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Industrial Action

Tallying the casualties after unions strike

Thu, 18 Aug 2011 08:52

Jonathan Goldberg

By Jonathan Goldberg

In September 2010, NUMSA embarked on a strike in the retail motor industry and the size of the strike swelled at its height to approximately 70 000 members, including petrol attendants, motor component manufactures and other workers in the sector. At the outset, the Union demanded a 20% wage increase across the board as well as a cap on the maximum working hours per 5-day week to 40 hours.

Other ancillary demands were for extended maternity leave, the complete abolishment of labour brokers and a 1 year wage bargaining agreement. The employers refused and the strike lasted for 15 days from September 1st 2010.Upon finalisation of the strike, there were substantial shifts in demands and different sectors of employees received differential awards.

Petrol attendants would receive an increase of 10% this year and 9% in each of the next two years. Those employees in component manufacturing would receive a 10% increase this year and 8% in each of the next two years.Workers in other parts of the industry, such as panel-beaters, would receive a 9% increase this year, an 8% increase next year and a 7% increase in the third year.

A 3-year wage agreement was also signed and this heralded a massive victory for the Union as they only requested a 1-year agreement at the commencement of the negotiations.The contentious issue of procuring labour brokers was also influenced and restricted to a maximum of 35% and would be incrementally decreased over the following years.

Interests of employees from strictly car manufacturing plants, including (but not limited to) Nissan, Toyota, Ford, Volkswagen and BMW demanded substantial improvements to their total remuneration which resulted in a strike in August 2010.

NUMSA demanded a 15% wage increase, 100% lay-off payment, the complete abolishment of labour brokers, a 40 hour work week, extended maternity leave, Saturday work to be paid at 150% rates and double pay on Sundays and public holidays. AMEO rejected such demands and the negotiations deadlocked.

It was decided to meet the Union “half-way” and made a final offer of a 7% wage increase and an inflation-link increase over the subsequent 3 years. They rejected the other benefits demanded.The parties settled on simply a 10% wage increase. According to economists, the eight-day strike reportedly cost the industry R3.5 billion rand and led to a loss of 14.6 million working days. The effect on motoring exports and manufacturer image was significant.

It was alleged that the strike cost the employers more than 2 100 cars per day (of which 50% are destined for export markets). It rocked the 16% of the country’s GDP that this industry contributes and employees themselves lost over R8-million per day in total wages and benefits.Intangible losses were also noted, including South Africa’s image as a stable investment target.

Out of all the strikes in 2010, the Public Service Employees strike is the one that seemed to expose public service grievances and employee dissatisfaction to many non-affected citizens. What differentiated this strike from its predecessors was the size: 1,2 million members and 700 000 approximately took part.

Compared to the other current strikes at the same time, the negotiators had a much more realistic approach to its demands. It chose not to start high and end low – which is the traditional market-place approach. Instead, they opted to start with very realistic demands such as an 8,6% wage increase; R1000 housing subsidy and a medical aid parity subsidy.

In response, Government offered them an inflation-related wage increase of 7% (with a 1,5% increase every following year) and a R630 housing subsidy. These offers were rejected by the umbrella body COSATU and the strike started in August.Finally, all parties settled on a compromise: a 7,5% wage increase and a R800 housing subsidy.

Cosatu’s chemical and energy union, CEPPAWU and the General Industries Workers Union demanded a salary increase of more than 10% and a minimum wage of R6000.00 in July 2011. Employers were offering an increase of between 6% and 7%. Pressure intensified on employers, with Solidarity members joining the strikes at Sasol and PetrolSA. The strike is currently on-going with hopes to be resolved at next meeting of 28 July 2011 whereby revised offer is considered.

170 000 metal and engineering workers embarked upon an indefinite strike in July 2011 led by NUMSA and at least five other affiliated Unions including COSATU, the United Association of South Africa (UASA) and South African Equity Workers Association (SAEWA).

NUMSA demanded a 13% wage increase, whereby Employers offered 7%. The strike ended on 17 July 2011 and parties signed a 3 year agreement which included a 10% wage increase for general workers.

In all these strikes except the public service, we see major movement of employers during the strike. Many sectors have concluded increases of 10% across-the-board while inflation is only at a level between 4% and 5%. This is increases in excess of double the inflation rate. The real question is how will this cost be dissolved into the cost of production and what will the consequences be.

Unfortunately if we are honest these settlements will inevitably lead to job losses and as most employers will not be able to pass this cost on to their customers.

The second observation must be that if these settlements are so high why did employers settle so quickly into the industrial action? An analysis of negotiations will show that it takes 3 to 4 weeks to have minimum movement as your offer as an employer to find settlement.

It does not seem good business sense or negotiations to move as much as 3% in a strike. It sends the wrong message and must amount to poor negotiating planning because you must have predicted the strike.