Centralised bargaining: Contrasted with collective bargaining

The Free Market Foundation launched a court challenge against a section of the Labour Relations Act, which allows collective agreements on wages and conditions to be extended to employers who are not party to negotiations. In terms of section 32 of the LRA the minister of labour extends bargaining council agreements to non-parties. It is argued that the section has numerous economic consequences such as distorting the labour market. Smaller companies that are more labour intensive can be squeezed out of the market by such agreements. The Free Market Foundation is seeking to alter the wording of the LRA from “must” to “may”, to allow certain sectors to be exempted.

Read the full report Collective bargaining out on its feet compiled by Karl Gernetsky and first published in BD Live on 14 July 2015. See also the letter that appears in the Comment.

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GilesFiles on July 20, 2015 at 11:10 am

LETTER: Bargaining blunders

YOUR article, “Collective bargaining out on its feet” (July 14), demonstrates a common error of misunderstanding or misuse of the term collective bargaining, as opposed to centralised bargaining.

The article was actually about centralised bargaining. Collective bargaining simply means that a union is bargaining on behalf of its members with an employer, occurs at any level and comes into place when a union has achieved sufficient representation in a defined bargaining unit for the employer to enter into a collective bargaining agreement.

It is a normal practice and demonstrates the role of the union as a legitimate stakeholder in the organisation’s governance structures.

The statement in the article that “there is no instrument in SA’s labour dispensation compelling collective bargaining” is misleading as the Labour Relations Act gives the right to a union that has majority representation in a workplace to require the employer to bargain with it by engaging in a protected strike if it refuses to do so. The sentence should use the term centralised bargaining.

The argument is around the extent to which collective bargaining should or should not take place on a centralised basis at sector or industry level and, when it does, to what extent the agreements reached in the centralised bargaining structure should be extended to employers and employees who are not party to the negotiations. Whether or not centralised bargaining is conducive to the interests of employers and union members depends to a large extent on the nature of the constitution of the bargaining forum, the economic structure of the sector or industry and the maturity of negotiation approaches from both employer associations and trade unions.

The way forward in our labour relations framework is under contention, and it is important that readers are accurately informed on developments, using accurate terminology and demonstrating a full understanding of the context and the issues.

Penny Abbot, R Harper Head: HR research, South African Board of Professional Practice; Head: Employment Law Department, Cowan-Harper Attorneys

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Centralised bargaining: Contrasted with collective bargaining

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