Judge Piet Koen yesterday reserved judgment in an application brought by five small clothing companies in Newcastle, and by the United Clothing and Textile Association, which could save about 450 factories from closure.

The companies - owned by businessmen originating from Taiwan, China and Hong Kong - want the court to set aside Labour Minister Nelisiwe Oliphant's decision to extend a collective agreement of the National Bargaining Council to clothing manufacturers that were not party to it.

A Centre for Development and Enterprise survey found that only 8% of clothing manufacturers in KwaZulu-Natal, and less than 25% nationwide, were party to the National Bargaining Council agreement but all manufacturers were legally bound to honour it and pay the new minimum wage.

In its court battle against Oliphant and the Southern African Clothing and Textile Workers' Union, the five companies said the minister acted unreasonably in extending the agreement to those not party to it without establishing the effect of such a move.

Four of the five companies said that if they abided by the wage agreement they would have to close; the fifth said retrenchments would be inevitable.

According to the Centre for Development and Enterprise report, written by University of Cape Town professors Nicoli Nattrass and Jeremy Seekings, more than 16700 clothing workers nationwide earn less than the minimum wage.

"If the cost of compliance includes both raising minimum wages and paying unpaid levies to the National Bargaining Council, and outstanding pension contributions, the likelihood is that many factories will be unable to absorb the costs and will close," the report stated.

But union federation Cosatu's KwaZulu-Natal branch yesterday said the threat of closures was a tactic to keep wages low.

The federation's KwaZulu-Natal secretary, Zet Luzipho, said the Southern African Clothing and Textile Workers' Union was expected to begin wage talks with employers by March.

["The employers consider] the demand for a living wage . economic sabotage," Luzipho said.

The union's advocate, Hans van der Riet, said there was no merit in the argument that non-participants in the agreement had been discriminated against by its application to them. He said companies that opposed the agreement had the right to petition for exemption from its provisions.