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South Africa’s Amplats CEO “confident we can reach agreement” with AMCU

By Xolisa Phillip, in Johannesburg
Posted on Wednesday, 16 October 2019 11:36

Members of South Africa's Association of Mineworkers and Construction Union (AMCU) chant slogans during a march to the Minerals Council of South Africa in Johannesburg, South Africa, January 22, 2019. REUTERS/Siphiwe Sibeko

Although marathon wage negotiations in the platinum sector have hit deadlock, Anglo American Platinum (Amplats) CEO Chris Griffith remains optimistic an amicable resolution is in sight.  

Platinum producers Amplats and Sibanye-Stillwater began wage negotiations with the Association for Mineworkers and Construction Union (Amcu) three months ago.

  • Amcu, the majority union in South Africa’s platinum belt, opened with a demand of a more than 40% wage hike.

Three months in, Amcu referred a dispute to the Commission for Conciliation, Mediation and Arbitration (CCMA), the country’s labour dispute resolution body.

Good overtures

Griffith says Amcu notified Amplats that the union referred a wage dispute to the CCMA for conciliation, while also requesting a meeting with the company outside of the CCMA process.

The Amplats CEO views this as “demonstrating the willingness of the parties to continue engaging…. [Amplats] remains committed to constructive negotiations with all our recognised unions, and we are confident we can reach a mutually-beneficial settlement.”

The wage negotiations started mid-year, with an ask from Amcu for an increase to R17,000 ($1,145) over a three-year period. That would translate into a R1,000 ($68.38) yearly increase for each of the three years of a wage agreement settlement.

  • Amplats has tabled an offer of R1,000 for the first year, and R800 ($53.90) for years two and three.
  • Sibanye-Stillwater has offered R300 ($20.21) for the first year, R350 $23.58) for year two and R400 ($26.95) for year three.

Next steps in wage negotiations

The union, which has become synonymous with prolonged strike action in gold and platinum mining, rejected the offers. It has referred a dispute to the CCMA. If the conciliation process fails and the parties are unable to reach consensus, the CCMA will issue a certificate of no resolution.

Such a certificate is one of the procedural steps required in the event the union embarks on protected strike action. In South African law, protected strike action guards against employees being victimised or threatened with dismissal.

New labour environment

At the beginning of the year, South Africa adopted the National Minimum Wage Act which came with a suite of amendments to the country’s labour relations legislation. The sweeping measures brought in by the new labour regime include a Code of Good Practice that deals with picketing rules and introduces secret strike balloting.

  • “We believe the new rules around secret strike ballots are a[n] important development that will ensure employees have a real voice when it comes to decision-making around strikes,” says Griffith.

The secret strike balloting is a contentious issue in the country, some unions view it as a mechanism to prohibit strike action. But employers see it as a protection mechanism for employees against union strongarm tactics and a stabilising measure.

Heightened union expectations

The wage talks in platinum are unfolding against the backdrop of a good run for platinum group metals (PGM) producers.

  • For the first time in years, companies are reporting bumper profits and declaring dividends amid healthy demand, a favourable exchange rate and a supply deficit.

Amcu has been especially critical of Sibanye-Stillwater, saying the company’s offer was a “provocation to strike”.

  • Amcu’s relationship with Sibanye is fraught.
  • The union is also upset by Sibanye-Stillwater’s plans to cut more than 5,000 jobs.

The union initially opposed Sibanye’s takeover of Lonmin’s operations in Rustenburg.

In 2018, Amcu went on a five-month strike at Sibanye’s strike, but eventually capitulated and signed the company’s wage offer. That strike led to a R1.5bn ($101m) loss.

  • “As always, the challenge is to balance wage demands with the need to ensure the company remains viable through future PGM commodity price cycles. We do not believe there is appetite from our current workforce for a lengthy strike in the current economic climate,” says Griffith.

For an in depth profile of Amplats, please see the forthcoming TAR110 edition of The Africa Report, on shelves end November.

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