After it took five months for the platinum strike to be settled with consequences that are so far reaching they are difficult to quantify. It is no wonder that there is serious concern about NUMSA’s strike, how far it can go, and how badly it could potentially damage the industry. The most concerning thing about the strike action that seems to hold the economy ransom, is that its long term impacts are the most dire for the strikers, with wide-scale moves in the industry to look into mechanising as much as possible. Having an in-depth look at the metal workers strike, is Labour Analyst, Tony Healy, he provides some sobering insights into a reality that has taken an unprecedented tone – who knows how long this strike will continue for and what the ultimate price will be? – LF
GUGULETHU MFUPHI: Welcome back to Power Lunch. Well, NUMSA says it will end the strike if the Employers offer a ten-percent wage increase in a one-year deal. The Union is meeting with Employers again today to finalise the offer. Now let’s take a quick look at what Steven Nhlapo, well he’s the Head of Collective Bargaining for NUMSA, told my colleague, David Williams, earlier this morning.
STEVEN NHLAPO: Our members make it clear that in the interests of reaching an agreement we can compromise to ten/ten/ten. Now, we also met yesterday with the leadership and looked at what is currently on the table. We then agreed that since there is a ten-percent on the table, for 2013/2014/2015 agreement, we could then agree with the Employers to enter into a one-year, which is ten-percent for this year. However, I think that is what we are going to put to management today. To cut the strike short, let’s have a one-year agreement, with ten-percent increase, across the board, for all of our workers.
GUGULETHU MFUPHI: Well, that was Steven Nhlapo of NUMSA giving us his view, earlier this morning, but joining us to share his view on the NUMSA strike, and the current wage negotiations is Tony Healy. He’s a Labour Analyst, from Tony Healy and Associates. It’s good to have you with us today, Tony. As you heard Steve mentioning, ten-percent for a one-year agreement, is this a compromise or an unrealistic expectation from NUMSA’s perspective?
TONY HEALY: Well, I think it’s a bit of both. It is a compromise. They’ve come down from their 12 – 15 percent original demand but of course, the Employers are pushing very hard for a three-year deal because a three-year deal does give them industrial peace over that period of time. I think what’s going to happen now is there is going to be a discussion around, what kind of potential three-year deal is possible, in terms of a compromise or whether in fact, the Employers are willing to accept Steve’s proposal of ten-percent for one-year.
GUGULETHU MFUPHI: From an economic perspective, do you think the companies can afford this? We saw what happened with the platinum sector strike and what that did to Amplats’ numbers this morning that were published, can the engineering society afford this ten-percent increase?
TONY HEALY: Well, Gugu, it’s such a big industry. Some probably can and others can’t. You might find that the bigger Employers can and the smaller Employers with say, ten to 12 Employees, will struggle to pay a ten-percent increase and, certainly a ten-percent increase for the next year, for each year over the next three years.
ALEC HOGG: Tony, I’ve been reading the communiqué’s from NIASA, who look after the smaller Employers, and it really doesn’t make good reading at all. How do you advise those companies that have ten to 12 Employees because it appears as though even if one or two of them are NUMSA members, the NUMSA Cadres arrive there and stop work, and stop them from working? There’s dozens, literally, of reports of intimidation, violence, destruction to property, etcetera. How do you advise your clients, when the law doesn’t seem to even apply in this case?
TONY HEALY: Well, the dilemma is, exactly that, Alec, in the sense that regardless of the size, pretty much you fall within the jurisdiction of this particular Bargaining Council. So those smaller Employers are, typically the Employers who suffer the most and find it most difficult to pay the kinds of wages that are being, discussed at this point in time, around the ten-percent mark. The most that one can really do is to recommend, to those clients that they seek exemptions from certain aspects of the obligations, when it comes to the payment of wages, when it comes to minimum wages, and when it comes to benefits as well. However, it is a difficult process. Exemptions are not, granted easily and you are quite right. It is the smaller Employers who really suffer in this whole Bargaining Council system.
GUGULETHU MFUPHI: For Employers who are looking at the situation, we’ve seen strikes unfolding in various sectors across the South African economy. Do you think that, from an employer’s perspective, they might change their strategies, going forward, when it comes to labour? Maybe instituting more mechanisation perhaps, going forward?
TONY HEALY: Well there’s no doubt, insofar as an employer can, mechanisation and automation is, indeed, an option and we’re starting to see that in a number of industries, and that is not necessarily a new phenomenon. Of course, there are certain other industries, where it’s more difficult, for example, in the hospitality industry, so one can mechanise and automate in certain industries, but not in all.
ALEC HOGG: Well, it was very interesting when Gerard Papenfus was here a little while ago, from NIASA, in our studio. He said that a survey they had done amongst their members, people who own businesses, said that 80-percent of them would shut-up shop, if they possibly could. If anybody would offer them anything approaching the value of those businesses, they would do so. Aren’t we getting ourselves into a situation here, where we won’t be able to (a) encourage new people to start businesses in this sector and (b) even keep those existing companies going?
TONY HEALY: I think that’s right and I think it’s really an indictment on the Bargaining Council’s system, where you have minimum wages prescribed over such a key industry type, such as metal and engineering. The industries that absorb jobs are very much your light and medium sized manufacturing, and metal and industry type entities and they can go a long way to addressing many of the job loss problems and job creation challenges that we are faced with. For example, if you are a welder and you are willing to work for less than the current, minimum, hourly rate, you are prevented, and prohibited from doing so, so it stifles job creation. I think the problem lies very much in the fact that we have the Bargaining Council system, which puts a certain prohibitive wage levels on smaller Employers, and dampens job creation and, indeed, it makes it difficult for them to even, break even.
ALEC HOGG: Is this something that somebody should be lobbying the new Minister of Small Enterprises or Small Businesses?
TONY HEALY: I think it’s a golden opportunity, Alec, in the sense that we have that new Ministry. It is something that should be, indeed lobbied and there has, to some degree, been lobbying around this particular subject and issue for some time. However, it flies in the face of, the sort of minimum wage agenda of many Unions, such as COSATU and even NUMSA itself. Andrew has gone on record, very recently, as having motivated for minimum wage legislation, so to tackle or oppose the Bargaining Council system, is akin to opposing minimum wage legislation.
GUGULETHU MFUPHI: So if the Government does step in, what kind of measures do they need to put in place to alleviate the situation?
TONY HEALY: Well, in my view, Gugu, I think that the Bargaining Council system is problematic. It does stifle job creation. It does increase the barrier of entry for many of the smaller Employers. It does make it harder for them to break even. The bigger organisations that have been around perhaps longer that have international contacts, are more able to ride the wave of recessionary periods but less so, the small to medium sized Employers.
ALEC HOGG: What’s this concern that the Unions have about Labour Brokers? Why are they so agitated about that?
TONY HEALY: Well, I think, Alec, they see and, probably to some degree correctly that there are many Labour Brokers who don’t provide decent working conditions, reasonable benefits, and pay extremely low wages, so they have concerns around that. They believe that, because they are not as regulated as they believe they should be that that is an abuse or an abusive relationship between the Employers of Labour Brokering companies and the Labour Brokers themselves. The fact of the matter is, in my understanding, in terms of international research is that even if we ban Labour Brokers; it doesn’t automatically mean that the same number of Employers, employed by Labour Brokers, would then be taken up by Employers directly. My understanding is that international research shows that about 75 percent of Employers, who, up until a point in time, had been employed by Labour Brokers, would be absorbed into the mainstream labour market. I’m a little at loss, in terms of why they insist in promoting this particular agenda item.
ALEC HOGG: Tony Healy is a Labour Consultant and giving us some insights there into what’s going on with the NUMSA strike and some of the issues. I’ll get back to that point that was made right in the beginning that if you have laws, they need to be able to be applied and in this case, well it doesn’t seem to be, and there we have the visuals, as you saw a little bit earlier. Of a guy with a tyre or carrying a tyre in his NUMSA shirt, what kind of a message is he trying to send? ‘Well, if you don’t join us, you know what’s going to happen to you’.
