Undermining SA’s many resources

Few people in South Africa would want to claim that our collective bargaining system is in good shape.

Statistic from the department of labour show that last year 45% of collective bargaining processes were unprocedural and resulted in 17-million working hours lost. This data reflects a system in which both unions and management have lost control and can only undermine this country’s competitive advantage with the outside world.

Criticism of our collective bargaining system ranges from the International Monetary Fund’s call in 2010 for more flexibility in bargaining outcomes, to warnings this year from the Reserve Bank governor that inflationary wage settlements are unsustainable.

Between 1995 and 2010 our public services salary bill escalated by over 50% and we now have municipalities spending more on salaries than they do on services. While South Africa is crying out for improved social services, it is an inconvenient truth that the private sector is a tax generator and the public sector is a tax spender.

Sectoral bargaining
The call by the IMF for greater flexibility in our bargaining outcomes raises questions over our public policy, which seeks to promote sectoral bargaining. The philosophy behind sectoral bargaining is to take the competition out of wages and to focus competition on the quality of service and product rather than on the basis of the price of labour.

Although this philosophy may seek to reduce the exploitation of labour, the advent of globalisation has made the objective impractical for many employers in South Africa who compete, not with local counterparts, but with operations throughout the world.

This year has seen Cosatu announce an intention to campaign for a national minimum wage, but unless South Africa can achieve consensus with its new best friends such as Brazil, Russia, India and China as to what they consider to be an appropriate “minimum social wage” a unilateral national minimum wage in this country has the potential to price us out of the global market place.

A further problem with an over- emphasis on sectoral bargaining is that it limits the scope for productivity bargaining.

Various enterprises within a sector, be they large organisations or small developing businesses, have diverse needs on how productivity may be improved. The philosophies of “rate for the job” and “one size fits all” are problematic in today’s fast-changing business environment.

Much has been made of the allegation that our current labour legislation is wedded to the concept of majoritarianism, meaning “winner takes all”, and certain commentators have sought to attribute this to some of the problems leading to Marikana.

However, the Labour Relations Act leaves the decision about whether or not to recognise a trade union for collective bargaining purposes, and the level at which such bargaining should take place, to the parties themselves.

It is up to employers, should they believe it is in their best interest, to enter into recognition agreements with majority unions.

Joint negotiations
Democracy is not merely a function of who achieves power by securing the most votes, but also how those who came to power govern in the interests of all, taking into account the needs of minorities.

In pre-Thatcher UK, when that economy was strike-prone and seemingly at the mercy of trade union militancy, managers and commentators placed the ills of the economy at the door of trade unions.

However, collective agreements are the joint responsibility of employers and trade unions and neither party can abdicate their responsibility.

Rather than tinker with our law, I would suggest that the future of collective bargaining lies in the hands of the leadership on both sides of the bargaining table.

Negotiators in the collective bargaining process represent not themselves, but their respective constituencies.

Essentially negotiators only have three options when confronted with unrealistic mandates from their principals.

They can directly confront their principals and seek to secure a more realistic mandate, they can ignore the mandate and negotiate the best deal they can and then seek to sell the deal as “the best we could get”, or they can merely accept the mandate, however unrealistic, and let the process take its natural course of conflict, hoping that the consequential pain of lost production and loss of wages during industrial action will bring the parties to their senses.

With many unions facing pressure from their members following the experiences of Marikana, levels of trust on both sides of the bargaining table are in short supply.

It will take brave leadership by both employer and union representatives to instill faith in collective bargaining processes in the coming months.

Pat Stone is the author of several publications, including Wage Bargaining in South Africa, The Adversarial Years – A Chronicle of South African Labour Relations 1980 to 1995 and last year published The Bargaining Game together with the founding of the Bargaining Institute aimed at developing skills on both sides of the bargaining table

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