Durban - Bargaining councils, which have grappled with escalating deregulation and battled to stem the flood of backyard sweatshop operations, were given back the teeth to begin enforcing strategic agreements between major employers and trade unions by the Labour Appeal Court in Johannesburg last week.
Brett Walker, the head of the compliance department at the bargaining council for the clothing industry in KwaZulu Natal, said last week's unanimous decision by the Labour Appeal Court to uphold the bargaining council's right to arbitrate in the pivotal Kem-Lin case was a major victory, not only for the clothing industry but for all centralised bargaining councils.
Durban's clothing sector has for more than a year been closely watched as a test case as smaller manufacturers challenged the Labour Relations and Basic Conditions of Employment Acts and turned their backs on official structures.
They withdrew from the bargaining council, refusing to implement wage or benefit agreements, claiming they outsourced production to independent subcontractors and were no longer employers.
This enabled struggling smaller manufacturers to slash costs by paying far lower wages than their equally hard-pushed larger counterparts.
The bargaining council believes this unfair competition in a depressed market is jeopardising the wellbeing of the sector as a whole.
To date 206 small manufacturers, which employ 10 000 people, have either deregistered or refused to register with the bargaining council. This leaves just 185 larger companies representing 19 000 employees within the official structures.
The Confederation of Employers of Southern Africa (Cofesa), which has championed the switchover of entire workforces to contractual agreements, has held the entire centralised bargaining system to ransom, repeatedly questioning its authority to arbitrate disagreements when it attempted to enforce registration.
Cofesa has also infiltrated the footwear and leather, motor, building, retail sectors.
The standoff between the bargaining council for the clothing industry in KwaZulu Natal and Cofesa began more than a year ago when the former attempted to force Kem-Lin Fashions to register. Cofesa took this to the Labour Court, questioning whether the bargaining council had jurisdiction to appoint arbitrators to rule on the disagreement in the first place.
Hein van der Walt, the director and originator of Cofesa, said on Friday that despite Judge President Zondo's ruling that the arbitrators were independent, Cofesa still questioned how bargaining councils could appoint their own arbitrators in cases in which they were intimately involved. Cofesa intended referring this case to the constitutional court.
The National Association of Bargaining Councils last week welcomed not only the Kem-Lin decision, but a strategic decision in a case between the motor industry bargaining council and Eastern Cape-based Woolsley Panel Beaters.
Wynand Stapelberg, the co-ordinating secretary, said this ruling had clearly shown that Cofesa's so-called subcontractors were, in fact, employees and were not exempt from the Labour Relations Act's definition.
The Kem-Lin case is one of 17 similar cases that have come up for arbitration in Durban. The bargaining council now intends pursuing the other 16 and rooting out the scores of companies operating outside the system.