When does an employer become a member of a Bargaining Council?
On 05 July 2023 we published an article about the negative impact of Bargaining Councils in South Africa. There are about 40 Bargaining Councils operating nationwide. List of Registered Bargaining Councils in SA.
Employer uncertainty regarding membership of or party to Bargaining Councils
The purpose of this article is not to duplicate the July 2023 article, but to enlighten employers about when they are falling under the provisions of a Bargaining Council and its collective agreement, especially small (fewer than 15 employees) and micro (fewer than 9 employees) employers. Many of these employers are not familiar with or are ignorant of when they should or must become a member of or party to a Bargaining Council and/or when the provisions of the respective collective agreements apply to them.
Establishment and formation of Bargaining Councils
Bargaining Councils currently operate in terms of the Labour Relations Act (LRA) of 1995, although the majority were established as industrial councils under the predecessor act, the Industrial Conciliation Act. Bargaining councils are established when employer and employee bodies (unions) in a particular industrial sector and geographical area agree to come together to engage in collective bargaining. The employer associations and unions that agree to do so are referred to as ‘parties’ to the bargaining council and constitute the bargaining partners once the council is established. In order to be registered for these purposes by the Department of Labour, the parties must prove that they are sufficiently ‘representative’. In particular, they must prove that the unions proposed as party to the council have more than 50% of employees in the specified sector as members.
Once registered, a Bargaining Council has a range of powers and obligations. Among its powers, are those relating to establishment of social benefit funds. Thus section 28 of the LRA gives registered councils the power “to establish and administer pension, provident, medical aid, sick pay, holiday, unemployment and training schemes or funds or any similar schemes or funds for the benefit of one or more of the parties to the Bargaining Council or their members. Among the obligations imposed on Bargaining Councils is the requirement that they report each year to the Registrar of Labour Relations.
Voluntary membership of a Bargaining Council
An employer may on its own discretion join or become a member of an Employer’s Organisation/Association of a particular Bargaining Council by registering and paying a registration fee. Once a registered member, the employer is automatically a party to the Bargaining Council and its collective agreement via the employers’ organisation. This means that the employer must comply with the provisions of the collective agreement and pay the required levies, minimum wages and contributions to pension/provident fund, sick fund, unemployment insurance fund (UIF), training schemes, etc.
There are two advantages to the employer, firstly, in cases of alleged unfair dismissals, unfair labour practices or any other labour dispute, a representative of the Bargaining Council will advise, assist and represent the employer in the dispute processes.
The second advantage is that the employer could participate through the employer’s organisation in the collective bargaining process and thereby participate in the conclusion of a negotiated collective agreement with the unions that are party to the Bargaining Council.
Forced/compulsory membership of a Bargaining Council
Among the advantages of registration is the possibility of having agreements extended to non-parties, so that all employers and employees in the industry are covered or included in the provisions of the particular collective agreement. Extension to non-parties requires a special application to the Minister. Extension means that non-member employers cannot unfairly compete against member employers, for example by paying lower wages. Section 33A(2) clarifies that the collective agreements that can be extended in this way include the rules of any fund or scheme established by the Bargaining Council.
This effectively means that if a Bargaining Council’s collective agreement is extended to include non-members, the employer is forced to comply with the provisions of the collective agreement. In such a scenario the employer is not a registered member of the Bargaining Council and would not participate in negotiating the collective agreement with the unions, which could be a disadvantage. Another disadvantage, is that a non-member employer will not have the luxury of having a Bargaining Council representative to represent it in labour disputes.
Many Bargaining Council collective agreements extend to non-parties, therefore all employers, but specifically small and micro employers must first establish whether the industry in which they operate is organised by a Bargaining Council and whether its collective agreement has been extended to include non-parties.
If an employer is a member of or party to a employers’ organisation or if the Bargaining Council has been extended to include non-parties, all the provisions of the particular collective agreement apply to the employer.