Economy

Strike season falters as labour force faces harsh economy

Cape Town – The reality of the tough economic climate in South Africa seems to have made the country’s labour force more realistic in its demands and speeded up its willingness to settle, according to Aadil Patel, head of employment practice at law firm Cliffe Dekker Hofmeyr.

Traditionally strike season in SA occurs between June and August. But according to Patel there has not been much strike activity so far this year.

“I am no statistician, but my impression is based on figures released by the director general (of the Department of Labour); the levels of traditionally quite high strike industries, which have settled wages; and the (lower) number of labour court interdicts against strike actions,” Patel told Fin24 on Wednesday.

“Having regard to those three factors, there is a distinct impression created of the decline in industrial action in SA during the current ‘recession’ or downturn in the economy.”

Patel said history shows that during times of severe economic downturn, strike actions in SA have tended to decline.

One of the reasons for this trend, in Patel’s view, was that during an economic downturn not many people could afford strike action where they do not get paid. He saw this as an example of intellectual maturity in SA’s industrial relations environment due to the harsh economic situation.

“In South Africa, we do not have a strike fund to support employees when they are on industrial action,” he said.

  • READ: Almost all working South Africans fear losing their jobs – survey

Employers

Employers also understand that during economic downturns they cannot afford strike action, said Patel, adding that they make a concerted effort to try and find a way to settle wage and salary disputes.

“While the South African economy was able to claw its way out of a technical recession, it still finds itself in a vulnerable position. Any strike action is increasingly problematic as it not only impacts on the employer’s productivity but also the efficiency of the country,” he said.

In his view during a recession or downturn in the economy both parties were becoming “more mature” in the industrial relations environment – with less violence during strike action and not as many interdicts coming to labour courts.

“Of course unions are (still) not settling for peanuts, but they are becoming more realistic about their demands during an economic downturn,” said Patel.

“Organised labour is potentially more acutely aware of the conditions organisations find themselves in, and employers are becoming more mindful of the fact that they need employees, and that employees need to be rewarded despite an economic downturn.”

However, he added it remained to be seen whether this trend of limited strike action would continue, given that SA just exited a technical recession.

Patel also pointed out that it appeared the courts had become less tolerant of strike violence, particularly where non-striking employees were intimidated for not taking part.

Fin24 asked Patel whether one could expect the trend of less strike action to continue into next year’s public sector wage negotiations.

In response, Patel said that because of the economic environment, he expected the “more mature” attitude to persist, especially among established unions.

  • READ: Nothing is equal in the job market

Statistics

Patel said that Department of Labour calculated that, on average, SA lost a collective 2.5 million working days annually due to strike action between 2005 and 2015.

At the start of the economic recession in 2008, SA experienced a significant decline in the number of strikes. The Department of Labour estimated that in 2008 SA lost 497 436 working days due to strike action – the lowest level since the 1990s.

In 2016 the country recorded 122 strike actions and lost an estimated combined 946 323 working days. This was still significantly lower than the highs of 2010 – with its relatively strong economic growth in preparation for the 2010 World Cup – when a total of 20.7 million working days were lost due to stoppages from various industries.

Patel, therefore, believes SA could be experiencing a similar trend to 2016.

SUBSCRIBE FOR FREE UPDATE: Get Fin24’s top morning business news and opinions in your inbox.

[“Source-fin24”]

About the author

Loknath Das

Powered by themekiller.com anime4online.com animextoon.com