... but claims victory for donors
The Free Market Foundation’s heavily publicised court challenge against the extension of bargaining council wage deals was quashed this week. Despite a full Bench of three high court judges dismissing the foundation’s argument as “wholly wrong” and “fundamentally misconceived”, the libertarian think-tank claimed victory – because the judges also identified all the actual ways that these wage deal extensions, which set wages for hundreds of thousands of formal sector workers, could be legally challenged.
The judgment gave companies the weapons they needed to get out of collective bargaining, claimed Leon Louw, the foundation’s executive director.
In effect, the judgment is a guide for employers and interest groups such as the foundation on how to properly attack future wage deals (see below).
This follows failed attempts to do exactly that by, among other organisations, the National Employers’ Association of SA (Neasa), which has been trying to get out of wage deals at the Metal and Engineering Industries Bargaining Council for years.
Gerhard Papenfus, the association’s CEO, also called the judgment a “victory”.
It would “absolutely” get used during the next wage talks in the sector, he told City Press. “For us, it is a breakthrough.” Louw said he wanted the foundation to make a request of its donors to fund an appeal, which he said could cost up to R10 million.
The case thus far has cost the foundation about R4 million, which was covered by donors, he told City Press.
It was initially funded and promoted by businessman Herman Mashaba, who has since joined the DA and cut formal ties with the foundation.
This week’s judgment was a victory for the donors – all of them formal employers – but did very little for the unemployed, said Louw.
Getting them to fund an appeal would mean getting them to give money, even though they would not gain much more, he said.
“All we want is for the interests of non-parties to be protected. The judgment does not do that sufficiently yet,” Louw said.
The foundation’s reasoning is that the councils impose high wages that stifle small companies and keep jobs from getting created at lower rates of pay.
According to Louw, the judgment clarifies that the law allows for challenges that “everyone assumed it did not”. The big winners were “big business”, Louw said. Large and small employers can now simply resign from their bargaining council to reduce its representivity to below 50%. Then they can challenge the extension of the council’s wage deals from the outside using this week’s judgment. “I already got a call from a big company, saying they will now pull out of their bargaining council,” he told City Press on Friday.
The case got off the ground in 2013, when the foundation first filed court papers, making an extensive attack on the constitutionality of wage deal extensions.
Since then, it had abandoned most of its original case, leaving the North Gauteng High Court to consider one main argument, which was dismissed. The long list of respondents included labour federation Cosatu, the National Union of Metalworkers of SA, bargaining councils and Labour Minister Mildred Oliphant.
Many of them asked the judges to slam the foundation with a punitive cost order, on the grounds that it had wasted their time and legal expenses by dropping most of its arguments along the way and being wrong on its remaining one.
However, the judges this week praised the foundation’s Advocate Martin Brassey SC for the “elegant and admirable ingenuity” of his arguments.
“By compelling the debate in the way it did, the application in its result has usefully demarcated the parameters of power and administrative justice in the legislative scheme governing collective bargaining at sectoral level,” read part of the judgment.