An employer concludes a ‘collective agreement’ with a registered trade union NUMSA whose members are the majority of the employees in the workplace [LRA s 23]. The collective agreement has been ‘extended’ to cover the non-union members as well. After the employer experiences bouts of coercive unprotected industrial action it agrees with NUMSA to terminate the services of a number of employees. Twenty six former employees rely on their right not to be unfairly dismissed [LRA s 185] and claim to have been ‘dismissed’ unfairly [LRA s 186(1)]
Question: Did the employer ‘dismiss’ them ? Answer: No. This interpretation of our labour law also needs to be challenged as unconstitutional.
According to the Labour Court, and even the Labour Appeal Court in an earlier judgment, our law does allow a ‘collective agreement’ to deprive union members, and also other employees, of their statutory right ‘not to be unfairly dismissed’ and the Labour Court lacked the jurisdiction to hear the matter.
In Fakude & 25 others v Kwikot (Pty) Ltd [case JS661/05 dated 27.12.2012] the Labour Court per justice Edwin Molahlehi agreed with the employer’s contentions that the former employees had ‘forfeited’ their statutory rights concerning dismissal in terms of the binding collective agreement.
[29] The above authorities indicate that a trade union is entitled to take any decision on behalf of either the majority or the minority of its members without necessarily having to obtain the members’ consent, even if such a decision is to adversely affect those members. In other words members affected by a decision taken by a union without their consent are bound by such a decision and are unable as a matter of principle to withdraw from such an agreement. Any decision taken by a trade union either detrimental or beneficial to some of its members cannot be said to be unconstitutional because the trade union would have derived the power to act in that particular manner in terms of the provisions of section 200 of the LRA which in turn has its basis in terms of section 23 of the Constitution.
. . . .
[39] In my view the collective agreement concluded by NUMSA on behalf of the employee does not offend the Constitution neither is it contrary to public policy. There is therefore no basis to treat it as unenforceable. The termination of the employment of the applicants was a result of a binding collective bargaining agreement.
Relevant statutory provisions
LRA sections: 23(1)(d); 185; 186(1); 200.
Related post in GilesFiles
Dismissal – ‘just because’ & ‘just cause’
Judgments referred to by Labour Court
Bredenkamp v Standard Bank 2009 (6) SA 277 (HC)
Barkhuizen v Napier 2007 (5) SA 323 (SCA)
Manyele V Maizecor (Pty) Ltd [2002] 10 BLLR 972 (LC)
Mzeku v Volkswagen SA (Pty) Ltd [2001] 8 BLLR 857 (LAC)
NUMSA v CCMA (MIBC) [2000] 11 BLLR 1330 (LC) at para [32].
Medscheme Holdings (Pty) Ltd v Bamjee [2005] 4 All SA 16; 2005 (5) SA 339 (SCA).
Arend v Astra Furnitures (Pty) Ltd 1974 (1) SA 298 (SCA)
Extracts from Labour Court judgment
The issues for determination
[14] The first issue to determine is whether the termination of the employment of the applicants by way of the above agreement constitutes a dismissal in terms of Section 186 of the LRA4.
[15] The second issue is whether the conduct of the respondent in requiring the applicants to sign an agreement for payment of their packages constitutes duress, which would have the effect of vitiating the agreement.
. . .
Evaluation
[22] The applicants’ contention in relation to the issue of the collective agreement is based on two legs. The first leg is that, despite accepting the validity of the agreement, it is unenforceable because the individual applicants did not give their consent to its conclusion. The second leg to the applicant’s contention is that which conflates the provisions of section 189 of the LRA6 and the situation were the parties have reached a consensus as to how their employment relationship is to be terminated without necessity of having to go through the process set out in that section.
[23] The first argument on behalf of the applicants is on its proper analysis based on the notion that trade unions are agents of their members. In other words, trade unions as agents of their members have as a matter of law, to seek approval from members before concluding any agreement.
[24] The general principle based on the proper interpretation of the common law and legislation is that a trade union has the power and authority to take decisions to settle disputes in the interests of its members, in particular in the interests of the majority and at times to the detriment of the minority members. This principle has its basis in the notion of majoritarianism and Freedom of Association. In terms of this principle a decision taken by a union cannot be vitiated by the fact that the decision was taken without having regard to the interest of the minority members.
[25] Trade unions specifically derives their power to make decisions on behalf of their members in terms of the provisions of Section 200 of the LRA which provides as follows:
‘(1) A registered trade union or registered employers’ organisation may act in any one or more of the following capacities in any dispute to which any of its members is a party –
(a) in its own interest;
(b) on behalf of any of its members;
(c) in the interest of any of its members.
(2) A registered trade union or a registered employers’ organisation is entitled to be a party to any proceedings in terms of this Act if one or more of its members is a party to those proceedings.’
The issue of the power and authority to make decisions by registered trade unions as envisaged in section 200 of the LRA has received attention in a number of the decisions of the Labour Court.
. . .
[29] The above authorities indicate that a trade union is entitled to take any decision on behalf of either the majority or the minority of its members without necessarily having to obtain the members’ consent, even if such a decision is to adversely affect those members. In other words members affected by a decision taken by a union without their consent are bound by such a decision and are unable as a matter of principle to withdraw from such an agreement. Any decision taken by a trade union either detrimental or beneficial to some of its members cannot be said to be unconstitutional because the trade union would have derived the power to act in that particular manner in terms of the provisions of section 200 of the LRA which in turn has its basis in terms of section 23 of the Constitution.
[30] In the present instance it is apparent that the union acted in the interests of the majority at the expense of the minority. The fact that the minority are adversely affected by the decision taken by the union is immaterial because in law, those affected by the decision joined the union voluntarily and in the exercise of their Freedom of Association.
. . .
Exceptions.
[34] In terms of section 23(1)(d) of the LRA, employees who are not members of the trade union or trade unions party to the agreement are bound by such an agreement if they are identified in the agreement and the agreement expressly states that those employees are bound by the agreement.
[35] It follows from the above that even if Mr Sello Moloi, was not a member of the trade union he is in terms of section 23 (1) (d) bound by the decision taken by the union. His case is further not assisted by the fact that he signed the individual settlement agreement.
[36] As indicated earlier, the applicants signed the individual settlement agreements in which they each individually accepted the packages given to them by the respondent in full and final settlement of any claim they may have against the respondent. However, the applicants seek to renege from these agreements on the basis that they were forced to sign them under the thread that they would not receive the packages if they did not sign those agreements.
[37] The basic and general principle of our law is that economic pressure to conclude an agreement does not constitute duress. It would however appear that in special circumstances of a given case our courts would be willing to consider rating economic pressure as duress. The reason for not treating economic pressure as duress is explained by Nugent JA in Medscheme Holdings (Pty) Ltd v Bamjee in the following terms:
‘[18] For it is not unlawful, in general, to cause economic harm, or even to cause economic ruin, to another, nor can it generally be unconscionable to do so in a competitive economy. In commercial bargaining the exercise of free will (if that can ever exist in any pure form of the term) is always fettered to some degree by the expectation of gain or the fear of loss. . . (H)ard bargaining is not the equivalent of duress, and that is so even where the bargain is the product of an imbalance in bargaining power. Something more – which is absent in this case – would need to exist for economic bargaining to be illegitimate or unconscionable and thus to constitute duress.’
[38] The requirements for a successful avoidance of the contract on the basis of duress is set out in Arend v Astra Furnitures (Pty) Ltd at 306 as follows:
“Duress may take the form of inflicting physical violence upon the person of a contracting party or of inducing in him a fear by means of threats. Where a person seeks to set aside a contract, or resist the enforcement of a contract, on the ground of duress based upon fear, the following elements must be established:
(i) The fear must be a reasonable one.
(ii) It must be caused by the threat of some considerable evil to the person concerned or his family.
(iii) It must be the threat of an imminent or inevitable evil.
(iv) The threat or intimidation must be unlawful or contra bonos mores.
(v) The moral pressure used must have caused damage.
Conclusion
[39] In my view the collective agreement concluded by NUMSA on behalf of the employee does not offend the Constitution neither is it contrary to public policy. There is therefore no basis to treat it as unenforceable. The termination of the employment of the applicants was a result of a binding collective bargaining agreement.
[40] As concerning the individual agreement, I am of the view that the applicants have failed to make out a case for vitiating their agreements on the basis of duress. The agreements are accordingly binding on the applicants.
[41] In light of this, the applicants are not entitled to pursue their claim of unfair dismissal. In the circumstances of this case I see no reason both in law and fairness why the costs should not follow the results.