Regulated and MIBCO Guaranteed Increases: I do not qualify!

Last week we announced the enactment of the newly negotiated and signed MIBCO Main Collective Agreement (hereinafter referred to as the ‘Agreement’). For most of our members, the Agreement does not bring any relief in terms of wage/salary increase.

Let us unpack the realities, the Agreement provides:

1. an annual threshold, that is R211 596.30 (R17 633.03 x 12 months) excluding incentives, bonuses and commission (MIBCO Circular 22 February 2021);
2. a scope of application (Division A, clause 2(3)) which limits certain provisions applicable or enforceable when you earn above the annual threshold, for instance a MIBCO Guaranteed Increase as set out in Division D of the Agreement; and
3. a Peace Clause (Preamble, Item 1(4)(1)(2)) which reads as follows:

“(1) The Parties agree not to embark on and/or participate in any form of industrial action as a result of any dispute on wage and/or salary adjustments and other conditions of employment relating to any sector or chapter in this Agreement: Provided that an employer has implemented the wage and/or salary adjustments and other agreed conditions of employment matters on or before promulgation. Participation in any form of industrial action after the date of the settlement Agreement until 31 August 2022 shall be unprotected.

(2) Provided further, that Bargaining within the Motor Industry, as defined in the Main Collective Agreement, takes place at centralized level. There shall be no two-tier bargaining on any matter of mutual interest, other than in Sector 6 where the Parties may engage in plant level negotiations on actual wages which negotiations shall be governed by the provisions of the LRA and shall not be conducted under the auspices of MIBCO. In particular, this clause shall not impact on the DRC jurisdiction to entertain disputes referred to it, arising out of such negotiations at plant level in respect of Sector 6 establishments.” (sic)

Now, rightly so, you may ask what the impact of these provisions are when you are employed in a sector 4 (repair and fitment establishment) or in a sector 7 (spares and accessories establishment). Here is how:

• Sector 4 and sector 7

MISA members employed in the retail motor industry, specifically in a sector-4 and sector 7-establishment benefit from the minimum wages/salaries and MIBCO guaranteed increase only if your wages/salaries are below the annual threshold. Earning above the minimum wage/salary and below the annual threshold entitles you to the MIBCO guaranteed increase, which is the monetary difference between the previous- and the new minimum wage/salary per class of employee, as set out in Division D of the Agreement.

The challenge is when you earn above the annual threshold, because the Peace Clause prohibits plant level negotiations and industrial action, except in terms of employees employed in a sector 6 (Motor Dealership Establishment).

NUMSA did attempt to negotiate on a matter of mutual interest when the Agreement in an earlier period lapsed. The dispute ended in the Labour Appeal Court,  Wallenius Wilhelmsen Logistics Vehicle Services v National Union of Metalworkers of South Africa and Others [2019] 8 BLLR 795 (LAC) (26 February 2019). The Labour Court held that even in the absence of a signed Agreement, the MIBCO Constitution still prohibits plant level negotiations and strike action, except for a sector 6 establishment. The justification for this provision as per the LAC was that… “The prohibition on plant level bargaining is directed at uniformity and orderly substantive outcomes. The attempt by NUMSA to introduce two-tier bargaining sought to alter substantive wage rates at plant level in respect of a single employer. That is a matter of mutual interest reserved by the MIBCO Constitution for centralised bargaining.” (Paragraph 27).

MISA’s concession is that this provision in both the Agreement and the MIBCO Constitution limits a constitutional right. The only question that now begs an answer, is whether the limitation of the right to industrial action is justifiable. This issue needs attention.

• Sector 6:

MISA members employed in a sector 6 will benefit from the provisions of the Agreement only as far as the minimum wages/salaries are concerned. The Agreement does not provide for a MIBCO Guaranteed Increase in this sector. In the absence of a contractual term, that provides a right to an annual increase, the only time that your employer is obliged to give you an increase, is when you earn the minimum wage/salary.

The Peace Clause in this instance does however provide the right for plant level negotiations and industrial action.

• Peace Clause: The Preamble of the Agreement, point 1(4)(2), does however provide recourse. The said clause reads as follows: “There shall be no two-tier bargaining on any matter of mutual interest, other than in Sector 6 where the Parties may engage in plant level negotiations on actual wages which negotiations shall be governed by the provisions of the LRA …” (Own Emphasis)

A dispute regarding wages, if not regulated by a collective agreement, is a dispute of mutual interest. That is, the creation of a new right that cannot be resolved through conciliation or arbitration. Creating the right involves negotiations on plant level and if there is no resolve, to embark on industrial action.

The Peace Clause does however not provide for an unlimited right to bargain, in fact it provides that the Parties “may engage in plant level negotiations on actual wages”.

‘…MAY engage in plant level negotiations…’

The usage of the word ‘may’ does not impose a duty on either the employer or the employee to engage in negotiations. According to the Oxford dictionary, the word “may” is defined as expressing a possibility, expressing permission, expressing a wish, or hope. The Supreme Court of Appeal confirmed in SANDU v Minister of Defence & Others; Minister of Defence & Others v SANDU & Others 2007 (4) BCLR 398 (SCA), that the right in section 23 of the Constitution of the Republic of South Africa, does not impose on employers or employees a judicially enforceable duty to bargain.

Therefor MISA, on your behalf, may engage with your employer in negotiating a better salary or increases on actual wages, but there is no duty on your employer to engage. This is however not the end of the road.

Watch out for the April 2021 MISA E-Data where we will unpack Industrial Action as bargaining mechanism.

Conclusion

The MIBCO Main Collective Agreement was signed, gazetted, and is from 29 March 2021, enforceable. Included in the Agreement are the annual increased minimum wages and MIBCO Guaranteed Increases. Not all is lost when you fall outside the scope as per the discussions above.

Remember, MISA is just a phone call away.

Kindly utilise the following e-mail addresses and links for assistance during this time: 

Legal/Labour-related enquiries                     Legal@ms.org.za  

Legal Reception                                              011 476 3620 

MISA Benefit claim-related enquiries          Claims@misa.org.za

Any other enquiries                                        Info@ms.org.za

Website                                                           www.misa.org.za

Mobile App                                                     https://onelink.to/w9a7ku