This is going to be a very interesting year on the labour front. All of us who are able to go to work should feel privileged and thankful. The statistics tell us that only 40% of the Matriculants will be able to access a place in the world of work. Over and above this, the pressure from the failing economy in Europe is being felt heavily in South Africa. It’s an old Chinese curse which states; “may we live in interesting times”.
The trade union movement has managed to gain enormous power over 2011 and indeed the sabre rattling has gone far beyond the workplace and into the world of politics and economics. At the end of last year we saw some rather strange but interesting strikes. The weird and wonderful story of the Xstrata strike needs to be told as it illustrates the creeping madness. The management of Xstrata made a decision to give a gift of shares in their company to the blue collar workers. This gift was valued in excess of three billion rand and was to be distributed in accordance with seniority. The gift was not contingent upon anything and was purely that – a gift. The National Union of Mine Workers were unhappy about the gift being distributed in accordance with seniority. The Union wanted the employee share ownership programme to be distributed equally regardless of seniority and rank. Management clearly were shocked and in fact refused to adhere to the Union’s demands. The Union referred a dispute to the Commission for Conciliation Mediation and Arbitration but the parties were unable to settle their differences at the CCMA. The CCMA then granted the Union a certificate allowing them to go on a legal strike which they promptly did. The gift amounted to 3% of Xstrata’s assets which meant that employees would have received 3% of the yearly profits. The scheme was not to have an expiry date and would remain valid as long as Xstrata continued to be operating in South Africa. No middle or senior management were to participate in the scheme. The employees strike lasted for over ten days with none of the striking workers earning any monies. During the course of that strike Xstrata management withdrew the offer completely, thereafter the strike continued for nothing at all. Eventually the strike was called off, workers came back to work but the share option scheme has still not been implemented. The lesson we learn from this sad story is that there were three losers, firstly, the employees did not receive their salary during the course of their strike, secondly, the workers and their families were not able to benefit from the share options scheme, and thirdly, Xstrata lost two weeks of production. Over and above this, the loss of production purely meant less income tax for the South African Government and in the long term destroys the mining company’s appetite to invest further in South Africa. One has to ask the question as to who is the genius who chose to dispute the gift and this certainly gives a new meaning to “looking a gift horse in the mouth”.
We expect more of the same during 2012.
There were some highlights during 2011 such as the effort embarked upon by the Cape Chamber of Commerce & Industry to ensure that business and labour at least meet together on some common issues and try to work together to create more jobs. Government has urged business and labour to work together in 2012. We will start seeing these umbrella organizations creating the wherewithal to ensure that the discussions do at least take place.
There has been a lot of frenetic activity at Nedlac where business, labour and government are still discussing many of the labour law changes. This year we expect these labour law changes to be implemented and we certainly expect many subtle differences in the implementation of the labour law. There will be a joint and several liability between the temporary employment service (the labour brokers) and the clients. Many restrictions will be brought to bear upon the labour brokers, there will be no regulation or intervention if employees are earning over one hundred and seventy two thousand rand per year.
Those who will be retrenched during 2012 and onwards, there is a tax break in that the first three hundred and fifteen thousand rand (once in a lifetime amount) will be given tax free if the amount is paid as a severance payment. This does provide some relief for those who are going to require their severance payment to pay off their debts.
We are expecting a volatile strike season during June / July, the expectations are high but the economy will not allow double digit increases. This makes for a perfect recipe for violence and destruction. The legislation has already stepped in to create a liability for the union movement and we expect litigation against the trade unions for the destruction that follows on legal strikes. The severe barriers that prevent unemployed people from entering the workplace will remain as severe and issues such as minimum wages will be strictly implemented during 2012. Despite many agreements having been struck at Nedlac, we will find the trade union movement still trying to bring pressure on government to outlaw labour brokers and temporary employment services. This political fight makes no sense at all but really boils down to the fact that the trade unions find it difficult to organize in the temporary employment services arena. Some of the restrictions that will be placed on temporary employment services are good and will make for better administration. The various bargaining councils will retain their strength and the inspectorate will be better equipped and better trained during the course of this year.
Although atypical employment has become the natural order of employment throughout the world, we find in South Africa the resistance to this arrangement. Employers will want to mechanize and will be reluctant to create new jobs because they are being forced to create permanent full time employment.
An interesting development will be whether senior employees will be excluded from the Commission for Conciliation Mediation and Arbitration and all their processes. There will also be an interesting debate on whether up to ten employees can be retrenched and still have their arbitration heard at the CCMA and not the Labour Court.
The Constitutional Court has ruled that second generation outsourcing in terms of Section 197 rarely falls under Section 197 and that a new employer must take over the staff from the old employer.
Because of the massive retrenchment over the last three years, we see that the union membership figures are down but unfortunately 2012 will show us that a larger percentage of the workforce is now unionized. The good news is that the private sector is less unionized than government and there has been a growth of non-unionization in small businesses.
We look forward to a more productive year but unfortunately an ANC lead government strongly assisted by Cosatu and the Communist Party are not in any way assisting the unemployed to get access to the workplace.