Finweek English Edition - - INSIGHT - David Mckay

There is a grow­ing threat of strike ac­tion in South Africa’s gold sec­tor in the next seven days fol­low­ing the Cham­ber of Mines lat­est – and fi­nal – 6.5% pay in­crease of­fer for en­try-level work­ers.

“Em­ploy­ers are hold­ing on tight, es­pe­cially the big three (An­gloGold Ashanti, Sibanye Gold and Har­mony Gold). When they say the fi­nal of­fer is fi­nal, they re­ally mean fi­nal,” a spokesper­son for the Cham­ber of Mines told Fin­week.

Hearts have hard­ened since a cham­ber work­shop in June, which at­tempted to not only es­tab­lish eco­nomic con­di­tions of the SA gold sec­tor, but ‘rules of the game’ as well dur­ing the ne­go­ti­a­tions.

For its part, the National Union of Minework­ers (NUM) has barely moved in its po­si­tion in which it asked for a 60% in­crease for en­try-level work­ers. It re­cently gave the in­dus­try seven days to meet its de­mands, or it will call for a strike.

Spec­u­la­tion from em­ploy­ers is that gold com­pa­nies may en­force lock-out rules in the event of a strike as a sym­bol of re­solve.

This would mean that gold mines where in­dus­trial ac­tion was called would be put un­der lock and key, bar­ring even non­strik­ing work­ers from op­er­at­ing.

The idea is that em­ploy­ers will not set­tle for only half its em­ploy­ees turn­ing up for work in the event of one union strik­ing but an­other send­ing em­ploy­ees to work. The onus would fall upon the unions to work among them­selves in or­der to find a so­lu­tion to wage ne­go­ti­a­tion im­passe.

Sol­i­dar­ity, how­ever, is thought to be more con­cil­ia­tory on gold in­dus­try of­fers. It said it would look at a sin­gle-digit wage in­crease and is look­ing into bonus in­cen­tives that of­fer an ad­di­tional 1% to 1.5% in­crease on em­ploy­ees ba­sic salaries.

There’s also a sus­pi­cion that NUM is not as strike-hun­gry as in pre­vi­ous ne­go­ti­a­tions. In fact, there’s a view that NUM doesn’t want to have the loy­alty of its mem­bers tested as it may ex­pose weak­nesses.

The NUM is still the ma­jor­ity union in SA’s gold in­dus­try, but its rep­u­ta­tion and self-be­lief have been dented by the advent of the As­so­ci­a­tion of Minework­ers & Con­struc­tion Union (AMCU).

This was ev­i­dent at the Min­ing Lek­gotla, a con­fer­ence in­volv­ing Govern­ment, unions and the in­dus­try, held on 27-29 Au­gust, where NUM’s pres­i­dent, Sen­zeni Zok­wana, de­liv­ered an un­cer­tain pre­sen­ta­tion. Gone was the fire of Zok­wana’s pre­vi­ous ap­pear­ances. In­stead, it was re­placed by an ap­peal to other unions – to all in­tents and pur­poses AMCU – that they play by “the rules of the game”.

“Some­times when peo­ple ask me how I feel, I find it dif­fi­cult to keep a straight face, es­pe­cially when our mem­bers are be­ing at­tacked,” said Zok­wana. “I don’t know where this in­dus­try is go­ing as peo­ple are break­ing the rules,” he added, re­fer­ring to at­tacks on NUM shop ste­wards.

As a state­ment, it sounds de­cid­edly on the back foot, but he’s not alone.

The fact is the gold in­dus­try can’t af­ford to pay more to em­ploy­ees not­with­stand­ing the in­con­ve­nient re­cov­ery in the gold price which sees it im­prove to R456 000/kg.

Nor can it meet the wage in­creases that are be­ing dis­cussed in SA’s au­to­mo­tive sec­tor largely ow­ing to the fact that the gold sec­tor is a price taker whereas au­to­mo­tive sec­tor play­ers can in­crease their prices.

Fur­ther­more, em­ploy­ers are re­fus­ing to en­ter into sep­a­rate deals with dif­fer­ent unions. That’s why its 6.5% of­fer to en­trylevel work­ers is bind­ing on all unions not­with­stand­ing AMCU’s re­luc­tance to join other unions in a sin­gle bar­gain­ing process.

There will be no out­bid­ding of one union by an­other in wage in­creases; and no po­lit­i­cal point scor­ing. Sibanye Gold CEO, Neal Frone­man, said the com­pany had suf­fi­cient cash re­serves to see out a pro­longed bout of in­dus­trial ac­tion. Will the unions have the stom­ach for the fight?

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