The end of unions?

It was slightly before 2am on November 8 2014 when the course of trade unionism in SA fundamentally shifted. It was late spring, balmy during the day, but there was an unmistakable chill in the air that night as journalists camped in their cars outside Cosatu’s smart, but allegedly controversially procured, new headquarters in Braamfontein, Joburg.

Irvin Jim, general secretary of the National Union of Metalworkers of SA (Numsa), emerged from behind the huge glass doors; the reporters scrambled for their equipment to catch the verdict, finally, of Cosatu’s central executive committee on its obstreperous and largest affiliate, Numsa.

"Expelled!" the radical Jim announced. Numsa, with its 320,000 members, had been axed from the Cosatu fold — and from the ANC-led tripartite alliance.

Five years later, the union movement led by Cosatu remains fragmented, factionalised and weak, a shadow of the force it was in the 1980s and 1990s.

And while Cosatu has barely recovered from its first major split since its historic formation in December 1985, it is also not immune to the corruption that has become endemic in SA in the past decade.

These problems are compounded by a rapidly shifting labour market complete with casualisation, technological advances, mechanisation and a younger workforce with little or no sentimental ties to a labour movement which, as "gladiators for a political cause", played a key role in the fight against apartheid from the factory floor and beyond.

The perfect storm facing SA unions is, however, a global phenomenon.

The International Labour Organisation, in a briefing last year, noted that collective bargaining has been under pressure in many countries since the 2008 financial crisis, which came on the back of a longer-term decline in union membership rates.

Despite the union decline in SA, labour issues continue to feature among the top three concerns highlighted by investors. The first is corruption; second, strikes and labour unrest; and the third worry is Eskom and its related baggage, says Daniel Levy, managing partner at Andrew Levy Employment, a labour market analysis firm.

Levy says research shows that union membership has declined worldwide. His firm has been tracking union density in SA over the past decade and the numbers show it has declined to 25% — meaning one in four workers are unionised today against around one in two a decade ago.

This is as a result of job losses, more people fighting for fewer jobs as well as the split in Cosatu, when Numsa was hived off to form the SA Federation of Trade Unions (Saftu) together with former Cosatu general secretary Zwelinzima Vavi.

Cosatu, though weakened considerably after the 2014 split, remains a partner in the governing alliance with the ANC and the SACP and is still able to flex its muscle to sway policymaking in the governing party and the government.

Legislation on the national minimum wage was a key Cosatu victory, signed into law by President Cyril Ramaphosa in November 2018. Expanding the mandate of the labour department specifically to include employment creation was another Cosatu demand Ramaphosa accommodated in his cabinet reshuffle after the 2019 elections.

A more destructive example of its muscle is the unions securing a 7% wage increase at drowning-in-debt Eskom last year, after going on a rampage in the face of a 0% opening offer from the state-owned power utility. The stalemate between unions and Eskom ended after public enterprises minister Pravin Gordhan intervened to get Eskom to stretch its balance sheet even further to accommodate the three-year deal. Eskom reported in August that staff costs had increased despite a decline in its head count due to natural attrition: salaries and benefits rose 13%, to R33bn.

So what exactly is the condition of SA trade unions and what does this mean for their future?

Employment & labour minister Thulas Nxesi, a former general secretary of the SA Democratic Teachers Union (Sadtu), is visibly vexed as he describes unions as "weak" and "not nearly as strong as they used to be".

He tells an anecdote about the lone battle of a unionised worker, injured on the job at an Eastern Cape tyre factory and then fired, while his union did nothing to fight for his rights. He goes on to describe how a Gauteng worker, a member of the Chemical, Energy, Paper, Printing, Wood & Allied Workers’ Union (Ceppwawu), was burnt and nearly lost his sight on the job but received no union assistance.

"Today, he strains to see," says Nxesi. "He was also dumped by an arrogant employer. To me that was a wake-up call, it was starting to say to me unions are very weak on the shopfloor, they are not as strong as they used to be and if you had strong unions those things would not have happened."

Infighting has plagued many unions to such an extent that they are split down the middle, with disgruntled members forming new organisations. Splits have affected almost all industrial unions as well as a few public sector unions over the past decade. The SA Municipal & Allied Workers’ Union (Samwu) has had two splits in the past five years, at the heart of which was control of the union coffers. Sadly, says Nxesi, it is often corruption that is behind the infighting in some of these unions.

"While we are accusing big business and the state of corruption, there must be a spotlight on how some leaders are running the unions," he says. Many do not have a proper constitution to guide them, do not hold regular congresses and fail to ensure that their finances are audited, Nxesi adds.

"That noncompliance becomes part of a wider pattern of corruption. When it comes to corruption, the law will have to take its course but it’s not just a question of the law, it is about the members themselves, taking responsibility and holding those elected ... to account."

The labour registrar has sought to crack the proverbial whip, taking on some powerful unions — including Numsa — over their failure to submit complete audited financial statements from 2009 to 2015, according to a notice seen by the FM. The registrar also took on Joseph Mathunjwa’s Association of Mineworkers & Construction Union (Amcu), which rose to prominence in the labour crisis in the mining sector before the Marikana massacre in 2012, over its failure to hold an elective conference.

Registrar Lehlohonolo Molefe, whose office is independent of the labour department and is designated by the minister in terms of the Labour Relations Act (LRA), is brutal about the condition in which he found many unions on taking up the post last year. The registrar is effectively a "watchdog" which ensures unions comply with the LRA by holding regular conferences, having proper financial statements and submitting audited membership numbers to the department.

The picture Molefe paints is bleak.

There are 213 unions in SA, he says, and only 34% are fully compliant with the law. He says union density is 38.7% of the workforce, in contrast to Levy’s figure of 25%.

An accurate figure is difficult to pin down as many unions do not submit audited membership figures. "[The] standard of compliance when it comes to trade unions is very bad," says Molefe, an advocate.

"I have to be frank. They do not comply with their own constitutions, they do not submit regular audited financial statements, which is a requirement in the LRA."

Nxesi emphasises that the registrar does not take orders from him but he is pleased that unions are being pushed to comply with the law.

"The compliance [the registrar] seeks to enforce is to ensure accountability of unions to their members, whom they are meant to serve," he says.

New laws allow the registrar to place a union under administration for failing to comply with the LRA.

This means the registrar will appoint an administrator to run the union until it holds a democratic congress.

In the past, unions would be deregistered for failing to comply with the law. This meant they couldn’t collect subscription payments or hold recognition rights.

The difference now, says Molefe, is that ordinary members do not pay the price for the failure of union leaders to run the organisations as required by law.

The registrar is in the process of applying to the court to place two unions under administration: Samwu and Ceppwawu.

So why have factional fights in the unions become so debilitating that union bosses end up abandoning their constitutions and failing to account to the requisite authority?

Molefe says most squabbles are over access to resources. "It has an impact on the members when you have all these challenges facing the unions, it distracts them from focusing on why they were established because these power struggles are about access to resources, it is no longer about serving workers on the shopfloor."

Corruption is by no means limited to Cosatu and its affiliates.

The third-largest federation in the country, the Federation of Unions of SA (Fedusa), fired its general secretary Dennis George last year after he’d been at the helm for 20 years. He was SA’s longest-serving union leader. He was axed after an independent Fedusa probe found him guilty of serious misconduct regarding his private investment in the controversial Ayo Technology Solutions. He was the first high-profile casualty of the commission of inquiry into allegations of corruption at SA’s largest asset manager, the Public Investment Corp.

Nxesi points to "business unionism" as another factor in the decline of SA unions.

Most Cosatu affiliates have investment wings, control of which is often at the root of union factional fights. Ceppwawu Investments, worth R3bn, is at the heart of the fight in the union, which could be placed under administration as a result.

"It’s very bad," says Nxesi. "What I know is that [the Cosatu I come from] has been destroyed by issues of business. You remember it started with the issue of a building [Cosatu’s new HQ], big issues there, implicating the general secretary and so on. In Ceppwawu, there are big issues about business. The same has happened to about four unions," the minister says.

He was referring to allegations of irregularities made against Vavi over the sale of Cosatu’s old headquarters and the purchase of a new building. At the heart of the transaction was Cosatu’s investment company, Kopano Ke Matla.

Cosatu general secretary Bheki Ntshalintshali says union investment companies have been as much a curse as they have been a blessing for organised labour.

"Ceppwawu started an investment company which is very rich but that has become its undoing. All the fights happening in that union are a result of that investment company. The people who are in there tend to be interested in who becomes the leader of the union because the union decides who is in control of the company.

"Almost all industrial unions have money issues, be it investment companies or resources of the union."

Ntshalintshali cites another stark challenge for unions — what becomes of their leaders once they are voted out? In the past, union bosses would likely become MPs or cabinet ministers on an ANC ticket once they were voted out of the union.

But space inside the ANC is diminishing.

Ntshalintshali describes this as a "lack of progression for leaders".

"You have been working in the union and occupied the highest position, if you are not re-elected, what do you do? Are you not then a threat to the new leaders? Sometimes they feel very uncomfortable. They have no career path, they have not been studying and they can’t go anywhere in the union. You have no income, what do you do? It poses some challenges."

The result is that leaders fight at all costs to retain their posts if they do not have a political berth lined up or cannot face the idea of joining companies they may once have organised in (though some have).

"So some general secretaries refuse to leave even though they have run out of time. When eventually they are kicked out they become an enemy in the union, they divide the union and sometimes they split the union," Ntshalintshali says.

He defends Cosatu affiliates’ shopfloor record, saying unions by and large remain strong at performing their core functions. He blames the labour department for not having enough inspectors and for failing to run the compensation fund efficiently.

Recently Cosatu stepped in to aid banking union Sasbo in its bid for a national shutdown of the banking sector, the first in two decades. Cosatu felt it had to take the union "by the hand" as the financial sector was one which Cosatu has long had in its sights.

But the attempt fell flat after Business Unity SA successfully got an interdict to prevent the action from taking place last week, due to the union making use of an old strike notice in its application to the National Economic Development & Labour Council (Nedlac).

Ntshalintshali says this was a setback but not a crisis and Cosatu is determined that the action will go ahead.

The Sasbo issue illustrates the effect of technological change on long-held jobs as banks close branches and customers switch to online banking apps. Such opposition recalls the Luddites who, in the 18th and 19th centuries, destroyed machines because they were putting people out of jobs.

But technological change did lead to other jobs being created.

What has also diluted labour’s power, says Ntshalintshali, is union fragmentation. The effects of the Numsa-Cosatu split are still being felt today. The federation still does not have a union which organises in the metals and engineering sector. The Food & Allied Workers Union also left Cosatu to join Saftu, leaving Cosatu out of another key area of the economy, the agricultural sector.

Vavi tells the FM that the fragmentation of unions has been the largest setback for unions since 1994. Cosatu is not what it was and while Saftu is clawing out some space, it can never reach its full potential in the current fractured environment, he says.

Levy says the split in Cosatu has had a far-reaching impact and shopfloor issues are no longer paramount to unions. Instead, jockeying for space and struggles for power have come to the fore. Nowhere was this more evident than in the events that led to Marikana, with contestation between Amcu and the National Union of Mineworkers (NUM) turning deadly.

A more recent example, says Nxesi, was in the trucking sector, where two loose groupings outside formal bargaining structures took on established unions and allegedly used violence to bar freight companies from employing foreign drivers.

Levy says this jockeying for power ends up placing unreasonable or unsustainable demands on the table — such as a 25% wage increase or political demands, as in the case of the truckers.

Says Levy: "The demand was for political action, basically for the government to step in and deal with foreigners, but companies have little power over that so the demand can never be met."

Such political demands could lead to lengthy standoffs and big losses in wages.

This has raised the issue of secret strike ballots, which the government has legislated to ensure that workers and not just union bosses have a say in strike action.

Nxesi says the strike ballot is necessary to ensure that when a decision to strike is taken, it is union members who opt for it and not just union leaders. Cosatu has largely accepted the secret strike ballot regulations, but Saftu, through its largest affiliate, Numsa, is challenging it in the Constitutional Court.

Vavi says Cosatu’s acquiescence over strike balloting shows its weakness.

While weakened organisationally, Cosatu, in particular, is viewed by some in the labour movement as an impediment to economic growth and transformation due to its proximity to the ANC.

Levy believes while unions are necessary and essential to protect workers in a country with SA’s history, they should tone down the war talk, especially over the economy. "We live in a constitutional democracy. Not only do people have the right to strike and freedom of association but there also has to be a voice for the voiceless in society. There is a valid role for trade unions, and strong ones at that, but the war talk is harmful and frankly scares investors."

For example, when the government announced plans to unbundle Eskom, the unions warned that the move was the first step towards privatisation, which avowedly socialist Cosatu is dead against.

It is interesting that the NUM, a Cosatu affiliate, was more receptive to the idea after meeting top ANC officials, who explained how grave Eskom’s troubles had become. However, the second-largest union at Eskom — Numsa, not a Cosatu member — has vowed to fight the move. Union competition for a small pool of workers could force the NUM to adopt a more hardline stance.

Another example is Cosatu’s outright rejection of finance minister Tito Mboweni’s economic growth plan, discussed by the ANC’s national executive committee last weekend.

Ntshalintshali does not believe Cosatu hampers economic progress — he says this is a scarecrow used to demonise the federation by a conservative and exploitative private sector.

Former NUM general secretary Frans Baleni, who served on the task team which recommended Eskom’s unbundling, also tells the FM it was a myth that the union blocked key reforms. "Cosatu, like all other federations, needs to be consulted as critical stakeholders," he says.

Ntshalintshali says Cosatu has for a few years not called on its members to launch a full-blown strike mainly because of the grim state of the economy. Instead, Cosatu believes dialogue through Nedlac and alliance forums is the key to ensure that the government takes labour along when making crucial decisions which could affect the working class.

"We only had one protest on the economy early this year and the banking sector was going to be the second one because we think we need to be raising issues consistently but not in a destructive way," says Ntshalintshali. "We hate capitalism but we know we have to live side-by-side with it. We are trying to find a fair distribution so we negotiate all the time. We believe in Nedlac."

But the Cosatu leader is concerned about the state of the alliance, particularly the divisions in the ANC. Cosatu has had to tread carefully as Ramaphosa’s opponents inside the party, such as secretary-general Ace Magashule, have pounced on grievances expressed by Cosatu to score political points against Ramaphosa (a former general secretary of the NUM).

Magashule, for instance, spoke at a Cosatu rally and denounced the government’s VAT increase.

Says Ntshalintshali: "We have an ANC that is not functional. We have an alliance that is headed by the ANC that is not up to scratch. We now have an ANC in Luthuli House that is prepared to march against its own government and even agree with Cosatu on the VAT increase.

"That is wrong and we said it is nonsense — you are the ruling party, you can’t oppose your own government [over the tax] and try to be sympathetic with us."

Though Cosatu supported Ramaphosa for the ANC presidency, it has not handed him a blank cheque, says Ntshalintshali. Yet a number of Cosatu and SACP leaders were appointed to key portfolios in Ramaphosa’s government.

Ntshalintshali reflects on Ramaphosa’s leadership so far — the president, too, cut his political teeth in the union movement and is a founding Cosatu leader. He finds it curious that Ramaphosa is not as "strict" as president as he was when he led unions.

"Whether it’s ageing or a question of money, I don’t know. He seems to be a soft person now," Ntshalintshali muses. He warns, however, that Ramaphosa’s plan to unite an ANC with competing aims is destined to fall flat and would not make a great legacy.

"You can’t unite people who are working against you. You won’t leave a legacy or be remembered for how you tried to unite the ANC, you will be remembered for how you governed," he says.

In 1996, Cosatu commissioned a report on how it should adapt to post-democratic SA. In her report-back, former Cosatu deputy president Connie September sketched three scenarios of what SA would look like in the future — the desert; the skorokoro; and pap, vleis and gravy.

Looking back, September hit the nail on the head with some key elements in her skorokoro (a beaten-up old car) prediction.

"In this scenario there is some economic growth and modest delivery," the September report says.

"The main features are, on the one hand, increasing social fragmentation and conflict, and on the other hand, the rapid self-empowerment of black business and the black middle class. SA is a skorokoro zigzagging from problem to problem.

In some unions a bitter struggle for power and resources has overtaken the aim of serving workers’ interests

—  What it means

"Ethnicity, racism, provincialism and regionalism become very powerful as a result of lack of delivery and conflict over resources. This makes it even more difficult to deliver. Patronage and corruption become the order of the day in government and in civil society.

"The ANC zigzags from policy to policy. It announces privatisation, but backs down when workers take mass action. It announces a crackdown on corruption and crime, but takes no firm steps. It proposes a new tax on the wealthy, but changes its mind when they protest that this will discourage foreign investors. It regularly announces new measures to transform the public service, but keeps changing its policies under pressure from various constituencies."

In this scenario, her peek into the future shows Cosatu being weakened by the divisions in society, with a culture of enrichment eroding trade union solidarity.

The only way forward for Cosatu is reform and adapt — unless the union movement wishes to limp along as in the "skorokoro scenario", which is now upon us.