/ 14 March 2014

Union battles spell trouble for business

The new ambitions of Numsa has upped the ante for future business and labour relations.
The new ambitions of Numsa has upped the ante for future business and labour relations.


It seems like only yesterday that the labour landscape was relatively simple – with a dominant union federation, which spoke more or less with one voice for labour. This federation, Cosatu, was in alliance with the ruling party and the arrangement provided relative stability in the labour market.

But that was yesterday, or at least not too long ago.

This landscape has now fractured along at least two fronts. On one side is the 100 000-strong Association of Mineworkers and Construction Union (Amcu) rising unexpectedly to feature in ongoing labour disruptions on the platinum belt. And on the other is Cosatu's largest affiliate, the National Union of Metalworkers of South Africa (Numsa), attempting to overhaul the federation and openly opposing the tenets of the ANC – announcing intentions to form a generalist union, and prompting expectations that it will eventually form its own political party.

Although Amcu, which has been leading a seven-week strike in the platinum belt, is insisting that it will not be politically aligned, the Numsa dispute with Cosatu is a political one.

The union's socialist stance is seen as far more radical than that of the ANC. A key point of departure between the two groups is the union's rejection of the National Development Plan. Although the ANC embraces the plan as its platform for economic policy, Numsa rejects it as something that "seeks to postpone the resolution of poverty, unemployment and inequality to 2030".

In one analyst's opinion, things could become "nasty" after the elections if Numsa continues on its current course, with the ANC employing various tactics to undermine its credibility.

Numsa also rejects certain fiscal priorities highlighted by the prevailing leadership, such as the strong emphasis on containing government debt. It "is not happy about government concentrating on meeting certain financial targets like reducing the deficit, if this means that ordinary people will suffer," the union's website reads. The union calls for the immediate nationalisation of mines and other key sectors of the economy.

Central to the dispute is trade union leader Zwelinzima Vavi, the suspended general secretary of Cosatu.

Vavi, whose views largely match those of Numsa's, was suspended by the federation on August 15 last year for having an inappropriate relationship with a subordinate on Cosatu premises during work hours. Numsa remains stubbornly loyal to Vavi and demands his reinstatement, whereas many Cosatu affiliates want him ousted.

A flavour of militancy has begun to taint the labour-negotiation environment, characterised by Amcu's take-it-or-leave-it demand for a minimum basic salary of R12?500 that has seen the platinum sector stall for seven weeks.

In its attempt to widen its net, Numsa seems intent on entering the beleaguered mining industry. In December, it pledged to donate money to the families of the Marikana victims, people who were mostly members of Amcu and the National Union of Mineworkers (NUM). Numsa claimed it was striving to give the victims a better Christmas than they had in 2012, but the undertones were clear: We will do for you what your union will not.

But what will the effect be of a third union with leftist economic views in a sector such as mining?

"I think business must get itself ready for a very volatile period of industrial relations," said John Brand, a director and alternate dispute resolutions specialist at law firm Bowman Gilfillan. "Unions are trying to one-up each other. There's a likelihood of unrealistic demands and strike action to outdo each other."

Most analysts attribute the often violent wage demands for increases of between 60% and 200% made by the NUM and Amcu over the past months to a battle for membership between the two.

Were Numsa to join the fray, said Brand, demands could become even more extreme. "I think Numsa might want to show it's tough, if not tougher than Amcu," he said.

Nevertheless, the mines have not shown any outward concern about Numsa's latest movements. "I have to say I haven't heard any such concerns expressed," said a senior source in the mining industry who asked not to be named.

"Numsa has been around for 30 years and more in various guises," he said. It is already represented in some smelters in the mining sector. Despite the fact that Numsa "talks radical", companies are familiar with their presence and comfortable with the fact that they have "long experience with collective bargaining", he said.

"To me I don't think Numsa has changed particularly much," said the source. "They've always been occupying [the left] part of the political spectrum. To me it's the other part of Cosatu that has changed. There is less space for those who are independently minded."

Nicolas Pons-Vignon, a senior researcher for the Corporate Strategy and Industrial Development research programme – part of the school of economic and business sciences at the University of the Witwatersrand – agreed.

"I think, if anything, a strong union like Numsa has been a very useful partner in a number of sectors," said Pons-Vignon. With the NUM seeing a decrease in membership, Numsa has taken over as the largest union in Cosatu. "What's been problematic in the mining sector with the rise of Amcu is that [they lack experience in collective bargaining].

"In some sectors, as in the mining sector, the companies really don't have a union with whom to talk." Companies, particularly those in manufacturing, should not be worried about a stronger Numsa, given its support of industrial policy, said Pons-Vignon.

But Brand points out that, although the union has a long history with collective bargaining, its emphasis is on political ideals. "Numsa secretary Irvin Jim is not on a collective bargaining mission; he is on a revolutionary mission," said Brand.

"For mutual gain in collective bargaining, you need to have parties who respect each other's integrity and respect that employers have legitimate interests to pursue. But Numsa has a view of abject hostility to private capital. They expressly say they're waging a war against capitalism."

Although the union has engaged in collective bargaining for decades, some argue that the protracted length of its strikes has meant limited gain for its members. Last year alone, its various members downed tools for eight successive weeks in the automotive sector. The subsequent increases agreed to varied between 8% to 10%. But workers are believed to lose 2% of their annual salary for every week they strike.

According to the March 2013 Strategic Bargaining Monitor, Numsa's median wage increase in 2012 was 8%, whereas the NUM's median increase was 10%.

When asked for his thoughts about Numsa's intentions, ANC secretary general Gwede Mantashe told the Mail & Guardian: "I'm not worried about that. If Numsa wants to be a general union, it will be a jack of all trades and a master of none. Because the power of [the trade unions] is not in numbers; it is in their knowledge. They won't replace the NUM … Amcu is trying now but it can't replace the NUM in terms of knowledge."

Mantashe said that if Numsa did push for unreasonable wage increases it would ultimately weaken the union. "The more you raise your demand unreasonably, the sooner you collapse yourself," he said.