RULING THE ROOST - JSE MAGAZINE

RULING THE ROOST

SA’s ‘winner takes all’ union system has had huge repercussions for industrial relations

RULING THE ROOST

Marikana brought a number of relatively obscure facets in SA’s labour system to the fore. These became the subject of grand, high-level peace agreements and highlighted the day-to-day union politics raging on the platinum mines especially. Unions’ ability to create monopolies barring competing unions from workplaces is one example.

The ‘winner takes all’ or majoritarian principle refers to Section 18 of the Labour Relations Act. It states that a union representing 50% of employees in a ‘workplace’ can negotiate recognition agreements with the employer. These also set the rules for the recognition of other unions, including the crucial membership threshold – the number of workers required by other unions to gain recognition.

If the threshold is 50%, it literally means only one union is recognised until another completely displaces it. This has consistently been fingered as contributing to the strike wave that started at Impala Platinum in January 2012 and spread to most of the deep-level mines in SA, culminating in the Marikana shootings.

Winner takes all is not often used to create exclusivity for unions – but it was at Impala. The National Union of Mineworkers (NUM) achieved this between 1997 and 2007 with a succession of deals that progressively kicked out both the minority unions Solidarity and the United Association of South Africa (UASA), which meant there would be no channel to the negotiating table before another union recruited 50% of workers.

This monopoly fuelled the tensions of 2012 after a committee of rock drill operators launched a strike in January. True to its agreement with NUM, Impala refused to talk to them while there was no other union to represent them. The rest is history.

Since NUM’s decimation in the platinum industry, the usual victims of winner takes all – the mining industry’s long-standing minority unions for higher job categories – have been particularly vocal about its evils. This is because the Association of Mineworkers and Construction Union (AMCU), which has displaced NUM as the dominant union, has rebuffed calls for a multi-union dispensation. Since Marikana, platinum companies have preached ultra-low thresholds as little as 10%, which even the ailing NUM can reach.

AMCU has since adopted a harsh policy with recognition agreements. Its president Joseph Mathunjwa has called the old minority unions – who have survived by reaching a threshold in small, separate bargaining units – a form of apartheid.

The post-Marikana Framework for a Sustainable Mining Industry brokered by Deputy President Kgalema Motlanthe makes a very weak gesture towards reforming the winner takes all principle. But it calls the majoritarian principle ‘one of the main pillars in the construct of our labour market regulatory system’ and claims ‘it has served the system of our industrial relations very well’.

It does admit that ‘some have raised concerns about its unintended consequences including, but not limited to, the possibility that it may infringe on the constitutional rights of other organisations and individuals’ freedom of association. These concerns warrant a need for evaluation’.

If the threshold is 50%, it literally means only one union is recognised until another completely displaces it

But the principle is not that simple. It’s no coincidence that it has become a bone of contention in mining rather than any other highly unionised industry. The deep-level gold and platinum mines are uniquely enormous workplaces involving thousands and often tens of thousands of employees. Applying a strict majoritarian principle there is very different to doing so in a factory with at most a few hundred workers.

‘Winner takes all makes sense in a factory, but maybe not so much in a mine,’ says Jan Theron, co-ordinator of the University of Cape Town’s Labour and Enterprise Policy Research Group and himself a former unionist. ‘The question of scale affects the practicality of it. In a workplace where a union has the majority, it will always want to force an agreement. It makes sense. On the mines it is a different scenario though. These are mega-workplaces. The system for establishing recognition thresholds in SA “is not at all unique”. It starts with how production is organised,’ says Theron.

The Labour Relations Act of 1995, and the majoritarian principles enshrined in it, were born out of the labour struggles of the 1980s and premised on industrial unionism.

‘A more flexible way might be necessary [on mines]. I think unions need to accept that some degree of competition is healthy,’ says Theron. Ultimately there is nothing magical about the line being drawn at 50%. A normal threshold of between 25% and 35% still amounts to several thousand people in a large mining company such as Impala so the rock drill operators who started the 2012 strike wave would still have been unable to bypass NUM with a new union at these levels.

The nature of SA unionisation is such that a significant minority in higher-end occupations don’t join unions. This means a 40% threshold could just as effectively bar competition. Even an uncommonly low threshold of 10% at a company such as Lonmin or Impala still amounts to more than 2 500 workers – a very large contingent of people to potentially leave unable to organise as they see fit.

One of the more devastating ways to use Section 18 against smaller unions is to redefine the ‘workplace’, instead of raising the threshold. Typically employers have their operations divided into several bargaining units either representing job categories or physically separate operations such as mines in different parts of the country. A separate threshold for recognition then applies to each one.

Combining the bargaining units into a single entity covering everyone will often have the effect of expelling smaller unions who have strong local support in one part of the company, even if the threshold is set well below 50%.

Practically, a union seeking to eliminate the competition would use a combination of workplace restructuring and thresholds. It probably won’t need the symbolic 50% absolute threshold (see graphic).Even though the pronouncements stemming from the summitry and talks after Marikana are vague and weak, the mechanism is not unassailable.

The pending amendment to the Labour Relations Act does dilute it slightly by making allowances for small unions – barred by standing recognition agreements – to win rights if they ‘represent a significant interest or a substantial number of employees’.

It remains to be seen what will qualify as a ‘significant’ interest or a ‘substantial’ number of workers, but the intention is clearly to put a pressure release valve on the absolute monopolies unions are currently able to negotiate.

Rationally there has to be some kind of barrier to union recognition. The act even makes arbitrators in recognition disputes ‘seek to minimise the financial and administrative burden of requiring an employer to grant organisational rights to more than one registered trade union’. Having one union with real legitimacy is a boon to employers as long as it has the overwhelming support of workers.

025_Labour extra_JSE58

It is also easy to be cynical about officialdom and NUM’s newfound opposition to winner takes all. It has served NUM to the detriment of other unions for years. Now that the government-aligned union finds itself on the back foot and the principle is serving its opponents, it is hard not to see the concern as politically expedient.

Although it has not insisted on anything as extreme as NUM’s old Impala deal, AMCU has practically set thresholds that expel competitors in the platinum industry. At Lonmin it set a threshold of 35%, knowing it was higher than the remaining membership of any other union at the company.

It is ironic that AMCU has used Section 18 to effectively kick other unions out of Lonmin since it has been battling NUM in court for doing the same thing elsewhere. At BHP Billiton Energy Coal South Africa (BECSA), NUM has also been trying this approach since 2010.

It negotiated a recognition agreement that suddenly left both AMCU and Uasa with too few members to retain their union rights by merging all the group’s mines into one bargaining unit.

This was a particularly meaningful move against AMCU as Becsa was where the union had originally been created as a breakaway from NUM a decade ago. Its headquarters are still located in Witbank near the coal operations.

Ultimately the problem with winner takes all is not the principle itself, but its various practical outcomes at vastly different workplaces. The weakness of the system is that it fundamentally relies on the goodwill of the people involved, not the law.

The way winner takes all comes into play when unions compete for recognition is not the only, or the most important, application of majoritarian thinking in SA’s labour system. It underpins another basic collective bargaining rule that has drawn even more fire, this time from employers and think tanks.

That is the automatic extension of wage deals to entire sectors when the parties to a bargaining council represent 50% of the sector’s employees. This is how much of the manufacturing sector’s minimum wages and conditions of employment get set.

In large bargaining councils such as the one for the metals and engineering industries, this system affects hundreds of thousands of workers at a multitude of small companies.

This rule is, to its opponents, even more undemocratic than winner takes all because the Minister of Labour is able to extend agreements even if the unions and employers involved represent less than half the workforce.

A series of court cases have taken aim at this principle with the Free Market Foundation in particular seeking to take it to the Constitutional Court on a grand scale, citing all 48 bargaining councils as respondents.

By Dewald van Rensburg
Image: David Maclennan