South Africa must brace itself for a tumultuous period of industrial relations and labour strife as the turmoil that has wrecked the largest union federation is likely to fuel a tussle for turf after the expulsion of Cosatu’s largest affiliate, the National Union of Metalworkers of South Africa (Numsa).
The union is not likely to take its expulsion quietly and has hinted that it may eventually go the legal route to be reinstated.
But at the moment it said it would take the matter to its 350 000 members who might be asked about forming a rival federation. The undercurrent in all of this is an apparent move by Numsa to challenge the ANC, which is in a tripartite alliance with Cosatu and the SA Communist Party.
Just recently, the country was confronted by hostility on the labour front when the Association of Mineworkers and Construction Union, an upstart union on the platinum belt, displaced the National Union of Mineworkers (NUM), an affiliate of Cosatu. The resulting tension culminated in the death of more than 40 people near Rustenburg in August 2012, including the massacre of 34 striking mineworkers by the police.
“The expulsion of Numsa from Cosatu is a political and economic earthquake, which inevitably ranks high on South Africa’s political economy’s Richter scale,” said Raymond Parsons, a former deputy chief executive of Business Unity South Africa and a professor at the North West University Business School.
Economy
Labour strife is the last thing the country needs right now as it grapples with massive unemployment, while the government wrestles with sluggish growth and strains in its finances. Three weeks ago, Finance Minister Nhlanhla Nene slashed growth forecast for 2014 to 1.4 percent from 2.7 percent, and instituted a series of spending cuts amid a shortfall in the tax revenues.
Credit ratings agencies will also not take kindly to these latest developments, coming less than a week after ratings agency Moody’s Investors Service slashed the country’s sovereign rating, citing power supply constraints, anaemic growth and rising government debt.
Parsons said in the short term, the expulsion of Numsa nonetheless injected another layer of uncertainty into the business environment and into particular areas of collective bargaining at a time when the World Economic Forum and other surveys had rated South Africa very low in employer-employee relations.
“It therefore also puts a question mark over the outcome of the Labour Indaba last week, at which a renewed declaration of intent was agreed to urgently tackle South Africa’s labour and economic challenges collectively,” said Parsons.
“The growth challenge has never been more urgent. That exercise will be a waste of time if the labour constituency becomes so divided as to be unable to fulfil its responsible role in social dialogue processes. We must hope that any reconfiguration of organised labour will be settled within a reasonable time.”
Naren Rau, the chief executive of the SA Chamber of Commerce and Industry, a business federation, said business hoped for a quick and orderly solution to the challenges that organised labour was experiencing. He said these challenges were unlikely to impact on the country’s business confidence. “If they are not resolved in an orderly manner, which then leads to major disruptions, then it will have an impact,” said Rau.
Sandile Zungu, the general secretary of the Black Business Council, said the rupture within Cosatu was bad news for business because it would be better if business dealt with organised labour.
“The more organised labour the better because that makes dealing with labour a lot more straight forward,” he said.
But Parsons said there would be aftershocks of an uncertain magnitude as the developments in Cosatu played out. Although the decision was not entirely unexpected, the immediate reaction of some business people he had spoken to was that the expulsion could be a harbinger of good or bad things to come.
“The dust will have to settle before an indepth assessment can be made of its long-running impact on labour relations and there is no room for dogmatism as to the eventual outcomes. What business presumably would want is stability in labour relations under any new alignment that may develop in the trade union movement.”
The Department of Labour was tight-lipped yesterday on what the likely impact from the Cosatu ructions might be. Cosatu decided on Saturday to expel its largest affiliate and its most vocal detractor.