Chinese clothing manufacturers in Newcastle and manufacturers under the United Clothing and Textile Association have won a high court bid to stop Labour Minister Mildred Oliphant from forcing them to pay their workers the minimum wage.
Pietermaritzburg High Court Judge Piet Koen handed down a reserved judgment yesterday that set aside the minister’s decision to extend the “national main collective agreement” of the National Bargaining Council to “non-parties” in the clothing industry.
This means that clothing manufacturing companies not part of the council do not have to apply the minimum wage agreements.
Five Chinese firms in Newcastle and members of the association had brought the court application. They argued that the survival of 450 firms nationwide, employing about 16 700 workers, was at stake if clothing and textile manufacturers were forced to apply the minimum wage agreements.
Judge Koen found that the members who belonged to the council had not represented more than 50 percent of the workforce, so its agreement could not be extended by the minister to “non-parties”. He also ordered that the cost of the application, including the costs of the applicant’s experts, had to be paid by the Labour Department.
It was unclear whether the department would appeal against the decision, or if it would put to bed ongoing labour relations issues facing the clothing industry.
It comes in the wake of the Free Market Foundation’s launching of a constitutional challenge to the Labour Relations Act. The foundation is taking the labour minister, as well as Justice and Constitutional Development Minister Jeff Radebe and various bargaining councils, to court.
The foundation said the basis of the challenge was “the constitutionality, negative effects and unintended consequences of the act, which permits the extension of bargaining council agreements to non-parties”.
Alex Liu, chairman of the Newcastle Chinese Chamber of Business, and the association’s chairman, Ahmed Paruk, welcomed the decision.
It “relieves our members’ fears of their factories being shut down by the Labour Department for not complying with the minimum wage”, said Liu.
“The chamber represents 158 firms in Newcastle and Vryheid, which employ more than 5 000 workers. Their jobs are safe for now, with no immediate threat of factories being closed down,” he said.
“In terms of labour legislation, we want to return the power of negotiation to the shop floor… We don’t want wages set by some organisation based in Cape Town that treats all employers the same.”
Paruk said the judgment was a victory, not only for the associations’s factory owners, but also for employees who stood to lose their jobs.
“At last our voices have been heard… The court’s decision to review and set aside the minister of labour’s ruling means that many manufacturers will be able to keep the doors open.
“The judgment is going to have a huge impact on the future of all bargaining councils throughout the country.”
A spokesman for the Labour Department said the department respected the ruling, but could not comment further, as it needed to study the judgment.
Andre Kriel of the SA Clothing and Textile Workers Union said the union would read the judgment and decide whether or not to appeal.