Labour federation Cosatu has vowed to press for higher pay increases during this year’s round of wage negotiations, despite the country’s difficult economic conditions.
Figures released by Statistics SA last week showed that in the fourth quarter of last year South Africa’s economy contracted for the first time in 10 years, indicating that the country may slip into a recession.
The hardest hit sectors include manufacturing — which plunged a record 21.8% — mining, automotive and retail. Combined, these sectors have already retrenched more than 60 000 workers in the past year and are contemplating off-loading 50 000 more as a cost cutting measure.
Cosatu president Sdumo Dlamini said that at its central executive committee meeting last week the federation had resolved to push for double digit salary increases across all sectors during this year’s wage negotiations.
Cosatu’s affiliated union South African Transport and Allied Workers’ Union (Satawu) fired the first salvo last week, demanding an average wage increase of 47.5% for workers within the security industry. Industry employers offered a below-inflation rate of 7.7%. Satawu want employers in the industry to phase out the area and grade systems, which the union says are designed to marginalise black security guards. Most black security guards are in grade E, D and C earning between R1 500 and R2 000 a month, while their white counterparts tend to be in grades A and B, with salaries ranging from R3 000 to R5 000 a month.
Satawu chief negotiator Jackson Simon said the wage system in the security industry was based on the 1956 laws, formulated in a military style. “We want the old system to be scrapped so that all employees, irrespective of colour, can get an entry level salary of not less than R3 000 a month,” said Simon.
The union is demanding that salaries within the industry should be in line with the skills level of individual employees.
Cosatu’s mining affiliate, the NUM, and the federation’s public sector unions will demand salary increases of more than 10% when they begin their wage negotiations in two months’ time, said Dlamini.
“We have received a report on the [financial] trends in all sectors and our view is that workers are running dry of cash because of high inflation and the global challenges. We are not back-tracking on the double digit demands,” said Dlamini. Cosatu acknowledged that, while the global economic crisis affected local companies negatively, the effect should not put pressure on workers.
He challenged employers to reveal their financial position so that workers could determine the extent of the financial pressures they were facing.
“Companies must disclose how they came to the point of making losses. We should first understand if the financial losses are as a result of their inability to manage the cash flow. They should show us how their financials have been over the past three years,” said Dlamini.
He dismissed suggestions that unions should lower their demands to match their proposals which calls for companies to cut down on high salaries and bonuses for senior management. “Our demands will remain relevant for as long as there are huge inequalities between workers and the management. You cannot equate a salary of a chief executive with that of a worker who earns R500 a month,” said Dlamini.
Industry bosses have warned that the unions’ high wage demands could exacerbate the financial situation faced by many companies and may result in further job losses. Kevin Derrick, a spokesperson for the Security Services Employer Organisation, said labour’s high demands were not economically viable for employers. He said more than 75% of security companies’ revenues went to workers’ salaries.
“Business is making profit of between 4% and 6%. Where should we take extra money if, after tax, we make 6% profit?” he asked.