA’s objectives of orderly and effective collective bargaining and workplace peace, as well as international law considerations referenced in the judgment.

Legislation may validly provide for legal consequences to flow from the conduct of private parties (such as the binding effect of collective agreements when statutory requirements are met), without thereby converting those private parties into bearers of public power for rule of law purposes, as treated in the Court’s reasoning.

Association of Mineworkers and Construction Union and Others v Chamber of Mines of South Africa and Others (JA103/2014) [2016] ZALAC 11; (2016) 37 ILJ 1333 (LAC); [2016] 9 BLLR 872 (LAC) (24 March 2016)