13 August 2018 by Employment Alert

Industrial action in 2017: A zero-sum game?

The Department of Labour recently released its Industrial Action Report for 2017. The report provides a useful snapshot of the state of labour relations in the country and the impact of industrial action on workers, business and the economy at large.

Industrial action in 2017 increased by 8% from 2016. The 2017 strike figures are the highest since the department began monitoring strikes in the country. There were 132 work stoppages in 2017, of those only 52% of were protected strikes. This is an indication that there is still insufficient compliance with the requirements of the Labour Relations Act when it comes to strikes. Most strikes lasted less than 11 working days, but the number of working days lost was up by 1.5% from 2016. 

Although strikes related to wages fell by 30% from 2016, this was still the primary reason for strikes in 2017. A sobering reflection of the state of our labour relations is the massive increase from 2016 in strikes related to grievances (up by 249%), socio-economic and political conditions (up by 212%), retrenchments (up by 445%) and refusal to bargain (up by 519%).

The public sector experienced more work stoppages than the private sector in 2017. The largest industrial disputes last year were recorded in the community sectors (mainly health and social services) with 58 strikes, followed by mining and manufacturing with 18 strikes each.

The average wage settlement rates in all industries was 7.7%. Wage settlements were highest in the mining, transport, utilities and manufacturing sectors and lowest in the construction and manufacturing sectors. On a positive note, a number of different industries were able to achieve multiyear wage agreements.

The history of income inequality in South Africa is a significant challenge and goes some way to explain the massive strike figures. However, in many cases the duration of industrial action and the financial impact strikes have on workers appears to be exacerbating their situation rather than improving it. Significantly, the economic impact of industrial action due to loss of wages on workers was calculated at R251 million in 2017. This is dramatic increase from the R161 million in lost wages in 2016. Invariably the report reveals that in most industries, workers resolve their disputes for far less than what they initially demanded. 

The soon to be implemented National Minimum Wage will increase the earnings of more than six million working South Africans. The report envisages that this will reduce the number of industrial disputes arising due to wage demands. Whether the implementation of the National Minimum Wage will achieve its laudable aim remains to be seen. 

The full report can be accessed at the following link: http://www.labour.gov.za/DOL/documents/annual-reports/industrial-action-annual-report/2017/industrial-action-report-2017.

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