South African Local Government Bargaining Council and Others v Municipal Workers Retirement Fund and Others

The South African Local Government Bargaining Council (SALGBC), together with SALGA and the majority trade unions IMATU and SAMWU, concluded a collective agreement in September 2021 titled the Retirement Fund Collective Agreement. The agreement introduced an accreditation regime requiring all retirement funds operating in the local government sector to meet prescribed criteria, including permitting transfers of members between accredited funds and amendments to fund rules. Several existing municipal retirement funds and related entities challenged the legality of the agreement in the Gauteng High Court, arguing that it impermissibly regulated pension fund governance, coerced trustees to amend fund rules contrary to the Pension Funds Act, and addressed matters not constituting terms and conditions of employment or matters of mutual interest under the Labour Relations Act. The High Court reviewed and set aside the agreement (save for one clause) on grounds of illegality. The bargaining council and associated parties appealed to the Supreme Court of Appeal, while the retirement funds cross-appealed.

The appeals were dismissed with costs, including the costs of two counsel. The cross-appeal was upheld with costs. The order of the High Court was replaced with an order reviewing and setting aside the Retirement Fund Collective Agreement in its entirety on account of illegality, and directing the appellants to pay costs.

This decision is significant for clarifying the limits of collective bargaining in South African labour law, particularly in relation to pension and retirement fund regulation. It affirms the autonomy and statutory primacy of pension fund governance under the Pension Funds Act and restricts bargaining councils from creating parallel regulatory regimes through collective agreements. The case has major implications for the local government sector and for the interaction between labour law and financial regulation.