Releasing the prisoners from their dilemma: how to resolve labour tensions in South Africa’s mining sector

This brief quotes that labour legislation in South Africa creates strong incentives for rival unions to value violence over co-operation. Indeed, mining companies cannot afford to offer the kind of wage increases that are being demanded, while labour unions refuse to temper their demands.

Mining firms and unions need to revise their dominant strategies, and a focal point around which stakeholders can converge is required. The paper proposes that a strengthening of the Council for Conciliation, Mediation and Arbitration (CCMA) to punish illegal or violent strikes by removing an offending union’s bargaining rights may constitute such a focal point.

Further recommendations include:

• the institutions defining the labour rules of the game have to change, and new amendments must be in place to reduce the entrance threshold above which unions are admitted to participate in negotiations
• balloting should be nonnegotiable, and union elites should be forbidden from dictating demands on behalf of members
• the unions’ conflation with the African National Congress’s interests must be decoupled, and the union’s direct access to policy formation withdrawn
• mining firms and unions, through the Chamber of Mines, need to agree on a revenue-sharing model that limits wage increases and incentivises productivity
• a weighted smoothing arrangement could also be built in to prevent problems arising from differing levels of profitability across mining companies