Expert: Lonmin strikers scored

2012-09-21 16:47

Johannesburg - The six-week Lonmin [JSE:LON] strike was one of the few extended stay-aways where employees actually benefited from downing tools, an expert said on Friday.

Efficient Group chief economist Dawie Roodt said Lonmin workers had avoided losing more than they gained from the work stoppage, which was the most common occurrence following the resolution of a strike.

"This is one of the few instances where workers have been able to break even... or are slightly better off," said Roodt.

"What usually happens is that the strike normally erodes the nominal benefits. What it illustrates is that the increase was really substantial."

Workers at Lonmin's platinum mine in Marikana were granted a 22% pay rise and a once-off bonus of R2 000 each to return to work.

Roodt said the 22% was in reality a 12% raise on top of a 10% increase that was already in the pipeline.

Workers lost a maximum of approximately 12% of their annual wage during the strike, at 2% a week, he said.

If the R2 000 once-off payment was included with the wage increase, it appeared workers had gained, making the strike worthwhile.

Chris Hart, senior economist at Investment Solutions, said the way the strike was resolved had implications for South Africa's economy and labour market.

"First, an enormous leap in costs because of what happened at Lonmin will be replicated across the mining and the manufacturing sectors. Already those industries are struggling for investment," he said.

"The big concern was that this took place outside the bargaining process."

The second implication was the number of jobs that would be lost in the medium- to long-term, with the viability of the mining industry being in question.

Hart said investor viability would have been affected, with South Africa being seen as an unreliable supplier, with the possibility of sources being developed elsewhere in the world.

"Even a tiny platinum discovery (elsewhere) will be developed instead of investing in South Africa."

Roodt said that the Lonmin settlement had set a bad precedent.

"Other workers are going to see this, and (believe) if they put (up) enough pressure, companies are going to give in. The monetary incentive may lead to more wildcat strikes."

He said any potential take-over of Lonmin was risky, considering that management and workers had reached a type of truce, with investors having to believe they were getting a bargain.

The strike ended this week, when workers and the company reached a pay agreement.

In terms of the agreement, the lowest paid worker would earn R9 883 a month and the highest, R13 022.

Illegal strikes have spread to other platinum and gold mines in the country following the start of the strike at Lonmin on August 10 and during which 46 people died - 34 of them shot dead by the police.

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  • J.Stephen.Whiteley - 2012-09-21 17:23

    True, but COSATU and the employers' associations should be engaged in ongoing discussion instead of waiting for a lose-lose strike which is usually ended by prolonged cat-and-mouse bargaining. Lonmin behaved magnanimously, but without half-annual conciliation processes with attendant publicity, we will not in future be so lucky. Section 95 of the Labour Relation Act must be stiffened to prevent proliferation of Unions, with a further amendment that Union bosses render an account of advance conciliation, ie. earn their money honestly.

  • greypatriot - 2012-09-22 07:52

    South Africans should congratulate the Lonmin management on their decision to settle. It speaks of foresight. The workers of this mine will now respect their employers more than their trade unions. This is the first step to a great organization. Employees respecting their leaders. The trade unions must ask themselves what value they were offering to employees. They failed to perform.

  • peterdonb - 2012-09-22 11:26

    My sceptical self wants to discover the faint odour of an anti-union strategy running concurrent with the wage settlement at Lonmin. Not that it is necessarily a bad thing, given that our unions are still captured in dialectic thought about the righteousness of communism and the National Democratic Revolution. The success of the wildcat strike at Lonmin (excluding the killings and violence) has send shockwaves through Cosatu, which rightfully makes them very nervous about how workers will be convinced to stay within their fold. And even with the support of the Labour Relations Act, I fail to see how they will not suffer a haemorrhage of members that may very well demand the recognition of the number of splinter unions that may appear in the very near future. Is this a good or a bad thing? I'm not willing to wager a bet at these early stages. I guess only history will tell.

  • brent.bartlett.98 - 2012-09-22 12:44

    Pay a man for what he is worth. I am tired of seeing wealthy mining engineers spending thouisands of rands on entertainment, large vehicles and the likes while drillers that work for a mine like Lonmin for 16 years still live in shacks and cannot put food on the table. The economy has changed. Now the mines need to get with it. And yes, you can forget about "business as usual".

  • Blixum - 2012-09-22 21:10

    China will buy these mines and bring in their own labour. And then what?

  • nelmari.smit.3 - 2012-09-23 01:36

    Break even?? 45 people DIED! Wtf?

  • frankylouw - 2012-09-23 07:45

    My exact sentiments too when I read this article!

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