Engineering industry body the National Employers Association of South Africa (Neasa) has continued its legal campaign to have a wage agreement concluded by the Metals and Engineering Industry Bargaining Council (MEIBC) and signed into law by Labour Minister Mildred Oliphant in 2013 declared invalid.

In strident commentary at a media briefing at the Free Market Foundation last week, Neasa CEO Gerhard Papenfus accused the MEIBC and the Steel and Engineering Industries Federation of South Africa (Seifsa) – which claimed to represent 51% of the industry workforce – of being insufficiently representative of the industry and, therefore, unable to present an agreement to the Minister on the sector’s behalf.

“The main collective agreement of the bargaining council is illegal and has a major detrimental effect on small businesses operating in this sector and a serious negative impact on jobs.

“Moreover, delays by the Minister to take action to rectify this are in contempt of the rule of law and causing further hardship to small business,” said Papenfus.

In 2012, Neasa challenged the validity of a three-year agreement, titled the 2011/2014 Agreement, presented by the MEIBC and extended by the Minister across the sector, arguing that the bargaining council did not represent the substantial industry majority required by law.

In December of that year, the Labour Court ruled in Neasa’s favour, finding that Oliphant had not applied her mind correctly to the number of employees covered by the collective agreement and the number of employees covered by the scope of the council, but suspended the ruling for four months to allow the Minister to consider extending the agreement.

“Instead, in April 2013, the Minister, without consultation of nonparties and contrary to the December 2012 ruling, gazetted and extended another amended agreement . . . [which was] illegally obtained…[as it] bypassed due process of the bargaining council.

“[The agreement] had been signed by two members of the council, without authority or proper negotiation by the parties on the council, and was sent to the Minister to extend, which she did despite repeated submissions from Neasa and others about its lack of validity,” asserted Papenfus.

He said the agreement was devastating “hundreds” of small companies in the industry, which had to “take hard decisions about retrenching workers or not hiring any new ones”.

In its rebuttal, the MEIBC vehemently denied Neasa’s allegations, telling Engineering News that the April 2013 agreement was the “same agreement presented to the Minister in 2011”, with the exception that the Minister, in exercising her discretion, decided to extend the main agreement to nonparties in accordance with Section 32(5) of the Labour Relations Act.

This piece of legislation allowed the Minister to extend the agreement to nonparties on the basis that the parties to the bargaining council were sufficiently representative, and that the Minister was satisfied that a failure to extend the agreement would undermine collective bargaining.

“It has also been the practice of the council for many years to have the parties agree on which individuals will sign the agreement on behalf of the employers and trade unions. This is normal practise, since this was not a new agreement which was subject to all other processes,” noted MEIBC CEO Thulani Mthiyane.

Moreover, Neasa counterpart Seifsa held that, acting as the agent of 27 affiliated employer associations, it was “properly” mandated by its membership to sign the MEIBC’s collective main agreement, effective September 2011 to June 2014.

“Seifsa was mandated to talk on behalf of its membership and engage in collective bargaining with the respective trade union parties, within clearly defined mandates, to conclude a collective agreement,” the association told Engineering News.

“Neasa’s unsubstantiated allegations regard- ing the integrity of the collective bargaining process and of the negotiating parties undermine the MEIBC and those party to the process. Seifsa, which respects the country’s laws, stands opposed to that myopic approach.”

It added that, as had been the case since the inception of the bargaining council in 1944, agreements concluded between the social partners had, without exception, been gazetted and extended to all party and nonparty employers and employees in the iron, steel and manufacturing sector.

Seifsa further accused Neasa of embarking on a “malicious” campaign of distancing itself from the collective bargaining process and challenging the outcome of agreements reached between employers and trade unions.

Following the Minister’s April 2013 decision, Neasa lodged an application in the Labour Court to set aside the Minister’s extension of the agreement, later claiming that Oliphant had delayed the due process of this application procedure by filing her answering affidavit “four months” later.

“We construe the Minister’s actions as a deliberate attempt to delay and obstruct the legal process. She is also in contempt of due legal process and, coming from a Minister, this is viewed in an extremely serious light, further demonstrating her disregard for judicial and administrative processes,” commented Papenfus.

The employers organisation had since appealed to the Registrar of Labour Relations to determine whether or not the MEIBC was, in fact, representative of the metals and engineering industry.

“According to the MEIBC’s own information, it represents only 8.6% of the industry. We suggest [to the registrar] that he exercise his powers and call on the council to show why it should not be deregistered,” Papenfus stated.

Meanwhile, Seifsa acknowledged that collective bargaining was not “a perfect model”, but held that remedies for companies that were unable to meet the requirements contained within the collective agreement were available, such as the exemption process.

It added that it was important to note that the current review application lodged by Neasa against the Minister of Labour had no impact on Oliphant’s decision, which remained binding, unless it was set aside for judicial review.

“Until and unless a court of law sets the decision of the Minister aside as having no legal force or effect, the decision remains valid and binding. Until such decision is set aside by a court of law in proceedings for judicial review, [the wage agreement] exists, has legal consequences and is fully operational,” Seifsa concluded.