Big legal victory for small textile factories in KZN

2013-03-14 00:00

A HIGH court ruling setting aside the blanket enforcement of minimum wages in the clothing and textile industry has potentially saved 17 000 jobs in KwaZulu-Natal.

Ahmed Paruk, head of the United Clothing and Textile Association (UCTA), said the judgment represented a victory for small businesses in the province and would set a precedent for the way such matters were dealt with by bargaining councils in all other industries.

UCTA claims to represent 140 clothing factories employing around 28 000 workers in the province.

Paruk said the judgment would give the embattled industry a chance to grow. “Our vision is that within a year we will be employing 40 000 workers.”

UCTA and five Newcastle-based manufacturers took on Labour Minister Mildred Oliphant, the National Bargaining Council (NBC) for the clothing manufacturing industry and the SA Clothing and Textile Workers Union (SACTWU) in the matter.

They asked the high court to review and set aside the decision by Oliphant to extend a collective minimum wage agreement reached during negotiations by the NBC and SACTWU to “non parties” to the agreement without consultation.

This meant that all companies in the clothing and textile industry were forced to comply with the agreed minimum wages even though they were not present or involved in the formulation of the agreement.

Valuline CC, Africa HK Manufacturing, Satcotrade (Pty) Ltd, JCR Clothing CC, Goldshu-Lin Clothing CC and UCTA submitted that the minister’s decision was unlawful, irrational and unreasonable. They argued that she had failed to take note of the probable loss of thousands of jobs and factory closures that would result.

The court was told that the clothing manufacturing industry was already in a state of rapid decline in terms of production, exports and job losses.

In yesterday’s reserved judgment, Pietermaritzburg high court Judge Pete Koen ruled that the minister had not complied with legislation that sets out the “jurisdictional facts”, which must exist if a collective agreement is to be extended lawfully to non-parties.

He ruled that her decision to extend the collective agreement to non-parties was therefore invalid and should be set aside.

Musa Zondi, a spokesperson in Olifant’s office, said of the judgement: “We are studying it and will issue a statement in due course.”

Koen declined to grant requests by the bargaining council and minister to suspend the order of invalidity for a period that would allow the minister to consider other options.

He also rejected arguments that the effect of the order should not be retrospective.

But Koen said it might be irresponsible for employers who had paid workers higher wages in terms of the extended agreement to seek to recover the “overpayment”. “I, however, have no evidence on the application before me that any non-parties to the extended collective agreement contemplate such action,” he said.

Sactwu’s general secretary, Andre Kriel, said the judgment had been misinterpreted.

“What they claim is a very hollow victory.

“What they think it means is that they will have to take away wage increases that were granted in 2010. That is not practically possible,” Kriel said yesterday.

He said the judgment also didn’t mean that there was no industry agreement in place.

“They must comply with the minimum wage agreement.

“They have made it worse for themselves,” he continued.

“We will defend the right of the clothing worker to a fair living wage. If we allow this, it will be a race to the bottom and workers will be exploited even more.”

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