South Africa to suffer worst year of strikes
State payouts after industrial action stir demands in private sector
Johannesburg: South Africa is set for its worst year of industrial action since all-race elections in 1994 after a 20-day strike by state workers won them raises of more than twice the inflation rate, encouraging miners and autoworkers to hold out on their pay demands.
About 1.25 million working days were lost to strikes in the six months through June, double that in the same period last year, according to Johannesburg-based Andrew Levy Employment, which advises clients on labour relations.
It expects even bleaker data in the second half, when the 20-day strike by state employees cost about 10 million working days.
The labour action has spread to private industry, with about 80 per cent of the 6,800 workers at Northam Platinum Ltd's Zondereinde mine downing tools on September 6, after other walkouts by car-parts makers and gas station attendants.
Manufacturers say that rising wages and the labour unrest threaten to undermine the competitiveness of exports, curb investment and deter companies from hiring in a country where 25 per cent of workers are jobless.
"The competitive challenge has never been greater and this wage-cost inflation makes the situation even more challenging," David Powels, managing director of Volkswagen AG's South African unit, said in a September 2 interview in Cape Town. "It's a very serious situation. The impact on our customers, export customers in particular, is critical."
On August 31, the government agreed to give its 1.3 million employees a 7.5 per cent pay increase, 2.3 per cent, or 6.5 billion rand (Dh3,283 million), more than was set aside for wages in the February budget.
Yesterday, unions that had been demanding 8.6 per cent raises suspended their strike, which shut thousands of schools and saw patients turned away from state hospitals, giving themselves 21 days to consult their members.
A benchmark for this year's wage settlement was set in May by the state-owned transportation company, Transnet SA,, which gave its workers an 11 per cent increase to end an 18-day strike, Powels said.
