Public interest factors and the jurisdiction of competition authorities in mergers: the consideration of employment under section 12A of the Competition Act of 1998 in South Africa

Abstract

Competition law does not exist in a vacuum. It is interdependent with society and the well-being of individuals inter alia. Under Apartheid in South Africa, there was weak competition legislation with no public interest doctrine which contributed to unfairness to individuals in the employment field. This allowed for monopolisation, skewed concentration of wealth and unfair employment practices. In the Constitutional era in South Africa, legislation was developed which checked the historic disadvantages under Apartheid. This paper focuses on s 12A(3) of the Competition Act 89 of 1998 as it aims to redress employment unfairness in the context of mergers where a public interest assessment is first conducted. Employment conditions are used to cushion the negative effects that mergers may pose when they occur, specifically a moratorium on retrenchments for a specified period of time. This ensures that employees have better prospects of retention or re-employment once retrenched. This enforces the concept of job security.

In light of the above, this paper explores the exercise of judicial power of competition authorities in making decisions on employment matters where relevant precedent and the public interest guidelines are analysed. It is found that competition authorities do have the required expertise to decide on employment in mergers. The process as it stands is time-efficient and cost-effective. Further, this paper explores whether competition authorities are effectively utilising the public interest guidelines on employment published by the Competition Commission. It is found from precedent-analyses that public interest guidelines have not consistently been used meticulously. The guidelines should be codified, especially the provision for effective consultation. Lastly, this paper explores whether competition authorities are misusing their judicial power and overstep their expertise into the labour realm. Hence it considers relevant Constitutional Court cases. It is found that competition authorities do not misuse their judicial power or step beyond their expertise and that the Constitutional Court gives a more generous, purposive and inclusive interpretation to the Competition Act 89 of 1998 which still allows for due deference between competition authorities in the Competition Commission, the Competition Tribunal and the Competition Appeal Court