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Worklaw subscribers receive a monthly newsletter containing commentary on the latest labour law cases and trends. This newsletter contains an article which looks at Dealing with unequal pay: how should employers respond? We also look at three new cases: The first case is an important High Court judgment on whether it is constitutional to extend collective agreements to non-members. The second case considers whether a violent protected strike can be declared unprotected. The third case looks at a recent LAC decision which asks whether a pastor is an employee of a church or servant of God?

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Extending collective agreements to non-members

A recent application to the High Court concerned a significant constitutional challenge to the system of collective bargaining in South Africa, and more particularly to s32 of the LRA. The applicant, the Free Market Foundation ("FMF"), is an independent policy research and education organisation promoting the principles of limited government, economic freedom and individual liberty.

S32 of the LRA permits the extension of collective bargaining agreements concluded at sectoral level to persons not directly involved in the collective negotiations and not party to the agreement concluded in the bargaining council forum. Government policy favours such an arrangement because it is perceived to advance: (i) the promotion of collective bargaining at sectoral level; (ii) the promotion of majoritarianism; (iii) the prevention of unfair competition; (iv) the benefit of workers who have no collective bargaining strength to negotiate wages and terms and conditions of employment; and (v) a pluralistic system of industrial relations based on voluntarism (self-regulation) rather than state interference in the collective bargaining relationship.

The FMF questioned the economic efficacy and morality of these policy objectives. Its attack on the system is predicated upon a free market perspective as opposed to the policy outlined above. The FMF argues that the current system of extending the outcome of sectoral bargaining to cover non-participants, far from advancing the protection of vulnerable workers, impedes the growth of small businesses resulting in less job creation and a higher rate of unemployment.

The High Court in Free Market Foundation v The Minister of Labour and Others (13762/13) [2016] ZAGPPHC 266 (4 May 2016) considered the arguments from both sides at great length in a strong and clear judgment. The Court held that the extension of a bargaining council collective agreement to non-parties in terms of s32 of the LRA is not inconsistent with the Constitution.

This judgment comes as a great relief to the bargaining council system in SA and is supportive of the majoritarian principle that underpins the LRA. Smaller employers, minority unions and non-unionised employees will probably not agree with the judgment, but for the time being the status quo has been confirmed.

Can a violent protected strike be declared unprotected?

The facts of this case are sadly all too common. After the strike notice was issued, the employer and the union agreed on picketing rules. However once the strike commenced the employer alleged that the striking employees had failed to comply with the picketing rules and had committed various acts of strike-related misconduct. The Labour Court granted an order in terms of which the picketing rules were enforced and misconduct interdicted. The employer subsequently filed an application to hold the union and two of its officials in contempt of the order granted.

During the course of the strike, banners were displayed criticising the employer's holding company, Woolworths, for doing business with Israel. EFF members visited the employer's premises, demanding to negotiate with management, and urged strikers to intensify the strike by targeting trucks doing deliveries and entering and leaving the employer's gates. The employer argued that the EFF was seeking to use political power and threats of violence and that the strike ceased to be lawful on account of the associated demands made in service of the wider political goals of the EFF.

The union asserted that it was not in alliance or in partnership with the EFF, and had no control over the EFF and its programs. While some of the union's members could well have been members of the EFF and while the EFF may have demonstrated solidarity with the striking workers, these are not matters that had been sanctioned by the union.

The Labour Court in National Union of Food Beverage Wine Spirits and Allied Workers (NUFBWSAW) and Others v Universal Product Network (Pty) Ltd; (2016) 37 ILJ 476 (LC); [2016] 4 BLLR 408 (LC) was asked to rule on whether the strike notice was sufficient, and whether the strike should be declared unprotected due to the accompanying violence and interference by outside parties. Whilst on the facts of this case the Court was not prepared to do so, the Court affirmed that there may be circumstances where the levels and degree of violence and interference by outside parties in a strike tilt the balance toward a finding that a protected strike called by the union should be declared unprotected.

This is an important judgment. Worklaw subscribers will be aware that employers have called for amendments to the LRA that specifically provide for the power of the courts to undo the protected nature of a strike when it is accompanied by violence. This judgment is further confirmation that the courts appear prepared to do so in appropriate circumstances under the wording of the current LRA.

Employee of a church or servant of God?

The LAC in Universal Church of the Kingdom of God v Myeni and Others (DA 3/14) [2015] ZALAC 31; [2015] 9 BLLR 918 (LAC); (2015) 36 ILJ 2832 (LAC) (28 July 2015) overturned the LC's approach to deciding whether a church pastor is an employee under the LRA. We cover this LAC judgment because it gives a very specific interpretation to s200A of the LRA, which may be of interest to Worklaw subscribers.

First a summary of the facts in this case: a church pastor, arguing that he was an employee of the church, testified that he was paid a 'stipend' by the church of R7500 per month, which was accompanied each month with a payslip. In addition, he was provided with accommodation worth R4500 per month paid for by the church. Both UIF and PAYE deductions were made from his stipend. He was obliged to compile a weekly work schedule and was required to conduct about three to four religious services every day. If, for whatever reason, he was unable to perform any of his duties he was obliged to report to his senior, the regional pastor, who would then instruct a reserve pastor to fill that gap and perform the service concerned. The Church, in opposing the pastor's contentions that he was an employee, relied on two documents signed by him which expressly said there was no employment contract. In his arbitration award, the commissioner found that the pastor was an employee of the Church. Having made this ruling, the commissioner proceeded and considered the merits of the unfair dismissal claim against the Church. The commissioner concluded that the pastor was unfairly dismissed and ordered the Church to pay him compensation plus further relief.

The Church launched a review application in the Labour Court against the award. By agreement between the parties, the Court was called upon to deal only with the jurisdictional issue raised by the Church as to whether the pastor was an employee of the Church under the LRA. The LC dismissed the review application, and upheld the commissioner's finding that the pastor was indeed an employee of the Church and that, therefore, the CCMA had jurisdiction to hear the matter. The Church then appealed to the LAC to overturn the LC judgment.

The LAC granted the Church's appeal, overturning the approach adopted by the arbitrator and the LC, holding that there was no employment relationship and that the CCMA accordingly did not have the jurisdiction to arbitrate the dispute. The LAC held that the mutually agreed relationship between the pastor and the Church was one in which the pastor rendered voluntary devotional service to the Church, under circumstances where both he and the Church never intended that such relationship would constitute an employment relationship between them that produced legally enforceable rights and obligations under the LRA.

The reason why the LAC's judgment has wider significance is that the Court has given what to us is a strange and wrong interpretation of the law. The Court was conscious of the fact that both s200A and the Code of Good Practice: Who is an employee create a presumption that it is possible to create an employment relationship despite the form of the contract. Section 200A(1) says:

  1. Until the contrary is proved, a person who works for, or renders services to, any other person is presumed, regardless of the form of the contract, to be an employee, if any one or more of the following factors are present:

    1. the manner in which the person works is subject to the control or direction of another person;

    2. the person's hours of work are subject to the control or direction of another person;

    3. in the case of a person who works for an organisation, the person forms part of that organisation;

    4. the person has worked for that other person for an average of at least 40 hours per month over the last three months;

    5. the person is economically dependent on the other person for whom he or she works or renders services;

    6. the person is provided with tools of trade or work equipment by the other person; or

    7. the person only works for or renders services to one person.

The Code of Good Practice: Who is an employee stresses that the presumption applies regardless of the form of the contract and says that "a statement in a contract that the applicant is not an employee or is an independent contractor must not be taken as conclusive proof of the status of the applicant".

How did the LAC get around the presumption? It said that before s200A and the Code is triggered, there has to be a contract. The Court said "the existence of an employment contract or any other contractual arrangement between the disputing parties (regardless of the form thereof) is prerequisite for section 200A to apply". The court held that the two documents relied on by the church were not contracts and therefore the presumption did not apply. Little weight was given to the UIF deduction which was clearly indicative that the church had assessed that it was liable as employer to pay.

In our view this is not a satisfactory judgment, but employers should be aware that the principle established by this LAC decision is that the LRA requires that there must be a legally enforceable agreement or some contractual working arrangement in place between the parties, for s200A of the LRA to apply.


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Bruce Robertson
May 2016
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