It’s do or die for NUM and AMCU as they prepare for Mother of all Trade Union Wars

Andrew Levy
Andrew Levy: Major ructions from looming NUM/AMCU showdown

The news cycle is like the proverbial caravan. The dogs bark daily, but it keeps moving on, always seeking out the freshest stories. In the process, some obvious flashpoints get ignored – and when they do hit, surprise everyone. Especially Mr Market. One of the biggest “surprises” waiting to hit South Africa is worsening labour relations. Specifically in the mining sector where the once totally dominant National Union of Mineworkers moved quickly to settle on wage increases after a mercifully short strike. This has put its rival, the upstart AMCU, in a tricky situation. The fledgling trade union has mushroomed by promising to negotiate better wages than NUM. But the mining industry is aware that should it pay even a fractional more to AMCU, that would be the death of NUM. A fate which, right now, is greatly feared. So what happens next? Our go-to guy on labour matters, Andrew Levy, addressed this fascinating subject with me today on CNBC Power Lunch. – AH

 To watch the full interview with Andrew Levy on CNBC Africa’s Power Lunch click here. 

ALEC HOGG: South Africa’s mining industry is in disarray with the continued labour unrest and seemingly never-ending wage negotiations. The country’s mining sector faces increased pressure from a new mining bill that’s proving unpopular with the private sector. So what’s next for mining in this part of the world? Andrew Levy, Labour Relations Advisor at Andrew Levy Employment joins us to unpack some of the major issues. And I guess, Andrew, we can start with labour. It’s all about labour. It’s all about unions. The National Union of Mine Workers accepted an offer from the Chamber of Mines. This isn’t the end of the story though?

ANDREW LEVY: No, absolutely not. AMCU have made it clear that they were not signatories. They’re not party to the agreement and as far as they’re concerned that’s still in dispute. Now whilst they haven’t done anything to actually moderate their position which is an increase of way over 100%, the debate right now is whether or not they are bound by that agreement. That’s something the courts will have to pronounce on, but at the end of the day workers are not going to accept the writ of the courts. We know that. And potentially it looks as if we’re in for possible strike action wherever AMCU may be. NUM may be using this as a strategic opportunity to stage a ‘once and for all’ confrontation with AMCU and see who is the last one left standing.

 ALEC HOGG: Just to go back a little; you say they are still wanting 100% increases in wages. That’s AMCU?

 ANDREW LEVY: It’s even more than 100%. Their initial position was somewhere around 150%. NUM started around 120% but they of course moderated their demands quite quickly and reached settlement within the 8 – 10% range. Obviously that’s what we expect for the AMCU unions, but AMCU are probably going to want to say ‘we can do better than NUM’ and that of course is the essence of inter-union disputes. The one union is always trying to better-ball the other and so it inflates or increases what is already a very, very difficult situation. So we’ve got to wait and see what AMCU are going to do. The problem creates significant strategic difficulties for them.

ALEC HOGG: And for the people in the mining as well, surely Andrew. Let’s just say: if the Chamber of Mines or the mining companies decide to give AMCU even half a percent more than they gave to the NUM members, surely that’s the end of NUM?

 ANDREW LEVY: Absolutely. Once there is a higher level of settlement, then as you say, it just shows AMCU are the better guys to be with. So I think from the Chamber’s point of view – the mine’s point of view – the answer is: No. We’re not going to. Which is why their initial approach is the technical argument which says ‘there is an agreement. You weren’t party to it but 75% of the industry was. Therefore you’re bound and you can’t have a dispute over that one’. And of course if that goes to court it will have to happen quite urgently. But the real risk always is that the unions and/or their members ignore the court and then it would seem almost inevitable that there is a strike and such a strike would have to be a lengthy one. Because if AMCU cannot win the strike and get more, then effectively they’re done for. So it’s do or die. And I think that they would probably be quite circumspect about where they would choose to do it. Obviously they would have to go for a mine where they have huge membership and then they face the additional difficulty that would be certain – that the already agreed increase would be in everyone’s pay packet. And now they’ve got to persuade workers who’ve had the benefit of the increase – they’ve seen it in their pay packet – to go out on strike again. So all in all, whilst observers tend to perhaps overestimate the power of AMCU – and I don’t want to underestimate it –  certainly their position at the moment, strategically, is one which, if I were AMCU, would cause me some loss of sleep.

ALEC HOGG: Andrew, look into your crystal ball. What do you think is likely to happen?

 ANDREW LEVY: Alec, if I take a broader view for a moment and say ‘what’s going to happen with COSATU?’ I think there is a possibility that COSATU would split. And if it does then it’s going to be in the next two to three years and our factory floors are going to be riven with this inter-union dispute at every level. So the outlook for SA’s entire Labour Relations is extremely worrying. At the AMCU level; if AMCU accepts this, which I think would be their strategic better option – don’t risk their membership in an all-out fight and just quietly increase their membership between now and the end of the agreement – then they would become more dominant and I think that would continue. I think NUM is still very vulnerable. If however, they choose to fight on as it were, then in point of fact I think they are in a position where their continued existence is not guaranteed. If you look at AMCU they’ve grown very rapidly over the last 12 to 18 months. One has got to question: is there real depth in the organisation? Is there permanence in the organisation? And I think the answer is ‘probably not’. I have heard AMCU described as two guys and a fax machine. Now I’m not saying that that should necessarily be taken literally but I think they clearly have not got the reach and the organisation that NUM has and of course if COSATU does split that means that a lot of the NUM energy will be directed into the political turmoil that will follow that and the NUM officials…permanent…full-time, will be more concerned about the security of their income than they will be about the wellbeing of their members in the mines. So that in itself would provide an opportunity for AMCU. At this stage the situation is fluid. The only thing that seems reasonably certain is that the probability of continued conflict in specific mines is a good one.

ALEC HOGG: So we know the smart move; if those two men and the fax machine were listening to you they would settle, they would play for time and they would build AMCU to be more destructive force perhaps in a year’s time.

 ANDREW LEVY: That would be my advice to them.

ALEC HOGG: If there’s not the smart move…if they feel the testosterone, they want to go out and strike now: would that paralyse the mining industry?

 ANDREW LEVY: No, it wouldn’t because AMCU’s presence is strong where it is. But where it is, is not right across the entire industry. So it’s not going to stop the industry at all but it could certainly shut down/stop production on the mines where they have their membership. I’d actually have to go and look at how much there are, but it won’t stop the industry.

ALEC HOGG: Andrew, just to close off with: when will all of this come to a head?

 ANDREW LEVY: I think that the next four to six weeks is the critical time. You see, AMCU has got to, even now, serve notice on the employers that it wants to negotiate with. The employers will say ‘sorry, you’re bound’. It will then go to court. The court will make a ruling on the subject. That’s got to happen soon. If AMCU does nothing in the next four to six weeks then there’s going to be an argument for passive acceptance and it would look as if either through good judgment or perhaps just through lack of understanding, they are following the wiser route. So I reckon these four to six weeks are going to be fairly critical which of course also takes us into the Christmas period.

ALEC HOGG:  Thank you, Andrew Levy, Labour Relations Advisor at Andrew Levy Employment.