“Much remains to be clarified.  The bottom line, however, is that the court accepted the extension of bargaining council agreements as a reasonable and necessary mechanism of sectoral bargaining which, when taken by unions and employers representing a majority of affected employees, justifies the removal of ministerial discretion (and, with it, court supervision) in deciding on the merits of extending it.  Section 6 of PAJA does create scope for reviewing the Minister’s “mechanical” decision on the ground of “rationality”, but this does not allow the court – any more than the Minister – to decide on its substantive merits.  This is the legislative model which the social partners agreed on in 1995 and which Parliament duly enacted.  It can be changed by legislative amendment, but not by order of court.  However, the judgment has opened up a new chapter in its application”.

The extension of bargaining council agreements: A new chapter:  Prof Darcy du Toit’s latest editorial in IR Network published by LexisNexis [subscription required].  The discussion concerns Free Market Foundation v Minister of Labour (13762/13) [2016] ZAGPPHC 266 (4 May 2016) per JR Murphy J [KE Matojane J and AC Basson J concurring].  Issues discussed at pages 52, 296 and 326 by Du Toit et al in Labour Relations Law: A Comprehensive Guide 6th ed (LexisNexis, 2015).

See also Job seekers: Collective bargaining and legality and the various comments thereon.

Further excerpts

Section 32 of the LRA does precisely that by requiring bargaining councils and the Minister to follow a specific procedure for extending bargaining council agreements.  This may again open up the question of the “fairness” of that procedure – a question which the court has effectively answered.  Beyond this it remains to be seen what scope there may be for PAJA review of decisions duly taken in accordance with section 32. 

This may include review of decisions on substantive grounds, in accordance with the criterion that “administrative action is reviewable if it is so unreasonable that no reasonable decision-maker could have taken it” (para 96).  Rationality, in turn, means “that a decision be rationally connected to the purpose for which it was taken, is supported by the evidence and furthers the purpose for which the legislative power was given to the administrator”.

However, this is not the same as “substantive rationality” in the sense of testing the substantive justifiability of extension versus non-extension.  In the case of extension in terms of section 32(5) – that is, at the Minister’s discretion in the absence of majoritarian support – the court found that a challenge on the grounds of unreasonableness “will involve a balancing of the range of competing interests.  The delineation of the standard of review is best left to a concrete case in which the extension of an agreement is attacked as unreasonable.  But, it must be said, it seems unlikely, if PAJA applies, that the standard of substantive due process preferred by the FMF would also apply” (para 98).

In the case of section 32(2) extensions, as noted already, the purpose was precisely to eliminate the discretion which the Minister had enjoyed in terms of the previous Act.  This also reduces the scope for judicial review.  “Where the agreement is negotiated and concluded by bargaining agents who represent and employ the majority falling within its coverage,” the court explained, “the legislature considers it justifiable to lower the level of Ministerial and judicial scrutiny” (para 104).  And, this being so, “any suggestion that section 32(2) should be suffused with a reasonableness requirement is misplaced” (para 106).