Attacks on labour institutions:Path to open conflict

Recently a worrying trend towards the undermining of collective bargaining institutions has emerged.  Lynford Dor argues that government austerity has resulted in budget cuts to the Commission for Conciliation, Mediation and Arbitration and attacks on bargaining council wage agreements. This together with the 2019 Labour Relations Act amendments which imposed limits on the right to strike, opens the way to greater worker rights abuses, reduced wages, and job losses.

In 2020, National Treasury abandoned the final year of the public sector three year wage agreement and slashed the Commission for Conciliation, Mediation and Arbitration’s (CCMA) budget. These moves were presented by Treasury, the mainstream media, and even the CCMA itself as a straightforward matter of addressing the government’s budget deficit. 

Different organisations and commentators in the labour movement have, however, noted that this is an attack on collective bargaining and speedy dispute resolution. These are two central pillars of the post-apartheid industrial relations framework. 

This article argues that these attacks, together with the 2019 Labour Relation’s Act (LRA) amendments that imposed new limits on the right to strike, are part of an ongoing process of redrawing the post-apartheid industrial relations framework.  Government is using austerity (budget cuts to control public-sector debt) as a weapon to deepen South Africa’s cheap labour regime and open up greater avenues for capital to extract profits.  

In doing so, the article shows how austerity is never a technical fix to balance budgets. Rather it always forms part of a class project to resolve crises in favour of capital.

Post-apartheid labour relations framework

The ANC government drafted the post-apartheid labour relations framework to move away from the industrial conflict, including numerous strikes, of the final decades of apartheid. This conflict threatened the capitalist model for a future South Africa. 

The 1995 LRA set up the CCMA to enforce worker rights and resolve disputes fairly and rapidly.  But it also restricted workers from striking over breaches of their rights (disputes of right). 

The LRA allowed for strikes over things like wages and working conditions (disputes of interest), but such disputes should be settled through “orderly” collective bargaining. Towards this aim, bargaining councils centralised collective bargaining at an industry level. 

In this way,  speedy dispute resolution and orderly collective bargaining formed the basis of a new labour relations regime that promoted industrial peace and prevented workers from striking as far as possible. For capital, this meant a period of relative stability while it searched for new avenues to increase profits.

The framework of labour legislation was designed around a concept called “regulated flexibility”. This is supposed to be a balance between employers’ interest in labour flexibility, and workers’ interest in security. In reality, regulated flexibility created legal avenues to allow capital to recreate a dual labour market in the democratic era. In essence an ever-shrinking permanently employed workforce,  and a growing number of workers in “precarious” or “flexible” employment.

Over the last two decades, union power has dwindled largely (but not solely) as a result of the union movement’s failure to organise under these new conditions.  Non-unionised precarious workers now dominate whole workplaces and even industries.

In recent years, capital and the state have taken significant steps to redesign labour relations to reflect capital’s dominance in the balance of power between workers and employers. The most notable example is the 2019 LRA amendments that attacked the right to strike. This attack accelerated under the cover of the Covid-19 pandemic in 2020 resulting in an erosion of the 1980s power balance.  

Limiting the right to strike

In 2019, the state, with the support of the Congress of South African Trade Unions (COSATU), the National Council of Trade Unions (NACTU) and the Federation of Unions of South Africa (FEDUSA), passed new labour legislation that gave workers a minimum wage with one hand, and attacked their right to strike with the other.

The amendments to the LRA introduced highly restrictive picketing rules. They also require trade unions to conduct a secret ballot of their members before going on strike to ensure majority support of the action. The labour registrar has at times used this provision to deregister unions that have failed to conduct strike ballots.

This attack on the right to strike may limit the number of strikes, but it may also drive  industrial action into open, unregulated conflict. Indeed, unprotected strikes (which if unlawful, such as not following procedures, may result in dismissal) already outnumbered protected strikes in four out of the last six years on record according to the Department of Labour’s  Industrial Action Reports.

The recent budget cuts to the CCMA and the trend towards undermining collective bargaining mean that institutional spaces to negotiate and settle disputes are being closed off. This means that workers and their organisations will increasingly be left with the choice to either accept their lot, or to pursue their interests through strikes, often outside of official channels. This may take the form of  wildcat strikes or other forms of unregulated expressions of worker power.

Undermining collective bargaining

Treasury’s announcement that it would not pay the scheduled public sector wage increase emboldened employer organisations in the private sector, who began to abandon their own wage and bargaining commitments. The National Union of Metalworkers of South Africa’s (NUMSA) 2020 newsletter revealed the extent to which this is happening in major areas of the economy.

In the metal industry, the employer Steel & Engineering Industries Federation of Southern Africa (SEIFSA) secured a postponement of 2020 negotiations with a freeze on wages. NUMSA reported that the expiry of the Metal & Engineering Industries Bargaining Council’s (MEIBC) Main Agreement opened the space for employers to argue that longstanding conditions of employment, won through decades of collective bargaining, are no longer binding. 

In the motor industry, employers refused to implement wage increases from a Metal Industries Bargaining Council (MIBCO) agreement signed in January 2020. Workers at big companies like Volkswagen South Africa were even forced to take 50% wage cut for a period last year. 

In the plastics industry, employer organisations secured a 0% wage increase by negotiating with the conservative Solidarity union alone, and excluding other unions in the sector.

In the bus passenger sector, a number of major employers applied for exemption from a binding wage agreement, while some companies resigned from employer organisations.  This makes centralised bargaining difficult to conduct.

Altogether these examples suggest a clear trend towards the undermining of collective bargaining. 

The Labour Appeal Court’s December 2020 judgment declaring the public sector agreement unlawful has sent an even more worrying message. Namely, that the courts will abandon collective bargaining rights if they come into conflict with austerity budgeting.

Destroying the CCMA

As part of the state’s deepening austerity drive, the Treasury cut the CCMA budget in 2020 by R600 million over a period of three years. 

The initial R100 million that was cut from the 2020/21 budget has already hampered the institution’s administrative capacity, resulting in an end to walk-in referrals.  The cuts have  also led the CCMA to “temporarily” lay off 60% of their part time contracted commissioners. Some analysts believe that part-time commissioners were responsible for up to 80% of arbitrations. This gives an early indication of the extent to which the work of the CCMA has already been disrupted. 

In recent years, the CCMA has suffered under the weight of an ever increasing case-load as a result of an expanding mandate from the state, and increased rights’ abuses by employers. In supporting workers to take up cases at the CCMA, the Casual Workers Advice Office has seen an increase in excessive delays which frustrate workers’ access to justice. 

Remaining commissioners are now often not able to fulfil the CCMA’s mandate of resolving disputes quickly. There are many examples of commissioners urging unrepresented workers to sign unfavourable settlement agreements. The current budget cuts will make this anti-worker tendency worse.  

The DEL’s (Department of Employment and Labour) Annual Reports indicate that the CCMA’s entire budget for 2019/20 was only R951 million. If the remaining planned R600 million cuts go through, it will be the end of the Commission as we know it.

Conclusion

Austerity has been the response of capitalist states across the globe to the economic crash of 2008/9. In many cases, austerity has been accompanied by stimulus programmes aimed at the banks and the financial sector. So austerity policies have cut spending on public sector social goods while encouraging private sector speculation.

Capitalists globally choose austerity not because it helps governments balance their budgets. They choose it because it makes new, immediate and existing avenues for accumulation more profitable. 

In South Africa budget cuts to state institutions and State-Owned Enterprises open new points of accumulation because they lead to privatisation. The cuts to the public sector wage bill, which has undermined collective bargaining, and the cuts to the CCMA, will together lead to an overall suppression of wages. They also open the way for greater rights abuses, more mass retrenchments, and the reorganisation of production often resulting in job losses.

Employers everywhere are looking to transfer the cost of the Covid-19 pandemic onto workers. 

At workplace level, employers responded to the Covid lockdown by imposing unpaid leave on many workers and also in some cases through dismissal. In addition, when the Unemployment Insurance Fund TERS (temporary employment relief scheme) was rolled out, some employers appropriated the money instead of distributing it to workers.  TERS ran only until September 2020, but many workers are still struggling to access the money owed to them by employers and the UIF.

Yet, what is more alarming is the way that business and the state have used the pandemic to alter the entire terrain of labour relations. We still have to see how workers and their organisations will respond to this increasingly adversarial approach.  What is clear is that under conditions of an intensified class offensive, the standard practice of directing worker struggles through crumbling institutions of class collaboration is likely to become less and less of an appropriate response.