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COLLECTIVE BARGAINING IN A MULTI-UNION CONTEXT

There is no rule in the Labour Relations Act 66 of 1995 (the LRA) that provides that there must be only one union in any given workplace. The LRA is clear in its preference for single-union representation of a workplace, but this preference is not cast into the concrete structures of the LRA itself. The LRA’s approach in respect of collective bargaining is perhaps most appropriately seen as voluntarist majoritarian in orientation: there is no legally enforceable duty to bargain (but there are procedures and processes that a union may use if the employer refuses to bargain). There is no absolute rule against multi-union representation, but one workplace, one union is a tacit principle underlying the LRA’s approach to collective bargaining.

The problems arising from multi-union representation

The facts of the recent Labour Appeal Court decision in Safcor Freight (Pty) Ltd t/a Safcor Panalpina v South African Freight and Dock Workers Union (2013) 22 LAC 1.11.3 offers a very good illustration of what may happen.

The employer’s operations were spread over a number of branches and, as is typically the case, the union was strong in some regions and weaker in others. In the Durban region, for instance, the union represented more than 50% of the employees in the applicable bargaining unit – naturally, the union was recognised as the collective bargaining agent in that region.

The union was also accorded recognition in the Johannesburg branch, but this did not follow in respect of the branches in Cape Town, Port Elizabeth and Richards Bay. In these orphaned regions, the employer simply applied the agreements of another bargaining council (the National Bargaining Council for the Road Freight Industry).

The problem comes in dealing with the unionised and non-unionised workers and ensuring that whatever is done for the non-unionised is not seen as discrimination against the union members. In this case they granted the non-unionised workers an increase – followed by yet another increase if they accepted certain dates. The offer was conditional – that they did not join the union the employer had recognised as collective bargaining agent. Naturally the union concerned saw this as constituting discrimination against its members – the union members were not granted the increase and they would remain on the same scale for a year. The Labour Court held that the union members had been discriminated against on the basis of their membership and the employer was ordered to increase the pay of the union members as well.

Infringing rights

The central issue, the Labour Appeal Court found, was whether the employer, by its conduct, infringed the protection of freedom of association – a fundamental right protected in section 23 of the Constitution of 1996 and Chapter II of the LRA. The Labour Appeal Court found, however, that the Labour Court was wrong in finding that the increased pay infringed the right to equality (section 9 of the Constitution) and section 23 (labour practices). In this regard the Labour Appeal Court duly echoed what the Constitutional Court had laid down long before: if there is legislation that gives effect to a constitutional right, a party may not bypass that legislation and rely directly on a provision of the Constitution – without first challenging that legislation as falling short of the Constitutional standards.

With reference to the LRA, this means that an applicant must base its rights on the contents of the LRA – and may not rely on a constitutional provision without first launching an attack on the constitutionality of the LRA (and that is one very, very tall order).

The Labour Appeal Court also pointed out that section 9(3) of the Constitution did not list union membership as a ground for discrimination and added that it was unlikely to be considered such a ground – this “discrimination” does not involve the same level of injury to human dignity as the other forms of discrimination – and adequate legislative protection is available. These considerations in turn meant that there was no reason for the Labour Court to declare the employer’s conduct unconstitutional.

Having gotten to that relevant conclusion with alarming swiftness, the Labour Appeal Court then goes through the entire process again, starting off with an analysis of section 4 and 5 of the LRA and the onus resting on a person or party alleging discrimination in terms of section 5 of the LRA.

The union had presented a number of submissions, including one submission that the increases of union members are negotiated first and then non-members have their remuneration set afterwards. It was not clear to the Labour Appeal Court what strategic advantage would be secured by this sequence of events – it agreed with the Labour Court that the employer wanted to plan its industrial relations strategy to avoid a strike – this would work if there was a peace obligation (no-strike clause) with one group with whom the employer had settled.

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In some respects, the Court said, it could seem that there was discrimination on the basis of union membership – and now again the Court embarks on an entirely unnecessary analysis of whether the discrimination it had discerned was unfair or justifiable. The strongest principle, the Labour Appeal Court found, was the following:

“[27] The strongest argument advanced by the appellant to justify its conduct and the condition precedent is that the LRA permits and encourages industrial relations pluralism and multiple bargaining agents. The structure of the LRA is such that employees are free to choose their bargaining agent and to conclude agreements on different terms to other employees represented by other agents or not at all. There has been surprisingly little judicial comment on the implications of a system of plural representation in our labour relations system. . . . There is undoubtedly merit in the proposition that a system allowing a plurality of bargaining agents or units may lead to unequal outcomes that depending on the justification may or may not be legitimate and fair. However, as always in the evaluation of fairness, reasonableness and equality, much will depend on the circumstances. I pause to interpose here that the prejudice or disadvantage contemplated by sections 5(2)(c) and 5(3) of the LRA, in the nature of things, is expected to be unfair.”

When things would be different

But things could well be different – for instance if the employer, at the end of negotiations with different unions agrees to introduce more favourable terms for one part of its workforce – and treats the other parts of its workforce differently altogether. The employer may be involved in tactics aimed at weakening the union’s bargaining position. If the employer’s conduct was not aimed at undermining the union as bargaining agent, the Court added, it could still perhaps have this unintended consequence. Non-members would not rush to join the union – they could have been tempted to stay unorganised because they saw a benefit in this approach down the line.

It was not necessary for the union to prove what the employer intended – anti-discrimination law is concerned with the effect of the discriminatory conduct – not the motive of the party doing the discriminating.

In the context of section 5 of the LRA, the Labour Appeal Court comes to a completely different conclusion: the employer engaged in a form of anti-union discrimination and this fell foul of section 5(2)(c) and 5(3) of the LRA. The net effect of the employer’s conduct would be to provide a “strong inducement” to non-union members not to join the union for the relevant period (six months) for which the wage imbalance reminaed in place. In this context the Labour Appeal Court agreed with the Labour Court’s order: that the employer’s conduct infringed section 5 of the LRA. The only question that remained was how the order was formulated: the Court found that the Labour Court’s formulation was too broad. Instead of the wide, capture-all orders the Labourt Court made, the Labour Appal Court said that it would be sufficient to declare that the employer’s conduct constituted a contravention of section 5(2)(c) and section 5(3) of the LRA – it prejudiced union members on the basis of nothing but their union membership – and this was in exchange for the non-members giving an undertaking not to join the union or participate in its lawful activities (in terms of section 4 of the LRA).

Re-writing what?

There was one final point raised that the Labour Appeal Court had to deal with: an argument that an award of damages or compensation would amount to “inappropriately” re-writing the contract between the parties. This argument was simply that the Court should refrain from interfering with the bargain struck by the parties and not impose its own views. This nonsense argument meant that the Labour Court’s power to redress discriminatory conduct (contravention of section 5) lies in section 158(1)(a)(iii) of the LRA. This provision gave the Labour Court the power to make any appropriate order, including ordering the employer or the union to do something specific – if this would remedy a wrong or give effect to the primary objectives of the LRA.

What this means for employers

The practical effect of this judgment is that employers must tread carefully whenever they do things differently for unionised employees and non-union workers. This is not, fortunately, a situation that arises too often. But in some cases an employer may want to extend some benefit to non-unionised employees in exchange for a certain undertaking or agreeing to a condition. This may create the impression that the employer is trying to undermine the union’s position as collective bargaining agent – and this is an impression the employer will be hard pressed to avoid. For avoid it, the employer must.

Carl Mischke (IR Network)