Amcu’s tug-of- war

2014-06-22 15:00

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The platinum strike will continue next week as the Association of Mineworkers and Construction Union (Amcu) tries to push for favourable terms in the return-to-work agreement.

The latest wage offer, made last Wednesday, “in principle” settled the main pay demand with a settlement far lower than R12?500, but still very favourable to the lowest-paid mine workers.

But Amcu replied with demands for a one-off return-to-work bonus of R3?000 per worker and written commitments that there will be no imminent retrenchments.

In the offer letter from Lonmin, the company had still tried to get Amcu to expressly accept that “restructuring is inevitable in the short to medium term”. That was rejected.

According to Johan Theron, the spokesperson for Impala Platinum (Implats), the back pay already due in terms of the latest offer would be “at least” R7?000 for entry-level workers.

At Anglo American Platinum (Amplats), it would probably be nearer to R6?000, and at Lonmin it would be lower.

Amplats has offered “humanitarian support” in the form of food and medicine.

The back pay represents the difference between the first year’s pay increase and the salaries workers actually received in the months since the previous deal lapsed, up to the strike.

The old deal lapsed for Implats and Amplats in June last year, but only in September for Lonmin.

While the one-off bonus would be expensive and the retrenchment clause tricky, Amcu has reportedly also come back with a demand that actually challenges the deal’s design.

That is a demand that living-out allowances are not after all frozen in order to boost the basic wage, but increase with the inflation rate.

The deal offered by the companies funds relatively high salary increases for the lower-level workers in particular by shifting benefits into cash wages as well as flattening the pay gaps between the underground job categories.

The flattening of pay gaps had been expressly opposed by Amplats CEO Chris Griffith. Much earlier in the strike, he said the traditional gaps between job levels need to be kept. Maintaining those gaps was one of his reasons for branding the demands from Amcu as “unaffordable”.

How things have played out

So, who wins?

The deal on the table represents gains for the lowest-paid mine workers (see graphic). But the pay sacrificed during the strike now amounts to roughly R50?858 for an entry-level employee at Implats.

The gains that have been won on top of the offer before the strike will only equal that loss by the second half of 2017.

That assumes mine workers would have received 8% increases in 2016 and 2017 instead of the five-year deal now on the table. In terms of cash in hand, they will break even sooner because the latest offer emphasises cash over benefits.

On the other hand, they will now likely return to work and receive more than R2?000 a month more than when the strike started. By the middle of next year, they will have 12% more cash in hand every month than under the prestrike offer. Their long-term position relative to co-workers will also be more egalitarian than before.

The biggest winners are workers who did not strike, managed to still get paid throughout part or all of the strike and now also get the extra increase.

The second-biggest winners are future mine workers, who will enter an industry where minimum wages are higher than they would have been before the strike.

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