Johannesburg - The fractious nature of South Africa’s labour relations became more stark yesterday as members of the Association of Mineworkers and Construction Union (Amcu) defied Lonmin’s deadline to turn up for work in Rustenburg, where the costs of a 16-week-old platinum industry wage strike continue to mount.
Joseph Mathunjwa, the president of Amcu, brazenly told his members at a rally in Rustenburg that they should fight to the bitter end to ensure that the union achieved its goal of a R12 500 a month basic wage.
Analysts said they doubted that Lonmin’s bid to break the strike would succeed as it had already dragged on for too long, meaning the union now had every intention to see the action through.
The strike is testing the staying power of management and the union. On one hand, the union has 70 000 miners at Lonmin, Impala Platinum and Anglo American Platinum who have now not been paid since January 23.
On the other hand, the platinum producers face a shutdown that has halted production and may soon force customers to turn elsewhere as platinum stockpiles dwindle.
“What is unique about this platinum strike is the ability of Amcu to outlast management and the astonishing development is that the trade union had saved up enough ammunition to go toe-to-toe with management,” said Ivan Israelstam, the chief executive of Labour Law Management Consulting.
He added that the strike, which had now cost companies close to R18 billion in lost production, would inevitably set a precedent of long drawn-out strikes that would all but cripple South Africa if essential changes to the labour relations framework were not effected with the utmost urgency.
The ripple effect of this industrial action, according to Israelstam, is that other unions may take courage from what has transpired over the past four months, given that the companies have already committed to cash remuneration of R12 500, albeit phased in over a four-year period.
Also, others may see this as a new era of strike action where employees can outlast management and push for their demands to be met. Another conundrum is that when the employees reach their goals the trade unions can use the increases to pad their strike funds for even more protracted strike action down the road.
“It is time to change the entire labour economic model. Employees must get increases based on performance and provisions for performance bonuses and profit incentives must take precedence. The strike is not only damaging the income of the workers and the mines’ profits, but the entire economy,” Israelstam said.
And as the strike drags on, the workers continue to lose billions in wages. Analysts said in the long run the strike might prove to have been futile because of inflationary pressures.
If Amcu does achieve its goal of a R12 500 basic wage, the question then becomes: how long will it be before inflation eats into the increase and thus takes striking workers back to square one?
Goolam Ballim, the chief economist of Standard Bank, said that due to the longevity of the strike, even if the union achieved its basic wage demand over four years, it would be no compensation for workers because they had lost a whole first quarter of annual earnings.
“R12 500 will not compensate for the life cycle of workers’ earnings and their credit standing will also come under scrutiny. However, during extraordinary times, banks can review the structure of credit facilities and terms which were signed but what needs to be taken into consideration is that these are losses that banks did not make provisions for.”
According to Ballim, many workers have loans in the informal market where creditors will have claims on the workers’ pay packets from the loans and they will be less forgiving after going on for such a long time without any payments.
“The event is a travesty and the true cost is far wider than platinum. The whole of South Africa seems to be going from one travesty to the another, finding temporary solutions to issues in a band aid method. As naïve and remote as it may appear, the developments underscore the need for a social contract where South Africa commits to go back to the workers diligently and for owners of capital to invest in a more promising stable environment,” Ballim added.