AMCU, the majority union in the bargaining unit at Western Platinum Limited and Eastern Platinum Limited's Marikana Operations, concluded an agency shop agreement with the employer on 24 April 2019. The agreement provided that the employer would deduct an agency fee from the wages of all employees within the bargaining unit. Clause 7.1 of the agreement stated that "employees who are not members of any trade union shall not be compelled to be a member of AMCU." Three other unions (UASA, Solidarity, and NUM) challenged the validity of this agreement on the basis that it failed to comply with section 25(3)(a) of the Labour Relations Act because it only referred to employees who are not members of any trade union, but did not expressly state that employees who are members of other trade unions are not compelled to become members of AMCU. The Labour Court (Whitcher J) declared the agreement invalid and unenforceable on 24 June 2019 and ordered the employer to cease deducting agency fees and to refund all deductions made. AMCU appealed to the Labour Appeal Court.
The appeal was dismissed with costs. The Labour Court's order declaring the agency shop agreement invalid and unenforceable was upheld, as was the interdict preventing the employer from deducting agency fees from members of the respondent unions and the order requiring refund of all deductions made.
An agency shop agreement is binding only if it complies with the mandatory requirements of section 25(3)(a) of the LRA, which requires that it must provide that employees who are not members of the representative trade union are not compelled to become members of that trade union. An agreement that only refers to employees who are not members of 'any trade union' does not satisfy this requirement because it fails to address employees who are members of other unions. Such employees must also be explicitly protected from compulsion to join the representative union. The Labour Court has jurisdiction to determine the validity of an agency shop agreement as this involves determining whether a valid agreement exists, which is distinct from disputes about the interpretation or application of an existing agreement under section 24(2) of the LRA.
The Court noted that there was no reason in law or fairness why costs should not follow the result in this matter. The Court also addressed procedural matters at the outset, noting that the appeal had been deemed withdrawn due to late filing of the record, but was reinstated and late filing was condoned as the respondents did not oppose these applications. The delay was explained as arising from the order granting leave to appeal not having been received, and once received, the necessary steps were taken although this was more than five months late.
This case clarifies the strict mandatory requirements for agency shop agreements under section 25(3)(a) of the LRA. It establishes that such agreements must explicitly provide that employees who are members of other trade unions (not just employees who are not members of any union) are not compelled to join the representative trade union. The case also confirms that challenges to the validity of collective agreements fall within the Labour Court's jurisdiction and are not subject to the arbitration requirements in section 24(2) of the LRA, which apply only to disputes about the interpretation and application of existing valid agreements. The judgment emphasizes the importance of precise drafting in collective agreements to ensure compliance with statutory requirements.