NEW YORK | PRETORIA - An ill wind of layoffs, company closings and unpopular labour reforms are taking a toll on South Africa’s once powerful trade union movement.
Membership in the Congress of South African Trade Unions (Cosatu) has slumped from a peak of 2.19 million four years ago to 1.8 million, following the expulsion of its largest affiliate, the National Union of Metalworkers of South Africa.
Some recent ANC “reforms” have contributed to the worker exodus. These include the recent revision to pension laws, signed in January by President Jacob Zuma. The two signed bills affecting pension payouts sparked fierce opposition from Cosatu.
Under the new law, workers entering retirement are entitled to only a third of their total pension benefit in a cash lump sum. The other two-thirds would be paid in a form of pension over the rest of their lives.
But according to the metalworkers union, this would leave workers with too little money at the date of their retirement and not enough to invest in an income-producing endeavour.
“Most workers leave employment with a pittance‚ so that at retirement they are left with a provident fund that is far too low to cover their needs‚” the union declared, adding: “Workers’ wages are not only insufficient but also not increasing in real terms in line with inflation.”
Bridgette Mokoetle, representing business, also found fault with the tax reform bills. On the one hand, some workers taking all their pension monies as a lump sum might spend it too quickly and not invest for the future, she said.
On the other hand, the amended laws pose the risk of denying retired individuals the right to create and accumulate wealth by starting a small business, for example. “This may be something towards which they have worked all their lives,” she said.
A new minimum wage is another thorn in the worker-business-government alliance.
In a further confrontation with the ANC, former Cosatu senior leader, Zwelinzima Vavi, announced the formation of an alternative labour federation which will be formally launched on May 1.
Meanwhile, a decision by mining companies, including Anglo American’s Kumba Iron Ore unit, to fire some 32,000 workers because of plunging commodity prices will add to a 25.5 percent jobless rate and strip unions of more members and their dues. The world's top platinum producers, which are losing money as costs soar and prices sink, are pleading poverty in advance of South African wage talks set to start in April. [International Press Syndicate – 9 February 2016]