Bargaining Councils, what are they?

South Africa currently has over 40 bargaining councils operating nationwide. What exactly is a bargaining council?

A bargaining council is a body that is established by one or more employers’ organisations and one or more trade unions. It must be registered under the Labour Relations Act for a particular industry. This means that there are restrictions on what kind of dispute specific bargaining councils may hear.

Section 27 of the Labour Relations Act allows for the forming of bargaining councils by employer organisations and trade unions for the purpose of seeking solutions to labour disputes, managing collective agreements, and putting forward labour law and policy recommendations, in addition to establishing relevant schemes.

Council Creation

Registered employer organisations and trade unions can form a bargaining council through the adoption of a constitution and by submitting an application in terms of section 29 with the Registrar of Labour Organisations. The application for registration must be accompanied by the application form and any other information deemed necessary and relevant by the Registrar.

The Role of a Bargaining Council

The role is governed by Section 28 in the Labour Relations Act and entails the creation and enforcement of collective agreements, establishment and management of a dispute resolution found, and the prevention and resolving of labour disputes. It also serves to create and manage funds and schemes, which will benefit its members or relevant parties, and to make proposals regarding the laws affecting the specific sector.

Does an employer have to register with the bargaining council?

An employer is legally obligated to register with that specific bargaining council, if the CORE FUNCTION of the employer is prescribed in the scope of application of any bargaining council. The employer must also comply with the terms and conditions as set out in the collective agreement of the bargaining council.

What are the benefits of being registered with the bargaining council?

When it comes to dispute resolution the commissioners assisting with the disputes in the bargaining council are specialised in that specific industry and collective agreement. Businesses, trade unions and employees will receive expert advice and assistance from the commissioner with regards to dispute resolution.

What are the Agreements?

Collective bargaining takes places and the agreement is the outcome of the negotiations. The Council agreement stipulates the minimum wages and aspects such as termination of employment notice period, sick leave and other conditions of employment.

The Bargaining Council consists of representatives from the various parties, including the employer organisations and trade unions. The outcome of the negotiations and bargaining is published in the Government Gazette. If the Council deems it necessary to extend the outcome of the collective bargaining to non-parties, it puts an application in writing to the Minister of Labour to the effect.

Where a sector is without a Bargaining Council, the parties can according to the regulations of the Labour Relations Act, apply for the introduction of a Statutory Council. For this to be approved, the sector-based unions must represent at least 30% of the workers in the particular sector and the employer organisations a minimum of 30% of the sector employers.

The Labour Relations Act stipulates compulsory adherence to the terms of the Bargaining Council Agreement for all parties relevant to the Bargaining Council. Disputes or problems regarding work conditions are referred to the Bargaining Council that appoints agents to investigate and provide compliance orders to the employers in breach of the Council Agreement.

How Disputes are Settled

The Bargaining Council plays an integral role in dispute settlements within the specific sector. Disputes can be referred to the Council for appeasement. Conciliators are appointed to help the parties negotiate and reach a compromise or solution. If this process fails then one of the parties can request the Council for arbitration assistance and the Council will appoint their arbitrators to seek a solution and order compliance.

Powers and functions of bargaining councils include:

making and enforcing collective agreements preventing and resolving labour disputes establishing and managing a dispute resolution fund
promoting and establishing training and education schemes establishing and managing schemes or funds to benefit its parties or members making and submitting proposals on policies and laws that affect a specific sector or area Certain bargaining councils have the status to resolve labour disputes in the same way as the CCMA. In such cases the CCMA does not have jurisdiction to preside over labour disputes in a specific industry, if an accredited bargaining council exists.

One example of a Bargaining Council to be used for purposes of explanation is the Motor Industry Bargaining Council (MIBCO), below.

MIBCO:

Is registered with the Registrar of Labour Organisations
Operates nationwide.
Has a website with detailed information for use by the public; refer to: www.mibco.org.za
Has a Constitution
Has a Collective Agreement in force till 31 August 2022 (and may be extended as and when required and made official by way of Government Gazettes; Number 43529 of July 2020 is applicable to MIBCO)
Publishes annual regulatory updates for wage increase matters

Given the above legal framework, Companies should note the following basic FAQs:

Why do I have to register as an employer?

In terms of the Main Agreement for the Motor Industry, all employers within the scope of application of the Agreement need to register with the Bargaining Council. All employees within the scope of application of the Main Agreement must also be registered by the employer. Amongst other requirements, there are social security funds to which both employers and employees contribute. These funds include the Auto Workers’ and Motor Industry Provident Funds.

Why must I join your Provident Fund as it is my constitutional right to decide which fund I want to join?

The Auto Workers’ and Motor Industry Provident Funds are compulsory Funds as per the collective agreements entered into by/and between the employer and employee parties to the Motor Industry Bargaining Council, and promulgated as such by the Minister of Labour. The Funds are industry funds and this means that you will remain covered by these funds for as long as you are employed in the motor industry as per the Bargaining Council’s scope of application. The funds offer substantial retirement, death and ill health benefits and have a proven track record of performance excellence.

In reading the term “compulsory”, all companies still retain the right to utilise other provident funds and may submit an application for exemption to MIBCO where required. This is covered in the Motor Industry Provident Fund Agreement – “Collective Agreement” and CLAUSE 10 – EXEMPTIONS, sub-clause 5(e)(vi) specifically as published in Government Gazette 43529 dated 17 July 2020.

MIBCO has an official application form to be used by companies when submitting the Exemption from Provident Fund application. It could take up to 30 days for such an application to be processed with a written response from MIBCO being compulsory too.

I have a small business; why am I not exempted from your legislation?

In terms of the Main Agreement for the Motor Industry, all establishments who employ people are required to register with the Council.

The motor industry as defined in the Main Collective Agreement is mostly a small employer industry. It is also relevant to note that in terms of Section 30(1)(b) of the Labour Relations Act, there is a specific requirement that the constitution of a bargaining council must provide for the representation of small and medium enterprises. This requirement has been incorporated in the Constitution of MIBCO and is applied in practice.

Why do I have to pay council levies; you don’t protect me as an employer?

The Main Agreement for the Motor Industry is the result of negotiations between the employer and employee parties to the Council. The provisions of the Agreement do provide benefits to both employers and employees.

I am struggling due to financial constraints and cannot pay annual increases. Will MIBCO exempt me this year?

There is an exemption process that employers can follow within 30 days of the promulgation of wage adjustments. Contact your MIBCO Regional Office for details.

Businesses should make sure of their rights and obligations when dealing with Bargaining Councils by reading and understanding the detail of the relevant council’s Collective Agreement. No Collective Agreement may contravene the basic requirements of the Labour Relations Act, Basic Conditions of Employment Act or National Minimum Wage Act and may not hinder the rights of employers or employees.

In the case of Provident Funds, all companies and employees retain the right to review the requirements thereof and submit an objection via an Exemption Application Form.

Author Craig Tonkin

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