Labour Watch

Not much expected from Ramaphosa labour indaba

The present relative calm on the labour front, after two major strikes earlier in the year, could be misleading.

A number of ongoing developments and more potentially disruptive labour situations threaten. Labour relations could continue to be South Africa’s Achilles heel when it comes to investment, growth and job creation.

There is little prospect of relief, even with the labour indaba to be hosted by Deputy President Cyril Ramaphosa next month:

• The-three-month old post office strike is not ending;

• The still unresolved political tensions in the Congress of SA Trade Unions (COSATU) continue to add to the instability;

• The conservative mini budget is rejected by COSATU while a possible public sector strike will play havoc with its numbers;

• The biggest municipal union is doing dress rehearsals;

• Layoffs in key sectors continue as the economy wobbles along, among others.

Although labour relations has become one of South Africa’s biggest challenges, especially since the Marikana tragedy of August 2012, government – and most of the other role-players – has done little if anything to address it.

Since Marikana there have been, among others, massive strikes in the platinum and steel sectors. Apart from the new mineral resources minister, Ngoako Ramathlodi, making some positive noises and ad hoc interventions, government has not tackled the underlying issues.

It was left to the opposition DA to table a private member’s bill seeking to hold trade unions accountable for violence, intimidation and damage to property during strikes. But that is only one small part of the problem and a new law by itself will not have much effect.

In November, and despite its urgency, Mr Ramaphosa will finally host the labour indaba, a full five months after President Jacob Zuma promised it in his state of the nation address. Judging by the recent National Consultative Forum, however, not much more than just another talk shop could be expected.

At indabas like these parties tend to agree on things on which there is already consensus and then agree to agree on more things at some future point. None of the tough issues are actually tackled head-on; no action programmes with targets and deadlines are drawn up; and no tasks are delegated to the parties.

For instance, President Zuma told the recent Mining Sector National Consultative Forum that the participants were at the meeting because “we all believe in finding solutions and in strengthening the country’s mining sector”. Nothing new in that.

Then Minister in the Presidency Jeff Radebe (who also heads National Development Plan implementation) added that “government is aware that achieving this will require all parties to commit to sustainable and lasting solutions”. Still nothing new; still no real action; just more commitments and nice words.

In essence these indabas tend to be little more than opportunities for making nice speeches. The upcoming labour indaba will need to start tabling measures to holistically review and reform the labour relations system, not trot out repetitions of already well-known wish lists.

Against this background, a major part of the paralysis on the part of government is caused by the ANC’s unholy alliance with COSATU. Talk shops and good intentions will achieve nothing while government and COSATU are lovers by night and arch-enemies by day, when COSATU holds government and business hostage – the harsh practical reality of which may soon again confront Finance Minister Nhanhla Nene and his colleagues.

Just as the platinum and metal sector strikes destroyed the numbers and projections of the last budget by Nene’s predecessor, Pravin Gordhan, the public sector unions are set to do the same with Nene’s first medium-term budget policy (MTBPS) statement delivered last week.

In his MTBPS Nene stated that the public service will have to accept inflation-related increases or face staff cuts, and said public service employee numbers would be frozen for the remainder of the medium-term framework.

The public service unions – together representing some 1.3 million employees – have, however, already collectively tabled an opening demand for a 15% pay increase (more than double the August inflation rate of 6.4%), plus a R3,000 monthly housing allowance and a 28% increase in medical aid contributions … enough to bust the bank that Nene now controls.

The unions have also already raised the spectre of strike action if the negotiations, expected to last into December, should deadlock.

The public sector wage bill of R439 billion for the 2014-15 year is one of the government’s biggest expenditure items and poses a risk to the fiscal framework outlined by the Treasury.

Already employing 20% of the total work force in the country (the highest percentage in the world), the public sector continues to grow while all other major sectors have shed jobs. More than 43% of the members of COSATU’s affiliated unions are employed in the public sector.

The chances of deadlock are good. Even in his MTBPS Nene warned that the 15% increase demand was unaffordable and could lead to job losses. However, a precedent has been set: both the Association of Mineworkers and Construction Union (AMCU) and the National Union of Metalworkers of SA (NUMSA) secured double-digit settlements, way above inflation.

Since then economic factors have worsened, putting more pressure on workers’ disposable income, while the broader socio-economic conditions of workers and their communities have not improved either.


Political divisions in COSATU – that have had a knock-on destabilising effect throughout the labour sphere in recent years – are also likely to play a role. COSATU and the ANC task team led by Ramaphosa have failed to find a solution to these deepening ideological, policy and leadership differences in COSATU and the ANC-led governing alliance.

The public sector unions have emerged as the dominant and most militant unions in the ANC-aligned faction of COSATU, strongly opposing NUMSA and its plans for a new workers’ socialist movement and political party outside the ANC/COSATU fold.

They have also been the most vocal advocates for the suspension of COSATU’s NUMSA-aligned general secretary, Zwelinzima Vavi.

Health (NEHAWU), education (SADTU), police and prisons (POPCRU) unions of COSATU, among others, have joined forces with the non-aligned Public Servants Association (PSA) and its 230,000 members in tabling the current wage demand.

They will want to demonstrate visible power to counter defections by public sector workers to NUMSA – which has recently been recruiting members well outside of the metals and engineering sector – and/or to a mooted new public sector union. This also offers motive for the COSATU public sector unions to, like AMCU and NUMSA, to achieve double-digit wage increases.

Last month outgoing Reserve Bank governor Gill Marcus warned that these double-digit above-inflation wage demands were not matched with increased productivity levels and is likely to hamper economic growth.

by Stef Terblanche

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