FACT SHEET:
CENTRALISED
COLLECTIVE
BARGAINING
IN THE SOUTH
AFRICAN GOLD
INDUSTRY
A SOUTH AFRICAN GOLD MINING INDUSTRY INITIATIVE
A brief history of
collective bargaining
in the South African
mining industry.
success has been attributed to its flexibility.
CENTRALISED COLLECTIVE
BARGAINING – THE RATIONALE
across the mines. The system ensures
Centralised negotiations on wages
It is a time-efficient process (compared
to decentralised negotiations at mine
level), enabling a pooling of resources and
expertise, and fosters the standardisation
of wages and conditions of employment
CENTRALISED BARGAINING –
THE PROCESS
The 2013 centralised collective bargaining
process for the period 1 July 2013 to 30
June 2015 for the gold sector, formally
began in July 2013. As per the established
practice, the Chamber’s Industrial Relations
that the best-possible negotiating skills
Services conducted these negotiations on
on both sides are available and present at
wages and conditions of service on behalf
substantive negotiating sessions.
of the Chamber’s gold mining members.
Historically, agreements have been
representing the majority of gold and coal
CENTRALISED NEGOTIATIONS –
WHO PARTICIPATES?
mine employers, and recognised trade
For a union to be able to represent
and conditions of employment are
held between the Chamber of Mines,
unions, representing their members.
The Chamber provides a venue for the
negotiations, which are often referred to as
the “Chamber negotiations”.
The platinum, diamond and base metal
mines, along with some of the smaller
gold and coal mines, negotiate on a
decentralised basis.
its members in gold’s centralised
negotiations it needs to be a registered
union, recognised on one or more of the
companies’ mines.
To be recognised, a union usually needs
extended to apply to all employees who
form part of the bargaining unit.
“Centralised collective
bargaining in the gold
mining industry dates
back to 1915.”
to represent at least 30% of employees in
a recognition or bargaining unit on a mine,
as parties to the centralised negotiations
Centralised collective bargaining dates
should be reasonably representative of the
back to 1915, when the Chamber was
employees in question. Gold companies
first assigned the role of negotiator on
have tended to have a very inclusive
behalf of its members. The NUM began
approach to recognition, seeking to
participating in centralised negotiations
engage with all unions that represent a
after it was recognised in 1983, the year
significant number of employees. This level
after its establishment. This practice of
is decided on a company-by-company
centralised collective bargaining has
basis and is usually incorporated into on-
evolved over the years and the system’s
mine agreements.
%
––
––
––
––
––
Union representation
at gold mining
member companies
as at December 2014*
NUM
AMCU
UASA
Solidarity
No union
57
25
7
2
9
* based on payroll deduction statistics
page 1
FACT SHEET:
CENTRALISED COLLECTIVE BARGAINING IN THE SOUTH AFRICAN GOLD INDUSTRY
While centralised negotiations aim to
stipulated that bargaining on basic
needs to be based on openness and
standardise wages and conditions of
wages and conditions of employment
an understanding of the other’s starting
employment, the agreements often provide
would take place at Chamber level, while
point. On this basis, and on request, the
for variable rates, particularly in the case
bargaining on organisational, operational
industry provides the recognised unions
of marginal mines or those facing acute
and workplace issues would take place
with information needed for informed
financial constraints. This introduces a
at mine or company level. From time to
participation in the negotiations.
necessary degree of flexibility that takes
time, so-called framework agreements
into account the differing profitability of
are concluded at the centre, which allow
While historically negotiations have taken
individual mines.
for further negotiations to take place at
place between the Chamber, representing
company or mine level on a specific issue.
its gold mining members, and the NUM,
A further feature of the Chamber process
is that not all issues are dealt with at
As relationships between the unions and
a centralised level. In 1996, a two-
employers have matured, both sides
tier agreement was concluded, which
have accepted that successful bargaining
UASA and Solidarity, AMCU gained
recognition in 2013 at a few operations
of the gold mining companies. As the
collective bargaining process is an inclusive
one, AMCU was invited to participate in the
A SATISFACTORY OUTCOME –
WAGE NEGOTIATIONS IN 2013
On 10 September 2013, following a five
day strike, the gold producers reached
an agreement with the NUM, UASA and
Solidarity which, at the time, collectively
represented around 72% of employees in the
gold industry represented by the Chamber of
Mines. This agreement is valid for the period
1 July 2013 to 30 June 2015.
The final agreement was for two years, the
terms of which are detailed below:
• Category 4 and 5 employees, and rock
drill operators will receive increases of
8% and other employees 7.5%, effective
1 July 2013.
•
All employees within these bargaining
units received further CPI-linked
increases effective 1 July 2014.
•
Monthly living out allowances will rise to
R1,820 in two steps.
Commitments were also made on certain
additional points, which include:
• the parties agreed to appoint an expert
to investigate and report on organisation
design in the gold mining industry;
•issues dealt with in the Sindisa Project
report, mostly relating to enhancing
working patterns and arrangements, will
continue at company or mine level where
appropriate;
•the companies are committed to working
with organised labour to develop joint
solutions on issues related to garnishee
orders and other aspects of employees’
personal financial management; and
•the minimum medical incapacity benefit
will increase from R30,000 to R40,000
over the two years.
The agreement was extended to all
employees. While AMCU, which represented
17% of employees at the time, was included
in the centralised collective bargaining
process from the outset of the 2013
negotiations, AMCU did not accept the
agreement. Nevertheless, as is provided for
in legislation and practice, the agreement
was extended to all employees regardless of
union affiliation and wages were backdated
to 1 July 2013.
In January 2014, AMCU served three gold
producers - AngloGold Ashanti, Harmony
and Sibanye - with a notice of the union’s
intention to strike at those operations where
the union was the majority at the time of the
2013 wage negotiations.
The gold producers, represented by the
Chamber of Mines, applied for a Labour
Court interdict against the proposed strike
on the grounds that the agreement precluded
any strike action on issues covered by the
agreement for the duration of the agreement.
On 30 January, the Labour Court issued
an interim interdict declaring any strike
action by AMCU at operations owned by
the gold producers unprotected. On 23
June the Labour Court declared the interim
interdict final and ruled that any strike
action by AMCU or its members relating
to wages and conditions of service for the
duration of the two-year agreement would
be unprotected.
Amcu has since applied for leave to
appeal against the court’s decision, both
to the Labour Appeal Court and also to the
Constitutional Court. The producers will
continue to oppose such action.
2013 wage negotiations. AMCU has since
been recognised by a number of
gold companies.
“While centralised
negotiations aim
essentially to
standardise wages
and conditions of
employment, the
agreements often
provide certain variable
rates, particularly in the
case of marginal mines
or those facing acute
financial constraints.”
WAGES AND BENEFITS –
THE NUMBERS
Wages and benefits account for between
50% and 55% of operating costs across the
gold sector and clearly have an impact on
the companies’ cost structures. Annualised
payments to employees by gold employers
rose by some R1.5 billion to around R23.5
billion a year following the 1 July 2013 wage
increase. This rose by a further R1.7 billion
to R25.2 billion with effect from 1 July 2014.
page 2
A SOUTH AFRICAN GOLD MINING INDUSTRY INITIATIVE
COST OF INDUSTRIAL ACTION
The true cost of industrial action are difficult to quantify. Nonetheless, high-level estimates show that the costs are enormous
– to employers, employees, communities and the country as a whole. The Chamber of Mines estimates that – based on 2013
data – a single day of strike action across the gold industry in 2013 would cost:
R349m
in lost revenue
R100m
in salaries and wages lost
to employees
R43m
in stores and materials
not purchased
R29m
in electricity paid for and not
productively used
R9m
taxes lost to the state
“High-level estimates
show that the costs
of industrial actions
are enormous.”
page 3
This is Gold is an industry initiative begun by South African gold producers to provide insight into the gold industry, its
processes and its contribution. We aim to provide honest, balanced information that can be used to understand the history
of gold mining in South Africa, the work being done by the industry now and the plans in place for the industry’s future.
“As relationships between
the unions and employers
have matured, both
sides have accepted that
successful bargaining needs
to be based on openness
and understanding of the
other’s starting point.”
KEY DEFINITIONS
AND ACRONYMS
Collective bargaining – negotiations on
wages and conditions of employment
between employers and employees
represented by their unions.
Centralised collective bargaining – agreed
bargaining system in which the gold mines,
(represented by the Chamber of Mines), and
the trade unions (representing the majority
of employees in the gold mining industry),
conduct collective bargaining at industry level
rather than at mine or company level.
Unprotected or unprocedural industrial
action – since strikes of this nature fall
outside the provisions of the Labour
Relations Act, employees who participate in
such strikes are not protected from company
disciplinary actions, and may also face
ultimatums, court orders or other notices to
facilitate a return to work.
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CONTACT DETAILS:
Charmane Russell
Spokesperson acting on behalf of the gold
producers
Tel: 082 372 5816
Email: [email protected]
Labour Relations Act – Act No 66 of 1995
as amended, which regulates collective
bargaining and labour relations issues.
Bargaining unit – the centralised gold
sector negotiations take place in respect of
employees who fall within the bargaining unit.
The bargaining unit excludes management
and consists of three employee groupings or
recognition units:
•
Category 4 - 8 employees – various
unskilled and semi-skilled employees
graded in line with the Paterson job
grading system. (Category 3 was
eliminated in 2013 in order to increase
wages at the bottom of the band).
•
Miners and Artisans – the next tier of
employees, consisting mainly of certified
artisans and miners with blasting tickets.
• Officials – supervisory employees.
Living-out allowance – a set amount
paid to employees who prefer to live in
private accommodation rather than being
accommodated in mine residences.
Chamber of Mines – mining industry
employer representative body founded in
1887, drawing members from across the
South African mining industry.
Representative unions – the unions which
represent the employees in the bargaining unit
• NUM – National Union of Mineworkers
•AMCU – Association of Mineworkers and
Construction Union
• Solidarity – Solidarity Trade Union
•UASA – United Association of
South Africa
Recognition unit – there are three recognition
units in the gold sector which collectively
make up the bargaining unit:
• Category 4 - 8 employees
• Miners and Artisans
•Officials
Each of these recognition units has its own
conditions of employment, but since 2005,
bargaining in respect of all of them has
taken place simultaneously at the Chamber
of Mines.
page 4
A SOUTH AFRICAN GOLD MINING INDUSTRY INITIATIVE