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Genesis backs Minister of Labour on Section 32 of LRA

Genesis was appointed on behalf of a number of bargaining councils and the Minister of Labour in a High Court matter concerning Section 32 of the Labour Relations Act, which permits the minister, under certain circumstances, to extend a collective agreement to employers and employees who are not members of the bargaining councils.

The applicant wished to have this section of the Act declared unconstitutional.

Genesis was asked to provide an economic perspective on the labour policy choice embodied within the bargaining council system. Sound labour policy is important for South Africa’s economic and social development and, given the state of the country‘s labour market and the diverging interests of the various stakeholders, it is an aspect of policy that naturally raises important questions and debate.

Within this context, Genesis was required to produce an independent expert economic report that would provide clarity to the court in the process of coming to a decision in such a highly contested environment.

The project team drew on its deep understanding of the economic, legal and policy context within which local bargaining councils operate. It then applied quantitative studies on the matter to demonstrate that the employment impact of bargaining council extensions would not be as large as originally indicated by the applicant.

The economic case was ultimately abandoned by the applicant and the case proceeded based purely on a legal challenge.

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