The South African workplace has been characterised by labour unrest and industrial action.
Taking a closer look at dealing effectively with South Africa’s massive unemployment problem and the harmful effects of frequent strikes on productivity and economic growth, will require major structural reforms to the labour market and its institutions. Unless these are undertaken, it is unlikely that the South African economy will be able to generate the number of new jobs required to address the unemployment problem and tackle poverty and inequality in the country.
A major contributing factor to the unemployment challenge in South Africa is the current state of the country’s labour market institutions and regulatory environment. In this regard, a rigid labour market, the widespread prevalence of the controversial practice of labour broking, problems with the determination and implementation of minimum wages, and policies that actually hamper – rather than aid, efforts to achieve higher rates of job creation, are all factors.
At the same time, the growing prevalence of strikes in key sectors of the economy, threatens to stifle economic growth and much-needed investment. In the period between 2007 and 2012, 41.9 million ‘man days’ were lost to strike action, more than four and a half times the equivalent number of days that were lost between 2001 and 2006, discusses Neil Balchin of the GSB Business Review.
Current labour market challenges
The efficiency of the South African labour market is currently undermined by a number of issues. One fundamental problem stems from the economy’s low capacity to absorb labour. The low absorption rate is primarily a product of the mismatch between the skills of the workforce and those demanded by industry. Owing to a lack of training and skills development, a large share of the country’s workers do not possess the skills required to fill the hundreds of job openings requiring highly skilled workers across South Africa. This problem has been exacerbated by changes in the sectoral composition of employment in the country, where a shift towards a more capital and skill-intensive economy has meant that fewer and fewer new low-skilled jobs are becoming available.
The effects of strikes on businesses and colleagues
With strikes in South Africa are becoming more and more common, this affects not only the local economy but, businesses and colleagues alike. Employment relationships between both parties could become strained and this could affect teamwork and profitability. Businesses suffer production and financial losses and consumer confidence is adversely affected.
Effects on employers
Whether a strike is legal or illegal, the business is affected and it is imperative for employers to know their rights and to keep up to date with current labour laws and legislation. Some businesses may opt to hire workers to replace the striking colleagues and perhaps increase shifts if the strike continues for a long period of time. It is very important that part time/temporary workers have a contract by law. The employer does not have to remunerate striking workers for days not worked. If the strike is illegal this could constitute as a fair dismissal.
Effects on colleagues
Striking colleagues that belong to a union are under obligation to strike when the union determines. They could be at risk of losing not only wages but benefits such as medical aid insurance, sick and holiday pay if the strike drags on for an extended period of time. If a colleague is a union member and does not want to partake in the strike, he/she could be at risk of intimidation by members of the union. Members belonging to a union in a legal strike are generally protected from dismissal.
Effects on the economy
The effects of striking will be felt in the immediate and long term future as strikes are appearing to re-occur in some sectors and in some cases have become violent. The South African economy is vulnerable at this point in time and striking season could harm the country’s investment reputation internationally. Economists agree that the effect of strikes on the economy are difficult to calculate but, is detrimental to the country and its workers. GDP growth will be affected and the consequences of higher wages in certain sectors would inevitably lead to higher inflation.
At Servest, as a trusted security solutions company, we understand how the country’s labour unrest situation has created the necessity to establish a specialised strike intervention service.
We are mindful of the voluntary principles of human rights and the basic codes of conduct within the security industry, and incorporate these principles into all aspects of our service delivery. We have integrated progressive methods, policies, training, governance and state of the art equipment, as driving components in our endeavour to be a responsible corporate citizen.