The Role of Trade Unions in the Context of Contemporary Employment Relations in South Africa - Case Study Example

A Critical Examination of the Role of Trade Unions in the Context of Contemporary Employment Relations in South Africa Name Date Executive Summary This report forms a critical examination of the role that trade unions have played in shaping the employment relations in South Africa. The report starts by indicating the history and current status of trade unions in South Africa. Further, the report observes that the unions play a critical role in facilitating the indirect creation of jobs by acting as labor market intermediaries; facilitating the creation of direct jobs by embarking on job creation initiatives; and influencing social and macroeconomic policies. The report further notes that trade unions negotiate and resolve issues mainly by building associational power, and negotiating directly with the employers. One of the outstanding implications of the labor movement in South Africa is that employers are increasingly externalizing specific labor activities and this invariably creates informal sweatshops. Such practices by employers are creating complexities in the labor market, and as the report notes, union membership is on a steady decline. The report concludes by noting that unless a strategic shift is adopted in how trade unions operate in South Africa, they will lose the position they previously held and their significance in effecting labor practices will have declined. Introduction Trade unions are essentially organizations created for the purpose of representing the rights of workers to prevent exploitation or unfair treatment from large corporations or governments. Hyman (2001, p. 2) specifically defines trade unions as the “continuous association of wage earners for the purpose of maintaining or improving the conditions of their employment”. Becoming a trade union member enables workers to complain about unfair labor practices through their union, and this ultimately leads to intervention, in which case the unfair labor situations are remedied. In South Africa (SA), trade unions date back to the 1880s, but they only got the independent powers and mandate to represent workers’ causes after the apartheid era ended in 1994 (Pillay 2006). Before that, trade unions were often linked to anti-apartheid groups (Trade Unions in South Africa 2013). Currently however, the Labor Relations Act (LRA) 1995 dictates the issues that trade unions can deal with. Specifically, the act states that trade unions must adhere to the issue-only disputes (Trade Unions in South Africa 2013). In other words, trade unions need to pursue business-related issues as opposed to personal issues that specific people in an organization may have. Other issues addressed by the LRA 1995 include: information disclosure, collective bargaining, co-determination, protection of striking workers and organizational rights (Welch 2000). Trade unions in South Africa have further support from the country’s constitution, which in section 27 indicates the rights that workers have not only to fair labor practices, but also to “form and join trade unions” (Department of Labor 2008, p. 8). The only groups of workers excluded from the LRA 1995 are: “the national defense force; the national intelligence agency; and the South African Secret Service” (Department of Labor 2008, p. 8). Incidentally, and unlike many other countries, members of the South African police are allowed to form and join trade unions as indicated by Marks and Fleming (2008). Discussion In the apartheid era, discrimination at the workplace (usually on racial basis), and the absence of adequate training in most workplaces were the common complaints among workers (Seekings & Natrass 2005). In the post-apartheid era however, Seekings and Natrass (2005) observe that low wages is rated among the top issues that unions have to deal with on behalf of their members. Job security is also another employment issue that South African organizations and trade unions have had to deal with. The National Dock Labor Scheme for example was created as a trade union for the purpose of guaranteeing “permanent employment and income to employees in an industry whose nature dictated fluctuating manning requirements” (Stratton & Hemson 2002, p. 5). In the post-apartheid South Africa, the country has experienced pressures from other global market players demanding what Webster and Buhlungu (2007, p. 416) call “a new work paradigm”. The foregoing citation is made in reference to the equality, non-biased and worker-sensitive work policies. The large number of casual, unskilled and externalized workers is also something that both trade unions and employers have to grapple with. According to Kenny (2005) for example, the management in some business corporations increasingly use casual workers as a means of reducing labor costs and deploying workers more easily. However, the continued use of casual workers often leads to problems because as one worker was quoted saying, “it does not make us feel good to be casual because we are made to feel inferior” (Kenny 2005, p. 234). Seemingly, unionizing casual workers is a difficult task because even the National Dock Labor Scheme referred to elsewhere in this paper was not able to guarantee all its members permanent employment. The best the union did was guaranteeing its members a specific number of work hours per week, and this was according to Stratton and Hemson (2002), a key benefit to the workers. Unfortunately, much as trade unions are meant to protect and advocate for the right of workers in South Africa, some union members feel that they (the unions) do not perform their mandate effectively. Studying the case of externalized workers for example, Kenny (2005) found out that a significant percentage of sampled workers felt that the trade unions were unable to help them attain fairness, good working conditions and equality in the workplace. In other workplaces, Kenny (2005) realized that clandestine committees took up the bargaining role that trade unions would have otherwise played. Yet trade unions still insist that they are best positioned to represent the workers, because unlike the clandestine committees, they (trade unions) have legal and constitutional mandates (Kenny 2005). The trade unions in South Africa continually advocate their roles and position in the changes witnessed in the country’s labor relations. Their rationale for the foregoing is pegged on the argument that beyond collective bargaining, they encourage workers to stop competing among themselves and instead combine their strengths to become a source of power. Pillay (2006) also notes that unlike the clandestine committees which only advocate for specific work-related issues, trade unions make considerations which are beyond prevailing employment issues. According to Pillay (2006, p. 169) such considerations are motivated by the realization that “the working class, while rooted in employed workers, also included unemployed workers and other dependants of workers...” Pillay (2006) notes that initially, the trade unions in South Africa adopted social movement unionism, which they later abandoned in the post-apartheid era after realizing that they needed to act as social partners in the country’s industrial relations. Generally, trade unions throughout the word use three ways of intervening in the labor markets. They include facilitating the creation of new jobs by encouraging potential workers to acquire new skills, facilitating the creation of direct jobs for existing skills, and influencing social and macro-economic policies (Benner 2000). In South Africa, trade unions have adopted all three approaches. i. Facilitating the creation of new jobs Trade unions can play a facilitative role in the creation of new jobs as the Sector Education Training Authorities (SETAs) has illustrated in South Africa. In SETA, trade unions sit in the board, hence allowing them high involvement. The trade unions play a facilitative role by acting as labor market intermediaries (LMIs). According to Benner (2002, p. 6) labor market intermediaries are organizations which “mediate work practices and broker employment relationships between workers and employers”. Since unions are membership-based, Benner (2002, p. 6) calls them membership-based LMIs. Usually, the membership-based LMIs respond to workers’ needs and help them “build and maintain employability in the broader labor market”. Additionally, they give workers the connections and networks needed to navigate the labor market. Building employability is done through offering training and education-based initiatives such as public-funded training programs, adult extension programs, and training programs offered in community colleges. ii. facilitating the creation of direct jobs An example of direct job creation by the trade unions is the Labor Job Creation Trust (LJCT) formed in 1999. According to Mutume (1999), LJCT was an initiative of the trade unions officials, the union leaders, and union investment companies to not only create direct jobs for employees, but also to minimize job losses. During its introduction, LJCT was poised to introduce support measure for the skilled but unemployed people with an objective of reducing unemployment (Mutume 1999). Closely supported by the South African government, the LJCT put in place several programs, which included large scale public works, domestic investment, and public sector restructuring among others. While economic analysts downplayed the sustainable nature of such job creation efforts arguing that growing the South African economy was the only sure way of creating lasting jobs, LJCT was undoubtedly committed to resolving the unemployment problem. iii. Influencing social and macro-economic policies Trade unions such as the Federation of Unions of South Africa (FEDUSA), Congress of South African Trade Unions (COSATU), and National Council of Trade Unions (NACTU) have for example made an attempt at influencing social and macro-economic policies by engaging with the government as social partners in the National Economic Development and Labor Council (NEDLAC) multipartite structure. In addition to government and trade unions, NEDLAC also allows the participation of employers. According to Webster and Sikwebu (2006, p. ii), NEDLAC has enabled the creation of “new labor market institutions that have included constituencies that were previously excluded from the policy-making process” and as such, is considered to have played a significant role in deepening democracy both in the workplaces and the larger society. Negotiating and resolving issues and challenges Trade unions in South Africa adopt different approaches in negotiating issues and challenges facing the labor force. To deal with increased sweatshops for example, Von Holdt and Webster (2008, p. 345) note that the unions adopted a strategy “of building associational power” in communities. Through this, the trade unions would organize mass demonstrations for sweatshop workers and invite their families and the communities to participate. Such demonstrations have been cited as necessary because sweatshops are often subcontracted by other bigger companies (even multinationals), and getting to the bigger companies’ attention is not always easy (Von Holdt & Webster 2008). In other cases, trade unions have adopted a strategy in which they establish a negotiated relationship directly with employers. According to Von Holdt and Webster (2008), such negotiated relationships work well where employees are empowered through union membership. However, and considering that there is a high degree of worker employment in some sectors in South Africa as indicated by Bennett (2003), negotiated relationships among unions and employers are not effective in all areas. An assessment of the outcomes and implications on employment relations and HRM systems of South Africa In South Africa today, and in response to the empowering nature of trade unions, it is indicated that employers are mobilizing efforts to undermine the labor movement (Von Holdt & Webster 2008). Employers are increasingly externalizing specific labor activities and this invariably creates informal sweatshops. On their part, unions have been faulted for not paying “sufficient attention to dealing with the problem of casualization, often being more concerned with their core, permanent membership and improving their associated benefits and wages” (Stratton 2000, p.4). The consequence of the foregoing is that casual workers are disillusioned by trade unions, hence making union membership less appealing to the casual segment of the workforce. It would also appear that the dislike of unions by employers is well known by workers because as illustrated by Wood and Glaister (2008), some workers cannot join trade unions because they fully understand their employers’ distaste of the same. Where unions are not appreciated, workers form clandestine committees, which they use to raise issues which would otherwise be covered in collective bargaining. Despite the dwindling appeal of trade unions in some South African labor sectors, Calenzo (2009) observes that employees (especially those employed on a permanent basis) understand that the unions provide them with opportunities to broaden their bargaining. The employers also realize that they cannot ignore unions especially if they want to harness collective solidarities in their workforce (Calenzo 2009). Overall, trade unions in South Africa affect the human capital development since in some cases; they restrain the hiring, firing, and/or rewriting of employment contracts. Employers are then forced to seek ways of effectively utilizing their human resources. Notably, the agreements reached when trade unions negotiate with employers are more effective and legitimate compared to what employees would get if employers were to make such agreements alone. An assessment of the trade union movement’s power in South Africa’s employment relations The power of the trade unions is arguably related to the unionization rate of the labor force. As indicated by Wood and Glaister (2008, p. 438), “a low unionization rate will make it easy for the government and the employers to take labor claims into little account and to hold a system of industrial relations relatively unfavorable for the workers”. The opposite of the foregoing is also arguably true in that a high rate of unionization enhances the trade unions’ relative position in policies and decision-making. Statistics indicate that trade union membership has steadily declined from 31% to 23.3% between 1994 and 2010 (Donnely 2013). These statistics could be interpreted to mean that the unions are slowly losing their relative position in the employment relations of the country because less than a quarter of the country’s workforce has union membership. But the trade unions’ loss of position in SA is not a consequence of low membership only. According to Donnely (2012), the traditionally strong trade union movement is losing some of its power to non-aligned unions which emerge ostensibly to remedy the non-satisfactory manner in which prominent unions like COSATU handle workers’ representation. COSATU’s involvement with the ruling political party, the African National Congress (ANC) has especially been criticized as contradictory to the welfare and interest of workers (Dhliwayo 2012). Trade unionism prospects in South Africa If union membership continues declining, it is probable that trade unionism will become less powerful going forward. Non-aligned unions, separate from traditional entities may however revolutionize trade unionism – creating a re-emergence of trade unionism in South Africa, and especially if, the young people will take up membership Existing trade unions can also re-look their existing structures and political affiliation and create more flexible and more employees-responsive policies, in which case they would revive trade unionism in the country. Conclusion Trade unions had and still have a critical role to play in the employment relations and human resource management practices in South Africa. With declining union membership however, the trade unions are increasingly losing their position in the country. As indicated in the prospects section above, trade unionism can still be revived in future. Unions’ ability to recover and flourish again however depends on their ability to mobilize more workers to take membership. This will however require a change in structure and /or political affiliations, and may even give relatively new trade unions which are not aligned to dominant unions like COSATU more leverage. Overall, union leaders need to understand the needs of the workers and set out to provide the same. Collective bargaining should be based on a sound understanding of workers’ needs and rights, as well as the ability of the South African economy to support workers’ demands. References Benner, C 2002, Work in the new economy: Flexible labor markets in Silicon Valley, Blackwell Publishing, NY. Calenzo, G 2009, ‘Labor movements in democratization: Comparing South Africa and Nigeria, 5th CEU Graduate Conference in Social Sciences, pp. 1-21. 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