Cape Town - South Africa’s labour relations are the most hostile of 144 countries measured by the World Economic Forum.
They’re poised to get worse.
The labour movement in Africa’s second-biggest economy has been thrown into turmoil by the move of the Congress of South African Trade Unions, the nation’s biggest labour group, to expel the National Union of Metalworkers of South Africa.
The decision on November 8 was opposed by seven of Cosatu’s 20 other affiliates and its secretary-general, Zwelinzima Vavi, and sets the stage for a fight for the loyalty and membership dues of the federation’s remaining 1.85 million members.
“Numsa’s expulsion is certainly going to destabilise labour relations further,” Andrew Levy, managing partner of labour market consultancy Andrew Levy Employment, said by phone from Johannesburg.
“It will add to the upward pressure on wages because of union competition. Strikes will become longer and we may well see a rise in inter-union violence.”
South Africa had 114 strikes last year that resulted in the loss of 1.85 million working days and cost employees 6.7 billion rand in lost wages, Labor Department data shows.
Prolonged stoppages by platinum and engineering workers this year will probably restrict the economic growth rate to 1.4 percent, the lowest since a 2009 recession, according to the National Treasury.
Cosatu has been a key ally of the ruling African National Congress that’s led South Africa since apartheid ended in 1994.
Numsa, which was Cosatu’s biggest affiliate with about 350 000 members, drew the federation’s ire after it accused the ANC of failing to do enough to reduce poverty and a 25 percent unemployment rate and refused to back the party in May elections.
It also violated Cosatu policies by trying to recruit members from other unions.
“In the eyes of investors, it’s bad enough that the unions have been the ANC’s main support base,” Nicholas Spiro, managing director of Spiro Sovereign Strategy, said by phone from London.
“It’s doubly worrying that union militancy in South Africa is growing with each passing day, setting the stage for a much more volatile social and political environment.”
A five-month strike this year by more than 70 000 miners at the world’s biggest platinum mines owned by companies including Anglo American Platinum cost the producers 24 billion rand in revenue and workers 10.6 billion rand in lost wages before it ended on June 24.
The stoppage cut government revenue and curbed economic growth, which Moody’s Investors Service cited on November 7 as a reason for downgrading the nation’s credit rating to Baa2, the second-lowest investment grade.
Cosatu also faces increased competition from the Association of Mineworkers and Construction Union, which led a strike at Lonmin’s Marikana operation that saw 34 workers killed by police on a single day in August 2012.
As an ally of the ANC, Cosatu has used its political clout to pressure the government into passing a series of laws to protect worker rights, including the 1995 Labor Relations Act, which promotes industrywide wage agreements.
Business groups say the legislation is overly restrictive and deters hiring.
“Cosatu has long been slated as the cause of the inflexible labour environment,” Ian Ollis, labour spokesman for the Democratic Alliance, the main opposition party, said in e-mailed comments.
A weakened federation may give the government “the opportunity to relax labour legislation as they will no longer be held hostage by Cosatu,” he said.
While the ANC has urged Cosatu to reconsider its decision to expel Numsa, the federation shows no signs of backing down.
“To expel a union, to kick workers out of the federation is a painful exercise, but we have to stick to principles,” Bheki Ntshalintshali, Cosatu’s deputy general secretary, told reporters in Johannesburg.
Cosatu’s rules requiring affiliates to stick to one industry and not poach one others’ members are necessary to prevent rivalry and violence, he said.
Vavi said Numsa’s expulsion threatened to wreck the labour movement.
“I will not be able to defend a decision that I honestly believe is contradicting and undermining organised workers and broader working class unity, a decision that will have momentous implications for years to come,” he said in a letter sent to Cosatu officials November 11.
“There must be an alternative to this.”
Numsa said it and four other unions will hold a press conference later today where they will respond to the “illegal” action taken by Cosatu.
The feud will undermine efforts by the government and business to create jobs and spur growth, said Raymond Parsons, a professor at the North West University Business School.
“The upheaval in the union movement will inevitably reach the shop floor,” Parsons said in an e-mailed response to questions.
“It injects another layer of policy uncertainty into the business environment. What business wants is stability in labour relations.’ - Bloomberg News