Solidarity obo Members Employed in Motor Industry v Automobile Manufacturers Employers' Organisation (AMEO) and Others

Solidarity, a trade union with 853 members in the automobile manufacturing sector, challenged an agency shop agreement contained in clause A3 of a collective agreement concluded in the National Bargaining Forum (NBF) between AMEO (employers' organisation), automobile manufacturers, and NUMSA (the majority union). The collective agreement was concluded on 12 June 2014 for the period 1 July 2013 to 30 June 2016. Employers began deducting a 'bargaining fee' (set at 1% of weekly wages) from non-union members from 1 February 2015. Solidarity contended the agency shop agreement was void ab initio because it did not comply with section 25(3) of the LRA. On 7 April 2015, Solidarity objected and sought reimbursement for its members. On 15 May 2015, the NBF parties entered into a second collective agreement amending clause A3 both retrospectively (from 1 July 2013) and prospectively (from 15 May 2015 to 30 June 2016) to ensure compliance with section 25(3). Solidarity instituted proceedings on 13 May 2015 seeking declarations of invalidity, an interdict against future deductions, and repayment of amounts deducted.

• Whether the original clause A3 of the collective agreement complied with section 25(3) of the LRA
• Whether an agency shop agreement that does not comply with section 25(3) is void ab initio and unenforceable
• Whether a collective agreement can be amended retrospectively to cure an invalid agency shop agreement
• Whether retrospective amendment of a collective agreement differs from rectification
• Whether the amendments to clause A3 brought it into compliance with section 25(3) of the LRA
• Whether deductions made under the original invalid agreement became lawful after retrospective amendment

Appeal dismissed with costs including, where applicable, costs of senior counsel. The Labour Court judgment dismissing Solidarity's application was upheld.

An agency shop agreement that does not comply with the mandatory requirements of section 25(3) of the LRA is void ab initio and unenforceable. The required provisions cannot be incorporated by implication into such agreements. However, parties to a collective agreement have the power to amend that agreement retrospectively to cure defects in non-compliant agency shop provisions. Such retrospective amendment differs from rectification: it operates to repeal the original invalid provision and substitute it with a compliant version effective from an earlier date. There is no express statutory prohibition on retrospective operation of collective agreements, and section 23(2) of the LRA, which provides that collective agreements bind parties for the whole period of the agreement, implies that parties may determine the operative period including retrospective commencement. Where parties to a collective agreement amend an invalid agency shop agreement retrospectively with a compliant version, deductions made during the period of retrospective operation are rendered lawful.

The court observed that agency shop agreements are less intrusive than closed shop agreements, as they do not compel union membership but only require employees who benefit from collective bargaining to pay an agency fee. The court noted that section 25 of the LRA is a reasonable limitation of constitutional rights to freedom of association but is circumscribed by prudential constraints. The court indicated that retroactive operation of collective agreements, although imposing limitations on rights, may in some instances promote the purpose of orderly collective bargaining. The court rejected Solidarity's argument that the prospective amendment failed to comply with section 25(3)(d) because it lacked mechanisms to ensure monies were not used for prohibited purposes, noting that section 25(3)(d) does not prescribe particular mechanisms and it is sufficient if the agreement contains provisions relating to the prohibitions.

This case establishes important principles regarding agency shop agreements under the LRA. It confirms that strict compliance with section 25(3) is required for an agency shop agreement to be enforceable, and that non-compliance renders the agreement void ab initio and unenforceable (following Greathead). The case importantly clarifies that collective agreements, as hybrid contractual and legislative instruments, can operate retrospectively in the absence of express statutory prohibition, particularly where this promotes orderly collective bargaining. The judgment distinguishes between rectification (a remedy to correct written instruments that do not reflect the true agreement of parties) and amendment of collective agreements. Parties to a collective agreement may amend it retrospectively to cure defects in earlier versions, effectively repealing and substituting non-compliant clauses. This power to amend retrospectively is derived from section 23(2) of the LRA which gives parties the power to determine the operative period of collective agreements. The case demonstrates the legislative policy of the LRA to encourage employers and unions to regulate relationships through collective bargaining, and the courts will facilitate this by permitting amendments that ensure compliance with statutory requirements.