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Article 24/2026

In the previous article, we dealt with the consequences of a plant level collective agreement with a definite beginning and end date.  We indicated to you that, in line with s23(2) of the LRA, and an analysis of the relevant case law, that, once such a collective agreement reaches its expiry date, it expires and is no longer of any force or effect.  In this article, we deal with the scenario where a plant level collective agreement is concluded for an indefinite period and the employer gave notice to terminate same.

What are the consequences when a party to a plant level collective agreement, concluded for an indefinite time period, gives notice to terminate such collective agreement?

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  • Section 23(4) of the LRA reads as follows: ‘Unless the collective agreement provides otherwise, any party to a collective agreement, that is concluded for an indefinite period, may terminate the agreement by giving reasonable notice, in writing, to the other parties.’
  • In Public Servants Association of South Africa and Others v CCMA and Others [2024] 10 BLLR 1087 (LC); (2024) 45 ILJ 2795 (LC) (PSA), the labour court had the opportunity to deal with such a plant level collective agreement concluded for an indefinite period and where the content of such collective agreement did not indicate how it may be terminated – i e termination in terms of s23(4) of the LRA was permitted.
  • Briefly, the facts of this matter are as follows:
    • during 2006, the Public Servants Association of South Africa (PSA), the Receiver of Revenue (SARS) and the National Education, Health and Allied Workers’ Union (NEHAWU) concluded a collective agreement, which provided that certain grades of qualifying field workers employed by SARS, who travelled extensively in the course of performing their duties, would be paid a field worker’s allowance (in essence, a travelling allowance)
    • such allowance would be paid on a monthly basis to compensate the employees so eligible for official business travel, up to 500kms for the month
    • on 4 April 2025, SARS gave the PSA and NEHAWU three months’ notice of termination of the said plant level collective agreement, which termination was to become effective on 4 July 2015
    • PSA lodged an unfair labour practice dispute with the CCMA – the commissioner found that no unfair labour practice was committed
  • What did the arbitrator find?
    • upon cancellation of the collective agreement, the allowance fell away
    • contracts of employment were only varied whilst the collective agreement remained in place
    • on review, PSA argued that the arbitrator committed a material error of law, seeing that the plant level collective agreement entailed the variation of the individual contracts of employment and, thus, the outcome of the arbitration award is a breach of s23(3) of the LRA – it was argued that de facto the contracts of employment were already amended
  • The labour court in casu adopted the following approach:
    • where a collective agreement is cancelled by one of the parties to such an agreement, seeing that the agreement is for an indefinite period, this has the effect that the terms of the cancelled/terminated collective agreement do not live on through the contracts of employment into which they were incorporated
    • this position gives full effect to the provisions of s23(4) of the LRA (as well as section 23(3) of the LRA), and accordingly promotes collective bargaining.

Food for thought

  • So, where a plant level collective agreement is concluded for an indefinite period and such collective agreement does not provide otherwise, it may be terminated by any of the parties giving reasonable notice in writing to the other parties.
  • Obviously, if the plant level collective agreement for an indefinite time period provides otherwise, then that is the approach to be adopted if it is to be terminated.
  • Under the circumstances where there is no provision in the plant level collective agreement regulating the indefinite time period and termination takes place in terms of section 23(4) of the LRA, then:
    • any party may terminate the said collective agreement by giving reasonable notice in writing to the other party
    • if during the currency of such collective agreement, it varied a contract of employment between an employer and employee, then, on termination of such collective agreement, such amendment of the employment contracts also falls away.
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