HAND OUT FOR LABOUR RELATIONS LAW, LAW 337

V. NEGOTIATING THE COLLECTIVE LABOUR AGREEMENT

General introduction
Normally, employees and trade unions enter into collective labour agreements in an attempt
to give meaning and effect to the law. They provide a source of rules for and terms and
conditions of employment.

Formal collective bargaining takes place within a well established negotiating framework.
Employers in the relevant industry are represented through an employers’ association and the
workers are represented by their unions.

Where there is a recognised trade union negotiating on behalf of its members those members
and any other employees affected thereby will “pay less regard to the individual contract of
employment than the terms of the agreements between their union and employer.” – The
Worker and The Law – Wedderburn 3 ed p.269. This view stems largely from the existence
and influence of trade unions which on behalf of their members negotiate agreements with
employers concerning the terms and conditions upon which that employer or those employers
employ the members of the union.

For members of the unions and those employed with them, whose terms and conditions of
employment are likely to be influenced by the outcome of collective bargaining, the
collectively bargained agreement is therefore of fundamental importance. Once negotiations
are completed, the agreements that emerge at whatever level of bargaining can be classified
as procedural or substantive. Procedural agreements or procedural clauses regulate how
substantive matters are to be determined, interpreted and applied and how conflicts stemming
from the agreement are to be solved.

Procedural agreements include-

a, Details of the parties to the agreement and categories of employees covered.
b, Matters subject to collective bargaining and the level at which bargaining is to take place
e.g company level or industry level.
c, Procedural arrangements for negotiating terms, conditions of employment and conditions
under which those terms can be negotiated.
d, Facilities for trade unions. Status, appointment and functions of shop stewards.
e, Procedures for the settlement of collective disputes, disputes arising out of matters of
interpretation.
f, Procedures to be followed in the event of industrial action by either party to the agreement
and the protection of essential services within a company or industry.
g, Banning victimisation on grounds of trade union membership, non-membership or trade
union activity.

Substantive agreements or substantive clauses establish the terms and conditions of

employment for the relevant workers. These include-
a, Hours of work, provision for shifts, overtime, annual, sick, maternity or compassionate
leave. Other forms of approved absences.
b, Wages, salaries, financial remuneration such as overtime rates, bonuses,
c, Job evaluation techniques, measurement of performance.
d, Pension, providence fund, gratuity schemes.
e, Service awards.
f, Codes of conduct, disciplinary measures and procedures.
g, Procedures for redundancies and lay offs.
h, Training and localisation.

1. THE RIGHT TO BARGAIN COLLECTIVELY

The right of employees to bargain collectively means in practice that employees are entitled
through trade unions to negotiate with their employers with regard to conditions of
employment and that such negotiations may result in agreement between parties.

The right of employees to collective bargaining is recognised internationally. The ILO

Convention No. 98 of 1949 recognises the right by stating that measures should be adopted,
taking into consideration local circumstances, to encourage and promote the full development
and utilisation of voluntary machinery between trade unions and employers, so that
employment conditions can be determined by means of collective agreements.

The TU & EO Act recognises employees’ right to collective bargaining by making

compulsory the recognition of trade unions as bargaining agents.
2. LEGAL STATUS OF COLLECTIVE LABOUR AGREEMENTS
The binding nature of collective agreements is recognised both by common law and statute. It
is a fundamental principle of our law of contract that agreements seriously and deliberately
entered into by parties of full contractual capacity and intended by them to be legally binding
are recognised as contracts and enforceable by the courts (see Conradie v Rossouw 1919 AD
279). Agreements concluded between a union and an employer on a substantive issue such as
wages are clearly intended to be enforceable. The binding nature of collective agreements
protects the interest of management in the continuous flow of production. Employers on the
other hand will be expected to abide by standards laid in the agreement. They are prevented
in law from contracting out of the agreement to the detriment of the employees.

In terms of section 37(1) of the TDA, collective agreements are binding on the parties.
However, subsection 2 provides that a collective labour agreement shall cease to be binding a
month after a party serves notice that he repudiates the contract. The notice may however
provide for a longer period. A party may not serve a notice of termination within six month of
the agreement coming into force without the written permission of the Minister of Labour.

3. REGISTRATION OF COLLECTIVE LABOUR AGREEMENTS

It is a statutory requirement that all collective agreements or amendments to such agreements,
or agreements to extend such agreements should be registered. In this regard, a certified copy
should be lodged with the Commissioner of Labour within 28 days of the day on which such
agreement was concluded. The Commissioner shall register the agreement and inform each
party to the agreement that he has done so.

If the Commissioner is of the opinion that any provision of the agreement is contrary to the
TDA, he may withhold registration and inform all parties to the agreement. Any party who is
aggrieved by the Commissioner’s decision to withdraw registration may appeal to the
Minister of Labour.

4. THE DUTY TO BARGAIN

At common law, the concept of collective bargaining was based on the principle of
voluntarism. This was confirmed by the case of Botswana Diamond Sorters and Evaluators
Union v Botswana Diamond Valuing Company [1998] B.L.R. 319 which interpreted section
50 of the Trade Unions and Employers Organisations Act as merely facilitating a voluntary
relationship. This would mean that the parties have no duty by law to bargain and they may
feel free to choose what areas will be subject to collective bargaining. However, in 2004, the
Act was re-enacted with the effect that section 48(4) introduced a duty to bargain. The effect
of the new statute is that an obligation is placed on the employer to bargain in good faith on
specific issues that have been referred to above. (S 48)

The duty to bargain includes a duty to bargain in good faith. The Act does not define what
good faith means. However, good faith is nothing less than concerted efforts to a collective
bargaining process to negotiate issues genuinely, without abuse of powers possessed at the
time and to enable the parties to come to an agreement in resolving the issues submitted for
negotiations. There should be a genuine desire to reach an agreement.

In East Rand Gold and Uranium Co. Ltd v National Union of Mine Workers (1989) 10 ILJ
675 at 692, the court noted:

“It is also common cause that, during negotiations between employers and trade
unions, there is a duty to bargain in good faith. This has been accepted by the
industrial court in South Africa and is in accordance with the view expressed by
overseas and local writers. The obligation was also agreed upon by the parties in the
recognition agreement. In fairness and also contractually both the union and
employees, therefore, were obliged to negotiate in good faith. The purpose of
bargaining required in comparable circumstances, is to resolve if possible the relevant
dispute in the interest of all concerned, employer and employee.”

In the case of Metal and Allied Workers Union v Natal Die Casting Pty Ltd (1986) 7 ILJ 520
(IC) the court listed the following examples as possibly suggestive of bargaining in bad faith;
making unreasonable proposals, the refusal to make concessions, dilatory tactics, the
imposition of onerous and unreasonable conditions, the by-passing of representatives, and the
unreasonable refusal to disclose sufficient information to enable the other party to appreciate
and discuss the issues involved.

5. DISCLOSURE OF INFORMATION
Both trade unions and employers cannot negotiate effectively without information from each
other, that forms the basis of their respective positions. For example, if any meaningful
progress is to be made in wage negotiations, the trade unions must be given all necessary
information that can help them appreciate the ability of the employer to meet their demands
or proposals. There may be situations where disclosure of the employers’ financial
information may compromise the company’s well-being and the employer may legitimately
and justifiably want to keep such information to itself. This may require that a balance be
struck between the need to disclose and the need to protect sensitive financial information. In
this regard, a company may not be required to disclose sensitive strategic information. For
example, in the case of SA Clothing and Textile Workers Union and Others v Jatex SA (Pty)
Ltd (1992) 12 ILJ 1252 (IC) the court held that it would serve no purpose to disclose sensitive
financial information and that all the employer was bound to do was to disclose sufficient
information to enable the union to make informed decisions.

Section 48(1) of the Trade Unions and Employers’ Organisation Act requires an employer to
disclose all relevant information on request to a recognised trade union, that is reasonably
required to allow the trade union to bargain collectively. The employer is not obliged to
disclose the following information-
a, Legally privileged information.
b, If the disclosure will result in a contravention of a prohibition imposed by law or a court
order.
c, Information that may cause material harm to the employer or an employee.
d, Private personal information relating to an employee, except where the employee consents
to the disclosure of such information.

Where an employer cannot disclose information, it should notify the union in writing. (S48C
(2)). Any dispute relating to disclosure of information should be referred to the
Commissioner of Labour for mediation except the collective agreement provides otherwise.