section 3: industrial relations - department of · pdf filesection 3: industrial relations....

Annual Labour Market Bulletin > South African labour market in particular amongst youth 2012

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3 SECTION 3: INDUSTRIAL RELATIONS


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SECTION 3: INDUSTRIAL RELATIONS

This section briefly looks at the relations between employers and their employees as reflected by industrial action and industrial dispute cases that have been handled by the Commission for Conciliation Mediation and Arbitration (CCMA), which are indications of a breakdown in that relationship. The strike statistics in this section covers the financial year 2011/12134.

Using worker characteristics in multivariate analysis, Hofmeyr (2000) estimates sectoral earnings functions to search for unexplained earnings differentials. On that basis, he finds substantial segmentation between unionised and non-unionised workers in the formal sector and between the latter and informal sector workers. He concluded that workers in these different segments cannot compete with each other even if they have the same skills and/or characteristics235. This is an important finding to be noted while analysing the industrial dispute in the country in line with wage negotiations.

The Department of Labour monitors work stoppages by employees using the LRA 9.2 form as prescribed by the Labour Relations Act, No. 66 of 1995 (as amended). The employers complete these forms and submit it to the Department after the conclusion of the work stoppage.

3.1. Industrial action trends – April 2011 to March 2012

This is an analysis of work stoppages that took place over the three-year period between April 2009 and March 2012 in the various industries.

34 A full report in industrial action analysis is provided in the annual industrial action report as published by the Department of Labour35 Hofmeyr (2000) cited by Fourie (2011), The Southern African Unemployment debate: the worlds, three discourses?, Working paper series, no. 63, p.11,

SALDRU.


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Figure 10: Number of strikes

Agriculture Mining Manufacturing Electricity Transport Wholesale Community Finance Construction

2011-2012 4 12 16 1 6 13 11 3 1 2010-2011 1 8 6 3 9 7 13 3 3 2009-2010 0 8 9 3 8 7 7 2 1

Num

ber o

f stri

kes

Industries Source: Department of Labour, Strike Statistics, Apr 2009-Mar 2012

• There was an increase in the number of work stoppages from 45 incidences in 2009/10, 53 in 2010/11 to 67 in 2011/12 financial years as shown in Figure 10. The increase was mostly noticeable in the manufacturing industry from six incidences in 2010/11 to 16 in 2011/12 as a result of the strikes in the steel and engineering sector, petroleum, pharmaceutical, chemical timber and sawmilling which was called by the union CEPPWAWU

• The wholesale and retail strikes increased from seven incidences to 13 due to some long drawn out work stoppages in the retail sector, hotels and casino. Mining and quarrying increased from 8 work stoppages to 12 due to widespread strikes in the gold, coal and some diamond mines. The agriculture, hunting and forestry strikes, increased from a single incident to four in the previous financial year as a result of the fishing sector strikes in the Western Cape and the forestry strikes in Mpumalanga

• There were decreases in work stoppages in the following industries, community, social and personal services from 13 in 2010/11 to 11 incidences in 2011/12, despite the lengthy strike by cleaners and the unsuccessful municipal workers strike

• Other decreases in work stoppages have been observed in the transport, storage and communication industry, where strikes decreased from nine to six incidences between the previous financial years despite the repeated work stoppages by the Gautrain-feeder bus system drivers, electricity, gas and water supply and construction industries, which experienced an increase from three work stoppages to a single work stoppage between the financial years, while the financial mediation, real estate and business services remained stable.


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Figure 11: Reasons for strike

0

10

20

30

40

50

60

70

Source: Department of Labour, Strike Statistics, Apr 2009-Mar 2012

• Work stoppages related to wages are the most common and have slightly increased between the years from 51% in 2009/10 and 2010/11 to 61% in 2011/12, as illustrated in Figure 11

• Working conditions that employees are subjected to is another reason that workers embark on strike for though there was a slight increase of 2% between 2009/10 and an observed decrease from 13% to 9% between the two previous financial years

• Another phenomenon that results in workers engaging in strike activity is grievances that they have, which are not addressed with the urgency that they deserve, resulting in workers downing tools. There has been a significant decrease of grievances from 19% in 2009-10 to 9% in 2010/11 and slight decrease to 8% in 2011/12

• Other compensation related matters increased slightly from 4% in 2010/11 financial year to 5% in 2011/12

• Work stoppages pertaining to trade union matters have also decreased from 9% to 3% between 2010/11 and 2011/12 with regards to refusal to bargain, and from 4% to 2% between 2010/11 and 2011/12 for recognition of trade union by employers.

Wages Working Conditions

Secondary action

Retrenchments Other Compensation

Grievances Disciplinary action

Refusal to bargain

Trade union

recognition

Other

2011-2012 61% 9% 0% 0% 5% 8% 0% 3% 2% 10%

2010-2011 51% 13% 0% 0% 4% 9% 0% 9% 4% 8%

2009-2010 51% 11% 2% 2% 0% 19% 5% 2% 2% 5%


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Table 19: Duration of work stoppages and employees involved

IndustriesWorkdays lost Work-hours lost Employees involved

2011-12 2010-11 2009-10 2011-12 2010-11 2009-10 2011-12 2010-11 2009-10

Community 1 452 233 18 871 913.1 151 348.5 11 440 149 150 721 513 637 332 78 683 1 072 825 26 185

Wholesale 50 598 253 608.56 190 011 2 196 791 1 358 655.41 1 520 087 3 749 17 730 18 372

Manufacturing 858 518.5 182 891 306 536 4 526 526 13 986 564 2 443 966.1 106 651 19 428 29 807

Agriculture 17 287 108 0 1 190 900 972 0 3 701 54 0

Finance 1 006 13 960 1 318 7 830 159 680 9 941 454 6 392 185

Electricity 70 8 107 98.4 560 34 336 758.7 70 3 919 249

Construction 28 750 520 269 134 172 918 2 416 2 422 206 3 578 228 41 164

Transport 36 209 639 118 279 599 275 738.6 4 217 870.41 2 107 694.5 3 303 36 306 32 847

Mining 1 148 260 30 128 309 832.5 30 289 253 261 849 2 127 212.5 87 647 3 625 23 110

Total 3 592 931.5 20 000 353.66 1 507 877.4 50 100 665.6 170 743 855.82 11 269 197.8 287 836 1 160 507 171 919

Source: Department of Labour, Strike Statistics, Apr 2009-Mar 2012

• Overall there was a significant reduction in the work days and work-hours lost as well as employees participating in work stoppages in 2011/12 financial year, as shown in Table 19 above

• Despite the reduction, there were increases in work days, work-hours lost and employees participating in work stoppages in the following industries: manufacturing, agriculture, construction and mining

• The increase was as a result of the duration of the work stoppages coupled with an increase in the number of employees involved in those strikes.


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3.2. Collective Bargaining

Table 20: Registered employer and employee organisations

2011 % change 2010 % change 2009

Registered trade unions 194 -1% 196 -4,4% 205

Membership of trade unions 3 392 149 11% 3 057 772 -5,6% 3 238 519

Registered employer organisations 166 12% 164 -1,8% 167

Bargaining Councils 46 -2, 1% 47 0 47

Source: Department of Labour, Collective Bargaining

• Table 20 above shows that the number of registered trade unions has been decreasing slightly by an average of 1% over the three previous financial years

• Despite the decrease in trade unions, there was an observed increase of 11% in the number of members. This means that members of deregistered trade unions tend to seek refuge in other established unions with similar interests

• There had been a growth in the number of employer organisations between the two previous financial years, while bargaining councils have declined.


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3.3. Dispute resolution

The CCMA is entrusted with the responsibility of resolving workplace disputes and the prevention thereof.

3.3.1. Referrals

Table 21: Referral of cases by region

Provinces Jurisdictional referrals Non-jurisdictional

Condination Pending/unknown

Total referrals

2011-12 2010-11 2009-10

Eastern Cape 7 368 9 471 10 011 1 756 80 9 204

Free State 6 402 8 023 7 934 1 789 66 8 257

Gauteng 48 238 59 093 60 150 15 919 54 64 211

KwaZulu-Natal 19 646 25 757 22 941 5 690 99 25 435

Limpopo 6 533 7 756 8 179 2 754 18 9 305

Mpumalanga 8 120 8 984 9 965 1 257 32 9 409

Northern Cape 2 298 2 842 3 101 658 16 2 972

North West 5 900 8 077 7 863 2 270 39 8 209

Western Cape 18 673 21 348 20 945 2 962 52 21 687

Head Office 2 862 2 928 2 568 29 8 2 899

Total 126 040 154 279 153 657 35 084 464 161 588

Source: CCMA, Operations (Apr 2011-Mar 2012)

• In Table 21, the number of cases handled by the CCMA has increased by 4.7% between 2010/11 and 2011/12 financial years, compared to 0.4% increase between 2009/10 and 2010/11

• Of the total referrals handled by the CCMA during the 2011/12 financial year, the CCMA had jurisdiction of 78% of these cases. This means they were correct referrals. Most of these cases (38%) were handled in Gauteng, followed by KwaZulu-Natal (16%) and Western Cape (15%), which is compatible with the economic activity within the country.


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Figure 12: Referrals by issue

1%1%

0%

4%4%4%

3%4%

3%

8%8%

7%

2%2%2%

2%2%2%

0 10 20 30 40 50 60 70 80 90

Capacity Building

Other

Severance Pay

Collective Bargaining

Mutaul Interest

UnfairLabourPreactice

Unfair Dismissal

%

2011-2012 2010-2011 2009-2010

79%80%81%

Source: CCMA, Operations, Apr 2011-Mar 2012

• As shown in the Figure 12 above, more than two thirds of the cases handled by the CCMA involved unfair dismissal, though this figure has been decreasing slightly over the years (81% in 2009/10 financial year to 80% in 2010/11 and 79% in the previous financial year)

• This is followed by unfair labour practice cases, which increased slightly between 2009/10 and 2010/11 financial year, but remained stable in the two previous financial years. Cases of mutual interest have also decreased slightly between 2010/11 and 2011/12 financial years. All other cases remained stable during the years under review.


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Figure 13: Referrals by sector

Agriculture

Food and Bev

Mining

Domestic

Construction

Safety/Security (private)

Retail

Business/professional services

%

2011-2012 2010-2011 2009-20104%4%4%

4%4%4%

4%4%4%

9%9%9%

15%15%15%

8%9%

10%

11%12%

11%

16%14%

13%

0 2 4 6 8 10 12 14 16 18

Source: CCMA, Operations

* Referrals for top 8 referring sectors

• The CCMA has received more referrals from the retail sector and this figure has stabilised throughout the years under review, except for the previous financial year, where cases from the business/professional services increased slightly. These cases have been increasing every financial year, as shown in Figure 13.

• Referrals for the private security and construction sectors also decreased slightly between the previous financial years, while all other types of cases have remained the same.


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3.3.2. Conciliations and Arbitrations

3.3.2.1. Conciliations heard and finalised

Table 22: Conciliations heard and finalised

Provinces

Conciliations heard and closed (90% of total conciliations heard)

2010-11 2009-10 Total conciliations

heard

Percentage conciliations

settled2011-12

Count Percentage

Eastern Cape 6 640 93% 89% 90% 7 162 47%

Free State 6 152 95% 94% 95% 6 452 46%

Gauteng 46 290 96% 94% 90% 48 465 45%

KwaZulu-Natal 17 819 95% 94% 84% 18 740 54%

Limpopo 5 497 94% 93% 92% 5 828 50%

Mpumalanga 7 268 97% 94% 93% 7 495 50%

Northern Cape 1 996 95% 96% 96% 2 108 50%

North West 5 456 96% 96% 92% 5 673 54%

Western Cape 21 431 97% 95% 97% 22 098 51%

Head Office 164 96% 90% 0% 171 44%

Total 118 713 96% 94% 91% 124 192 48%


Note: Settled includes only closed cases and those that were settled, settled by parties or withdrawn

• The overall performance of the CCMA in terms of conciliations heard is improving slightly just above the set target of 90% as it achieved 96% in the 2011/12 financial year, with all the provinces achieving the set target. This has been slightly improving throughout the years, as presented in Table 22

• All the provincial offices have also surpassed this target, with Mpumalanga and Western Cape exceeding the national average (97%), while Gauteng, North West and the Head Office have equaled that target. Just under half of the conciliations heard nationally were settled.


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3.3.2.2. Arbitrations heard and finalised

Table 23: Arbitrations heard and finalised

Provinces

Arbitrations heard and closed (90% of total arbitrations heard)

2010-11 2009-10 Total Arbitrations

heard

Percentage Arbitrations

settled2011-12

Count Percentage

Eastern Cape 3 351 93% 91% 88% 3 598 44%

Free State 2 369 95% 94% 93% 2 489 45%

Gauteng 19 515 95% 94% 89% 20 451 36%

KwaZulu-Natal 7 940 96% 94% 89% 8 270 52%

Limpopo 2 587 93% 91% 91% 2 782 39%

Mpumalanga 2 707 96% 95% 94% 2 820 47%

Northern Cape 628 95% 96% 96% 659 56%

North West 1 894 97% 96% 95% 1 960 50%

Western Cape 3 624 98% 97% 100% 3 694 49%

Head Office 52 68

Total 44 667 95% 94% 91% 46 791 43%


• With regards to arbitrations in Table 23, the CCMA has surpassed the set target of 90% as it heard 95% of the arbitration cases nationally in 2011/12 financial year, with all the provinces achieving the target. The Western Cape (98%), North West (97%), KwaZulu-Natal and Mpumalanga exceeded the national average (96%), while the Free State, Gauteng and Northern Cape have equalled the national average of 95%

• The arbitrations settled were just under half of all those heard (43%).


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In Table 24, more than 50% of the decisions taken by the CCMA have always been in favour of the employees, although there have been awards rendered in favour of the employers, dispelling any concerns of possible bias towards employees by the CCMA.

3.2.3.3. Awards rendered*

Table 24: Awards rendered by participants and province

ProvinceEmployee Employer TOTAL

Dec-11 Nov-10 Sep-10 Dec-11 Nov-10 Sep-10AWARDSCount % % % Count % % %

Eastern Cape 762 57% 64% 63% 561 42% 35% 36% 1 334

Free State 1 075 71% 71% 72% 425 28% 29% 27% 1 505

Gauteng 6 843 57% 58% 54% 5 117 43% 42% 46% 11 964

KwaZulu-Natal 1 724 62% 67% 69% 911 33% 31% 26% 2 766

Limpopo 1 049 72% 71% 67% 416 28% 29% 33% 1 466

Mpumalanga 924 69% 68% 66% 414 31% 32% 34% 1 342

Northern Cape 216 65% 62% 58% 113 34% 38% 41% 330

North West 515 59% 64% 61% 363 41% 36% 39% 878

Western Cape 1 237 51% 50% 49% 1 185 49% 48% 48% 2 429

Total 14 345 60% 61% 59% 9 505 40% 38% 40% 24 033

Source: CCMA, Operations

*Resultant is awards rendered in favour of other parties


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CONCLUSION


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CONCLUSION

A major conclusion may be drawn from the three main sections covered in this annual report. From the section one, South African economy cannot be disintegrated from the global economy. Most reports associate the current changes in the South African economic growth to external factors though the growth in the domestic consumption provides some kind of “comfort” for the national economy. Within this, for example, the National Treasury (NT) forecast that household consumption and investment would continue to grow in 2012 and Government spending would also support growth.

From Section Two, although economic conditions have improved relatively in the past three years, job creation still remains restrained in South Africa. There is no improvement in the structure of employment and this means that there is still a problem with regard to the shortfall demand and supply of labour in the labour market. Overall, it appears that more and more youth (15-34 years) became discouraged to search for work over the three-year period. In September 2011, 70% of discouraged work seekers were youth from a total of 2 204 000 discouraged work seekers in the country. On the other hand, the number of approved claims had declined from 177 968 in September 2009 to 130 159 in September 2010, although it increased in 2011 and also in March 2012. A decreased of 21% was recorded between September 2009 and September 2011.

By province, Gauteng, KwaZulu-Natal and Western Cape remained the three provinces were most of the claims are received and approved. In general, all claims should be processed within three months and the UIF has set the target of more than 90% of claims received to be approved and paid. The number of advertised vacancies was highest from July to September of 2010 when 21 213 vacancies were advertised in one quarter. This was due to the high demand of police officers and other administrative workers by government departments and municipalities. The number of advertised vacancies began to decline in the same quarter in 2011 until January to March 2012. This indicates that the South African labour market is not totally contracted but it does offer opportunities to those individuals who meet the skills requested by companies. From Section Three, there was an increase in the number of work stoppages from 45 incidences in 2009/10, 53 in 2010/11 to 67 in 2011/12 financial years. The increase was mostly noticeable in the manufacturing industry from six incidences in 2010/11 to 16 in 2011/12 as a result of the strikes in the steel and engineering sector, petroleum, pharmaceutical, chemical timber and sawmilling which was called by the union CEPPWAWU. The wholesale and retail increased from seven incidences to 13 due to some long drawn out work stoppages in the retail sector, hotels and casino. The number of registered trade unions has been decreasing slightly by an average 1% over the three previous financial years.

Despite the decrease in trade unions, there was an observed increase of 11% in the number of members. This means that members of deregistered trade unions tend to seek refuge in other established unions with similar interests.


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POLICY IMPLICATIONS

• The structural shift away from the most low-skills intensive parts to the skilled parts resulted in skills supply and demand mismatches. It is the key to understanding the concentration of unemployment among the young unskilled and Black population

• Employment creation should continue to be a policy priority and Government needs to support SMME’S in order to integrate the youth into the mainstream economy. There is also a need for provincial economic integration in the country to allow less mobility of resources from one province to another. However it is important to remain focused on the goal of achieving faster and more sustainable economic growth and the creation of decent jobs particularly for the low-skilled and the youth.

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