ERM: Where are we now?

The changing landscape of employment relations in South Africa

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SABPP, the endorser of Achiever magazine, partnered with GIBS and Cowan Harper Attorneys on a workshop held at GIBS, where leading thinkers and practitioners in the Employment Relations Management (ERM) field addressed contemporary issues and possible future trends.

The discussions ranged across issues from the day to day workplace through to ER institutions and the legislative framework. Albert Wocke from the GIBS Faculty opened the event and remarked that 2012 ushered in some major changes in the ERM field and he questioned whether the legal dispensation was adequately addressing these. As an example, unprotected strikes seem to be the norm rather than the exception. Also, based on CCMA statistics, three in 100 workers will take their employer to the CCMA at some point. Wocke said this points to poor management.

Charles Nupen from Stratalign said patterns are emerging in those organisations which have pathologically poor labour relations and that much more attention needs to be paid to the quality of employee relationships because at present this is limiting South Africa’s ability to achieve stability and economic growth. Private sector organisations, which perform very well in relation to their competitors, are characterised, without exception, by good workplace relations.ood workplace relations are underpinned by, among other factors, strong information flows where employee opinions are canvassed and listened to. The country has invested heavily since 1994 in putting in place labour legislation and labour market institutions and this has had a positive return in terms of access to industrial justice and a clear framework. However, as yet we have not seen much impact on workplace relations we still have dispute driven workplaces and there is a rising disrespect for rules and procedures.

Nupen traced this state of affairs to conflicting stakeholder ideologies, leadership challenges and dysfunctional institutional arrangements alongside limited state intervention. To achieve a meaningful change, a new and different kind of stakeholder conversation needs to take place to find a new and different way of doing things. Organisations must shift to a partnership approach and institutions must shift to analysis of problems and dispute prevention.He described how Sasol had, since 2010, moved a long way. In 2010, there were four unions who all competed for membership and refused to sit together to negotiate. There was conflict and violence. Company policies were “benignly paternalistic”, working for the people rather than with the people, which led to employee resentment. Since then, all stakeholders had faced up to these problems and worked in a more partnership approach, resulting in much improved workplace relations. This type of fundamental re-appraisal of approach requires leadership commitment and a deliberate process of change and renewal, without which no significant and sustainable improvements will be achieved.  Verna Robson from Sun International presented a case study of a lock-out conducted by Sun International in 2015. Unresolved wage negotiations ended up with a notice to strike from SACCAWU and the union proceeded to conduct a series of one day strikes, timed to coincide with peak periods of business to cause maximum disruption. On the second occasion of the strike, one day after the union gave three days’ notice of the strike, the company gave notice of a lock-out and implemented this, at the same time engaging replacement labour. The lock-out was kept in place for 11 days and the union applied to the Labour Court for an interdict on the use of replacement labour. On the final day of the lock out, the union accepted the company’s wage offer, hours before the Labour Court granted the interdict.Robson noted that the lock-out took the union negotiators by surprise but did not damage the negotiating relationship as the union, despite seeking an interdict to stop the replacement labour, recognised the lock out as a legitimate employer remedy. In reflection after the strike and lock out, management resolved to improve direct communication with employees as it was recognised that the union was doing all the communicating and the management position was not being clearly communicated.

Rod Harper from Cowan Harper Attorneys spoke about some issues in the current legislation that he feels need to be addressed to resolve current high levels of conflict. He said that there is an implied contradiction between the “open door” approach to registration of small unions with the preference for majoritarianism in organisational rights and that a higher test for the registration of new unions might be required. An absence of statutory employer remedies in disputes and conflicts interferes with the balance of power between unions and employers. It is not clear in the law whether a minority union has the right to strike on an interest dispute and the legal support for threshold agreements to keep out minority unions will not help to prevent conflict. Arnause Mohlala from CCMA (Ekurhuleni) confirmed that the CCMA would prefer to work on dispute prevention rather than dispute resolution but at present is constrained in its resources to do this work. The CCMA was expecting an increase in disputes around organisational rights with the implementation of the 2014 LRA amendments, but this has not happened—it seems that most workplaces are settled in terms of union preferences and that AMCU, NUMSA and, to a lesser extent, NTM are the only unions that have recently made significant inroads into established union environments. CCMA Commissioners have for many years been very conservative in granting organisational rights to unions claiming to be “sufficiently representative”, using normally a test of 30% and Mohlala said the CCMA recognises this probably needs to be revisited because in their view, a strict majoritarian approach leads to negative consequences in terms of labour relations, but they would not want to encourage a proliferation of very small unions with no resources.

He said if a majority union neglects the interests of its members, the workers will seek an alternative. He noted that employees today often join unions, not for collective bargaining, but for protection and representation in the workplace—against employers who do not know, or who ignore, the law or employers who persist in treating workers badly. If this is the case, then having several unions in the workplace would not be a problem. 
Lucio Trentini (SEIFSA) discussed how the prevalence of prolonged and violent strikes was leading to many human tragedies. The economic consequences can be managed, but those human tragedies cannot be dealt with. The centralised bargaining structures of the metal industry are going to have to change—a new model will be needed before the next round of wage negotiations. However, the process of breaking up the large institutions in the industry will not be easy and could be very hard to manage the analogy of fixing a plane in flight is apt. Marius Meyer (SABPP CEO) presented the SA Board for People Practices National HR management Standard which was launched in 2013. The Standard describes minimum good practice for organisations and is based on an integrated quality assurance system model of HR Management which emphasises that good results in people management will not be obtained unless minimum standards in each part of the system model are achieved. 

The Standard also emphasises the importance of understanding the socio-economic conditions under which employees live and that organisations must work towards community development which improves these conditions. Based on the ER element of the Standard, the SABPP has published an analysis of the Lonmin handling of the ER aspects of the Marikana tragedy, which clearly shows the shortcomings of the employer management of the issue. The SABPP has set up an HR Audit Unit, the first in the world, and offers audit certification to organisations across the range of the elements of the HR Management Standard. Gideon du Plessis (Solidarity) said the focus in ER should be on “relations” but these have become very adversarial—employers talk to union officials referring to “your members” rather than understanding that those members are first and foremost employees. Unions also need to understand that those members are also South African citizens with rights and responsibilities to the country, he said. He felt that many union officials are driven by personal political agendas to build their public profile and in the process they create unrealistic expectations amongst their members. However, he felt that this is all now changing as the continual wave of retrenchments hits in all industries and, as a consequence, there is a shrinking pool of potential members. But for reality to hit home to all stakeholders, there needs to be good communication, and employers still too often communicate through unions—as an example, at Highveld Steel management told the unions to pass the shocking message about the company closing down to their members.

Helen Diatile (NUM) agreed with this and said everyone, unions and employers, are living in a different world today and everyone needs to get the same knowledge base, which can only come from clear and full communication from employers. She said the reality is that unions are not penetrating the mass of employees, people feel they don’t need unions any more, but managers don’t care for their employees properly, so the role of the shop steward is actually very important. Unions need to re-dedicate themselves to active service of their members on the shop floor and need to ensure that there is internal worker democracy. Managers, shop stewards and HR must play their proper roles. Du Plessis noted that after the Marikana tragedy, CEOs suddenly got involved because the stakes were now so high, and in the process they gained a much better understanding of labour relations. But this greater understanding must be accompanied by ER and cultural sensitivity training for middle managers. In discussing the effects of declining membership of unions and majority/minority unions in the workplace, Du Plessis pointed out that every single union is in the minority at some or other workplace, so multi-unionism has to be embraced. The emphasis of unions should be not only on minimum wages which is a short term issue, but on empowerment in the longer term through skills development, which has the potential to increase wages for an individual much more.

Hermann Nieuwoudt (Norton Rose Fulbright) pointed out that union membership is in decline all over the world, but at the same time everyone has the right to bargain—but with this declining membership, the power of unions in the bargaining relationship is declining. Hartford said in a competitive situation (unions competing for membership), unions are tempted to hold out for the last Rand in wage negotiations to prove they are the strongest, but if this happens in a declining industry such as mining, this is not sensible in the long-term—so what is the responsible thing for a union to do? According to Diatile shop stewards need to be better trained in economics and unions must reflect on their role and engage on real issues. Unions cannot stagnate, but must adjust strategically, tactically and organisationally. The role that HR and ER practitioners have assumed over the last 25 years evolved out of a wave of complex legislation that required careful following of procedures. This has inadvertently resulted in form over substance— procedures getting in the way of sound shop floor relations between informed employees and skilled managers. HR and ER practitioners need to adopt the SABPP. 

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