Assignment 4 2025
Unique number:
Due Date: 3 October 2025
INTRODUCTION
Ubuntu AutoTech South Africa (UASA) is facing a period of intense change as it introduces
automation and digital transformation to remain competitive. While these changes are
necessary for the long-term success of the company, they have also created significant
conflict between management and trade unions. Issues such as wage negotiations,
retrenchments, compulsory reskilling, and the role of collective bargaining structures have
highlighted tensions about fairness, trust, and compliance with labour law. The case study
raises key questions about the application of the Labour Relations Act, the functions of
bargaining councils, organisational rights of unions, and the requirements for fair
retrenchment and dispute resolution. It also demonstrates how poor communication and
symbolic consultation can deepen mistrust in the workplace. This assignment will critically
examine these challenges and suggest ways in which UASA can strengthen collective
bargaining, improve labour relations, and ensure fair and lawful employment practices during
automation.
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Great care has been taken in the preparation of this document; however, the contents are provided "as is" without any express or
implied representations or warranties. The author accepts no responsibility or liability for any actions taken based on the
information contained within this document. This document is intended solely for comparison, research, and reference purposes.
Reproduction, resale, or transmission of any part of this document, in any form or by any means, is strictly prohibited.
, +27 67 171 1739
INTRODUCTION
Ubuntu AutoTech South Africa (UASA) is facing a period of intense change as it
introduces automation and digital transformation to remain competitive. While these
changes are necessary for the long-term success of the company, they have also
created significant conflict between management and trade unions. Issues such as
wage negotiations, retrenchments, compulsory reskilling, and the role of collective
bargaining structures have highlighted tensions about fairness, trust, and compliance
with labour law. The case study raises key questions about the application of the
Labour Relations Act, the functions of bargaining councils, organisational rights of
unions, and the requirements for fair retrenchment and dispute resolution. It also
demonstrates how poor communication and symbolic consultation can deepen
mistrust in the workplace. This assignment will critically examine these challenges
and suggest ways in which UASA can strengthen collective bargaining, improve
labour relations, and ensure fair and lawful employment practices during automation.
QUESTION 1: COLLECTIVE BARGAINING AT UASA
1.1: Bargaining Unit and Bargaining Level
A bargaining unit refers to the group of employees who are covered by a collective
agreement. Its composition determines who is represented in negotiations and with
whom bargaining will occur. For example, the unit may include all workers in one
plant, a specific occupational group across different plants, or even most employees
within a company or industry (Bendix, 2019:197). At Ubuntu AutoTech South Africa
(UASA), the bargaining unit is made up of around 1 250 employees who are
production workers, artisans, and technicians below supervisory level.
Bargaining level, on the other hand, refers to the level at which negotiations take
place. It can be centralised, such as industry-level bargaining through a council, or
decentralised, such as company-level bargaining at one plant (Finnemore et al.,
2018:122). In UASA, although the Automotive Industry Bargaining Council usually
conducts wage negotiations at sectoral level, wage talks were held at company level.
Disclaimer
Great care has been taken in the preparation of this document; however, the contents are provided "as is"
without any express or implied representations or warranties. The author accepts no responsibility or
liability for any actions taken based on the information contained within this document. This document is
intended solely for comparison, research, and reference purposes. Reproduction, resale, or transmission
of any part of this document, in any form or by any means, is strictly prohibited.
, +27 67 171 1739
1.2. Assessment of Company-Level Wage Bargaining at UASA
In South Africa, the Labour Relations Act (LRA) provides the framework for collective
bargaining and promotes centralised bargaining where possible. Centralised
bargaining usually takes place through bargaining councils, such as the Automotive
Industry Bargaining Council (AIBC), which represent both employers’ organisations
and trade unions across a sector. The purpose of centralised bargaining is to ensure
uniformity in wages and conditions of employment, reduce fragmentation of
agreements, and promote stability in an industry (Finnemore et al., 2018).
At Ubuntu AutoTech South Africa (UASA), wage negotiations were conducted at
company level rather than through the AIBC. While company-level bargaining can
allow for flexibility and tailoring of agreements to a specific workplace, in this case it
was problematic because UASA is already a member of the AIBC, which has
jurisdiction over wages in the automotive sector. The AIBC Collective Agreement
(2024–2027) explicitly covers wage increases, retrenchment procedures, and
training allowances, meaning that wage negotiations outside this council may conflict
with legally binding agreements extended to the entire sector (Nel & Kirsten, 2020).
By bypassing the AIBC, UASA and its unions risked creating parallel agreements
that may not be enforceable under the LRA. Section 31 of the LRA states that
agreements concluded at bargaining councils are binding on the parties and Section
32 allows for their extension across the sector. This means that any company-level
agreement could be invalid if it contradicts or undermines the sectoral agreement.
Therefore, while management and unions at UASA sought company-level bargaining
to address immediate concerns about automation and retrenchments, this approach
was not correct in terms of the law. Centralised bargaining through the AIBC
remained the proper structure for wage negotiations in this industry. Company-level
discussions could supplement but not replace the AIBC framework (Bendix, 2019;
Venter et al., 2014).
Disclaimer
Great care has been taken in the preparation of this document; however, the contents are provided "as is"
without any express or implied representations or warranties. The author accepts no responsibility or
liability for any actions taken based on the information contained within this document. This document is
intended solely for comparison, research, and reference purposes. Reproduction, resale, or transmission
of any part of this document, in any form or by any means, is strictly prohibited.