Savings grace: The provident fund of the South African Commercial
One of trade union federation Cosatu’s biggest affiliates is one missed deadline away from being liquidated, potentially leaving 140 000 workers without a union, in a low-wage sector in which labour is regularly outsourced.
The South African Commercial, Catering and Allied Workers’ Union (Saccawu) has one more chance to pay R30-million to its provident fund or face liquidation, and probable dissolution.
Although negotiations are continuing to prevent it, analysts have asked whether the development means Cosatu has “taken its eye off the ball”.
The union’s debt stems from allegations of the misappropriation of funds. Its provident fund, under curatorship since 2002, has sued the union for money allegedly siphoned off through an investment fund. But the union has denied the allegations.
The union missed its March?9 deadline to pay back the money or face liquidation. Apparently Cosatu’s top brass recently made a last-minute appeal to the provident fund’s curator, Tony Mostert, for another extension.
If the union is liquidated, it will have no control over its finances and its assets will be wound up. Mostert said liquidation would be a last resort because it would have dire consequences. He had given the union one more extension, “but if they default again, it’s game over”.
Retirement funds are safe
Cosatu also asked him to allow the union access to some of the money in its bank accounts to pay staffers’ salaries, which Mostert agreed to. But, he said, the provident fund was healthy, so the workers’ retirement funds and disability benefits would be safe if the union collapsed.
Lucien van der Walt, a professor of sociology at Rhodes University, said the potential collapse of the union would leave workers exposed in a sector in which casualised labour was prevalent and in which the organising of workers was particularly difficult.
Although there might be smaller unions in the sector, there was no other the size of Saccawu that could absorb workers on a national scale, he said.
“While the situation differs vastly from retailer to retailer, labour broking is cheaper for companies instead of having a big group of permanent workers,” Van der Walt said. “It also allows employers to outsource industrial relations.”
He said workers were often divided into smaller groups in the sector. For example, packers might be organised separately from cleaners in the same shop. Or waiters might be organised separately from kitchen staff in a resaurant.
A number of companies had maintained good relationships with Saccawu, but some large retailers had taken a hard line against unions over the past two decades, in what was already a low-wage sector. “Losing the single biggest union in the sector would leave workers especially exposed,” Van der Walt said.
Richard Pithouse, a politics lecturer at Rhodes University, said the crisis in Saccawu and other unions was indicative of a “serious, entrenched crisis in Cosatu from which there is no easy exit”.
‘Disaster for workers’
“It’s clear that when unions collapse that it’s a disaster for workers. As soon as workers are not organised, bosses will push back as far as they can, both in terms of outsourcing and in changing working conditions. A part of the crisis of Cosatu is that a lot of the union leadership has become distant from workers.”
Pithouse said part of the problem was the idea in the trade union movement that the South African Communist Party (SACP) was the vanguard of workers and would provide the intellectual muscle. But the SACP had become mainly concerned with supporting the ANC and President Jacob Zuma.
“There appears to be an attempt to contain workers, not to empower them. The logic of trade unions, which is to advance workers’ struggles, has been inverted.”
Saccawu is not the only embattled union in Cosatu. The Communication Workers’ Union was hit hard by the strike at the South African Post Office, which arose from divisions between casual and permanent workers, as illustrated by research conducted by Professor David Dickinson from the University of the Witwatersrand.
The Food and Allied Workers’ Union was also dealt a blow by the Constitutional Court in 2013, when it was ordered to pay damages to two workers it had failed to represent adequately in a labour dispute.
Van der Walt said many unions were “rudderless. Cosatu has been concerned with infighting within its central committee, and a lot of that is around trying to get rid of the National Union of Metalworkers of South Africa [Numsa]. Cosatu took their eye off the ball.”
He said part of the problem was that the unions were at a political impasse. They recognised that the government was part of the problem but were too deeply invested in the ANC to take action.
Van der Walt said the government was as bad as the private sector for not always enabling large-scale unionisation. Retrenchments and labour broking were rife on the shop floor, even at the state-owned Post Office.
Proximity to power
Pithouse said the unions’ original argument was that their proximity to power would give them influence. “The one thing that the unions did take a position on was labour broking, and it went nowhere. It shows that proximity to power isn’t always the way to change things.”
The question was whether this was bad strategy on the part of the unions, or whether it was symptomatic of a bigger system they had bought into. But the result was control of the workers and a patronage network for the union elite.
Pithouse said the economy was increasingly debt- and consumer-based and was no longer built on mining and industry. “So retail is where the money and the jobs are.” This made the potential demise of the biggest union in the retail sector “disastrous”.
Mazibuko Jara, the national secretary for the Numsa-aligned United Front, said Saccawu’s potential collapse and the infighting among Cosatu’s leadership presented an opportunity for the broader labour movement to renew itself.
“What is required is unions that are controlled by workers and unions that think carefully about their political allegiances,” he said.
Saccawu did not respond to requests for comment, and Cosatu’s spokesperson, Patrick Craven, said it would be unwise for him to comment until the matter had been discussed at a senior level in the union federation.