SA mining and the almost ‘unwinnable’ labour situation – by Jeff Candy ( – July 23, 2013)

Norton Rose Fulbright’s Joe Mothibi discusses the lay of the South African mining labour landscape and looks at the best and worst case outcomes for the current gold wage negotiations

GRONINGEN (MINEWEB) – GEOFF CANDY: Hello and welcome to this edition of Newsmaker podcast. Joining me on the line is Joe Mothibi – he is a partner with Norton Rose Fulbright. Joe we saw over the course of last week, significant movement on the wage negotiation space within the South African gold sector. We saw the gold companies represented by the Chamber of Mines, putting out their first offer of 4% increases across the board for basic wages and for housing allowances, and on the other end of the spectrum we saw demands from the likes of AMCU of up to 130%, we saw demands from NUM of 61%. Clearly these are very far apart numbers, is this as far apart as you’ve seen it in the South African labour sector?

JOE MOTHIBI: Without a doubt, certainly in recent memory. What concerns me most is this probably is an indication or symptom of the instability which is actually occurring within the federation of COSATU and the weakness that is perceived by unions such as AMCU who then see a weakness and try and go in there and get a piece of the cake in terms of membership. Yes, but certainly it’s been quite stark indeed, the gap between what they each put on the table.

GEOFF CANDY: Now we’ve heard fairly strong words from the likes of AMCU and from NUM, Lesiba Seshoka telling Mineweb earlier last week that these demands or the offer by the companies was an insult, was a cause for provocation, Joseph Mathunjwa telling Mineweb that he probably wasn’t going to take it back to his members because it wasn’t very good. How likely are we to see a breakdown in these talks, or is there a likelihood that they will push ahead and actually come to some kind of resolution?

JOE MOTHIBI: Well one can never foretell the future, but I would hope that there will be some resolution. Certainly I don’t think there’ll be a resolution very quickly and there will not be a resolution without some pain. The problem with this thing is that nobody wins, ultimately. The mining sector as it is, is in turmoil in terms of commodity prices – platinum, gold and so on, and they’ve been squeezed as miners and companies. The problem for the employees of course is that they also feel the ravages of inflation and so on, and I don’t think anyone wins. I think it will be resolved but I do think there will be pain before there is gain.

GEOFF CANDY: Just to take us through the process, I spoke to Dr Elize Strydom of the Chamber of Mines, and she said in a good year this takes about two months and they come back and forth with demands and counter demands. How does this process actually unfold?

JOE MOTHIBI: It unfolds with an opening position, which is what we have seen, which seems quite unrealistic, the 60% and 4% and so on. Ultimately what they try to do is reach agreement so that’s what’s going to happen. If they don’t reach agreement the unions can obviously ballot their members and then go out on strike in terms of their own constitution. The companies can lock out employees to try and force them to an agreement. I’m not so sure that we will see any industrial action in that sense, in the sense of a lockout or strike action. But that certainly is the way forward. It doesn’t unfortunately go to arbitration where a third party makes a determination on what would be a reasonable increase – it has to be power play, that’s how it works!

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