No-one likes a strike. Industrial action is bad for employers, workers, the economy and society. In an inherently violent country such as SA, strikes don’t merely herald the prospect of lost wages and production but also carry the real risk of death and mayhem.
Given its turbulent past, the mining sector’s shift to peacefully negotiated, long-term wage settlements is significant, and signals a maturation of the relationship between employers and labour unions. Last week, miner Harmony Gold joined the ranks of diamond producer De Beers and a swathe of platinum group metal miners, including Anglo American and mining and metals processor Sibanye-Stillwater, that have clinched similar wage agreements.
Harmony Gold signed a deal with all five of the labour unions representing its employees, promising annual wage increases that are expected to be higher than inflation and guaranteed to be no lower. The deal also includes increases to housing allowances, and non wage-related benefits such as parental leave.
It is worth noting that the mining sector’s long-term wage agreements are not borne of largesse flowing from a commodity boom: while gold is at a record high, platinum group metal prices are in the doldrums. Rather, these deals have been brokered because they provide stability to workers and employers, and offer respite from the disruption that all too often accompanies bruising and exhausting annual wage negotiations.
For an example of how bad it can get look no further than state-owned electricity provider Eskom, which settled on a 7% wage increase after a violent strike in 2022, and less than a year later was facing fresh demands for a 15% pay rise.
Long-term wage agreements are not unique to mining: the Plastics Converters Association of SA reached a four-year deal in 2021, and further afield a handful of US cities, including New York and Milwaukee, have signed five-year agreements with their municipal workers.
But they remain uncommon, as they are difficult deals to broker: employers fret about whether their companies will be in a financial position to honour long-term commitments, while unions need to be confident that if in years to come a company genuinely cannot afford agreed-upon pay increases — due to a drastic change in profitability, a sharp downturn in the economy, or a cataclysmic event — there is room to manoeuvre without job cuts.
Long-term collective agreements carry inherent risk, as both the national government and the City of Tshwane have discovered. Both declared parts of their respective three-year wage agreements to be unaffordable, catapulting them into acrimonious territory with public sector unions.
In the case of the government, the Constitutional Court upheld its decision not to implement the last part of its three-year 2018 wage settlement, but Tshwane is still mired in a legal fight over years one and three of its 2020 deal. When agreements like these unravel, matters quickly take a nasty turn, as the residents of Tshwane can attest: a protracted strike by municipal workers last year left service faults unattended and garbage dumped throughout the city.
There is however, an important difference between the public sector and the mining industry — mining companies negotiate their own deals and are not bound by the strictures of centralised agreements of the kind that has hobbled insolvent Tshwane. It is safe to say the mining sector’s five-year deals are anything but a reckless wager.
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