THE LABOUR APPEAL COURT OF SOUTH AFRICA, CAPE TOWN
Reportable
Case No: CA 16/2023
In the matter between:
SOUTH AFRICAN ROAD PASSENGER BARGAINING COUNCIL Appellant
and
GOLDEN ARROW BUS SERVICES (PTY) LTD First Respondent
SIBANYE BUS SERVICES (PTY) LTD & OTHERS Second Respondents
SA BUS EMPLOYERS ASSOCIATION Third Respondents
COMMUTER BUS EMPLOYERS ASSOCIATION Fourth Respondents
SA TRANSPORT & ALLIED WORKERS UNION Fifth Respondents
NATIONAL UNION OF METALWORKERS OF SA Sixth Respondents
TRANSPORT & ALLIED WORKERS UNION OF SA Seventh Respondents
TRANSPORT & OMNIBUS WORKERS UNION Eighth Respondents
UNITED ASSOCIATION OF SA Ninth Respondents
MINISTER OF EMPLOYMENT & LABOUR Tenth Respondents
NON-UNIONISED EPLYEES LISTED IN ANNEXURE “A”
TO APPLICANTS’ NOTICE OF MOTION Eleventh Respondents
& Further
Respondents
2
Heard: 14 May 2025
Delivered: 13 November 2025
Coram: Savage JA, Musi AJA et Waglay AJA
Summary: Appeal and cross-appeal concerning extension of main collective
agreement in terms of section 32 of the Labour Relations Act,
1995, where the Minister has not heard representations from non-
parties before decision is made and constitutionality of sections
32(2) and (3) impugned where the Act does not allow for the right
to make representations, infringing right to fair administrative
action – Following sections 36 limitations analysis, determined
that section 32(2) is a deliberate choice in favour of
majoritarianism to promote collective bargaining and workplace
democracy while reducing ministerial discretion – Appeal and
cross-appeal dismissed.
___________________________________________________________________
JUDGMENT
___________________________________________________________________
MUSI, AJA
Introduction
[1] This is an appeal against a judgment and order of the Labour Court in which it
reviewed and set aside a decision by the Minister of Employment and Labour
(Minister) to extend the main collective agreement (MCA) to non- party
employees and employers to the South African Road Passenger and
Bargaining Council (SARPBAC). The appeal is with the leave of the Labour
Court.
[2] The Labour Court found that the Minister had no duty to hear any non- parties
before extending an agreement. The SARPBAC lodged a cross -appeal
3
because the Labour Court did not deal with a constitutional issue that it
pertinently raised: if the Labour Court found that a non- party, who is bound by
the MCA, does not have the right to make representations before the Minister
extends an agreement, then sections 32(2) and (3) of the Labour Relations
Act1 (LRA) unreasonably limits the right to administrative action that is lawful,
reasonable and procedurally fair in terms of section 33 of the Constitution and
is therefore unconstitutional.
Background facts
[3] The first and second respondents, Golden Arrow Bus Services (P ty) L td
(Golden Arrow) and Sibanye Bus Services (P ty) Ltd (Sibanye), are not parties
to the SARPBAC. I shall henceforth refer to these two companies collectively
as the bus companies.
[4] They allege that the across -the-board salary increases determined by the
SARPBAC and made applicable by the Minister to non -parties prejudice them
because of the wage disparity it creates. They assert that there is a
substantial disparity between the wages which they are obliged to pay their
employees, on the one hand, and the wages which other employers must pay
theirs, on the other.
[5] The disparity arose because of the notch system agreed between the two bus
companies and the Transport and Omnibus Workers Union (TOWU), before
the establishment of the SARPBAC. The SARPBAC main collective
agreements have invariably provided for across -the-board wage increases to
be applied to employees’ actual wages and have generally retained status
quo clauses, which historically governed the terms and conditions of
employment applied by employers covered by the historical agreements.
[6] In terms of the SARPBAC’s constitution (constitution), the National Bargaining
Forum (NBF) comprises of an equal number of representatives of both the
employers and the trade union parties who shall come together at agreed
intervals to negotiate and endeavour to conclude a main agreement. The
1 Act 66 of 1995, as amended.
4
constitution also makes provision for a Central Committee (CC), which is a
committee of nominated representatives charged with the responsibility of
administering the constitution and the affairs of the SARPBAC. The CC
comprises ten representatives nominated by the employers’ organisations and
ten representatives nominated by the t rade unions that are party to the
SARPBAC.
[7] In terms of the constitution, the CC is charged with administering SARPBAC's
constitution, the setting up of subcommittees, the appointment of staff,
matters of policy, the establishment and maintenance of a dispute resolution
process as provided for in section 28(1)(d) read with section 51 of the LRA
and any other function as detailed in the constitution. The constitution does
not make provision for a meeting of the SARPBAC.
[8] On 25 March 2021, the NBF signed the MCA, in terms of which they agreed
to implement a 4% increase on the actual wage rate of employees (clause
3.2). The implementation date of the agreement was 1 April 2021, valid for
one year until 31 March 2022.
[9] According to the SARPBAC, on 22 April 2021, before the commencement of
the meeting of its CC, all parties to the SARPBAC and the MCA met to sign
the amended collective agreement, which was submitted to the Minister.
[10] On 7 June 2021, the Minister extended the MCA to non- parties, and the
extension was subsequently published in the Government Gazette on 18 June
2021. On 11 June 2021, the bus companies wrote to the Minister requesting
information and pointing out that the extension would discriminate against
them. The Minister did not respond to this letter. On 25 June 2021, they again
wrote to the Minister requesting information and reasons for the extension.
[11] On 28 June 2021, the Director General responded, pointing out that the
Minister had relied on the determination of representativeness which had
been made on 3 August 2020 and would expire on 31 July 2022.
been made on 3 August 2020 and would expire on 31 July 2022.
Furthermore, they were informed that they may apply for exemptions.
2
2 The bus companies had, on numerous occasions, unsuccessfully applied for exemptions.
5
In the Labour Court
[12] The bus companies launched a review application seeking the following
orders:
12.1 Reviewing and setting aside the Minister’s decision to extend the 2021
MCA;
12.2 insofar as may be necessary, declaring sections 32(2) and (3) of the
LRA unconstitutional and invalid to the extent that they do not require
the Minister to follow a procedurally fair process before deciding to
extend a collective agreement to non-parties;
12.3 Reviewing and setting aside the SARPBAC’s decision to request the
Minister to extend the 2021 MCA to non-parties; and
12.4 Declaring clause 3 of the 2021 MCA ultra vires the LRA, invalid and of
no effect insofar as it seeks to impose a 4% across-the-board increase.
[13] The bus companies submitted that the 2021 MCA does not constitute a
collective agreement concluded in the B argaining Council as envisaged in
section 32(1) of the LRA. Relying on the documents filed by the SARPBAC,
they submitted that the 2021 MCA had not been concluded when the
SARPBAC’s General Secretary sent his April 2021 report to representatives
of the parties to the Council. He arranged for it to be signed between the
FinCom and CC meetings, which were scheduled for 22 April 2021. The
documents further revealed that the 2021 MCA had been concluded by being
signed by representatives of each of the five parties to the SARPBAC on 22
April 2021. They additionally contended that the Minister could not rely on the
2020 determination of representativeness.
[14] In terms of section 27(1) of the LRA , one or more registered trade unions and
one or more registered employers’ organisations may establish a bargaining
council for a sector and area by—
14.1 adopting a constitution that meets the requirements of section 30; and
6
14.2 obtaining registration of the bargaining council in terms of section 29.
[15] Section 30 provides:
‘(1) The constitution of every bargaining council must at least provide for—
(a) the appointment of representatives of the parties to the
bargaining council, of whom half must be appointed by the
trade unions that are party to the bargaining council and the
other half by the employers’ organisations that are party to the
bargaining council, and the appointment of alternates to the
representatives;
...
(d) rules for the convening and conducting of meetings of
representatives, including the quorum required for, and the
minutes to be kept of, those meetings;
(e) the manner in which decisions are to be made ...’
[16] In terms of section 213 of the LRA , ‘collective agreement ’ means a written
agreement concerning the terms and conditions of employment or any other
matter of mutual interest concluded by one or more registered trade unions,
on the one hand and, on the other hand—
16.1 one or more employers;
16.2 one or more registered employers’ organisations; or
16.3 one or more employers and one or more registered employers’
organisations…’
[17] The Minister may extend a collective agreement entered into in a bargaining
council to non-parties in terms of section 32 of the LRA, which reads:
‘(1) A bargaining council may ask the Minister in writing to extend a
collective agreement concluded in the bargaining council to any non-
parties to the collective agreement that are within its registered scope
7
and are identified in the request, if at a meeting of the bargaining
council—
(a) one or more registered trade unions whose members
constitute the majority of the members of the trade unions that
are party to the bargaining council vote in favour of the
extension; and
(b) one or more registered employers’ organisations, whose
members employ the majority of the employees employed by
the members of the employers’ organisations that are party to
the bargaining council, vote in favour of the extension.
(2) Subject to subsection (2A), the Minister must extend the collective
agreement, as requested, by publishing a notice in the Government
Gazette, within 60 days of receiving the request, declaring that, from a
specified date and for a specified period, the collective agreement will
be binding on the non-parties specified in the notice.
(2A) If the registrar determines that the parties to the bargaining council are
sufficiently representative within the registered scope of the bargaining
council for the purposes of subsection (5) (a), the Minister must
publish the notice contemplated in subsection (2) within 90 days of the
request.
(3) A collective agreement may not be extended in terms of subsection
(2) unless the Minister is satisfied that—
(a) the decision by the bargaining council to request the extension
of the collective agreement complies with the provisions of
subsection (1);
(b) (i) the registrar, in terms of section 49 (4A) (a), has
determined that the majority of all employees who,
upon extension of the collective agreement, will fall
within the scope of the agreement, are members of the
trade unions that are parties to the bargaining council;
or
8
(ii) the registrar, in terms of section 49 (4A) (a), has
determined that the members of the employers’
organisations that are parties to the bargaining council
will, upon the extension of the collective agreement, be
found to employ the majority of all the employees who
fall within the scope of the collective agreement…’
The determination
[18] It is common ground that the registrar did not issue a determination for the
2021 MCA. The bus companies submit that the Minister erred by relying on
the determination of representativeness issued by the registrar on 13 August
2020 because the certificate had not been issued in terms of section 32(3)(b)
of the LRA. They contend that the registrar must issue a determination for
each and every MCA before the Minister is requested to extend it to non-
parties.
[19] They argue that this must be so because the words ‘collective agreement’ in
section 32(3)(b)(i) and (ii) are preceded by the definit e article ‘the’. This, so
they argue, is a clear indication that there must be a determination for the
specific collective agreement. Section 49(4) provides:
‘(4) A determination of the representativeness of a bargaining council in
terms of this section is sufficient proof of the representativeness of the
council for the two years following the determination for any purpose
in terms of this Act, including a decision by the Minister in terms of
sections 32(3) (b) and 32 (5).
(4A) A determination made by the registrar in terms of—
(a) section 32(3)(b) is sufficient proof that the members of the
employer organisations that are party to the bargaining council,
upon extension of the collective agreement, employ the
majority of the employees who fall within the scope of that
agreement; and
9
(b) section 32(5)(a) is sufficient proof that the parties to the
collective agreement are sufficiently representative within the
registered scope of the bargaining council.’
[20] In terms of section 49(2) , a bargaining council, having a collective agreement
that has been extended by the Minister , must inform the registrar annually of
the employees who are covered by the collective agreement, members of the
trade unions that are parties to the agreement and who are employed by
members of the employers’ organisations that are party to the agreement.
These figures assist the registrar in making the determination. The reference
in section 49(4) to ‘this section’ is a reference to the entire section 49. The
determination in terms of section 49 is sufficient proof of the
representativeness of the council for two years following the determination for
any purpose, including a decision by the Minister in terms of section 32(3)(b)
and 32(5).
[21] Sections 49(1) and (4) cannot be read as requiring separate determinations
for each collective agreement concluded in the two years following the
determination.
[22] The bus companies contend that the Court should construe the words ‘is
sufficient proof’ in section 49(4) as prima facie proof. They assert that
because the industry scope of the SARPBAC changed during May 2021, the
determination is invalid and therefore this constitutes countervailing evidence
which displaces the prima facie proof. It must be accepted that changes to the
representivity figures would change for various reasons. The policy choice by
the legislature was to have a determination that is valid f or a long period
instead of having a new determination every time there is a change. In any
event, a drastic change can be picked up when a bargaining council provides
its annual figures.
[23] The bus companies knew or ought to have known about the August 2020
determination; they did nothing to have it set aside or to seek an order
determination; they did nothing to have it set aside or to seek an order
compelling the registrar to issue a fresh determination.
10
[24] The Minister stated that he had regard to the employee numbers employed
within the scope of the collective agreement as at 31 July 2020, as well as the
number of employees within the bargaining council as at May 2021. He further
states that in May 2021, 17 368 employees fell within the scope of the
collective agreement. This information was provided to him as part of the
request to extend that collective agreement. The Minister , therefore, went
beyond the determination.
[25] The determination was properly issued on 3 August 2020. It was therefore
valid until 31 July 2022. The Minister considered it when he took his decision
on 7 June 2021. The Minister properly had regard to that determination. The
argument that there must be a determination for every MCA before it is
extended is rejected.
Did the SARPBAC comply with its constitution?
[26] The SARPBAC constitution, contrary to the express provision in section
30(1)(e), does not stipulate how decisions of the SARPBAC are to be taken. It
sets out the composition, powers and functions , meetings, quorum at
meetings, and the filling of vacancies of the CC. I will assume for present
purposes that a proper decision of the CC is a decision of the SARPBAC.
[27] The SARPBAC contends that the conclusion of a collective agreement in a
bargaining council is not the same as the conclusion of a collective agreement
by a bargaining council. This is so, the SARPBAC submits, because the
bargaining council is not the contracting party or the party performing the legal
act of concluding the agreement. It is the individual parties who conclude the
agreement. It points to the definition of ‘ collective agreement ’ to bolster its
point.
[28] The implication of the argument is that a collective agreement is concluded by
the parties , and they therefore do not have to comply with the bargaining
council’s constitution in doing so.
[29] In terms of section 28(1)(a) of the LRA , the powers and functions of a
[29] In terms of section 28(1)(a) of the LRA , the powers and functions of a
bargaining council are, inter alia , to conclude and enforce collective
11
agreements in relation to its registered scope. The SARPBAC constitution
states that one of its objects is to negotiate, conclude, monitor and enforce
collective agreements.
[30] Section 23, which deals with the legal effect of collective agreements in the
workplace, must be distinguished from sectoral collective agreements. The
binding nature of sectoral -level collective agreements is governed by section
31, which states that , subject to section 32 and the constitution of the
bargaining council, a collective agreement concluded in a bargaining council
binds specific parties, under section 31. In A ssociation of M ineworkers &
Construction Union and Others v Chamber of Mines of SA and Others
3, this
Court held that:
‘It is apparent from a reading of sections 32 and 23, within their proper
contexts within the LRA, that the two sections contemplate, essentially , two
different kinds of collective agreement. In section 23, collective agreements
outside bargaining councils are contemplated and provided for, whereas
section 32 contemplates collective agreements concluded on a broader
[sectoral] basis, and more particularly, within bargaining councils.’
4
[31] A bargaining council must act in terms of its constitution. In University of the
North v Franks and Others 5, the court held the following with regard to the
decision-making powers of a juristic person:
‘A body corporate does not act through mere discussions by its members. It
acts through resolutions properly passed. Its decisions are to be sought in its
resolutions. If these are clear , cadit quaestio. If there is no resolution, there is
no decision.’
6
[32] In SALGA v IMATU7, this Court held that the provisions of the constitution of a
bargaining council have to be complied with for a valid and binding collective
agreement to be concluded.8
3 (JA103/2014) [2016] ZALAC 11; (2016) 37 ILJ 1333 (LAC); [2016] 9 BLLR 872 (LAC) (24 March
2016).
4 Ibid at para 43.
2016).
4 Ibid at para 43.
5 (JA11/01) [2002] ZALAC 13; [2002] 8 BLLR 701 (LAC); (2002) 23 ILJ 1252 (LAC) (29 May 2002).
6 Ibid at para 35.
7 (JA46/2012) [2014] ZALAC 97 (4 March 2014).
12
[33] The SARPBAC contended that the NBF does not have the authority to
conclude collective agreements because it is merely a negotiating body. As
stated above, in terms of SARPBAC’s constitution, the NBF’s function is to
negotiate and endeavour to conclude a main agreement. ‘Main agreement’ is
defined as a collective agreement concerning substantive conditions of
employment, concluded within the NBF. In terms of clause 15 of the
SARPBAC’s constitution , the NBF shall be the sole forum for negotiating
collective a greements on substantive conditions of employment. Wages are
part of the substantive conditions of employment.
[34] Clause 8.5 provides for a maximum of five observers , each without voting
rights, to attend NBF meetings. By necessary implication, the members of the
NBF do have voting rights.
[35] I am satisfied that the NBF is the sole forum mandated by the SARPBAC
constitution to decide whether to conclude a main agreement, and if so, what
its terms are to be. The SARPBAC does not deny that the NBF did not take
the decision to conclude the 2021 MCA in its final form. The SARPBAC’s case
is that the NBF’s decision was not required.
[36] It is common cause that the agreement concluded on 25 March 2021 and
signed by the respective parties on 12 April 2021 was not the MCA in its final
form. As at 14 April 2021, when that SARPBAC’s General Secretary
circulated a report in preparation for a CC meeting scheduled for 21- 22 April
2021, the terms of the 2021 MCA had not yet been finalised. The final 2021
MCA was signed between the Finance committee meeting and the CC
meetings on 22 April 2021. The NBF did not meet on that day. The NBF
therefore did not conclude the 2021 MCA. The 2021 MCA was not concluded
in the bargaining council.
Did the SARPBAC take a valid decision to request extension?
[37] The review ground that the SARPBAC did not take a valid decision to request
the Minister to extend the collective agreement was raised in the Labour
8 Ibid at paras 34 to 38.
13
Court, but it did not make any finding relating thereto. In terms of section
32(1), a bargaining council may ask the Minister in writing to extend a
collective agreement concluded in the bargaining council to non-parties if, at a
meeting of the bargaining council , one or more trade unions whose members
constitute the majority of the members of the trade unions that are party to the
bargaining council , and one or more registered employers’ organisations,
whose members employ the majority of the employees by the members of the
employers’ organisations that are party to the bargaining council , vote in
favour of the extension.
[38] It is the bargaining council that may ask the Minister for the extension. The
bargaining council must vote in favour of the decision to request an extension.
There is no evidence that the CC took a proper decision to request the
extension. There was no vote. When there is no vote, there is no valid
request.
[39] Moreover, clause 10.8 of the constitution provides:
‘If the Chairperson so decides, a motion shall be submitted in writing, and
shall be read out by him.
10.8.1 No motion shall be considered unless seconded.
10.8.2 Except where otherwise provided for in this Constitution, or decided by
the Central Committee, all matters forming the subject matter of
motions shall be decided by secret ballot with the votes of the majority
being carried.
10.8.3 Both the Chairperson and the Vice-Chairperson shall have full voting
rights but no casting vote.’
[40] The Chairperson has discretion to decide whether a motion should be in
writing. It is also clear that all matters forming the subject matter of motions
shall be decided by secret ballot, with the votes of the majority being carried.
[41] The SARPBAC contends that all participants at the meeting of 22 April 2021
did not feel that a secret ballot was warranted. The motion was only seconded
with no subsequent voting. No motion was tabled or passed to forgo a secret
14
ballot. The SARPBAC admits that no vote took place regarding the decision to
request the Minister to extend the collective agreement. It asserts that the
motion was seconded and there was no counter motion or objection to the
motion. There was therefore no need to vote. This assertion is incorrect
because it is at odds with the SARPBAC’s constitution. The SARPBAC’s
purported decision to request the extension was contrary to its constitution,
improper and therefore invalid.
Clause 3.2 of the 2021 MCA
[42] Clause 3.2 of the 2021 MCA reads:
‘An across-the-board increase of 4% on the base rate of pay will become due
from the 1st April 2021 for parties and for non-parties on a date determined
by the Minister, until 31 March 2022.’
[43] The bus companies contend that clause 3.2 is ultra vires the LRA because
they are already paying their employees more than other employers in the
sector. They assert that, because the SARPBAC imposes increases
expressed in percentages year after year, they are obliged to maintain the
same percentage differential from other employers, year after year. Instead of
harmonising wage rates, the SARPBAC actually increases the differential
year after year in Rand terms. This, they argue, is utterly subversive of the
main purpose of sectoral bargaining. It is inimical to the primary objects of the
LRA, which include the promotion of orderly collective bargaining and, in
particular, collective bargaining at a sectoral level.
[44] They argue that clause 3.2 of the 2021 MCA e ntrenches wage competition
between employers in the same industry; actively permits some employers to
undercut their competitors on wages, thereby creating or perpetuating unfair
competition; and promotes disharmony in conditions of service and wage
fragmentation in the sector.
15
[45] In Free Market Foundation v Minister of Labour and Others 9 (Free Market
Foundation), the court observed that:
‘Finally, sight must not be lost of the fact that once the Minister publishes the
extended collective agreement in the Government Gazette, as required in
terms of section 32(2) of the LRA, the agreement assumes the character of
subordinate legislation. At common law such legislation is reviewable on the
grounds enumerated in the English case of Kruse v Johnson where Lord
Russell famously held:
“If, for instance, …. [by -laws] were found to be partial and unequal in
their operation as between different classes; if they were manifestly
unjust; if they disclosed bad faith; if they involved such oppressive or
gratuitous interference with the rights of those subject to them as
could find no justification in the minds of reasonable men, the Court
might well say: “Parliament never intended to give authority to make
such rules; they are unreasonable and ultra vires”.”
10
[46] In Kem-Lin Fashions CC v Brunton and Another 11, this Court held that the
rationale behind the extension of collective agreements is to prevent unfair
competition which non-party employers may pose to their competitors who are
bound by collective agreements.12 It further held:
‘If the collective agreement is not extended to non-parties, the non- parties
would be able to pay employees at rates which are lower than those which
their competitors who are party to collective agreements have to pay to their
employees. The result of this would be a serious threat to the business of
those who are parties to collective agreements. This would seriously
discourage orderly collective bargaining in general and collective bargaining
at sectoral level in particular which are part of the primary object of the Act. If
this were allowed, there would be little, if any, point in any employer seeking
9 (13762/13) [2016] ZAGPPHC 266; (2016) 37 ILJ 1638 (GP); [2016] 3 All SA 99 (GP); 2016 (4) SA
9 (13762/13) [2016] ZAGPPHC 266; (2016) 37 ILJ 1638 (GP); [2016] 3 All SA 99 (GP); 2016 (4) SA
496 (GP); [2016] 8 BLLR 805 (GP) (4 May 2016).
10 Ibid at para 117.
11 (DA1015/99) [2000] ZALAC 25; [2001] 1 BLLR 25 (LAC); (2001) 22 ILJ 109 (LAC) (16 November
2000).
12 Ibid at para 20.
16
to be party to a bargaining council. That would be a threat to one of the pillars
of the labour relations system in this country.13
[47] The disparity in the wages that the bus companies have to pay and those that
their competitors pay is not caused by the 2021 MCA. It is caused by the
historical notch system , which they agreed to under the auspices of the
TOWU, which predates the SARPBAC. The SARPBAC points out that its
successive MCAs had locked in the consequences of the notch system. This
is being done in order to protect workers who are paid more due to the notch
system. Clause 31 of the 2021 MCA stipulates that:
‘All substantive terms and conditions of employment and benefits that were
applicable at an employer as at the effective date of this agreement and are
not regulated by the agreement, shall remain in force and effect. Further, any
existing substantive terms and conditions of employment and benefits that
were applicable as at the effective date of this agreement at a level
higher/better than regulated in this in the agreement, such higher/better terms
and conditions of employment and benefits will continue to apply.’
[48] The SARPBAC submits that across -the-board percentage wage increase
extensions similar to the 2021 MCA occurred during the period when Golden
Arrow was a member of the Commuter Bus Employers Organization
(COBEO) and Sibanye was a member of the South African Bus Employers ’
Organization (SABEA), both employers’ organisations that are party to
SARPBAC. Both employers’ organisations consistently supported the
extensions of the respective SARPBAC MCAs.
[49] I cannot find anything inherently wrong with clause 3.2. I agree with the
SARPBAC that no provision or principle of the LRA is offended by a collective
agreement that requires employers to continue to observe prevailing plant -
level terms and conditions of employment, coupled with the improvements to
those terms and conditions of employment that are set out in a given
collective agreement.
those terms and conditions of employment that are set out in a given
collective agreement.
13 Ibid at para 21.
17
[50] The 2021 MCA treats all employers even handedly. It also ensures that all
employees who are covered by the collective agreement receive adjustments
that keep pace with the rising cost of living. Courts should be slow to interfere
with collective agreements. These agreements are the products of rigorous
engagements between the employer parties and the workers. If courts are to
interfere in the collective bargaining process, it may lead to uncertainty and
even foster labour unrest.
[51] The bus companies seek to nullify a clause which is beneficial to all
employees in the sector because they elected to implement the notch system ,
which translates into higher wages for their employees. This implies that when
an employer chooses to afford its employees conditions of employment that
are better than the industry minimum standard, an industry -wide collective
agreement must nullify the employer’s choice by cancelling out the premium
that the employer has chosen to pay. Collective agreements woul d have to
take into account all of the different pre- collective agreement employment
conditions implemented by all employers within its scope, and then somehow
equalise disparate substantive conditions of employment by means of the
collective agreement. This is impractical. In my view, it is not the 2021 MCA
that is the source of the disparate treatment, but the bus companies’ historical
election to opt for the notch system. Clause 3.2 is not ultra vires the LRA.
[52] Sections 32(2) and (3) provide that:
‘
(2) Subject to subsection (2A), the Minister must extend the collective
agreement, as requested, by publishing a notice in the Government
Gazette, within 60 days of receiving the request , declaring that, from a
specified date and for a specified period, the collective agreement will be
binding on the non-parties specified in the notice.
(2A) If the registrar determines that the parties to the bargaining council are
(2A) If the registrar determines that the parties to the bargaining council are
sufficiently representative within the registered scope of the bargaining
council for the purposes of subsection (5)(a), the Minister must publish the
notice contemplated in subsection (2) within 90 days of the request.
(3) A collective agreement may not be extended in terms of subsection (2)
unless the Minister is satisfied that—
18
(a) the decision by the bargaining council to request the extension of the
collective agreement complies with the provisions of subsection (1);
(b) (i) the registrar, in terms of section 49(4A)(a), has determined
that the majority of all employees who, upon extension of the
collective agreement, will fall within the scope of the
agreement, are members of the trade unions that are parties
to the bargaining council; or
(ii) the registrar, in terms of section 49(4A)(a), has determined
that the members of the employers’ organisations that are
parties to the bargaining council will, upon the extension of
the collective agreement, be found to employ the majority of
all the employees who fall within the scope of the collective
agreement;
…
(d) the non- parties specified in the request fall within the bargaining
council’s registered scope;
(dA) the bargaining council has in place an effective procedure to deal
with applications by non-parties for exemptions from the provisions of
the collective agreement and is able to decide an application for an
exemption within 30 days;
(e) provision is made in the collective agreement for an independent
body to hear and decide, as soon as possible and not later than 30
days after the appeal is lodged, any appeal brought against—
(i) the bargaining council’s refusal of a non- party’s application
for exemption from the provisions of the collective
agreement;
(ii) the withdrawal of such an exemption by the bargaining
council;
(f) the collective agreement contains criteria that must be applied by the
independent body when it considers an appeal, and that those
criteria are fair and promote the primary objects of this Act; and
(g) the terms of the collective agreement do not discriminate against
non-parties.
19
(3A) No representative, office- bearer or official of a trade union or employers’
organisation party to the bargaining council may be a member of, or
participate in the deliberations of, the appeal body established in terms of
subsection (3)(e).
(3B) The Minister may make regulations on the procedures and criteria that a
bargaining council must take into consideration when developing the criteria
for the purposes of section 32(3)(dA), (e) and (f).’
[53] The bus companies contend that the Minister’s decision to extend a collective
agreement in terms of section 32 infringes their right to fair administrative
action.14 The SARPBAC asserts that the Minister ’s decision does not
constitute administrative action.
[54] SARPBAC submits that in d eciding whether to grant a s ection 32(2)
extension, the Minister exercises a mechanical power akin to the power to
proclaim legislation or notices. It relied on Reflect -All 1025 CC and Others v
MEC Public Transport, Road and Works, Gauteng Provincial Government and
Another15, in which the Constitutional Court held:
‘The narrow scope of discretion thus conferred by section 10(1) and section
10(3) is analogous to the discretion conferred upon members of the executive
branch of government to determine the date on which legislation will come
into force. This court has held that the power conferred by legislation upon a
member of the executive to determine the date upon which legislation shall
come into force is not administrative action because bringing a law into force
is neither making it (thus the power is not legislative) nor is it administering
the law.’
[55] The SARPBAC argue that where a decision- maker has an extremely narrow
discretion, and particularly where that discussion pertains to, or is analogous
14 Section 33 of the Constitution of the Republic of South Africa, 1996 reads:
‘(1) Everyone has the right to administrative action that is lawful, reasonable and procedurally fair.
(2) Everyone whose rights have been adversely affected by administrative action has the right to be
given written reasons.
(3) National legislation must be enacted to give effect to these rights, and must –
(a) provide for the review of administrative action by a court or, where appropriate, an independent
and impartial tribunal;
(b) impose a duty on the state to give effect to the rights in subsections (1) and (2); and
(c) promote an efficient administration.’
15 (CCT 110/08) [2009] ZACC 24; 2009 (6) SA 391 (CC) ; 2010 (1) BCLR 61 (CC) (27 August 2009) at
para 83.
20
to, a decision to proclaim legislation. It is not administrative in nature and thus
does not constitute administrative action.
[56] The Minister correctly concedes that his decision was administrative action. In
Permanent Secretary, Department of Education and Welfare, Eastern Cape
and Another v Ed-U-College (PE) (Section 21) Inc
16, the Constitutional C ourt
held:
‘Policy may be formulated by the executive outside of a legislative framework.
For example, t he executive may determine a policy on road and rail
transportation or on tertiary education. The formulation of such policy involves
a political decision and will generally not constitute administrative action.
However, policy may also be formulated in a narrow er sense where a
member of the executive is implementing legislation. The formulation of policy
in the exercise of such powers may often constitute administrative action.’
[57] The Minister’s power in terms of section 32(2) is policy -making in the narrow
sense, because it is policy -making to comply with a legislative duty. The
Minister’s decision is administrative action and therefore reviewable. The
Minister must extend an agreement if the numerical and jurisdictional facts in
section 32 are present. The Minister’s power is ‘mechanical’ 17 or an
‘automatic extension’. 18 So, when the majority of the trade union parties and
the majority of the employers’ organisations represented in a bargaining
council request the Minister to extend the agreement to non- parties, the
Minister is compelled to extend it.
[58] The bus companies argue that the absence of a right of minority unions or
non-parties to the SARPBAC to make representations to the Minister before a
collective agreement is extended renders the provisions of section 32 unfair.
They accept, as they must, that majoritarianism is a policy choice by the
Government and that the principle of majoritarianism is a recurrent theme
throughout the LRA. They do not take issue with majoritarianism.
throughout the LRA. They do not take issue with majoritarianism.
16 (CCT26/00) [2000] ZACC 23; 2001 (2) SA 1 (CC); 2001 (2) BCLR 118 (CC) (29 November 2000) at
para 18. See also Fedsure Life Assurance Ltd and Others v Greater Johannesburg Transitional
Metropolitan Council and Others [1998] ZACC 17; 1999 (1) SA 374; 1998 (12) BCLR 1458 (14
October 1998) at para 27.
17 Free Market Foundation supra at para 85.
18 H Cheadle: ‘Regulated Flexibility: Revisiting the LRA and the BCEA’ (2006) 27 ILJ 663 at 697.
21
[59] They, however, contend that section 32 must be interpreted in a manner that
affords non- parties a right to make representations before the Minister
extends an agreement in terms of section 32. They further point out that
section 32 must be interpreted in conformity with the Constitution. 19 I agree
with the bus companies that all l egislation must be interpreted through the
prism of the Bill of Rights.20 However, I must be mindful that:
‘There will be occasions when a judicial officer will find that the legislation,
though open to a meaning which would be unconstitutional, is reasonably
capable of being read “in conformity with the Constitution”. Such an
interpretation should not, however, be unduly strained.’
21
[60] When interpreting legislation, or any document, the court must consider the
text, context and purpose. Where reasonably possible, legislative provisions
ought to be interpreted to preserve their constitutional validity.
22
[61] Section 32 does not expressly or by implication give non- parties a right to
make representations before a collective agreement is extended. Section 32
postulates two types of extensions by the Minister. First, the automatic
extension of the majoritarian collective agreement in terms of section 32(2).
Second, the discretionary extension of a non- majoritarian collective
agreement as set out in section 32(5), which reads:
‘(5) Despite subsection (3)(b) and (c), the Minister may extend a collective
agreement in terms of subsection (2) if—
(a) the registrar has, in terms of section 49(4A)(b), determined that
the parties to the bargaining council are sufficiently
representative within the registered scope of the bargaining
council;
19 Section 39(2) of the Constitution provides: ’When interpreting any legislation, and when developing
the common law or customary law, every court, tribunal or forum must promote the spirit, purport and
objects of the Bill of Rights.’
objects of the Bill of Rights.’
20 Investigating Directorate: Serious Economic Offences and Others v Hyundai Motor Distributors
(Pty) Ltd and Others In re: Hyundai Motor Distributors (Pty) Ltd and Others v Smit NO and Others
(CCT1/00) [2000] ZACC 12; 2000 (10) BCLR 1079 (CC); 2001 (1) SA 545 (CC); 2000 (2) SACR 349
(CC) (25 August 2000).
21 Ibid at para 24.
22 Cool Ideas 1186 CC v Hubbard and Another (CCT 99/13) [2014] ZACC 16; 2014 (4) SA 474 (CC);
2014 (8) BCLR 869 (CC) (5 June 2014) at para 28.
22
(b) the Minister is satisfied that failure to extend the agreement
may undermine collective bargaining at sectoral level or in the
public service as a whole;
(c) the Minister has published a notice in the Government Gazette
stating that an application for an extension in terms of this
subsection has been received, stating where a copy may be
inspected or obtained, and inviting comment within a period of
not less than 21 days from the date of the publication of the
notice; and
(d) the Minister has considered all comments received during the
period referred to in paragraph (c).’
[62] The section 32(1) and (2) request for an extension is a product of a collective
bargaining process. The parties who are members of the bargaining council
negotiate the agreement and agree to request the Minister to extend it. This is
done without consulting non-parties or affording them an opportunity to make
representations. The Minister has a very limited discretion. Absent such a
request, the Minister may not extend it to non-parties.
[63] The section 32(5) extension is not because of a request by the majority. It is
entirely based on the Minister’s discretion. The Minister must be satisfied that
if the collective agreement by parties who are sufficiently represented in a
bargaining council is not extended to non- parties, it would undermine
collective bargaining at a sectoral level. In this case, the Minister is obliged to
give non-parties an opportunity to be heard.
[64] This difference is in deference to majoritarianism and the central place which
collective bargaining holds in our labour relations. The Legislature has
deliberately decided to deprive non- parties of the right to be heard in the
instance of a majoritarian collective agreement . It has imposed a notice and
comment procedure in respect of section 32(5) extension. I agree with the
SARPBAC that to hold that section 32(2) must nonetheless be read to include
SARPBAC that to hold that section 32(2) must nonetheless be read to include
a notice and comment procedure does violence to the plain meaning of the
section.
23
[65] In Association of Mineworkers and Construction Union (AMCU) and Others v
Royal Bafokeng Platinum Limited and Others 23 (Royal Bafokeng), this Court
had to determine whether non- parties had the right to be heard when a
collective agreement is extended to non- parties in terms of section 23(1)(d) of
the LRA. This Court held:
‘Section 23(1)(d) does not require expressly or implicitly that a minority union
should be consulted before a collective agreement is extended. The
representative union would generally be in a better position to consult with the
employer, because it will have all the necessary information at its disposal
and it represents all the employees at the workplace. To grant a minority
union the right to be heard in circumstances where the representative union
has by means of collective bargaining acquired the right to be the only
bargaining agent would be subversive to collective bargaining and the
principle of majoritarianism which underpins section 23(1)(d).’
24
[66] Section 32(2) extensions are not done in total disregard of the rights of non-
parties. The Legislature, being mindful of the hardships that may, generally,
be visited upon non- parties by such extensions , made provision for
applications for exemptions. The collective agreement must embody
mechanisms for non- members to apply to an independent panel for
exemptions. They must give reasons why the collective agreement should not
be extended to them. The independent panel would then assess whether the
reasons provided are sufficient to warrant exemption. This is an important
safeguard, and it also gives the non- parties an opportunity to be heard. The
panel must be independent so that no aspersions of bias and partisanship can
be thrown at the panel, which would be the case if the panel w ere constituted
by members of the majority parties.
[67] Giving non-parties the opportunity to be heard by the Minister would cast the
Minister in an adjudicative role. The Minister would have to determine whether
Minister in an adjudicative role. The Minister would have to determine whether
each representation made has merit. Representations which, on face value ,
might seem to address issues of process , might address substantive issues.
23 (JA23/2017) [2018] ZALAC 27; [2018] 11 BLLR 1075 (LAC); (2018) 39 ILJ 2205 (LAC) (26 June
2018).
24 Ibid at para 68.
24
The majority parties might end up wondering why they had to negotiate
collective agreements , only for them to be questioned and maybe upset by
the Minister. The section was designed to give the Minister very limited power
so that collective bargaining gains are respected.
[68] The non-parties have a further and important safeguard: the ability to judicially
review the bargaining council’s decision to request an extension. 25 In view ,
section 32(2) does not envisage giving non- parties the right to be heard. It
justifiably deprives them of the right to be heard. My conclusion that non -
parties need not be cons ulted or given a hearing before a collective
agreement is extended in terms of section 32(2) activates the bus companies’
constitutionality point.
Is section 32 unconstitutional?
[69] Section 32(2) limits non- parties' right to administrative action that is lawful,
reasonable and procedurally fair. Section 36 of the Constitution provides:
‘(1) The rights in the Bill of Rights may be limited only in terms of law of
general application to the extent that the limitation is reasonable and
justifiable in an open and democratic society based on human dignity,
equality and freedom, taking into account all relevant factors,
including—-
(a) the nature of the right;
(b) the importance of the purpose of the limitation;
(c) the nature and extent of the limitation;
(d) the relation between the limitation and its purpose; and
(e) less restrictive means to achieve the purpose.
2. Except as provided in subsection (1) or in any other provision of the
Constitution, no law may limit any right entrenched in the Bill of
Rights.’
Importance of the right
25 Free Market Foundation supra para 81.
25
[70] We come from a past where administrative action was used as part of the
oppressive structure of government. Decisions were generally taken about
people, especially black persons, without giving them an opportunity to be
heard. Administrative decisions were taken in a high- handed and opaque
manner, with utter disregard of the rights of the affected persons. It is inter alia
for these reasons that a person’s or the public’s right to be heard should be
expressly, or by necessary implication, excluded.
[71] The right to administrative action that is lawful, reasonable and procedurally
fair is a very important right . When decisions are taken after the affected
parties are given an opportunity to comment and make representations , it
dispels suspicions of bias, underhandedness, unfairness , arrogance of the
majority parties and ulterior motive. Decisions made after representations
have been made promote transparency, trust in the process, inclusivity, even-
handedness and that the decision was not influenced by ulterior motive. It
also fosters labour peace.
Purpose and importance of the limitation
[72] The LRA gives expression to the rights in section 23 of the Constitution. Its
objects are, inter alia, to promote orderly collective bargaining, and specifically
collective bar gaining at sectoral level . Section 32(2) promotes collective
bargaining at sect oral level. Majoritarianism is the vehicle through which the
Legislature chose to ensure that collective bargaining at sectoral level is
implemented and respected.
[73] Section 32(2) strengthens the voice of the majority by limiting the bases on
which the minority non- parties can challenge and possibly stymie the
extension of a collective agreement . If a collective agreement is entered into
by the majority parties , secure in the knowledge that there would be no
interference by the Minister or minority non- parties when the Minister is
requested to extend it , it creates certainty. It also promotes and respects the
requested to extend it , it creates certainty. It also promotes and respects the
principle of non- interference in freely concluded collective agreements. This
Court has determined that:
26
‘The extension of a collective agreement without affording a minority union or
non-union members a hearing... facilitates orderly collective bargaining; it
avoids the multiplicity of consulting parties and it was this peace and order in
the workplace.’26
[74] In the context of section 23(1)(d) extensions the Constitutional Court held, in
Association of Mineworkers and Construction Union and Others v Chamber of
Mines of South Africa and Others27:
‘It may be posited that if there is to be orderly and productive collective
bargaining, some form of majority rule in the workplace has to apply. What
Section 23(1)(d) does is to give enhanced power within a workplace, as
defined, to a majority union: and it does so for powerful reasons that are
functional to enhancing employees ’ bargaining power through a single
representative bargaining agent.’
28
[75] Although the Constitutional Court was referring to section 23(1)(d) it is also
applicable to section 32(2) extensions.
The nature and extent of the limitation
[76] Section 33 of the Constitution and P romotion of Administrative Justice Act
29
are fact specific. The facts of a particular case will determine if and to what
extent a party may be heard. They do not require that affected parties must be
heard before a decision is taken. In Royal Bafokeng, this Court held that the
majority parties have a duty to represent the interests of the minority parties.
The minorities who are not members of the bargaining council are
represented by the majority. The minority parties are not altogether deprived
of their right individually to make representations because they may join the
bargaining council and participate in its processes; they can challenge the
26 Royal Bafokeng supra at para 69.
27 (CCT87/16) [2017] ZACC 3; (2017) 38 ILJ 831 (CC); 2017 (3) SA 242 (CC); 2017 (6) BCLR 700
(CC); [2017] 7 BLLR 641 (CC) (21 February 2017).
28 Ibid at para 44.
29 Act 3 of 2000.
27
extension decision in a court of law; and importantly, they may apply for an
exemption; appeal a refusal to grant an exemption; and review the refusal to
uphold an appeal. In Free Market Foundation, it was held that the exemption
procedure is a decisive consideration in the section 36 limitation analysis.
30
Rational relationship between the limitation and its purpose
[77] In Royal Bafokeng, this Court said the following about section 23(1)(d)
extensions:
‘The extension of a collective agreement without affording a minority union or
non-union members a hearing is rationally related to the achievement of the
purpose of the section 23(1)(d) process. I t facilities orderly collective
bargaining; it avoids the multiplicity of consulting parties, and it fosters peace
and order in the workplace.’
31
[78] Reducing the fora in which parties can make representations about collective
agreements plainly incentivises greater participation in bargaining councils .
The limitation therefore promotes greater participation in bargaining councils.
The Minister’s role and discretion are narrow in that , he must extend a
collective agreement on the request of the majority parties, after being
satisfied that the jurisdictional facts for an extension are present. As stated
above, the Minister’s discretion would be expanded if she must consider
representations and adjudicate the merits and demerits of the
representations. This was aptly explained in Free Market Foundation:
’28. The requirement in section 32(2) of the LRA that the Minister “must”
extend the agreement once the jurisdictional facts are established, is
predicated upon the notion that collective bargaining at sectoral level
will be undermined if bargaining agents in a majoritarian setting were
uncertain at the outset of negotiations about whether or not their
agreements would be extended in terms of section 32(2) of the LRA.
An advantage from the employer perspective is that an extended
An advantage from the employer perspective is that an extended
sectoral agreement will become binding on trade union members
within the workplace of a particular employer who are not party to the
30 Free Market Foundation supra at para 115.
31 Royal Bafokeng supra at para 69.
28
council or the collective agreement with the result often that they will
be prohibited from taking industrial action over matters dealt with in
the agreement by virtue of peace clauses in the agreement and the
provisions of section 65(1)(a) of the LRA. The compulsory extension
of a majority collective agreement can ensure orderly industrial
relations and be an effective progenitor of industrial peace.
29. Parliament when enacting the LRA therefore deliberately refrained
from conferring a wide discretion upon the Minister to extend collective
agreements to non-parties in those cases where the numerical
thresholds of majoritarianism are achieved. Self-regulation on the
basis of majoritarianism and voluntarism is a cornerstone of the policy
of industrial pluralism. Parliament’s choice to make the exemption
process the main safety valve to protect the interests of non-parties,
the Minister believes, is legitimate and justifiable. Parliament
recognised that a broad Ministerial discretion over extensions would
create uncertainty and weaken the effectiveness of collective
bargaining. Reiterating the FFCC’s line of thinking, the Minister
affirmed her view that orderly bargaining would be eroded if the
parties know that notwithstanding their endeavours and hard fought
agreements the Minister had an open-ended discretion to refuse to
extend the collective agreements or to alter their terms. Parties would
have less incentive to participate in collective bargaining at sectoral
level and would instead be incentivised to redirect their efforts to
lobbying in an effort to persuade the Minister. The limits on the
Minister’s discretion are ameliorated by the provision of an effective
remedy to aggrieved non-parties in the form of an independent and
impartial exemption process.’
Less restrictive means
[79] Section 36(1)(e) of the Constitution does not postulate an unattainable norm
of perfection when it refers to less restrictive means. The standard is
of perfection when it refers to less restrictive means. The standard is
reasonableness.32 The bus companies submit that a notice and comment
procedure constitutes a less restrictive measure. I disagree. It would
32 S v Mamabolo (CCT 44/00) [2001] ZACC 17; 2001 (3) SA 409 (CC); 2001 (5) BCLR 449 (CC);
2001 (1) SACR 686 (CC) (11 April 2001) at para 49.
29
disincentivise participation in bargaining councils – contrary to the stated
purpose of the LRA to promote sectoral collective bargaining; it would weaken
the voice of the majority by allowing the minority to stymie decisions through
representations to the Minister.
[80] Section 32(2) extensions are strictly circumscribed – they apply to non-parties
for the duration of the agreement and in respect of the issues it covers. The
limited power of the Minister , the right to apply for exemptions; the right to
review decisions of the bargaining council and the Minister are all indications
that, in restricting the right to be heard, the L egislature embarked on a
balancing act between the rights of the majority and the deprivation of the
minorities’ right to be heard. This is reasonable and justified.
[81] In my view , section 32(2) reflects a deliberate choice in favour of
majoritarianism to promote orderly collective bargaining and to reduce
ministerial discretion. It also promotes workplace democracy. Depriving the
minority parties of the right to be heard in the context of section 32(2)
extensions avoids giving minorities a right to veto a collective agreement
negotiated by the majority parties.
Conclusion
[82] In my judgment, section 32(2) extensions are not unconstitutional. The appeal
and the cross-appeal ought to be dismissed.
[83] I therefore make the following order:
Order
1. The appeal and cross-appeal are dismissed.
2. There is no order as to costs.
________________
CJ Musi AJA
30
Savage JA et Waglay AJA concur.
APPEARANCES:
FOR THE APPELLANT: Adv Anton Myburgh SC
With Riaz Itzkin
Instructed by Ivings
McFarlane Attorneys
FOR THE FIRST AND SECOND RESPONDENTS: Adv AJ Freund SC
With Adv G Leslie SC
Instructed by Edward Nathan
Sonnenberg Inc
FOR THE TENTH RESPONDENT: Adv N Arendse
Instructed by State Attorney