1. COLLECTIVE BARGAINING CHALLENGES AND SOLUTIONS PRESENTED AT THE 19 TH ANNUAL GENERAL MEETING OF THE NABC by John Brand 27 September 2012

2. INTRODUCTION

3. 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

4. THE MARIKANA CONFLICT

5. THE MARIKANA CONFLICT 5 MANIFESTATIONS MODERATORS AGGRAVATORS CAUSES TRIGGER

6. THE MARIKANA CONFLICT MANIFESTATIONS MODERATORS AGGRAVATORS CAUSES TRIGGER POLICE ACTION INTIMIDATION ARRESTS TRIALS DEATH UNPROTECTED STRIKE DISREGARD OF PROCEDURES AMCU workers reps church VIOLENCE LIVING CONDITIONS HOUSING ELECTRICITY SEWERAGE HEALTH WATER ROADS REFUSE REMOVAL SECURITY EDUCATION TRANSPORT WORKING CONDITIONS HEALTH & SAFETY WAGE DIFFERENTIALS LABOUR BROKERS DISCRIMINATION MIGRANT LABOUR LACK OF CONCERN LACK OF RESPECT POLITICIANS REMOTE UNION BEAUROCRATIC CORRUPT CONFLICTED SHOP STEWARDS WEAK BARGAINING STRUCTURES OVER CENTRALISED POOR BARGAINING SKILLS NOT INTEREST BASED VERY ADVERSERIAL LACK OF TRI- PARTITE DIALOGUE IMPLATS 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 CHURCH MEDIATION NEED FOR PAY NEW PLAYERS CORRUPT CONFLICTED REMOTE THE MEDIA

7. SOME IMPORTANT FACTS

8. –Average SA worker earns R3 000 per month –59% have pension –40% have medical aid –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 Few have all 3

9. 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

10. 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

11. OUTCOMES IN PUBLIC SECTOR BARGAINING

12. 12 PUBLIC SECTOR STRIKEMUNICIPAL WORKERS STRIKE Time period20102011 Duration of strike3 weeks2 weeks 2 days Wages lost (no work no pay)(2% per week) 6% annual salary lost4.2% annual salary lost Apparent gain (difference between employer offer at start of strike and settlement) (7.5 - 6.5) = 1% "gained"0.0% Actual gain/loss (diff. of wages lost and apparent gain) (1 - 6) = 5% lost(0 - 4.2) = 4.2% lost Number of weeks/years for workers to recover actual loss using apparent gain 156 weeks / 3 yearsNever Reported violence Intimidation, rubber bullets, water cannons, death, dismissal Service interruption, destruction of property, intimidation Reported cost to employerEstimated cost to South African economy R1 billion per day -

13. OUTCOMES IN PRIVATE SECTOR BARGAINING

14. 14 NATIONAL ROAD FREIGHT STRIKE METAL INDUSTRY STRIKE CHEMICAL AND PETROLEUM INDUSTRY STRIKE MINING INDUSTRY STRIKE (DIAMOND) MINING INDUSTRY STRIKE (COAL) MINING INDUSTRY STRIKE (GOLD) CLEANER SECTOR STRIKE MUNICIPAL WORKERS STRIKE 2011 Duration of strike 6 days2 weeks3 weeks2 weeks1 week 3 days4 days3 weeks2 weeks 2 days Wages lost (no work no pay) 2.1% annual salary lost 4% annual salary lost 6% annual salary lost 4% annual salary lost 2.3% annual salary lost 2% annual salary lost 6% annual salary lost 4.2% annual salary lost Apparent gain (difference between employer offer at start of strike and settlement) (9 - 7.5) = 1.5% "gained" (8 - 7) = 1% "gained" (10 - 7) = 3% "gained" (8.5 - 7) = 1.5% "gained" (10 - 7) = 3% "gained" (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%

15. OUTCOMES IN PRIVATE SECTOR BARGAINING (cont.) 15 NATIONAL ROAD FREIGHT STRIKE METAL INDUSTRY STRIKE CHEMICAL AND PETROLEUM INDUSTRY STRIKE MINING INDUSTRY STRIKE (DIAMOND) MINING INDUSTRY STRIKE (COAL) MINING INDUSTRY STRIKE (GOLD) CLEANER SECTOR STRIKE MUNICIPAL WORKERS STRIKE Actual gain/loss (diff. of wages lost and apparent gain) (1.5 - 2.1) = 0.6% lost (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 (4.5 - 2.3) = 2,2% gained (3 - 2.3) = 0.7% gained (0.5 - 2) = 1.5% lost (1 - 2) = 1% lost (2 - 6) = 4% lost (0 - 4.2) = 4.2% lost Number of weeks/years for workers to recover actual loss using apparent gain 41.6 weeks / 8 months Highest paid workers - 104 weeks / 2 years Lowest paid workers - 34.67 weeks / 6 months Majority workers - 104 weeks / 2 years Lowest paid workers - 52 weeks / 1 year Skilled workers - 208 weeks / 4 years Unskilled workers - 41.60 weeks / 8 months Lowest paid employees - 18.49 weeks / 3 months All other employees - 27.73 weeks / 5 months 41.60 weeks / 8 months - 83.20 weeks / 1 year 6 months 78 weeks / 1 year 5 months Never

16. OUTCOMES IN PRIVATE SECTOR BARGAINING (cont.) 16 NATIONAL ROAD FREIGHT STRIKE METAL INDUSTRY STRIKE CHEMICAL AND PETROLEUM INDUSTRY STRIKE MINING INDUSTRY STRIKE (DIAMOND) MINING INDUSTRY STRIKE (COAL) MINING INDUSTRY STRIKE (GOLD) CLEANER SECTOR STRIKE MUNICIPAL WORKERS STRIKE Reported violence Petrol bombs, damage to property, intimidation, assault, rubber bullets, arrests, injury Intimidation, malicious damage to property, assault, arrests, blockades, stone assault Fuel shortages, violence, intimidation Rubber bullets --Intimidation, assault Service interruption, destruction of property, intimidation Reported cost to employer --Fuel retailers R2 billion and taxi industry R35 million --$25 million per day in output lost -

17. THE FREQUENCY AND EXTENT OF STRIKE ACTION

18. 18 Working days lost

19. THE FREQUENCY AND EXTENT OF STRIKE ACTION (cont.) 19 Working days lost per 1000 employees

20. THE FREQUENCY AND EXTENT OF STRIKE ACTION (cont.) 20 Wages lost

21. THE FREQUENCY AND EXTENT OF STRIKE ACTION (cont.) 21 Working days lost through industrial action per 1,000 employees, annual average 2005–2009 Source: EIRO

22. WORKING DAYS LOST COMPARISON

23. –All European countries 2005 – 2009 Average 30.6 working days lost per 1,000 employees Maximum 159.4 Minimum 0 –South Africa 2006 – 2011 Average 507 working days lost per 1,000 employees Maximum 1593 Minimum 36 23

24. 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

25. STRUCTURAL COLLECTIVE BARGAINING CHALLENGES

26. –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

27. PROCESS COLLECTIVE BARGAINING CHALLENGES

28. –The typical strike in South Africa in recent times has been characterised by: 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 THE TYPICAL STRIKE 28

29. PROCESS COLLECTIVE BARGAINING CHALLENGES (cont) –The typical strike in recent times has been characterised by (cont.): 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 THE TYPICAL STRIKE (cont) 29

30. PROCESS COLLECTIVE BARGAINING CHALLENGES (cont) –The typical strike in recent times has been characterised by (cont.): A decision to terminate the strike Loss to workers Loss to employers Loss to the community THE TYPICAL STRIKE (cont) 30

31. PROCESS COLLECTIVE BARGAINING CHALLENGES (cont) –The negotiations which have preceded these strikes have had the following features: 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 THE TYPICAL NEGOTIATION 31

32. PROCESS COLLECTIVE BARGAINING CHALLENGES (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 THE TYPICAL NEGOTIATION (cont) 32

33. PROCESS COLLECTIVE BARGAINING CHALLENGES (cont) –Manipulation of information –Adversarial rhetoric –Incremental removal of non-wage issues –Threats to use power –Benign uses of power –All out strike action THE TYPICAL NEGOTIATION (cont) 33

34. WHAT NEGOTIATION LOOKS LIKE Party AParty B Position Compromise Position Insult Zone Threat and power zone Haggle zone Zone of potential agreement “ZOPA” Insult Zone Threat and power zone Haggle zone

35. TYPICAL NEGOTIATION 35 CLAIMER + = MEDIOCRE / MEDIOCRE OUTCOME

36. POSSIBLE COLLECTIVE BARGAINING SOLUTIONS

37. 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

38. 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

39. 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

40. COLLECTIVE BARGAINING PROCESS SOLUTIONS (cont) –Eliminate conflict aggravators and introduce conflict moderators –Conduct negotiation which is characterised by: 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 40

41. COLLECTIVE BARGAINING PROCESS SOLUTIONS (cont) –Conduct negotiation which is characterised by (cont): 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” 41

42. PEACEMAKERS CREATOR + = GREAT/GREAT OUTCOME

43. Thank you