“THE RESUSCITATION OF THE NOTION” – ‘BARGAINING IN GOOD FAITH?’

BAD FAITH BARGAINING

In an article by Karl GernetzkyWage talks impasse goes back to grassroots” Business Day Live (02 April 2015) it was reported that public – sector unions aligned to the Congress of South African Trade Unions (Cosatu) would consult members “on a way forward” after being told by state negotiators they had “exhausted their mandate” for salary increases, before declaring a dispute.

According to the Business Day article the unions the public sector were “hopeful” that a period of conciliation would end the impasse, but were mindful of the government “treating these negotiations with an unprecedented level of arrogance“, according to National Education, Health and Allied Workers Union (NEHAWU) general secretary Bereng Soke.

To a large extent collective bargaining within the South African context in terms of the relevant provisions of SA labour legislation takes place at bargaining councils in the form of ‘centralised bargaining’.

In short: centralised bargaining could be described as negotiations between a group of employers (often members of an employer organisation[s]) and one or more trade unions (often affiliated to trade union federation[s]), regarding conditions of employment within a specific industry or sector.

In some countries, for example Sweden, the term at times referred to bargaining at a national level in respect of the economy as a whole, however in SA it generally refers to bargaining at industry level, for example in a bargaining council.

Insofar as it pertains to the SA public sector employees collective bargaining takes place at the Public Sector Co-ordinating Bargaining Council on a centralised basis or at a national level.

The constitution of the Public Sector Co-ordinating Bargaining Council (PSCBC) stipulates that in the event of an impasse mediation must be concluded within a month of the receipt of a referral, which according to the article referred to above would mean conciliation/mediation until the end of April 2015, failing where to industrial action may follow subject to compliance with the PSCBC constitution; read with the relevant provisions of the SA Labour Relations Amendment Act, 6 of 2014 (the LRA).

The 30 day period referred to above may be extended by the parties to the PSCBC by agreement.

It was mentioned in the article that among the government’s [employer] offers “is a three-year agreement for a 5.8% rise in the first year, followed by two years of inflation-plus-0.5% increases, but unions are asking for a 10% wage deal in one year.”

Credit rating agencies, analysts and the government issued warnings that the public-sector wage bill posed a risk to fiscal stability. “It hovers around 40% of non-interest state expenditure.”

The state, which budgeted for a 6.6% increase in the wage bill, “said its offer represented an estimated R37bn above the current R400bn wage bill.”

According to a government spokesperson, “Any increase beyond what is budgeted will lead to borrowing for recurring expenses, such as salaries, and impact negatively on operational budgets,”

In an article published in Business Day on 08 April 2015, it has been reported that, ”Cosatu aligned public sector unions have resolved to reject a wage offer from the government during conciliation to be held during the week of 13 April 2015.”

Unions would however continue to receive mandates from their members on other aspects of the wage negotiations, and on how to proceed should conciliation fail to bear results and the state “unilaterally” implements a rejected offer, chief negotiator for Cosatu unions, according to Mugwena Maluleke.

SA’s public-sector wage bill of more than R400bn ranks among the highest of countries at a similar level of economic development and the government has repeatedly said an above-inflation increase is unaffordable. Unions maintain that their members deserve real wage increases’ and have previously argued that the state’s comments on the wage bill ignore high salaries at the top end of the civil service, which are not part of the current negotiations.

Public sector unions met in four provinces of South Africa on Wednesday, 08 April 2015 to receive a report back on wage talks with the government “and chart a way forward after the state declared a dispute at the end of March 2015.”

In the article dated o8 April 2015 it has been reported that, “negotiations between the government and unions have been rancorous, with the state declaring a dispute after the government negotiators said they had ‘exhausted their mandate’ with a 5.8% wage offer. Unions, which have resolved to co-ordinate their demands, had been demanding a 10%.”

In an article published by Greg Nicolson, “Public sector wage negotiations: Unions hammer state’s ‘arrogance”  Daily Maverick (09 April 2015) it is reported “The public sector wage negotiations have been going on for months but after government declared a dispute on Friday unions are accusing it of acting in bad faith. Both parties hope a 30-day mediation process yields an agreement, but a strike could be coming.” [Emphasis added].

The Cosatu affiliated unions, Sadtu, Denosa, SAMA, Popcru, Nehawu, Sasawu and Pawusa, so it was reported, said they “are appalled and infuriated by the reckless and arrogant attitude of government in dealing with this year’s wage negotiation…what is obvious from all this is that we are dealing with some unprecedented levels of provocation and intransigence from the employer. This has made it clear to us that we might have to mobilise the workers for a possible mass action in the public service.”

Upon perusal of the articles supra and especially the statements made by the trade unions then a central theme, so to speak is the fierce criticism that the employer [government] – “Bargained in bad faith.”

The purpose of this article is not to assess or determine the validity, or otherwise of the allegations levelled against the employer of “bargaining in bad faith”. The purpose is to revisit and briefly address the meaning of “bargaining in good faith” vis-à-vis “bargaining in bad faith”.

Furthermore, the importance of the concept of “bargaining in good faith” would be emphasised as an indispensible requirement or prerequisite for a negotiated resolution of a dispute within the four corners of the collective bargaining arena.

As may be gleaned from the articles supra and of specific interest is the apparent “re-emergence in popularity”, as it were of the concept or notion – “Bargaining in good faith” especially the resuscitation thereof insofar as it pertains to South African labour relations.

Seasoned negotiators, mediators and dispute resolution practitioners not au fait with historical developments and in particular statutory amendments to South African labour legislation may be tempted to pose the question as to the rationale for writing an article with the subject matter or raison d’être the importance of “bargaining in good faith” as a prerequisite or indispensible requirement for the peaceful resolution of labour disputes.

Those involved in the resolution of conflict could make a wry remark that a first year college student grappling with the study of Conflict Resolution, especially those sections of the module “Mediation cum Negotiation – 101” would without much intellectual effort persuade a willing listener of the importance of bargaining in good faith and that without a bona fide intention by disputants to reach agreement – ‘mutual destruction’ is inevitable.

Be that as it may and as the saying goes “different strokes for different folks” or rather “different strokes for South Africa.”  

BRIEF OVERVIEW OF INDUSTRIAL STRIFE IN SOUTH AFRICA

The writer published articles in LinkedIn entitled “Bargaining in Good Faith” July 01, 2014; “The Root Cause of Strikes in South Africa” July 20, 2014; “The Importance of Developing Rapport – Mediation” June 10, 2014 & Strike Violence in South Africa – “Judicial Scrutiny of Unions to Curb Unlawful Conduct” December 16, 2014 wherein the incidence of industrial strife and the manifestations thereof were dealt with more fully.

Suffice it to record that at the time of drafting the article supra South Africa was experiencing some of its most torrid, extensive and seemingly endless phases of industrial conflict since the promulgation of “the new” Labour Relations Act, 66 of 1995 (the LRA).

Under the previous LRA the Courts realised that a statutory duty to bargain or rather compulsion to bargain was not enough to achieve the objectives of collective bargaining. In addition, parties were required to approach the negotiations with an open mind and a genuine desire to reach agreement.

This purpose was encapsulated in the expression ‘good faith bargaining’. Practices and stratagems which undermined the bargaining process were deemed to be unfair and duly declared by the Courts and Arbitrators as such.

Judgments and awards were handed down to the effect that unwilling parties were compelled or ordered to engage in a process of ‘bargaining in good faith’ or those who for some or other reason lost interest and became reluctant to bargain, an appropriate or to ‘return to the negotiating table’ and to without reservation do so in a manner that satisfied the test of ‘bargaining in good faith’.

“BARGAINING IN GOOD FAITH” – THE INTERPRETATION BY THE SA COURTS: PRE – 1995 PERIOD

As was stated above the Courts held and Arbitrators ordered that parties were required to approach the negotiations with an “open mind” and a “genuine desire to reach agreement.”

This purpose was encapsulated in the expression ‘good faith bargaining’. Practices which undermined the bargaining process were ‘deemed to be unfair’.

Included as being unfair and tantamount to ‘bargaining in bad faith’ were codified of which some examples are recorded hereunder:

  • Unreasonable preconditions for bargaining;
  • Premature unilateral action;
  • Illegitimate pressure tactics;
  • Denial of union access;
  • Sham bargaining, inadequate substantiation of proposals and dilatory tactics;
  • By-passing a recognised union and negotiating directly with employees when the union was not acting in bad faith; and
  • Unilaterally implementation of proposals.

The elimination of the unfair labour practice jurisdiction [statutory duty to bargain] in the LRA of 1995, left relatively little scope for arbitrators or the Labour Court to promote the scope of good faith bargaining. The duty to bargain was excluded and the bargaining process was left to the exercise of power.

For the purpose of this article writer revisited some of the judgments handed down by the Courts, prior to the 1995 amendments, and to refer to some of the pronouncements made by the Courts during the aforesaid period.

In National Union of Mineworkers v East Rand Gold and Uranium Co Ltd (1991) 12 ILJ 1221(A) at 1237 the Court held that, “the very stuff of collective bargaining is the duty to bargain in good faith”.

[Also see: Standard Bank of Bophuthatswana Ltd v Reynolds NO & others 1995 (3) SA 74G].

COMMENTARY

It would be wise, in the interests of all the parties in the public sector dispute and more importantly the SA public that negotiators involved in attempts to resolve the impasse should revisit and take due cognizance of the pronouncements made by the Courts supra that: “The very stuff of collective bargaining is the duty to bargain in good faith’.

The legislator at the time deemed it appropriate to leave it up to the bargaining partners to regulate bargaining relationships in a responsible and accountable manner in accordance with the principle of voluntarism rather than a statutory duty to bargain.

The recent amendments to South African labour legislation and insofar as collective bargaining and the right to strike are concerned survived significant amendments. [See: Labour Relations Amendment Act, no 6 of 2014].

Therefore, the South African public expect the parties to act responsibly by negotiating in good faith with the purpose of reaching consensus.

Johann Scheepers.

April 09, 2015

Copyright

Copyright reserved. No part of this article/ guide may be reproduced, without prior written permission by the author.

 

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