Challenging the law can become costly


“Organised business has been talking about it for a long time, it took a knight such as Herman Mashaba to stand in and raise that finance for the Free Market Foundation to do it,” the Cape Chamber of Commerce’s president Michael Bagraim told CNBC Africa.

“Business is supporting them in the sense that they will give them whatever help they can give them, but you do need someone who’s got to dig very deep into their pockets to litigate. It’s very expensive to litigate in situations like this.”

The Free Market Foundation, which aims to promote and foster an open society, the rule of law, personal liberty, and economic and press freedom, is proceeding with its constitutional challenge in the High Court against Section 32 of the Labour Relations Act.


“Well if you understand how the bargaining councils work, the biggest way that they structure themselves is they have a certain amount of membership companies that join [and] unions that join. They then try and encompass the entire industry, in other words, many other companies, firms, partnerships [and] one-man shows,” Bagraim explained.

“They force them to join that bargaining council and, in forcing them, they’re also forcing the staff into a closed-shop agreement with the union in that bargaining council. Section 32 forces the minister to extend that agreement to the non-parties – to people who aren’t involved with that bargaining council at all.”

The Free Market Foundation believes that the Section 32 agreements are unfair.

“It’s not right and it doesn’t give a chance to the smaller firms, the smaller operations, who don’t want to belong to this grouping. It forces them to have to pay the wages as agreed between the bigger companies, the big unions, and also forces them into a situation where their staff have to join that union,” Bagraim said.

“Invariably that pushes all the costs of doing business up. The Free Market Foundation is saying that they don’t believe that’s constitutional. They have sued, in effect, the minister[s] of labour, justice and also all the bargaining councils – there are 48 of them in the country.”

He added that the case has been well researched, and that it looks like a very strong challenge to what’s happening in South Africa’s labour law.

“I know the lawyers involved, I know the senior council involved. I’ve been looking at all the background paperwork – this looks like it’s something that could challenge the bargaining council system. To a large degree, this is challenging our system, our judges are going to have to look at this very carefully,” Bagraim indicated.

“The real problem is many of the bargaining councils have not joined the issue and decided not to defend it. I think about half of them are defending it themselves, the minister of justice is not defending it either. It’s a very exciting time in labour law in South Africa. Over and above the fact that we’ve got hundreds of strikes, we’ve also got the employers striking back through the Free Market Foundation – we need to thank them for what they’re doing.”