Marikana and Collective Bargaining - good or bad?

A lot has been written on the role of collective bargaining in the current labour relations in South Africa. How did it impact the Marikana massacre? What are the consequences for the future of collective bargaining? Is this a good or a bad thing?

Collective bargaining means that bargaining agreements are binding at an industry level, rather than an enterprise level.

Some, like sociologist Peter Alexander, believe that collective bargaining is the cause of current labour unrest in South Africa, since it gives undue power to the dominant labour union. If NUM membership has 50%+1 of all union membership in an industry, it can bargain on behalf of all workers. Smaller unions feel unrepresented and not all worker concerns are addressed.  It has the further danger that the dominant union can get too “cozy” with the capitalists, since it is insulated from enterprise-specific labour issues.  

What I don’t understand about this argument is that collective bargaining is weaker in the platinum industry than in the rest of the mining sector; yet it is in the platinum industry where labour conflict is most severe. In all other minerals, agreements are binding for all mines, whereas in the platinum industry, agreements are only binding to other platinum mines. Furthermore, the response of NUM and industry after Marikana, was to strengthen collective bargaining in the platinum industry.

Others, like Jay Naidoo, bemoan the potential demise of collective bargaining, and claims that it is the “cornerstone of our democracy”.

So, is collective bargaining a good thing or not? The evidence seems to point that it is a bad thing for South Africa: bad for employment and often bad for employer-worker relations.

 A recent paper by Berkeley economist finds that collective bargaining in South Africa comes at a prohibitive cost for small firms, and thus contributes to lower employment. South Africa has a smaller proportion of small firms relative to other countries. This is worrying since small firms are a large source of employment in a country. The problem is that small firms have lowe capacity and thus cannot afford the collective agreements, that are commonly reached between the largest firms and unions in an industry. More flexibility for firm-specific labour negotiations would thus allow for more entrants of smaller firms in an indsustry.

Labour mediator Brand claims that collective bargaining often hurts both employer and employee, since it does not allow bargaining on firm-specific issues. He cites the case where Impala Platinum actually wanted to pay a wage premium for Rock-Drill Operators (RDO’s) because of competition from other mines, which NUM rejected.  

The puzzle is that collective bargaining seems to work in other countries. It is seen as one of the reasons for wage equality and stability in north European countries like Germany and Sweden. But then again, the largest source of inequality in South Africa is not wages, but employment.