Business is trying to subvert union power by making unions shareholders and offering workers ‘no-strike’ bonuses, writes Jacques Magliolo
The bargaining power of unions is under threat. Recent trends in the market show that management is refusing to compromise during wage demands, but is, at the same time, introducing bonuses for those who do not strike and offering unions company shares.
An investigation into these market movements shows that, instead off waging a wage war with unions, business’ aim seems to be changing to reducing union power and influence over workers, confusing employees and causing dissension among union leaders to the point where trade organisations could virtually become outcasts.
How does business intend to achieve this and can it actually succeed? Experts agree that there is no question some companies would dearly love to break up, or at least confuse, unions’ collective bargaining voice.
This, say the experts, can be successfully carried out if companies “play hardball during negotiations”, can turn unions into capitalists and, finally, if workers can be enticed not to strike. Even if all three trends are coincidental, they could seriously affect unions’ ability to call members to strike.
“When management is unwilling to compromise during wage talks, unions usually turn to workers and ask for strike action. If the union is also an owner, it would be more inclined to strike only as a last resort and, if workers get a non-strike bonus, unions will find it difficult to persuade workers to down tools,” says a consumer analyst.
* Firstly, management is no longer willing to compromise to the extent it has in the past and is definitely adopting a much harder line. The we-will-not-budge attitude during wage negotiations has not been seen in South Africa since prior to the rise of union power. This was aptly demonstrated by Pick ‘n Pay’s stance in only offering R5 more before the strike was called off.
And, the planned union call for a countrywide mass stayaway plan caused many directors to assume that the Pick ‘n Pay strike could move to their industry and found themselves huddled behind closed doors to work out a new approach to rid themselves of the negative effects of labour unrest.
* Secondly, the answer some companies came up with is to introduce a new attractive incentive scheme for workers not to strike. Highveld Steel and Vanadium is one company to say that it will adopt such a strategy in the future.
Financial director Luigi Matteucci says: “This is not a bribe, but an incentive for workers to act in a responsible and businesslike manner.” He indicates that, given the number of working days lost in the past five years, such bonuses would be well worth the cost to the group.
“The bonus would be in addition to the normal Christmas bonus and to annual wage increases,” he says. In fact, workers who do not strike could receive three wage cheques in December.
This type of scheme is being considered by a number of firms. While it seems attractive not to have striking workers, some company directors do not believe that profit margins could sustain such bonuses.
Matteucci disagrees: “Last year we had a lock-out at one of our steel plants, which lasted four weeks and we lost millions of rands.” He adds that “of course we are concerned about labour unrest, particularly when you are in the international market”. He indicates that under any circumstance a four week strike would mean that any company would be unlikely to make deadlines and “you end up loosing credibility and reliability with your clients”.
Mathison & Hollidge industrial analyst Bruce Krugel says: “This incentive scheme would be a 14th cheque and effectively add up to a 7,7 percent increase in the workers’ annual salary.” He believes that this type of bonus would, including a wage increase, amount to about a 20 percent wage rise and “certainly be an incentive not to strike”.
* The third trend became highlighted during the recent takeover of Methold by a consortium of black businessmen, which included the National Council of Trade Unions (Nactu) — South Africa’s second largest union federation with a membership in excess of 350 000 workers. The union is to take up a 13,7 percent stake in the insurance company, which has assets in excess of R7-billion.
Cosatu, South Africa’s largest union federation with nearly a million members, has publicly stated that it is also conducting negotiations with Methold to take up a stake in the new venture.
Cosatu spokesman Neil Coleman says: “No decision has been taken to invest in particular companies.” While this reference relates to last week’s WM&G’s claims that Cosatu is negotiating with Sunbop to acquire a major stake in the company, he does not deny that Cosatu could be, or is, interested in the idea of becoming a shareholder in a variety of companies.
“Cosatu already has large provident funds invested in the market,” he says, adding that “there is an existing mechanism (Community Growth Fund) in place in South Africa to determine which companies to invest in”. While Cosatu claims that it has not made a final decision on whether to enter business, Coleman says that there is no reason why subsidiary divisions within Cosatu cannot invest in the market.
The Methold deal comes close on the heels of Southern Life’s sale of 51 percent equity in African Life to a black consortium and trade unions, and highlights business’ intention of bringing unions to the party in the guise of affirmative action policies.
There is no doubt that conflict of interest will arise, particularly during wage negotiations. In addition, conflicts are bound to occur when it has to be decided how much should be spent on safety methods and other work practices.
Union leaders are adamant that they can successfully wear two hats, one as boss and another as voice of the people. Coleman admits that there are dangers, but that these could be addressed in guidelines and “are issues which have to be looked at”.
At least Cosatu says it is still assessing problems associated with becoming shareholders. Not so with Nactu, which has already taken the plunge. Nactu secretary general Cunningham Ngcukana is on record as having said that he “hopes this deal will allow it to supervise members’ pension fund investments”.
Hopes! Doesn’t he know? Certainly Nactu spokesman Mudimi Maivha doesn’t. He says: “If there is a decision by Nactu to invest in companies, that policy has not reached my desk.”
By themself, these trends do not represent anything sinister, but together they provide a strong springboard for business to stem the blackmail nature of union’s modus operandi during wage negotiations.