Lawyer Jeremy Gauntlett answered a question from the constitutional judges when he explained that the National Treasury considered clause 3.3 in isolation, but that did not mean that the rest of the agreement was valid. In addition, at least one lawyer argued that the unions fear that civil servants will be taken out of their pockets if the agreement is found to be invalid. The Treasury Department said it would have been a huge exercise to recover money paid to public servants during the first two years of the 2018 collective bargaining agreement, when the state made salary increases that it said were illegally made. Over the past year, the U.S. Department of Justice (DOJ) has filed its first charges of criminal wage fixing and non-poaching criminal conspiracy between competing employers. In December 2020, the Justice Department indicted the president of a recruitment company for violating Section 1 of the Sherman Act by allegedly conspiring with competitors to set salaries paid to physiotherapists. A month later, the Justice Department sued a company for violating Section 1 of the Sherman Act for allegedly entering into “naked non-poaching agreements” under which it agreed not to recruit senior executives from two competitors in March 2021, the Justice Department filed its second salary-fixing indictment, which also alleges a conspiracy to affect workers. As noted here and here, these charges were the culmination of the Department of Justice`s policy, contained in its 2016 Antitrust Guide for Human Resources Professionals (“Antitrust Guide”), to lay criminal charges against employers who conspired to reduce wages, either through wage setting, or through naked non-poaching agreements. In 2018, the Supreme Court ruled that waiving class actions in arbitration agreements did not violate federal labor law. In 2019, the Supreme Court ruled that arbitrators, not courts, should decide whether arbitration agreements are applicable – even though the wording of the agreements suggests that there should be no arbitration – if the agreements give arbitrators the power to make that threshold decision. JOHANNESBURG – The Constitutional Court asked when the government realized it could not afford the 2020 public sector wage increases and when it realized that the agreement guaranteeing the increases is invalid.
Lawyers for the public sector trade unions were involved in the case, with the applicants arguing that the Labour Court of Appeal had wrongly ruled that the agreement was invalid. The Constitutional Court has yet to rule on a motion to overturn a decision by the Labour Appeals Court that allowed the government to refuse a pay rise for the final year of the three-year agreement. The unions said the agreement was a contractually binding document that became an integral part of workers` working conditions when it was signed. At the time of the second indictment, we stated that the indictments claimed that collective bargaining and no-hole agreements were illegal per se, meaning that the agreements were considered illegal without proof of their anti-competitive effects. We also explained that no case directly claimed that a conspiracy to agree on wages or an outright agreement on the absence of poaching per se was illegal and that the law was not settled on this issue. Given that Section 7-1,100 of the DOJ Manual generally limits the prosecution of Violations of the Sherman Act to cases involving agreements that are in themselves illegal, we predicted that these charges would lead to decisions analyzing whether wage-setting and not poaching agreements per se were illegal. It was therefore not surprising that the defendants in the first wage-fixing case dismissed the charges, arguing that the alleged wage negotiation conspiracy was not in itself a violation of the Sherman Act and that they had not received a fair warning that the conduct in question was criminal. The government argued that it could not afford to comply with the agreement due to budgetary constraints. In addition, said lawyer Pedro van Wyk of the National Union of Public Service and Allied Workers (Nupsaw), there is concern that if the agreement is found invalid, it could lead to a catastrophic situation in which the government “sues all civil servants” for the part of the agreement that the government has respected for the first two years.
In a recent case, the Supreme Court heard oral arguments in disputes that could affect labour arbitration disputes. The case concerns when federal courts have the power to confirm or set aside arbitral awards. The state`s wage bill accounts for nearly a third of its consolidated spending. The Justice Department`s victory over the application for dismissal in the Jindal case is a clear indication that the antitrust review of the labor market will continue. And the Justice Department has not limited itself to plots limiting wages. On the contrary, the government has also intensified the enforcement of “no poaching” agreements for employees. In January 2021, the DOJ accused Surgical Care Affiliates, LLC of allegedly conspiring with a Texas-based company not to ask each other for high-level employees, which, according to the indictment, was in itself illegal as a contract allocation agreement.5 Companies should closely pursue both cases to monitor how the DOJ enforces the Sherman Labor Market Act. The lack of prior prosecution for a wage agreement does not make the lawsuits unconstitutional, the court concluded. The defendants had been sufficiently informed that the wage agreements themselves as price agreements were illegal and were subject to prosecution. As the court noted, “the absence of criminal decisions only shows the unfortunate status of the defendants as the first two people the government has prosecuted for this type of behavior.” 4 South Africa may have to raise taxes, borrow more and lay off workers if the government is forced to implement a civil servants` wage increase that was part of a 2018 deal. .