Dealing with strike negotiations

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Finding the find common ground between employers and employees in the negotiation process can be tricky, yet failure to so can be costly for both parties Nritika Singh looks at the fundamental problems of the negotiation process and how to overcome them.


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The traditional strike season may be over for this year, however this does not mean that some of the unions are not still pushing for higher wages for their members. Unfortunately this comes at a hefty price for both employers and employees, due to increased overheads, downtime, lost productivity and the, "no work no pay' principle.
Nritika Singh, MD of Isilumko Staffing, a national recruitment company, which offers temporary, flexible and permanent staff, says, "When unions and some non-unionised organizations decide to go on strike to demand higher wages, the percentage increase is often unrealistic, with the contention that if one starts at an inflated level, it will lead to a better offer from the employers. However this inevitably results in strong resistance from employers because in most cases the increases are financially unaffordable.

"On the other hand there are many cases where the employers aim is to get their labour at the lowest possible rate, often resulting in minimum wages that do not meet inflation and are a strong motivation to go on strike.
"One needs to look at the fundamental problems in the negotiation process. For a start there is a "them and us? mindset inculcated in many employees, especially those who belong to trade unions. The hostile approach from the shop floor is based on a deep-seated mistrust of management and business owners, including the public sector. The employers on the other hand often see their workers? demands as a form of blackmail to force them into a corner.'
Singh adds, " What is needed is a more mature approach, where there is transparency in the organisations? operation. How does one go about implementing a transparent structure? For a start, management needs to embrace the fact that unions are part of business. They need to also build better relationships with shop stewards. Perhaps have weekly or bi-monthly meetings, during which they take the shop stewards into their confidence, explaining the current business performance of the company or public enterprise. Management should even embrace shop stewards and see them as business partners.
"The shop stewards can then pass this information on to their constituents and members, in turn by way of weekly or bi-monthly meetings. If this can be successfully achieved, then a culture of transparency will go a long way to a better understanding between the employers and employees and reduce the hostility.
"It must be stressed that there is no universal solution, no one easy fix. Many areas that can be considered are inter alia: having a transparent, open relationship with the unions through their shop stewards; improving working conditions; paying acceptable wages by making comparisons with other similar businesses and keeping pace with the rising cost of living.'
Singh says if the shop stewards have kept their members informed about the economics of running the business profitably and have relayed this information to their union constituents, even if a strike ballot is successful after a vote, at least some of the animosity towards management will have been reduced. Tactically this would then mean that when the two parties come to the negotiating table, there is a better climate of understanding. It is also a reality check to diffuse any possible hostility from the unions. The "them and us? mindset has a better chance of being changed over a period of time, with the ultimate goal being a win-win situation for both parties.
The current reality is the alarming cost of industrial disputes that are not resolved before strike action is taken. According to the *Annual Industrial Action Report for 2010, data recorded by the Department of Labour shows that the number of working days lost to work stoppages last year were the highest by historical standards, with approximately 20,674,737 working days lost from about 74 work stoppages. This increase is attributed to the public service strike that started in July 2010 and ended in August 2010. Although the number of work stoppages was higher than in the two previous years (ie 57 in 2008 and 51 in 2009) at 74, they were lower than in 2006 and 2007 respectively.
The months from June to September remain the strike prone period of the year as about 18,788,794 working days were lost during these four months in 2010. About 1,593 working days were lost to work stoppages in 2010 compared to 119 in 2009. In other words for every 1,000 employees in South Africa in 2010, about 1,593 days were lost due to work stoppages. Another interesting statistic is that the median wage settlement as reported by the Labour Research Service in 2010 was about 9%, which is above the level of inflation in South Africa.
Although mining and quarrying have traditionally been plagued by high levels of strike activity measured in working days lost, in 2010, the community, social and personal services industries had the highest working days lost of 18,866,531, about 91.6% of the total working days lost in 2010.
In 2010, approximately R407,082,302 (that is R407 billion) in wages was lost due to the participation of employees in work stoppages, compared to R235,458,414 in 2009. This is a disturbingly high figure.
Singh concludes, "If the unions and their members are kept well informed about an organization?s operating performance relating to prevailing economic circumstances, then the chances are that they will approach negotiations with employers with more realistic wage demands. This will prevent a protracted and sometimes acrimonious period before any agreement can be reached.

"Some of the explanations of strike occurrences would indicate that workers strike when unemployment is low or decreasing, as they have greater bargaining power. In other words, workers strike after they have become accustomed to rising wages, when wage increases diminish. Unions hold that the basic function of the strike is a leveling mechanism to square up the unions? membership wage expectations with what the employer may be prepared to pay. Establishing common ground, improving relationships, and establishing trust and transparency between employer and employee should be the objective of every organization. This will hopefully lead to a reduction in strikes and the concomitant cost to the country.'
*Statistical source: The Annual Industrial Action Report for 2010.


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