Workers world-wide have been arguing for years that privatisation invariably leads to cuts in wages and working conditions, and that multinationals in their quest for profits compound the problem. Jane Barrett* reveals all at Equity Aviation.
In South Africa right now we need look no further than the dispute in Equity Aviation to find evidence of this fact. Equity Aviation was born when Transnet, on the directive of government, sold a 51% stake in the company Apron Services. The buyer was a Joint Venture between British multinational service specialist Serco and a consortium of six black economic empowerment companies combined to form Equity Alliance. Transnet continues to hold a 49% share of the company. The deal was completed in April 2003, coinciding with the time when annual wage increases fell due in the company. The transfer contract between Transnet and Equity Aviation specified that “unless otherwise agreed with the representative union”, wages and working conditions would not be varied downward by the new majority owners for at least 18 months. This is in line with Section 197 of the Labour Relations Act. The company employs 1500 workers, 500 of whom are contracted via Labour Brokers. The ink was hardly dry on the transfer agreement when Equity Aviation management tabled a set of demands to Satawu for some major changes in working conditions. Satawu represents the majority of the company’s workforce. While the labour broker (casual) workers are members of the union, they are currently not on strike as they are not formally employed by Equity Aviation and their conditions are unaffected by the dispute. The union is the largest transport union in South Africa , having 100,000 members in the transport, cleaning and security industries. Satawu is an affiliate of Cosatu.
Downward variation
Management’s opening wage offer was 0,5% combined with a performance bonus of up to 3%. The wage offer was conditional on accepting a range of downward changes in conditions including an increase in hours of work from the hard fought for 40 hour week to a 45 hour week, with no compensation; those whose shifts do not add up to 192 hours per month to be paid pro rata, instead of a regular monthly wage (resulting in less overtime pay); the abolition of a shift premium of 6,75% for all shift workers and the introduction of a shift allowance limited to nights which will benefit mostly white workers; a change in the way in which overtime is calculated so that overtime would no longer be calculated on a daily basis but on a monthly basis (resulting in a further loss in overtime pay); a ban on weekends off i.e. no worker to have Saturday and Sunday off in any one week; and sick leave to be reduced from 60 days over 3 years to 37 days. How Equity Aviation thought they could get a negotiated agreement on these downward changes remains a complete mystery!
Opening demand
Satawu’s opening demand was 10% subsequently dropped to 8%. On management’s attempts to downward vary working hours and other conditions, Satawu has been consistent in arguing that it would be willing to talk about these proposals outside of the wage bargaining process. Negotiations dragged on for months, delayed for a long period by management’s refusal to disclose financial information requested by the union. This became the subject of a dispute on its own. Deadlock in the wage negotiations was eventually declared by the union in November last year. The matter was referred to the Commission for Conciliation, Mediation and Arbitration (CCMA) but little progress was made in the talks. By mid December Satawu had issued notification of intention to strike. The strike started on December 18. 950 workers have been on strike ever since. On December 22, Equity Aviation applied for an urgent interdict against the strike, but their application was denied with costs. The strike continued over Christmas and New Year with no movement from management. Management’s next tactic was to take the unprecedented and illegal step of selectively dismissing around 150 workers for striking. The workers were selected for dismissal on the basis that they were “not union members of long standing”. The dismissals became the subject of another separate dispute, with the union applying for an urgent interdict. On the eve of the court hearing, the company backed down and withdrew the notices of dismissal. Their withdrawal became an order of court. Since early January there have been two further rounds of negotiations at the CCMA as well as a number of informal talks brokered by the leadership of Cosatu. At the time of writing, management had marginally shifted its wage offer to 4% plus a 2% performance bonus. However all their other conditionalities involving a downward variation of conditions remain. There have been two major problems in the process of negotiation. The first is that management has not maintained consistent representation in the negotiations. Faces have chopped and changed, and indeed the Human Resources Executive manager was on leave for a full month in Australia from the point at which the strike started. The second problem is that management has constantly altered its offers, never once reducing them to writing. The union considers this to be a form of bad faith bargaining. In the absence of any progress through negotiation, Satawu has moved its focus to the mobilising of solidarity – both local and international, as well as to putting pressure on the shareholders. Letters sent by the union to the three major shareholders (Serco, Equity Alliance BEE consortium, and Transnet) on January 19 had not been answered at the time of writing, so clearly bolder tactics are required to wake them up.
Pressure on government
Pressure will also be put on government as the shareholder of Transnet and as the agent which effected the part sale of Apron Services in the first place. Minister Radebe’s statement in the Sowetan on January 26 has not gone down well in the union. He stated that: “We protected the employment of workers. The issue is between the employer and the employees”. On Friday January 23, solidarity secondary strikes took place nationally at SAA, Acsa, SAA Technical, LGM, SA Express, and Equity Aviation itself (workers who currently fall outside of the bargaining unit). 450 strikers picketed the Equity Aviation headquarters for four hours and a memorandum was delivered to management. The company was presented with a set of five demands namely that the company:- drops its demand for an increase in hours of work and other downward variations of conditions, and waits for a proper timing should they want to engage; sends consistent representatives to negotiations, comes to the table when required, and bargains in good faith; stops selectively dismissing striking workers and that it adheres to the court order for the re-instatement of selectively dismissed workers; releases all outstanding payments to workers and issues pay slips for November wages; and drops its attempts to challenge the right of workers to picket. While Johannesburg workers were presenting the memorandum of demands, Cape Town and Port Elizabeth workers were loudly protesting at the airport. At the time of writing the company was starting to use desperate measures. They have threatened to again challenge the legality of the strike by using the Satawu constitution. Satawu sees this as yet another strategy to avoid good faith bargaining and is confident that this new legal challenge will be dismissed. Meanwhile the Director of the CCMA has taken new steps to mediate a settlement. At the time of writing he had met separately with Satawu and was about to meet with Equity management. Whatever the final outcome of the strike, there will be some important issues for Satawu and Cosatu to reflect on. The first will be how to step up the struggle for a 40 hour week at a national level, so that the issue is not left to surface only in the course of individual disputes. The role of labour brokers in increasingly “casualising” employment is an issue that has been somewhat hidden in the dispute but which is nevertheless important to reflect on and strategise a response to. The development of strategies of engagement with BEE shareholders will also be necessary at a Federation level. Some reflection on strategies for building international solidarity in the context of increasing multinational involvement in our economy will also be useful. It would also be important if the experience of the Equity Aviation strike contributes to the formulation of proposed further amendments to Section 197 of the LRA. Clearly the wording of the Section has given Equity Aviation the space to put unreasonable demands on the table for a downward variation of conditions.
Structure of collective bargaining
There is also the issue of the structure of collective bargaining to be reflected on. Currently there is no centralised bargaining forum in the Aviation industry. The breakup of SAA into a myriad of different services (many of which have now been privatised), combined with the entry of many new players in the industry, has resulted in a fragmentation of collective bargaining. This has placed excessive demands on the union and has fragmented worker solidarity. Centralised bargaining in the industry is therefore likely to become a key Satawu demand in the next year. Finally, and most sobering, the strike holds many lessons for the Federation on the consequences of privatisation for workers.
*Barrett is policy research officer of Satawu (SA Transport and Allied Workers’ Union )
(This article originally appeared in the SACP’s Umsebenzi Online Volume 3 No 3 February 4, 2004)