1. “SA must brace itself for a tumultuous
period of industrial relations and labour
strife as the turmoil that has wrecked
the largest union federation is likely to
fuel a tussle for turf”. (Business Report)
2. South Africa is currently in deep unchartered
territory and for this reason commentary, even
amongst seasoned politicians and Industrial
Relations experts are purely speculative
Jay Naidoo, COSATU’s founding GS, admitted to
the Daily Maverick that “Not a soul involved in the
terrible activities of the past week should pretend
that they know where the other shoe will drop”
The Future of Collective
Bargaining in SA
3. 1. NUMSA vs. COSATU
2. COSATU post NUMSA
3. The Split
4. NUMSA post COSATU
5. NUMSA: United Front
6. NEASA vs. SEIFSA / MEIBC
7. Metal and Engineering Industry
4. REASONS FOR NUMSA’s EXPULSION FROM COSATU
NUMSA withdraws support for ANC in May ‘14 elections
“The political division in COSATU is between those who recognise the political
bankruptcy of the ANC and those who don't” (Irvin Jim - NUMSA)
COSATU political infighting in Central Executive Committee (CEC)
Heated exchanges between Gen Sec Vavi & Cosatu Pres Dlamini
COSATU leaders not in touch with worker / plant level issues (e.g. NUM vs. AMCU)
NUMSA ‘poaching’ other sectors of industry (Bidvest Food Services’ judgment)
NUMSA breaches mantra ‘one industry, one union’ & suspend levies to ANC and
SACP - R12,2 Mil p.a.
NUMSA stays true to original trade union Marxist/Socialist endeavours for social
justice and opposes any free-market/capitalist enrichment
5. Cosatu is a complicated case: indifferent to worker interests, with double agendas,
personal enrichment, investment arms and hidden hands at play.
COSATU membership supports ANC seeking class privileges, state power and
current government economic development policy. (accused by NUMSA - neo-
liberal market economy)
Loss of NUMSA and potentially 7 affiliates. Cash flow crises R12 – R20 mil
Remaining membership primarily 5 public sector unions
Dominated by largely white collar and middle management
Government SA’s biggest employer, more union members than whole of
private sector
Expelled Sadtu president Thobile Ntola to form new public service “superunion”
to rival COSATU
Prospect of further 8 affiliates following NUMSA? (demise of COSATU)
Ramaphosa heading ANC task team to reunite COSATU – voting machine.
7. COSATU watershed – end of an era…?
“Can NUMSA’s left wing fly”? (Cope / Agang -
Political Dodos)
“All Gwede’s horses and all Gwede’s men
can’t put COSATU together again.” (Daily
Maverick)
A new labour federation and political party
rising – will the ANC meet it’s match in the
polling booths in 2016?
Together with the recent Parliamentary crises,
where is Pres Zuma?
These 2 events evidence that Cyril
Ramaphosa is “Prime Minister” (head of
government – a lά Thabo Mbeki to Nelson
Mandela late 90’s)
Ramaphosa:
Successor to Pres Zuma
Restore labour stability?
Chief ANC negotiator at Talks
about talks and CODESA 1&2
“Trade Unionist turned
Capitalist”
8. COSATU “mortally wounded” (McKinley)
NUMSA “Stinking corpses” and membership “cannibals” (SACP –
challenged by new political party?)
9. A political comment on the day to
day functions of COSATU per
political illustrator
10. Champion of the working class (clear mandate)
Vavi in twilight zone
◦ Refuses to attend press conference
◦ Engages ANC without mandate
◦ Charges against Vavi - ANC reprieve?
COSATU unity is a pipe dream. Call for Dlamini to resign?
Need to mobilize rank and file membership – campaigns (320 000 members)
Establish new political alignment – UF, Worker Party / Movement for Socialism
Manifesto: “militant, revolutionary, socialist worker party”
A new federation?
10 Month wait for next appeal – National Congress.
NUMSA / AMCU Merger? EFF talks?
11. • DOL grants approval to expand scope
o Mining, transport, security, construction, cleaning, industrial chemicals, renewable
energy, information and communication technology, aviation, health and canteen
services.
• This will effectively place NUMSA in direct conflict with its former allies in the
COSATU, including NUM, AMCU, SATAWU and Ceppwawu.
• UF exploring possibilities of funding for “war chest” against ANC
Note: estimated 50 political assassinations in past 5 years!
Will this socialist worker party eventually dislodge the ANC from power?
12. Ervin Jim tours USA (why not Cuba?) to:
o Establish strategic alliances,
o Gain insights into establishing political party,
o Promote launch of UF and
o Explore funding opportunities.
o Endorses Marxism/Leninism despite demise of Stalinist states since the 1980’s
Campaigns to grow membership:
◦ Soweto meetings: Looting / Zenophobia
◦ Energy crises
◦ National minimum wage
◦ Allowances for unemployed / job seekers
◦ Education
◦ 5% of GDP to housing, water & sanitation
◦ Challenge Pres. Zuma at the State of the Nation Address.
◦ June 2015 – National launch in Gauteng
ANC reaction
◦ Gearing up for challenge at municipal polls - May 2016
◦ Visiting areas where UF has strong support (JHB, Pretoria, PE)
◦ Will the ANC be looking for coalition partners?
13. IMPACT OF NUMSA / COSATU “spat”:
◦ Impacting on foreign investment & job creation in sector
◦ Destabilize labour relations
◦ Increase pressure on wage demands
◦ Increase pressure on Socio / Political issues and related demands
◦ Increased militancy?
TURF WAR IN PUBLIC SECTOR
◦ Destabilisation of infrastructures
◦ 1.3 million state employees / 16 unions
◦ Financial profits made by unions: Incentive to compete for membership
◦ Immense power of trade unions in South Africa.
Unionisation peaked in 1997 at 45.2% of total employment. Now 25.4% in 2012
(Institute of Race Relations)
14. IMPACT OF NUMSA / COSATU:
◦ Inter-union violence
“Feud will undermine efforts by government and business to create jobs and
spur growth”
“The upheaval in the union movement will inevitably reach the shop floor,”
(Prof. Raymond Parsons)
◦ 2013: South Africa had 114 MAJOR strikes, LOST 1.85 million working days
◦ Cost to Employers 6.7 billion rand
15. NEASA’s application to prevent the 2011/14 extension of Main Agreement to non-
parties succeeds
LC findings:
◦ Agreement is set aside
◦ Agreement not concluded under the auspices of the MEIBC (Technicality: A-H
grade increases, specifics not negotiated)
◦ Severely criticises the MEIBC and DOL
◦ MEIBC, DOL and Minister to appeal ruling.
NEASA’s application to prevent the extension of the 2014/17 fails
◦ Court confirms SEIFSA’s standing as an employer organisation
◦ Holds the MA legally binding on parties and non parties effective 5 January 2015
◦ Finds NEASA’s approach to the interpretation of the LRA “insensible”
◦ NEASA appeals finding
NEASA’s next challenge - Dispute Levy, Administration Levy, Collective Bargaining
Levy
In private legal circles NEASA likened to a certain singer named Hofmeyr:
Passionate, but not going to win any political friends… (source undisclosed)
16. INDUSTRY FALLEN ON HARD TIMES
Manufacturing declining share of the economy / contribution to GDP
1983 – 20%
2012 – 16%
Local manufacturing reduction in favour of imports
exports = 35% of production / Imports captured 45% of domestic market
Inconsistent energy supply, cost of energy and complex “hire and fire” perceptions
deters investment
November 2014 – prime lending unchanged. Economic Growth Nov 2014 - 1.4%
Lowest since 2009 according to the National Treasury.
Capital stock in manufacturing relative to output declining since the early 1990s
Key factor is global competitiveness
Importation and Assembly operations instead of manufacturing operations
17. INDUSTRY FALLEN ON HARD TIMES Cont.
Energy intensive sector
Conservative estimation: 8.3 – 16.6% reduction in output (ferrous and non-ferrous: 12
- 24 hour operations)
Damage to electronic control systems = millions
Planned and unplanned outages cont for 3 months – 6 years.
Very conservative estimations: Sector suffered about R6 billion worth of output
23% loss of production and value added respectively, to the economy.
Nedbank statistics: projects announcements halved since 2013.
No Growth expected in 2015
◦ Uninspiring demand
◦ Employment decline
◦ Little investments
◦ Low capacity utilisation
◦ Declining profitability
22. ◦ Summary Impressions:
◦ SA turns back on manufacturing in favour of imports in the wake of a labour
relations regime characterised by conflict and growing confrontation on the part of
Labour
◦ Higher imports replacing domestic suppliers lead to lower capacity utilisation,
lower profit margins and, eventually, lower domestic investment in the sector
◦ Mortal battle for survival between manufacturers and importers.
◦ IR environment gets really tough – retrenchments, layoffs, short time
announcements, insolvencies etc.
◦ Energy crises is very serious
◦ Shop Floor union rivalry
23. ◦ SEIFSA’s response to crises:
Objective - revive the metal and engineering sector and to promote
manufacturing in Southern Africa
Southern African Metals and Engineering Conference to take place in
Johannesburg each year: 28-29 May 2015 at Emperor’s Palace Hotel
Captains of Industry, Policy makers, Investors, Minister Rob Davies, leaders in
other African States to participate)
Annual SEIFSA Awards - Excellence in manufacturing
Joins BUSA in energy crises management engagements with ESKOM and
Government
SPECIAL THANKS TO HENK LANGENHOVEN FOR DATA GATHERING AND STATISTICAL
ANALYSIS
24. Prepared and presented for KZNEIA by:
Ian Delport (Chairperson: KZNEIA)
Thank you for your kind attention
Conclusion:
There are clearly challenges in industry, but how do WE, as
industry, together with Government and our opposition,
Labour, meet them?
ian.delport@defy.co.za 031 – 460 9791, 083 412 2921
Tribute: NELSON
ROHLIHLA MANDELA
18|7|1918 – 05|12|2013
R.I.P.
