Wage short cuts come at a price

2012-09-22 13:41

That Lonmin was under tremendous pressure to have its workers return to work is undeniable.

Five weeks without production and adverse media attention on a company already highly leveraged meant that Lonmin had to think out of the box.

In doing what they needed to do, they may have inadvertently and perhaps permanently damaged the basis on which the labour bargaining system was built.

Workers have the right to withdraw their labour for however long a period they are able to in order to push for their demands to be met. Employers have the right to lock out workers.

These rights are constitutionally entrenched. Once workers and employers have entered into an agreement, they have a duty to stick to the agreement.

The unpredictability of the force of a working conditions agreement serves neither the workers nor employers in the long run.

If workers can deviate from the agreement midway between two negotiating seasons, nothing is to stop employers doing the same when conditions change and make them unable or unwilling to fulfil their end of the bargain.

Also, inevitably, a mining company as financially stressed as Lonmin will find it hard to justify to its shareholders why it has increased its overheads by as much as 14% annually without matching productivity and revenue.

In the end, it is the workers who will face retrenchment.

We shudder to think what will then follow.

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