Strike settlement: Trick or treat?

2014-06-29 15:00

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The settlement to end the platinum strike has been proclaimed a historic victory and a self-defeating calamity. Who’s telling the truth?

The platinum industry claims workers lost R10.7?billion in earnings owing to the strike, but that figure may be inflated by more than 100%.

According to department of mineral resources (DMR) statistics, earnings by platinum workers dropped by about R920?million a month in the first two months of the strike. That adds up to less than R5?billion over five months – less than half the figure given by the mines on their website.

The official data covering the first quarter of the year from the DMR forms the basis for mining statistics used by Stats SA on employment and earnings.

According to Johan Theron, spokesperson for Impala Platinum (Implats), the mines’ tally is “not 100%, but very close”.

The R10.7?billion figure is based on the assumption that 80?000 strikers lost all five months’ earnings and that the other 20?000 employees at the affected companies lost 40% of their earnings, says Theron.

The same DMR statistics show a noticeable drop in platinum employment after January, when the strike started. By March, the total number of permanent employees fell by 5?225 to about 133?000, while the number of contractors fell by 6?076 to about 47?500.

Unlike the gold sector, platinum mines employ a significant amount of subcontracted labour. In total, 26% of platinum employees are contractors.

An array of commentators take it for granted that there will be a wave of retrenchments as a direct consequence of the strike. As these contract employees can be let go without going through actual retrenchments, they are the most likely victims of any immediate cost-saving measures by the platinum companies.

Following the resolution of the wage settlements brokered by the Association of Mineworkers and Construction Union (Amcu) with Lonmin, Anglo American Platinum and Implats, commentators have predicted that the strike itself, and the new higher wages, will almost inevitably lead to retrenchments in the short term.

Even though Amcu had tried to haggle for some form of guarantee against retrenchments, the actual agreements are ambiguous.

In Lonmin’s agreement with Amcu, of which City Press has a copy, Amcu has agreed to “deal in a constructive manner with recommendations regarding shafts or sections of shafts that are unprofitable, inefficient or unsustainable”.

Amcu would have to “consider” placing these shafts under care and maintenance or “outsourcing of services, where appropriate”, reads the agreement signed by Amcu president Joseph Mathunjwa this week.

The deal also in effect prohibits further strike action related to one labour-reducing intervention Lonmin is already implementing. The company is switching its rock-drilling methods from a system where the rock-drill operator (RDO) has an assistant to one where he operates the machine alone.

Within nine months, all the drilling assistants will be redundant, according to the agreement. “As and when” there are real RDO positions available, these assistants will get them.

At Implats, the issue of possible retrenchments is one of many being referred to a task team. The peace clauses in Implats’ and Lonmin’s agreements prohibit any strikes on issues handed over to their respective task teams, seemingly pre-empting action against any potential retrenchments.

A source in the industry told City Press the narrowing wage gap should be a concern as it erodes the reward that goes with skill and qualifications.

This week’s deal overwhelmingly favours the lowest-grade employees and significantly narrows the gap between so-called A-band and C-band workers.

In the 1970s, the gap between skilled and unskilled mine wages was as high as 2?000%, reflecting apartheid racialised wages. By the late 1990s that fell to about 400%.

The Amcu deal reduces the gap between the entry-level underground worker and the highest underground level from about 370% to 336%, based on the actual median wages the “C4s” at Lonmin receive.

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