Every enduring industry is built on institutions. That proposition is neither ideological nor controversial. Markets function because they operate within recognised rules, while industries grow because they develop structures that provide certainty, facilitate co-operation and enable participants with differing interests to engage constructively.
It is often during periods of economic difficulty that the value of those institutions is most seriously questioned. When businesses face declining demand, rising operating costs and heightened competitive pressure, it is understandable that employers ask whether institutions that have served an industry for decades remain fit for purpose. Collective bargaining has increasingly become one such institution.
That debate is legitimate and necessary. No institution should regard itself as immune from scrutiny, nor does longevity alone justify its continued existence. Institutions remain relevant only for as long as they continue to fulfil the purpose for which they were established and respond effectively to the changing environment in which they operate.
The more fundamental question is therefore whether an institution should be abandoned when it comes under pressure or whether its ability to fulfil its purpose should be strengthened.
The Steel & Engineering Industries Federation of Southern Africa (Seifsa) has little difficulty answering that question. More than eight decades of representing employers in the metals and engineering industries have demonstrated that industries seldom become stronger by dismantling institutions that provide stability and predictability. They become stronger when those institutions remain relevant and continue to respond effectively to changing circumstances.
Collective bargaining should be viewed through precisely that lens. Its purpose has never been to eliminate disagreement between employers and organised labour. Employers and trade unions represent different constituencies and will inevitably approach negotiations from different perspectives. The value of collective bargaining lies in providing an orderly and recognised framework within which those differences can be managed constructively.
While no bargaining process will satisfy every expectation, its contribution extends well beyond the agreements ultimately concluded. It provides a degree of confidence and predictability that is easily underestimated. Businesses are more likely to invest, commit capital and make employment decisions when they can plan with reasonable certainty. Institutions that reduce unnecessary uncertainty therefore make an important contribution to industrial competitiveness.
This is particularly important in South Africa’s metals and engineering industry, where manufacturers continue to contend with subdued economic growth, increasing import penetration, infrastructure constraints, escalating electricity costs, logistics failures and persistent policy uncertainty. These structural challenges have placed considerable pressure on businesses, but it would be a mistake to confuse them with one of the institutions designed to manage industrial relations within that environment.
Collective bargaining did not create South Africa’s structural economic challenges, nor will abandoning it resolve them. The real challenge is to strengthen its contribution to an industry undergoing profound economic and technological change. This should not be interpreted as a defence of the status quo. Institutions that fail to respond to changing circumstances eventually lose their relevance, irrespective of how valuable they may once have been.
Collective bargaining did not create South Africa’s structural economic challenges, nor will abandoning it resolve them. The real challenge is to strengthen its contribution to an industry undergoing profound economic and technological change.
The commercial environment facing manufacturers has changed fundamentally. Global competition has intensified, production technologies have advanced rapidly, supply chains have become increasingly integrated and customers demand greater flexibility and improved productivity. Collective bargaining must remain responsive to those realities while recognising the legitimate interests of employees in fair wages, decent working conditions and sustainable employment.
These objectives are not mutually exclusive. Prosperous businesses create employment, invest in productive capacity and contribute to economic growth. Equally, a skilled, productive and fairly rewarded workforce contributes directly to the competitiveness and sustainability of those businesses. Neither employers nor organised labour ultimately benefit from outcomes that undermine the long-term viability of the industry upon which both depend.
This is precisely why collective bargaining remains important. It provides an institutional platform through which competing, yet interdependent, interests can be reconciled through engagement rather than confrontation. Negotiations will often be difficult and agreements will require compromise, but these realities reinforce rather than diminish the reason for the institution’s existence. Institutions are necessary precisely because agreement is not always easy.
The alternative is sometimes presented as though abandoning collective bargaining would remove conflict from industrial relations. Experience suggests otherwise. Differences between employers and employees will exist irrespective of the framework within which they occur. The real issue is whether those differences are better managed through recognised structures that encourage engagement and accountability or in an environment characterised by greater fragmentation and uncertainty.
For Seifsa the objective is neither to preserve collective bargaining simply because it has served the industry for many years nor to dismantle it because economic conditions are difficult. The responsibility is to strengthen its capacity to fulfil the purpose for which it was established and deepen its contribution to competitiveness, investment and sustainable employment. This is vital not just for Seifsa but for South Africa as a whole.
The real issue is whether those differences are better managed through recognised structures that encourage engagement and accountability or in an environment characterised by greater fragmentation and uncertainty.
South Africa’s metals and engineering industry has demonstrated considerable resilience through political transition, economic crises, technological change and increasing global competition. That resilience has been supported by institutions that have enabled employers, employees and their representative organisations to continue engaging one another even during periods of considerable difficulty.
The future competitiveness of the industry will not be determined by whether disagreement exists. Disagreement is inevitable. What matters is whether the institutions responsible for managing those differences continue to command confidence, remain relevant to changing economic realities and contribute positively to the long-term sustainability of the industry.
The debate should therefore not be about whether collective bargaining should survive but how it can continue to be strengthened to better serve employers, employees and the broader interests of South African manufacturing. That is what responsible institutional leadership requires: ensuring that institutions continue to fulfil the purpose for which they were established and, in doing so, strengthen the industries they exist to serve.
• Trentini is Seifsa’s executive director and head of collective bargaining
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