South African Municipal Workers’ Union National Medical Scheme (SAMWUMED) v City of Ekurhuleni and Others

SAMWUMED is a registered, self-administered medical scheme accredited annually by the South African Local Government Bargaining Council (SALGBC) under a collective agreement concluded between SALGA and trade unions. Accreditation entitled SAMWUMED to market its scheme during a prescribed window period and to service municipal employees who elected to join it. The City of Ekurhuleni (COE) appointed a broker, later Moso Consulting Services (Pty) Ltd, and sought to compel SAMWUMED to market its scheme and service members exclusively through that broker, to accept the broker as exclusive intermediary, and to pay broker fees. SAMWUMED objected, relying on its accreditation rights and a prior non-exclusive broker agreement with Moso that contained a territorial limitation excluding COE. When COE and Moso persisted, SAMWUMED approached the High Court for declaratory and interdictory relief. The High Court dismissed the application, holding that SAMWUMED was not a party to the collective agreement and that the territorial limitation was unlawful. SAMWUMED appealed to the Supreme Court of Appeal.

The appeal was upheld with costs. The High Court’s orders were set aside and replaced with orders compelling COE to accept and process applications directly from SAMWUMED, declaring that Moso was not entitled to broker fees absent a written broker agreement and actual services rendered, and interdicting COE and Moso from hindering SAMWUMED’s marketing and servicing of members or holding Moso out as an exclusive broker while SAMWUMED remained accredited.

The case clarifies that while medical schemes are not parties to collective agreements under the LRA, accreditation by a bargaining council gives rise to an independent contractual relationship capable of protection. It affirms the delict of unlawful and intentional interference with contractual relations in the labour and medical schemes context, and limits employers’ ability to impose brokers on accredited medical schemes. The judgment is significant for collective bargaining structures, municipal employment benefits, and the autonomy of medical schemes.