Putco (Pty) Ltd v South African Road Passenger Bargaining Council and Others

Putco (Pty) Ltd, a major commuter bus operator and party to the South African Road Passenger Bargaining Council, applied for partial exemption from certain provisions of the 2018 main collective agreement. The exemptions related mainly to a 9% across-the-board wage increase, minimum hourly wage provisions, and the payment of an annual bonus. Putco’s application was based on severe and sustained financial distress caused primarily by chronic underfunding of provincial bus contracts, leading to significant losses, cash flow constraints, an ageing fleet, declining passenger numbers, and the risk of business rescue affecting approximately 3 300 employees. Although the exemption authority acknowledged Putco’s financial stress, it granted only partial exemption, effectively imposing wage increases (initially 7%, later 6%) and deferring the bonus payment with interest. Appeals to the exemption appeal authority were unsuccessful. Putco then approached the Labour Court to review and set aside both the exemption authority’s and appeal authority’s decisions.

The decisions of the exemption authority and the exemption appeal authority were reviewed and set aside. The Labour Court substituted its own decision for that of the exemption authorities, granting Putco the exemption sought on the basis of demonstrated unaffordability.

This judgment is significant for confirming that decisions of bargaining council exemption and exemption appeal authorities are reviewable under section 158(1)(g) of the Labour Relations Act, subject to the Sidumo reasonableness test. It clarifies that affordability is a factual enquiry central to exemption applications and that exemption authorities may not engage in arbitrary compromise decisions. The case also underscores the duty to give proper reasons and affirms the Labour Court’s power, in appropriate circumstances, to substitute its own decision to ensure expeditious resolution of labour disputes.