Labour Watch

Labour turmoil shaping up to major economic threat

Strike season, again
Strike.jpg

Developments on South Africa’s organised labour front are posing a bigger short-term threat to the country’s economy than even the Eskom electricity supply crisis.

In some ways the two might even become intertwined in the near future as some trade unions have embarked on political/ideological campaign against elements of Eskom’s turnaround strategy. And to further complicate matters, the utility might be forced to reduce its number of white, mostly highly skilled and experienced, employees to reach ‘equity’ targets in five years’ time.

 In the meantime, as has become an annual occurrence, this year’s ‘strike season’ looks set to start within the next few weeks.

Towards the end of January it was foreseen that probably before the negotiations between government and central and provincial public service unions, which opened in September last year, are completed negotiations in the local government sector will start.

Negotiations in the gold and coal mining sectors are to follow short on the heels of the public sector.

That time has arrived now with the current Public Service Coordinating Bargaining Council wage deal for national and provincial civil servants expiring at the end of March. The local government sector’s existing 3-year wage deal expires in July.

With what is known in the public domain at this stage, it seems highly likely the negotiations will become deadlocked pretty soon at all three government levels.

Unions representing civil servants form all three levels of government – national, provincial and municipal – have put a demand for a 15% salary increase on the table. Government, having budgeted for a maximum 6.6% rise in its remuneration bill, has offered a 5.8% to national and provincial civil servants and the South African Local Government Association (SALGA) has offered 4.4% to municipal employees.

Government does not have much room to manoeuvre and as reported last week, even lifting its offer to the unions by one percent will wipe out the overall state reserve funds provided for in last month’s budget.

In the meantime it was reported that public sector unions affiliated to the Congress of SA Trade Unions (COSATU) lowered their demand to 10%, still leaving a 4.2% gap between the parties. The South African Municipal Workers’ Union (SAMWU) in turn has rejected SALGA’s offer as “ridiculous”.

Strikes in the public sector in the midst of widespread public discontent with service delivery, look increasingly likely during the coming weeks.

Mining sector

In the mining sector, where last year’s five-month-long strike at platinum mines had a devastating effect on the South African economy, the two-year wage agreements in the gold and coal mining sub-sectors both run out  after June this year. 

The National Union of Mineworkers (NUM), the majority union in the coal and gold mining sectors, said it will submit its wage demands for both sectors by the end of this month.

The Deputy Minister of Mineral Resources Minister, Godfrey Oliphant, claimed in a media interview the country has learned its lessons from last year’s platinum strike.  "Both for industry and labour, it was a hard lesson of that long strike of five months," he said and claimed these lessons will help prevent a similar stoppage during gold mining sector wage talks this year.

NUM’s big rival, which became the majority union in the platinum sector, the Association of Mineworkers and Construction Union was (AMCU), the driver behind the platinum strike. It is presently still involved in an intense recruitment drive among NUM members in the other mining sectors.

If history and recent AMCU claims of intimidation tactics being employed among its recruiters are indicators, combining with the single-sector based agreement imbedded in South African labour legislation, this rivalry could still impact heavily on the wage negotiations. AMCU has already indicated that it will be lodging its own demands in April.

It remains to be seen if Mr Oliphant’s optimism is justified.

In the meantime, especially from the gold mining sector, the indications are that mining companies will be taking a hard line.

The CEO of Sibanye Gold is reported by Reuters as having said that while he remains optimistic about negotiations “we won’t be bullied or intimidated”.

He also warned that South Africa’s gold industry was in a “sunset phase” and needed to be “nurtured and not raped”.

State enterprises

To further complicate the scene with the potential to add to difficult economic circumstances for the country, NUM with the Food and Allied Workers Union (Fawu), climbed onto the South African Communist Party’s political/ideological bandwagon regarding the woes of two state enterprises.

They joined the SACP’s call that government should intervene to prevent Eskom from selling noncore assets to help them survive, claiming it will amount to privatisation by stealth.

NUM will embark on a “Save our Eskom” campaign, including interventions to try and prevent the sale of the Eskom Finance Company, which provides home loan facilities to its employees. 

South African Airways seems to be heading for a confrontation with cost-saving retrenchments of staff and at the beleaguered Post Office the troubles are not over after another crippling strike by the Communication Workers Union (CWU) was avoided courtesy of an interim interdict issued by the Labour Court. The CWU said it would not abandon its demands for a 15% increase and the conversion of casual positions to permanent ones.

Into this pot can be thrown the ongoing internal squabbles and power struggles of COSATU and the danger that the country might be heading for a “winter of discontent” on the labour front becomes very real.

by Steve Whitemen

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