Trade Union and Agent Shop Agreement In Tanzania
March 15, 2022

Tanzania indicates impressive economic growth which has significantly fostered the country to be profiled as a low-medium income country in 2019. This is also a positive indicator in the labour market where the real minimum wages continue to deteriorate slightly, supporting inequality on the rise and weak poverty reduction during the recent years. The recent legal reforms have resulted in improved interests of employees mainly due to the improved trade unionism in working places. However, the legal framework to protect unionism’s rights has flaws concerning international standards. The informal economy is widespread, creating loopholes in labour and business regulation, often due to workers’ and employers’ lack of awareness in trade unions and their incentives.

This article is therefore prepared to address the meaning of trade union, objectives of a trade union, who can be members and applicability of dues to members and non-union members.

It is important to note that the constitution of the United Republic of Tanzania of 1977 (as amended) forms the basis upon which the fundamental rights of association to belong to any organization are founded. Article 20 (1) states that every person has the freedom, to freely and peacefully assemble, associate and cooperate with other persons, and for that purpose, express views publicly and to form and join with associations or organizations formed for purposes of preserving or furthering his beliefs or interests or any other interests. In Tanzania, trade unions were initially formed to complement the constitution under the Trade Union Act No. 10 of 1998 (Chapter 244). However, the enactment of the Employment and Labor Relations Act No 6 of 2004 repealed Act No. 10 of 1998 and thereby making Act No. 6 of 2004 a regulating law of the trade unions.

Act No. 6 of 2004 provides a legislative framework on the formation, registration and general operations and management of trade unions. It also sets the road map for strike and lockout action, collective bargaining, and employment dispute resolution. The Act defines trade unions as any number of employees associated together for the purpose, whether by itself or with other purposes of regulating relations between employees and their employers or employers’ association to which employers belong. This entails that trade union is the organized groupings of wage and salary earners with the purpose of bringing to bear the economic and social interests of their members in labor relations and to maintain or improve employment conditions of their members. Workers’ unions provide a forum through which collective bargaining is used primarily to secure workers’ economic rights.

According to International Labour Organization, the primary objectives of Trade unions is to improve working and living conditions and to represent workers’ interests, to offer responsive cooperation in improving levels of production and productivity, discipline and high standard of quality. They are also aimed to secure fair wages for workers, to enlarge opportunities for promotion and training, to promote the identity of worker’s interests with their industries, to cooperate in and facilitate technological advancement by broadening worker understandings of their underlying issues, and to influence the state by making it more concerned about worker’s rights.

With that said, the application of trade union dues varies between members and non-members. However, there has been a misconception in the application of these dues whereby employers are deducting from their employees and remit the same to the trade unions irrespective of whether the concerned employee is a member or not. This has raised various issues and most especially on the question that membership to a trade union or any other form of groupings should be voluntary opt-in and opt-out.

In addressing these issues, it is trite law that membership in a trade union is a voluntary act and employees are not obligated by any law to forceful be a member of any trade union and be responsible for its underlying obligations. What is mandatory is for the concerned trade unions to be recognized by employers as long as that union is dully registered and employees of the concerned employer are registered with that union.  Recognition is normally done by way of written notifications from trade union itself to the employers of the registered employees. Once notification is done, the employer shall have knowledge of all registered members who shall then seek confirmation from respective employees and thereby start making deductions of union dues immediately.

As stated above, membership to a trade union or any other form of grouping should be voluntary opt-in and opt-out. That is to say, membership to a particular trade union should not be mandatory, employees should choose on their own whether to be members or not. In Tanzania, there has been a misconception about this. This is because employers are being directed to deduct trade union dues from their employees’ salaries and remit the same to trade unions without the consent of respective employees and regardless of whether these employees are members or not. The misconception is grounded on the fact that as long as 50% or more of employees in the employer’s workplace are members of the respective union, the employer is required to remit dues to the trade union for all his employees including the non-members.

Our laws under section 61 (1) (4) and (5) of ELRA, require deductions of union dues to be implemented to only employees who are voluntary members of the respective trade unions and such deduction is subject to employee’s authorization. There is nowhere the law compels employees or imposes a force on employees to become members of the respective union and be subjected to these deductions. The law goes further to nullify all agreements that compel employees to be members of the trade union under section 72(1) of the ELRA.

The law gives an alternative to addressing concerns of the employees who are non-members in order to ensure all employees regardless of their status at a particular trade union and workplace are served to their best interest. In this, the law introduced what is called Agent Shop Fee (ASF) applicable and payable by employees who are non-members of the trade union.  Normally this fee is stated to be equivalent to BUT not more than the fee payable to trade unions by registered members.

Take cognizance that this ASF is not automatic and neither is it subjected to employees without legal arrangements. There are various conditions that must be met before imposing this fee on employees who are non-members. These conditions are;

  1. A trade union must be recognized by the employer
  2. Employees registered with that union must be a majority
  3. There must be Agent Shop Agreement between employer and trade union
  4. Trade union when addressing employment issues should address for the benefit of all employees (members and non-members). This means an employer must ensure and recognize that the trade union will be Bargaining Agent for both members and non-members.
  5. The Agreement does not compel employees to be members of such trade union
  6. The agent fee to be imposed on the non-member employees is equivalent or less than that imposed on members
  7. The fee is used to address the social-economic interest of non-member employees and it is paid to an account separate from the one used to pay members’ dues.

With that said, the trade union shall have to consult with the employer and upon deliberations the two parties shall develop what is called Agent Shop Agreement. Once the two parties enter into this agreement, the Agent fee will be effective for deductions from non-member employees. At this stage, employees will not be part of the agreement but for obvious reasons they will be informed by the trade union and of course benefit from this mutual agreement.  This is the best option in order to ensure all employees are represented and their interests and concerns are not left behind during deliberations of trade union and employer for membered employees. In essence, it shall eliminate forms of discrimination because normally deliberations with trade unions will better employees’ affairs and if it applies to only members, it will be clear discrimination to non-members.  All these are governed by provisions of section 71(c), 72 (1), (2), (3) and (4) of ELRA.

The Agent Shop Agreement can be terminated at any time provided that the trade union is no longer representative or when recognition is withdrawn. It is therefore an option of the employer to enter or not enter into the said Agent Shop Agreement with the trade union in order for an employee to be subjected to the agent fee. It is clear that regardless of the agreement, non-members are not forced to join a trade union and the agent fee is payable only if the agent shop agreement is executed by the parties. Short of that, employees should not be subjected to deductions.

With regard to what type of employees do the deductions applies, generally, the law is silent on differentiating deductions of union dues and Agent fees in terms of the length of employment. However, the very law recognizes employees of both short- and long-term contracts and says deductions for union dues apply to employees who are members, while agent fee applies to non-members provided that the conditions explained above are met regardless of the length of their employment.

Therefore, to us deductions of union dues which is applicable to union members shall not be affected by the length of the contract. However, on deduction of Agent Fee, it is our considered views that employer should take a creditable accord to the length of employment of the respective employee before making a decision. This is because these are non-union members and they may be serving a very short-term contract like one to three months or saving for specific tasks only and once they are done, they will be gone hence subjecting them to these deductions would seem unfair.  But if a temporary employee is employee employed under a contract of one year or more, these deductions should apply similarly to the long-term employees provided that the conditions for agent fee are met.

In addition to that, the current law recognizes three types of employment contracts. That is to say;

  1. Contract for unspecified time ie. Long term employee (mostly applicable to unskilled)
  2. Contract for a specific time (designed specifically for skilled employees ie. professionals and managerial cadre) and
  3. Contract for specific tasks (short terms and preferably consultants).

So, when considering for Agent Shop Agreement, employers should critically analyze which employees are non-members and what type of agreement are they engaged. If they are members of a trade union regardless of their nature of agreement they should deduct and remit the same to the respective trade union.

 

Written by:

Bertha Nanyaro, Advocate,
Victory Attorneys & Consultants,
IT Plaza Building 1st Floor,
Ohio Street/Garden Avenue,
P.O. Box 72015,
Dar es Salaam, Tanzania.
+255 752 089 685
[email protected]

Victory Attorneys & Consultants © 2022

Augustine Dominic Shio

Managing Partner

Augustine Dominic Shio is also known as Mr Shio is a highly sought-after and widely recognized criminal law expert with more than 30 years of experience advising and assisting corporations and individuals charged with white-collar crimes.

Overview

Before founding the firm Mr Shio held several positions in the public sector, he served as a Principal State Attorney at the Attorney General’s Chambers, Legal Advisor at the President’s Office (Commission for Enforcement of the Leadership Code), Director of Legal Services and Complaints at the Ministry of Home Affairs and retired as a Deputy Director of Public Prosecutions at the Directorate of the Public Prosecutions.

Mr Shio is a recipient of the Presidential Medal for his distinctive public services and ethics of the highest order. His distinguished aptitude in handling complex criminal cases, particularly money laundering, economic and organized crimes has enabled the firm to handle high profile criminal cases in Tanzania.

Practice Focus

As the firm’s head of the Financial & Organized Crimes Department, Mr Shio represents corporations and individuals in the telecoms, media & ICT, mining, oil & gas and banking sectors in high profile criminal cases. He has advised and prepared legal compliance models and for large scale agribusiness operators, public listed companies and securities dealers and brokers in line with sector-specific laws.

He possesses vast experience in advising multinational corporations on money laundering and tax evasion throughout the life span of their commercial transactions.

Mr Shio has represented clients in major plea bargaining negotiations at the office of the Director of Public Prosecutions. He is renowned for closing some of the best pleas deals in the country on behalf of many locals and expatriates charged with money laundering, economic and organized crimes and cybercrimes. Additionally, Mr Shio consults and assists criminally charged individuals to secure pre-trail and post-trial bail on serious criminal charges.

Education

Mr Shio holds a Bachelor’s Degree (LL.B Hons) from the University of Dar es Salaam, Certificate in Criminal Justice and Treatment of Offenders from the United Nations Institute (Fuchu, Japan). He is a certified criminal law expert in Money Laundering and Terrorism.

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