Trade unions as suppliers of goods and service
| Jurisdiction | South Africa |
| Citation | (2018) 30 SA Merc LJ 216 |
| Published date | 16 August 2019 |
| Pages | 216-250 |
| Date | 16 August 2019 |
| Author | Jacolien Barnard |
TRADE UNIONS AS SUPPLIERS OF GOODS
AND SERVICES
JACOLIEN BARNARD*
Associate Professor, Department of Mercantile Law, University of Pretoria
MONRAY MARSELLUS BOTHA**
Professor and Head of Department, Department of Mercantile Law,
University of Pretoria
Abstract
Trade unions are important vehicles through which social justice is
achieved in the South African society. They play a role in the social,
political, and economic spheres. Trade unions are powerful
institutions and many provide a wide variety of services and goods
to their members, having extended their activities to financial
services such as insurance, pension funds, and health products.
Some unions have questioned the constitutionality of limiting
workers to a particular pension fund which has the effect of
impinging on their freedom of association.
1
Section 5(6) of the
Consumer Protection Act 68 of 2008 (‘the CPA’) forms part of the
application provisions of the Act. The aim of the section is to
provide ‘greater certainty’ regarding the scope of application of the
CPA. It provides that the supply of any goods or services in the
ordinary course of business to any of its members by a club, trade
union, association, society, or other collective entity, whether
incorporated or not, of persons voluntarily associated and
organised for a common purpose or purposes, whether for fair
value consideration or otherwise, irrespective of whether there is a
charge or economic contribution demanded or expected in order to
become or remain a member of that entity, will fall under the Act.
This section implies that the goods and services provided by trade
unions to their members are subject to the Act, and has
fundamental implications for trade unions and their members. This
contribution illustrates the development and extended role that
trade unions play, not only with regard to labour relations, but also
as the suppliers of goods and services to their members.
* LLB(Pret) LLM (Unisa) LLD (Pret).
** BLC BCom (Hons) LLB LLM (Pret) MCom (UJ) LLD (NWU) AIPSA Diploma
(AIPSA/Pret) Diploma in Alternative Dispute Resolution (AFSA/Pret) Diploma in Corporate
Law (UJ).
1
Mtyhopo v South African Municipal Workers Union National Provident Fund 2015 JDR
2098 (CC). See also Coyle, ‘Long-standing moratorium imposed on pension fund transfers
216
(2018) 30 SA Merc LJ 216
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I INTRODUCTION
Trade unions in South Africa (and worldwide) are ‘important and
influential bodies’
2
in the political, economic, and social spheres and, as
pressure groups, they can influence government or politics and business
‘in favour of labour, principally and accessorily to promote the interests
of society at large.’
3
There were 192 trade unions registered at the
Department of Labour in 2017.
4
This is a large number compared to the
size of the labour market. Trade unions have become highly influential
and compete in order to secure majority representation
5
in the work-
place. A trade union has been defined as nothing other than ‘an
association of employees whose principal purpose is to regulate relations
between employees and employers, including employers’ organisa-
tions’.
6
Through the trade unions, labour, as a component of society,
plays an important and active role in decision-making that ‘vitally
concerns its interests’.
7
The role of trade unions, not only in the labour
domain, but also in society, cannot be overstated. In addition to
defending and vindicating the rights of their members, trade unions also
play an important role in the economic life, social consciences, and
development of workers.
8
Trade unionism
9
is complex
10
not only in the
South African context, but also in other jurisdictions. It relates to ‘the
principles, methods, and practices of trade unions, or it may refer to
trade unions considered collectively’.
11
Trade unions have a duty to
collaborate with other social institutions, including representatives of
management and capital. In addition, they have responsibilities when it
may be unconstitutional and unlawful’, available at http://bit.ly/2vzu4el in ‘Legal Articles’ on
14 August 2015 Webber Wentzel, accessed on 1 July 2017.
2
Budeli, ‘Trade unionism and politics in Africa: The South African experience’2012
CILSA 479.
3
Budeli, 2012 CILSA 479.
4
Available at http://bit.ly/2vTQaDE accessed on 13 August 2017.
5
Representation of 50% plus one members in the workplace. See the discussion below.
6
See s 213 of the Labour Relations Act 66 of 1995 (‘the LRA’).
7
Lower, Employee Participation in Governance: A Legal and Ethical Analysis (Cambridge
University Press 2012) 151.
8
Lower, (Cambridge University Press 2012)151, where he quotes from The Compendium
of the Social Doctrine of the Church.
9
Trade unionism and politics in South Africa cannot be separated and the history of trade
unionism and political involvement in South Africa may be divided into four periods: (i) the
colonial period from the Dutch settlement during the seventeenth century and the formation
of the Union of South Africa in 1910; (ii) the period between 1910 and 1948; (iii) the
establishment of apartheid (1948) and the end of apartheid (1993); and (iv) the democratic
post-apartheid-era (1994 and onwards) (see Budeli 2012 CILSA 465).
10
Budeli, 2012 CILSA 454.
11
Budeli, 2012 CILSA 454.
TRADE UNIONS AS SUPPLIERS OF GOODS AND SERVICES 217
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comes to the production of wealth.
12
It is therefore important for society
as a whole (not only corporations and their shareholders) that wealth
creation takes place on a continuous basis and in a sustainable manner.
It is argued that sustainable development and participatory democracy
are inextricably linked, and that trade unions play a key role in the
democratic process.
13
Trade unions have always played an important role in demanding
greater democracy and the involvement in decision-making of workers
in the workplace. In this context, it is important to note the primary
objectives of the LRA, which include the provision of
‘a framework within which employees and their trade unions, employers
and employers’ organisations can (i) collectively bargain to determine
wages, terms and conditions of employment, and other matters of mutual
interest; and (ii) formulate industrial policy
14
and ... to promote orderly
collective bargaining [and] ... collective bargaining at sectoral level’.
15
In this light, Khan-Freund remarks that the primary purpose of
labour law is, and always will be, ‘a countervailing force to counteract the
inequality of bargaining power which is inherent and must be inherent
in the employment relationship’.
16
The power imbalance between
employees and employers can be addressed through trade unions by
enabling workers to organise and bargain collectively. In this context,
the necessity for trade unions can be summarised as follows:
‘The most important function of trade unions is to level the playing fields
for management and the workforce ... Actually, the capitalist system gives
the employers more rights and powers than it does the employee. It is
accepted that as investor and risk bearer the employee could be exploited
as a result of decisions made by the employer. The trade union has the
potential to mobilise labour in a collective unit to decrease the extent of the
decision-making autonomy of the employer. ... The trade union can play
this role in different ways. The crucial issue is collective bargaining. This
means the inclusion of checks and balances in the decision-making
process, the creation of a culture of legitimacy and fairness, the acceptance
of co-dependence on and respect for each other, the development of
respect for basic fundamental principles and rights of people in the
workplace, the development of the understanding that healthy labour
relations are good for the enterprise performance as well as the broader
12
Lower, (Cambridge University Press 2012) 151.
13
Kester, Trade Unions and Workplace Democracy in Africa (Ashgate 2007) 3.
14
Section 1(c)(i)–(ii) of the LRA.
15
Section 1(d)(i)–(ii) of the LRA. The long title of the LRA includes as one of its purposes,
the promotion and facilitation of collective bargaining at the workplace and sectoral levels.
16
Davies & Friedland, Kahn-Freund’s Labour Law (Stevens and Sons 1983) 18.
(2018) 30 SA MERC LJ
218
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