What's wrong with SA's industrial relations

SA’s labour relations system is under pressure. Industrial action is increasingly marred by violence while there are several legal challenges to the collective bargaining arrangement. Gillian Jones examines whether the system can withstand these challenges.

A flare-up of violence at an Anglo American Platinum (Amplats) shaft in Rustenburg last week provided yet another example of the tense state of labour relations in SA.

Last year platinum mines in Rustenburg were brought to a standstill as wildcat strikes turned violent. But this year the area has been relatively peaceful while other industries, such as farming, have been racked by instability as labour disputes escalated into violence.

The Marikana tragedy, which started with clashes among workers and culminated in the police shooting intransigent strikers, resulted in 44 deaths, throwing the spotlight on the crisis besetting labour relations.

But tensions had been brewing long before that.

In the past five years there has been a steady increase in the length of strikes and violence associated with industrial action.

Another trend has been inter-union rivalry, particularly in the mining industry between the National Union of Mineworkers (NUM) and the breakaway Association of Mineworkers & Construction Union (Amcu), which is at the centre of last week's clash at Amplats.

NUM general secretary Frans Baleni admitted they were not in control after about 13 workers were injured, one critically, during clashes between NUM and Amcu members.

"We are at the receiving end of the violence," he said after workers downed tools on Tuesday. Amcu did not respond to requests for comment.

In addition to growing violence accompanying strikes and protests, there are now three prominent legal challenges to the collective bargaining regime, raising questions about whether the system can endure these challenges.

Cosatu general secretary Zwelinzima Vavi and Baleni admit they are concerned about the recent turmoil and are anxious that the collective bargaining system be preserved.

Cosatu wants collective bargaining to become mandatory in all industries.

It also blames employers for making the problem worse when they accede to workers' demands after they become violent.

Prof Eddie Webster of Wits University's Society, Work & Development Institute (Swop) and labour analyst Andrew Levy say that strike conflict has intensified in post-apartheid SA.

"There has been a steady increase in strikes and violence in strikes over the past five years," says Webster.

Levy has compiled a statistical analysis which shows strikes declined from 1995 until 2003, when they began to increase. Based on 15 years of data, his statistical analysis suggests that strike activity will increase in 2013 and 2014.

Tensions continue to simmer on Rustenburg's platinum belt with looming retrenchments at Amplats, while the threat of retrenchments of farmworkers in response to an increased minimum wage has the agricultural industry in a state of unease.

Three legal challenges to bargaining councils are under way.

At issue is the extension of collective bargaining agreements reached in bargaining councils to nonmembers. Bargaining councils are accused of representing the interests of larger unions and businesses at the expense of smaller companies which are placed under an unnecessary burden when subject to the same minimum wage agreements.

In December, the labour court ruled labour minister Mildred Oliphant's extension of a collective bargaining agreement in the metal & engineering industries bargaining council (MEIBC) invalid. The National Employers Association of SA (Neasa) had taken the minister to court over an extension of a 2011 agreement to nonparties.

When the Labour Relations Act was drafted, Cosatu was keen for collective bargaining to become ingrained as it provides a degree of stability and a predictable cycle for wage negotiations. That may change with the legal challenges.

The act provides for the extension of agreements made in bargaining councils to nonparties if a majority of the trade unions or employers is represented. The court ruled Oliphant's decision should be reviewed and set aside as the unions represented 49,47% of employees covered by the main agreement instead of the required 50%.

The gist of the matter is that after the collective bargaining agreement is extended to nonparties, those who signed the agreement represent the majority of workers and employers in that industry.

"By doing this, you don't want minority players in the industry being allowed to impose conditions on the majority of the sector," says Werksmans director Bradley Workman-Davies.

Oliphant was given four months to reissue the extension under a different section of the act.

But Neasa CEO Gerhard Papenfus has vowed to fight against the power of bargaining councils. He says they went to court to protect small and medium-sized companies - Neasa's main members. "The whole bargaining council system is rigid and employer-unfriendly. The bargaining council interferes in your right to do business and the system has destroyed employment in rural areas."

He says smaller companies would not have agreed to the wages set by the council as they have had no say in the agreements dictated by big business, which can absorb higher wages.

In the second case, five small clothing manufacturers from Newcastle and the United Clothing & Textile Association challenged the minister's extension of a collective agreement of the national bargaining council for the clothing industry on the grounds that the council was not representative.

They argue the minister did not act fairly as she did not consult nonparties and that she acted unreasonably as she did not look at the effect on jobs of extending the agreement to nonparties.

The firms object to having to pay the legislated minimum wage, arguing that it will put 450 firms employing 16700 workers out of business.

Norton Rose labour director Joe Mothibi says the main complaint in this case is that nonparties were not given a chance to make representations before the bargaining council agreement was extended to include them.

"They are arguing that the decision affects their right to trade and freedom of association," he says.

This raises questions about whether the extension of agreements in a bargaining council to nonparties is anticompetitive, cartel-like behaviour, Mothibi says.

"Can the minister of labour simply include people who want to compete at lower rates and in different conditions when they have the constitutionally guaranteed freedom to trade?"

On the other hand, it can be argued that extending the agreements creates a level playing field and contributes to labour peace.

Mothibi says bargaining council agreements are excluded from the Competition Act.

The third legal attack is pending. The Free Market Foundation is soon to launch a court application challenging the labour law on constitutional grounds. Chairman Herman Mashaba says they are still ironing out the legal details but that bargaining councils will be the "biggest target". The case is expected to argue that the extension of agreements to nonparties destroys jobs and is illegal as it extends a private contract reached in the bargaining chamber to nonparties.

About 2,4m workers are covered by bargaining councils, while 3,5m are covered by sectoral determinations. Oliphant has said in parliament: "The whole issue of overcentralisation of collective bargaining is only a fallacy. Only 20% of workers in this country are covered by centralised collective bargaining; 80% of workers' wages and conditions of employment are determined outside centralised collective bargaining."

Cosatu's quest for legislated centralised bargaining sets the stage for a drawn-out battle.

Vavi blames the absence of centralised bargaining in the platinum sector as a factor in the turmoil of 2012.

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