Starring

Unemployment Rockets Union Rivalry Intensifies

Political Assassinations Increase Wage Inequality Deteriorates

Centralised Bargaining Compromised Dissent amongst Employer Associations

Threat of Mega Bargaining Units Weak Consumer Demand

Imports Increase Service Delivery Problems Corruption in Government

Strike Season looms High Crime rate

1. An Economic Overview of the Metal and Engineering Industry

2. Collective Bargaining in SA

3. MEIBC

4. Political Activity and Union Rivalry

“It has been said that "it is

difficult to make predictions,

especially about the future".

Nowhere is this truer than in the

world of work. The complexities

and uncertainties generated by

the interaction of economic

change, new technology, politics

and labour relations make any

long term analysis a highly

conditional exercise.“

(Prof. Darcey du Toit)

An Economic Overview: Summary

Reputable qualitative surveys: The outlook for demand is weak. There is a very low appetite for investment in the tough domestic and international environment Unless conditions improve, the actual performance of the Metal and Engineering sector and its contribution to the economy will be worse than anticipated.

Imports vs. Exports

• South African companies losing domestic market share to imports at an alarming rate.

• South African producers’ share of the domestic market peaked in 2002 at 68% and has since declined to 48%.

• Imports grew by more than 12% in 2015 compared to 2014.

SIZE versus SHARE of the ECONOMY

Manufacturing Economy M & E Manufacturing Met & Eng to Met & Eng

to Economy Manufacturing to Economy

% % % % % %

10 years 18.9 30.5 6.5 -8.9 -10.4 -18.4

20 years 56.2 82.3 53.6 -14.3 -1.7 -15.8

30 years 70.3 103.3 56.0 -16.2 -8.4 -23.3

Growth over Time Change in Contribution

Production & Utilisation

SEIFSA expected a 3% contraction in production during 2016 on last year. The 5% annual and 6% year to date actual declines are therefore of extreme concern. It is said that production levels are now hovering just above the 2009 crisis levels - the same low levels recorded during 1999 – 15 years ago.

Employment and Production

SA Unemployment Rate

Drugs / alcohol consumption, prostitution, poverty, hunger, revolutionary views, family feuds, wage demands, violent demonstrations, robberies, “gangsterism”, suicides.

Load Shedding

Source: Business Day - 5 July 2016

Collective Bargaining

Major events over last 5 years:

• Cost‐benefit exercise over last five years - conclusion reached that gains achieved fails to adequately recover financial losses that employees suffered during strikes.

• 2010 - three‐week public sector strike, involving around 1.3 million workers

• 2012 - strike‐associated violence reached new heights: Killing of SAPS and 34 mineworkers.

• 2013 - massive, protracted strikes occurred across mines in the platinum belt, industrial unrest in the auto assembly & components industry. 200 000 employees affected in Coal and Gold sectors

Union membership declines

Strikes becoming longer in duration

Strikes violence escalates

Collective Bargaining

Major events over last 5 years cont.

• 2013 Back-to-back strike in auto and components (7 weeks) 40 000 employees.

• 2013 Construction Sector strike; 3 weeks. 90 000 employees.

• 2014: 6 week strike in Metal and Engineering Industry estimated 220 000 employees.

• 11 000 jobs lost in Metal and Engineering in 2015.

• 2016: Violent service delivery protest action and a spike in political assassinations

• The unemployment statistics report released 9 May 2016 - 355 000 jobs lost in the first quarter of 2016 (Source: SA News.gov.za). Unemployment rises from 24.5 to 26.7% in first Q.

• Currently 8.9 million people unemployed.

• SEIFSA warns that around 500 000 jobs could be shed this year.

Collective Bargaining SA

ECA International – Forecasting pay increases of 6.9 percent for staff this year, based on inflation forecasts of 5.9 percent.

Ave wage settlement rate in collective bargaining agreements (Andrew Levy)

8.1 percent in 2014.

7.7 percent in 2015

Wage negotiations at Eskom, and in the automotive, tyre and motor sectors are already in progress. Retail motor industry accused by NUMSA of not making a wage offer.

Eskom offers 7% across the board, rejected by NUMSA

AMCU about to make wage demands in platinum, still reeling from the record five-month strike in 2014, led by AMCU. NUM demands 20% at Plats, AMCU demands R12 500.00 minimum.

Talks between government and COSATU on“the minimum wage, balloting before strikes, and compulsory arbitration, so that strikes don’t last forever” at a sensitive stage – strongly opposed my NUMSA.

Collective Bargaining SA

The MEIBC which represents of the largest employer federations and some of the most influential unions in SA, is in crises.

Gulf between Employer Associations: fundamental opposing views.

Financial collapse of MEIBC

Alleged poor management of MEIBC

High level of tension: labour, employers & government

Strategic high level engagements with NEASA and NUMSA.

Strike potential – impact could be disastrous to SA e.g. Khusile & Medupi.

MEIBC

RESOLUTION:

Agreement now reached and oversight committee to be established.

NEASA challenges postal voting process: “…not constitutionally permissible to have a postal vote at this stage as this particular vote must be dealt with at the AGM on 25 August 2016”

Some employers remain sceptical whether the financial intervention will save the MEIBC

The potential collapse of traditional structures of Centralised Bargaining will require innovative lateral thought for legislative changes to cope with future Labour Relations challenges in South Africa

MEIBC

Politics and Union Rivalry

The Silent War…

Politics and Union Rivalry

“Durban – A KwaZulu-Natal ANC councillor was killed and his wife was critically injured when their car was shot at in KwaNongoma on Monday morning.”

“eThekwini ANC councillor, Zodwa Sibiya, was shot and killed at the Glebelands Hostel in Umlazi, Durban”

“29 June 2016 - The African National Congress welcomes the arrest of a suspect in connection with the murder of Comrade Simon Modige in Tshwane. Comrade Modige lost his life when he was shot during the outbreak of violence which took place at the outskirts of a meeting held to report to branches on the ANC Mayoral Candidate for the City of Tshwane.”

(Isithebe Durban)

“The African National Congress' Branch Chairperson at Edendale outside Pietermaritzburg was shot and killed at Mbali Township.”

The Silent War…

“…in the past couple of weeks several councillors and party members have been killed in the province.”

Politics and Union Rivalry

The Silent War…

“JOHANNESBURG - Workers belonging to the major union at South Africa's Northam Platinum said on Wednesday they would not resume work at its Zondereinde mine until arrests were made for a spate of murders.”

Mineral Resources Minister Msebenzi Zwane: “politics are causing the rivalry between unions at the Zondereinde mine.”

Andrew Levy: “It’s a turf war”

Gideon du Plessis (Solidarity GS): “Trade union rivalry could set country on fire”

Numsa and Amcu are jointly recruiting members in the coal sector and it is only a matter of time before the rest of the coal mining sector is also shaken by those two leftist trade unions. Numsa is also holding the Medupi project to ransom, while Amcu is getting a foot in the door at Medupi through the backdoor. As a result of their growth, those two unions may also soon become the centre of trade union activities at Eskom, while Numsa is already insisting on having a seat on the Eskom Board.

Assasination of Numsa shop stewards involved in Limusa activities

NUMSA terminates membership of employees following disciplinary hearings

“Numsa outrightly condemns what looks like a well-calculated and dastardly killing of its three shop stewards… in Isithebe,” KwaZulu-Natal regional secretary Mbuso Ngubane said in a statement.

3% 0%

10%

13%

5%

5%

4% 0%

11% 1% 8%

3% 0%

15%

5%

2%

4%

6% 1% 3% 0%

THE COSATU SPLIT

NUMSA

EFF Discussions?

AMCU Discussions?

New

Fed

erat

ion

?

COSATU Vavi vs. Dlamini

New radical left wing political party: United Front

Gedore (June 2016)

• Petrol bombs

• Destruction of property

• Evacuation of

employees

Isithebe (2016)

• Political

• Petrol bombs

• 1 factory destroyed

• 3 others damaged

• Vehicles torched

• Schools closed

Lack of public service delivery

High unemployment

Political factors

Wage inequalities

Thank you for listening

Ian Delport

KZNEIA Chairperson

Member of the SEIFSA board

Member of MEIBC MANCO

Executive: Defy Appliances (Pty) Ltd

0834122921