Amcu vs platinum wage talks, round two

The Association of Mineworkers and Construction Union (Amcu) this week laid down an ambitious set of wage demands to the platinum sector.

It wants to belatedly start talks with Anglo American Platinum (Amplats), Impala Platinum (Implats) and Lonmin this week, after the companies’ existing deals expired at the start of this month.

Amcu’s demands break from the core principal of the deal that ended the historic five-month platinum strike in 2014.

That logic was to shift as much remuneration into the basic cash wage as possible.

The controversial living out allowance was frozen, and most other allowances and benefits were delinked from the basic wage and pegged to inflation.

The net effect was to put more cash into people’s hands but, over time, to erode the relative value of the allowances and provident fund contributions that make up a large part of the mine workers’ wage bills.

However, the new demands ask for a far larger living out allowance.

This is currently about R2 000 a month at all the mines. Amcu is demanding R3 000 a month at Amplats and R5 000 a month at Implats and Lonmin.

It also demands big hikes to a number of other benefits.

The list of demands is not the same for all three companies, with some substantial differences between the demands on Amplats and those on Lonmin and Implats.

The R12 500-a-month basic wage is the centrepiece, but is not the most far-reaching component of the union’s demands.

Apart from larger allowances and benefits, Amcu wants the mines to abandon their long-established shift system, known as the 11-shift fortnight.

This comes down to mine workers getting every second Saturday off, meaning that they work a five-day week, then a six-day week.

If this got scrapped, it would reduce the shifts worked in a large mine per year from 275 down to 250, eliminating almost 10% of work time.

The mines have traditionally gone into wage talks asking for the exact opposite, adopting the continuous operations approach, also known as full calendar operations – where the mines run every day, for about 353 days a year.

Another far-reaching demand is that platinum workers’ provident savings get transferred to a new Amcu fund called Igula – a proviso it has also made in the gold sector.

In that sector, Amcu’s demand comes down to destroying one of the legacies of rival union the National Union of Mineworkers (NUM) – the R27 billion Mineworkers Provident Fund, to which the majority of gold workers belong.

In the platinum industry, the different companies generally use different umbrella funds. Putting all these assets into Igula – potentially alongside gold mine workers’ assets – would instantly create a significant entity.

“All our members will be transferred, but the companies are very reluctant to move,” said Amcu president Joseph Mathunjwa this week.

As things stand, Igula is provisionally registered with the Financial Services Board and has financial services group Alexander Forbes as its administrator.

Mathunjwa made an effort to pre-empt the inevitable criticisms that the demands would cost jobs and were unrealistic, given the current parlous state of the platinum industry.

“There are numerous reasons for retrenchments; you cannot just say it is because of wages,” he said.

“It is irrational to draw a correlation between wage increases and job losses, and employers are given a blank cheque when it comes to retrenchments.”

Mathunjwa also denied that the mines were doing as badly as they claimed, citing earlier research about Lonmin’s alleged use of transfer pricing to shift profits out of the country.

Lonmin has always strongly denied these allegations.

In the letters of demand sent to the three companies, Amcu warns them against “selectively” pleading poverty.

“The mining companies have portrayed themselves as cash-strapped and struggling, with their shareholders suffering low returns and their wage bill spiralling out of control,” reads the letter.

“Although this might be the case, it is selective because it applies only when viewing company data through a narrow time frame focusing on the past few years, during which companies have been hit by the global recession and lengthy work stoppages.”

One of the union’s demands is nevertheless that any retrenched worker receive a minimum severance package of R120 000.

Mathunjwa dismissed NUM’s 20% demand made on the mines this year as a “PR exercise”, and indicated that Amcu saw little role for the minority unions in the coming talks.

“We are the majority. Those small unions will follow us,” he said.

The three platinum companies were unwilling to comment before the talks got under way.