COLLECTIVE BARGAINING
CHALLENGES AND SOLUTIONS
PRESENTED AT THE 19TH ANNUAL GENERAL MEETING OF
THE NABC
by John Brand
27 September 2012
INTRODUCTION
CONTENT
•
Collective bargaining in the aftermath of Marikana
•
Some important facts
•
Outcomes in public sector bargaining
•
Outcomes in private sector bargaining
•
The frequency and extent of strike action
•
Working days lost comparison
•
Structural collective bargaining challenges
•
Process collective bargaining challenges
•
Possible collective bargaining solutions
THE MARIKANA CONFLICT
THE MARIKANA CONFLICT
MANIFESTATIONS
MODERATORS
AGGRAVATORS
TRIGGER
CAUSES
5
THE MARIKANA CONFLICT
MANIFESTATIONS
DISREGARD
OF
PROCEDURES
UNPROTECTED
STRIKE
AMCU
workers
reps
POOR POLICING
POWER APPROACH
POOR NEGOTIATION
WEAK MEDIATION
UNREALISTIC EXPECTATIONS
INACCURATE PERCEPTIONS
PAST UNRESOLVED CONFLICT
DIVIDED CONSTITUENCIES
ILLITERACY
INNUMERACY
IGNORANCE
LANGUAGE BARRIERS
FEAR
WEAK DEMOCRACY
NOT LISTENING
POOR COMMUNICATION
POLITICAL OPPORTUNIST
WEAK LEADERSHIP
COMPROMISED UNIONS
THE MEDIA
THE CHURCH
MEDIATION
NEED FOR PAY
IMPLATS
AGGRAVATORS
MODERATORS
VIOLENCE
TRIGGER
ELECTRICITY
SEWERAGE
HOUSING
HEALTH &
SAFETY
HEALTH
LIVING
CONDITIONS
WATER
OVER CENTRALISED
WAGE
DIFFERENTIALS
WORKING
CONDITIONS
BEAUROCRATIC
CORRUPT
CONFLICTED
SHOP
STEWARDS
LABOUR
BROKERS
DISCRIMINATION
REMOTE
UNION
POOR
BARGAINING
SKILLS
TRANSPORT
MIGRANT LABOUR
ROADS
CONFLICTED
EDUCATION
SECURITY
REFUSE
REMOVAL
LACK OF RESPECT
CAUSES
LACK OF CONCERN
LACK OF TRIPARTITE
DIALOGUE
WEAK
BARGAINING
STRUCTURES
NOT
INTEREST
BASED
VERY
ADVERSERIAL
SOME IMPORTANT FACTS
SOME IMPORTANT FACTS
– Average SA worker earns R3 000 per month
– 59% have pension
– 40% have medical aid
Few have all 3
– 77% have UIF
– Rock drillers are in the top earning 25% of formal sector employees
– The top 25% of formal sector employees earn R7 500 per month and more
– The top 10% of formal sector employees start at R15 000 per month
SOME IMPORTANT FACTS (cont)
– Only 4 out of 10 adults work in South Africa
– 7 out of 10 adults work in the rest of the world
– Therefore only 7.3 million out of 32.9 million people work in South Africa
– Therefore rock drillers are in the top 6% of adult earners in South Africa
– In 8 out of 30 OECD countries teachers earn less than rock drillers in South Africa
– Greek teachers earn R8 392 per month
– Indian high tech employees earn R6000 per month
SOME IMPORTANT FACTS (cont)
– Actually the maximum increase at Lonmin was 7.7% to the lowest grade
– The actual increase to rock drillers at Lonmin was 3%
– Lonmin workers lost +- 12% of annual wages in the strike due to no work no pay
– Some Lonmin workers received a R2 000 return to work bonus
– +- 9000 Lonmin contract workers got nothing
OUTCOMES IN PUBLIC SECTOR
BARGAINING
OUTCOMES IN PUBLIC SECTOR BARGAINING
Time period
Duration of strike
Wages lost (no work no
pay)(2% per week)
Apparent gain (difference
between employer offer at
start of strike and settlement)
Actual gain/loss (diff. of
wages lost and apparent gain)
Number of weeks/years for
workers to recover actual loss
using apparent gain
Reported violence
Reported cost to employer
12
PUBLIC SECTOR STRIKE
2010
3 weeks
6% annual salary lost
MUNICIPAL WORKERS STRIKE
2011
2 weeks 2 days
4.2% annual salary lost
(7.5 - 6.5) = 1% "gained"
0.0%
(1 - 6) = 5% lost
(0 - 4.2) = 4.2% lost
156 weeks / 3 years
Never
Intimidation, rubber bullets, water cannons,
death, dismissal
Estimated cost to South African economy R1
billion per day
Service interruption, destruction of
property, intimidation
-
OUTCOMES IN PRIVATE SECTOR
BARGAINING
OUTCOMES IN PRIVATE SECTOR BARGAINING
NATIONAL
ROAD
FREIGHT
STRIKE
METAL
CHEMICAL
MINING
INDUSTRY
AND
INDUSTRY
STRIKE
PETROLEUM
STRIKE
INDUSTRY (DIAMOND)
STRIKE
MINING
INDUSTRY
STRIKE
(COAL)
2011
2011
2011
2011
2011
Duration of
strike
6 days
2 weeks
3 weeks
2 weeks
Wages lost
(no work no
pay)
2.1% annual
salary lost
4% annual
salary lost
6% annual
salary lost
(8 - 7) = 1%
"gained"
(10 - 7) = 3%
"gained"
(8.5 - 7) =
1.5% "gained"
(10 - 7) = 3%
"gained"
Apparent gain (9 - 7.5) =
(difference
1.5% "gained"
between
employer offer
at start of
strike and
settlement)
14
MINING
INDUSTRY
STRIKE
(GOLD)
2011
CLEANER
SECTOR
STRIKE
MUNICIPAL
WORKERS
STRIKE
2011
2011
1 week 3 days 4 days
3 weeks
2 weeks 2
days
4% annual
salary lost
2.3% annual
salary lost
2% annual
salary lost
6% annual
salary lost
4.2% annual
salary lost
(8 - 7.5) =
0.5% "gained"
(10 - 7.5) =
2.5% "gained"
(10.5 - 6) =
4.5% "gained"
(8 - 5) = 3%
"gained"
(7.5 - 7) =
0.5% "gained"
(10 - 9) = 1%
"gained"
(8 - 6) = 2%
"gained
(8.5 - 6.5) =
2% "gained"
0.0%
OUTCOMES IN PRIVATE SECTOR BARGAINING (cont.)
NATIONAL
ROAD
FREIGHT
STRIKE
Actual
(1.5 - 2.1) =
gain/loss (diff. 0.6% lost
of wages lost
and apparent
gain)
METAL
CHEMICAL
MINING
INDUSTRY
AND
INDUSTRY
STRIKE
PETROLEUM
STRIKE
INDUSTRY (DIAMOND)
STRIKE
(1 - 4) = 3%
lost
(3 - 4) = 1%
lost
(1.5 - 6) =
4.5% lost
(3 - 6) = 3%
lost
(0.5 - 4) =
3.5% lost
(2.5 - 4) =
1.5% lost
Number of
41.6 weeks / 8 Highest paid Majority
Skilled
weeks/years months
workers - 104 workers - 104 workers - 208
for workers to
weeks / 2
weeks / 2
weeks / 4
recover actual
years Lowest years
years
loss using
paid workers - Lowest paid Unskilled
apparent gain
34.67 weeks / workers - 52 workers 6 months
weeks / 1 year 41.60 weeks /
8 months
15
MINING
INDUSTRY
STRIKE
(COAL)
MINING
INDUSTRY
STRIKE
(GOLD)
CLEANER
SECTOR
STRIKE
(2 - 6) = 4%
lost
(2 - 6) = 4%
lost
MUNICIPAL
WORKERS
STRIKE
(4.5 - 2.3) =
2,2% gained
(3 - 2.3) =
0.7% gained
(0.5 - 2) =
1.5% lost
(1 - 2) = 1%
lost
(0 - 4.2) =
4.2% lost
Lowest paid
employees 18.49 weeks /
3 months
All other
employees 27.73 weeks /
5 months
41.60 weeks / 78 weeks / 1 Never
8 months year 5 months
83.20 weeks /
1 year 6
months
OUTCOMES IN PRIVATE SECTOR BARGAINING (cont.)
NATIONAL
ROAD
FREIGHT
STRIKE
METAL
CHEMICAL
MINING
MINING
MINING
CLEANER
INDUSTRY
AND
INDUSTRY INDUSTRY INDUSTRY
SECTOR
STRIKE
PETROLEUM
STRIKE
STRIKE
STRIKE
STRIKE
INDUSTRY (DIAMOND)
(COAL)
(GOLD)
STRIKE
Reported
Petrol bombs, Intimidation, Fuel
Rubber
Intimidation,
violence
damage to
malicious
shortages,
bullets
assault
property,
damage to
violence,
intimidation, property,
intimidation
assault,
assault,
rubber bullets, arrests,
arrests, injury blockades,
stone assault
Reported cost Fuel retailers $25 million
to employer
R2 billion and
per day in
taxi industry
output lost
R35 million
16
MUNICIPAL
WORKERS
STRIKE
Service
interruption,
destruction of
property,
intimidation
THE FREQUENCY AND EXTENT OF
STRIKE ACTION
THE FREQUENCY AND EXTENT OF STRIKE ACTION
Working days lost
18
THE FREQUENCY AND EXTENT OF STRIKE ACTION
(cont.)
Working days lost per 1000 employees
19
THE FREQUENCY AND EXTENT OF STRIKE ACTION
(cont.)
Wages lost
20
THE FREQUENCY AND EXTENT OF STRIKE ACTION
(cont.)
Working days lost through industrial action per 1,000 employees, annual
average 2005–2009
Source: EIRO
21
WORKING DAYS LOST
COMPARISON
WORKING DAYS LOST COMPARISON
– All European countries 2005 – 2009
•
Average 30.6 working days lost per 1,000 employees
•
Maximum 159.4
•
Minimum 0
– South Africa 2006 – 2011
23
•
Average 507 working days lost per 1,000 employees
•
Maximum 1593
•
Minimum 36
WORKING DAYS LOST COMPARISON (cont.)
– 20 674 737 working days lost in 2010 in South Africa
– 2 806 656 working days lost in 2011 in South Africa
– Estimated to be the highest in the world
– 2012 and 2013?
24
STRUCTURAL COLLECTIVE
BARGAINING CHALLENGES
STRUCTURAL COLLECTIVE BARGAINING CHALLENGES
– Lack of a uniform national minimum wage
– Lack of coherent demarcation of wall to wall industrial sectors
– Lack of wall to wall mandatory sectoral minimum wages and working conditions
– Lack of national development strategy
– Lack of sector development strategies
– Lack of wall to wall powerful sectoral collective bargaining structures
– Lack of distinction between sectoral minima, frameworks and workplace actuals
– Lack of mandatory collective bargaining in appropriate bargaining units
– Lack of appropriate organisational rights
– Lack of properly resourced collective bargaining and social dialogue institutions
PROCESS COLLECTIVE
BARGAINING CHALLENGES
PROCESS COLLECTIVE BARGAINING CHALLENGES
THE TYPICAL STRIKE
– The typical strike in South Africa in recent times has been characterised by:
28
•
Picket line violence
•
Absence of ballots
•
Minority support
•
Persuasion / Intimidation
•
Replacement workers from the unemployed
•
Clashes between strikers and non-strikers
•
Court interdicts
•
Employment of private security
PROCESS COLLECTIVE BARGAINING CHALLENGES
(cont)
THE TYPICAL STRIKE (cont)
– The typical strike in recent times has been characterised by (cont.):
29
•
Violence at homes
•
Lack of overt encouragement of violence by unions
•
Failure to curtail violence by unions
•
Calls to marshal picket lines and help management ineffective
•
Difficulty to sustain the strike
•
Escalation of violence
•
Polls amongst diminishing pool of strikers
PROCESS COLLECTIVE BARGAINING CHALLENGES
(cont)
THE TYPICAL STRIKE (cont)
– The typical strike in recent times has been characterised by (cont.):
30
•
A decision to terminate the strike
•
Loss to workers
•
Loss to employers
•
Loss to the community
PROCESS COLLECTIVE BARGAINING CHALLENGES
(cont)
THE TYPICAL NEGOTIATION
– The negotiations which have preceded these strikes have had the following features:
31
•
Letter with a list of demands from the union
•
Rejection and low counter proposals by the employer
•
Assumption of eventual compromise
•
Lack of counter demands by the employer
•
Superficial positional preparation
•
Exaggerated motivation at the negotiation table
•
Demeaning of opponents
•
Threats to walk out and walk outs
PROCESS COLLECTIVE BARGAINING CHALLENGES
(cont)
THE TYPICAL NEGOTIATION (cont)
– Early declaration of disputes
– Assumption that real negotiation will only take place:
•
with imminent or actual strike action
– Hope that an opponent will take fright and make concessions
– Un-reciprocal concessions
– Slow moves from concession to concession
32
PROCESS COLLECTIVE BARGAINING CHALLENGES
(cont)
THE TYPICAL NEGOTIATION (cont)
– Manipulation of information
– Adversarial rhetoric
– Incremental removal of non-wage issues
– Threats to use power
– Benign uses of power
– All out strike action
33
WHAT NEGOTIATION LOOKS LIKE
Position
Position
Threat and power zone
Haggle zone
Position
Insult Zone
Position
Position
Threat and power zone
Zone of potential agreement
“ZOPA”
Position
Compromise
Haggle zone
Insult Zone
Party B
Position
Position
Party A
TYPICAL NEGOTIATION
CLAIMER
+
CLAIMER
= MEDIOCRE / MEDIOCRE OUTCOME
35
POSSIBLE COLLECTIVE
BARGAINING SOLUTIONS
STRUCTURAL COLLECTIVE BARGAINING SOLUTIONS
– Introduce a uniform national minimum wage
– Demarcate coherent, wall to wall industrial sectors
– Prescribe wall to wall mandatory sectoral minimum wages and working conditions
– Implement a nation development strategy
– Ensure powerful sectoral collective bargaining structures
– Make a clear distinction between sectoral minima, frameworks and workplace actuals
– Democratise organisational rights
– Properly resource collective bargaining and social dialogue institutions
37
COLLECTIVE BARGAINING PROCESS SOLUTIONS
– Accept the pluralist idea of partnership and mutual gain
– Accept Unions and Employers as legitimate entities with divergent interests
– Subscribe to constitutional democracy
– Recognise that the right to strike is fundamental
– Recognise that a strike is a last resort
– Recognise that strike action is often futile
– Recognise dependence and independence
– Recognise overlapping and different interests
38
COLLECTIVE BARGAINING PROCESS SOLUTIONS (cont)
– Commit to good faith bargaining
– Commit to exhaustion of disputes procedures
– Commit to industrial democracy
– Commit to picket rules
– Commit to non-violence
39
COLLECTIVE BARGAINING PROCESS SOLUTIONS (cont)
– Eliminate conflict aggravators and introduce conflict moderators
– Conduct negotiation which is characterised by:
40
•
Joint training in modern negotiation theory and practice
•
Use of an independent and trusted facilitator
•
Meticulous preparation
•
Adoption of problem solving methodology
•
Sensitivity to the negotiation paradox
COLLECTIVE BARGAINING PROCESS SOLUTIONS (cont)
– Conduct negotiation which is characterised by (cont):
41
•
Adjusting the mandating process
•
Exploring causes, interests, needs, fears and concerns
•
Credible exchange of information
•
Creative solution search
•
Objective solution evaluation
•
Trading across issues
•
“Expanding the pie”
PEACEMAKERS
CREATOR
+
= GREAT/GREAT OUTCOME
CREATOR
Thank you