AMCU agreed to centralised gold wage talks

[miningmx.com] – ONE of the lesser known aspects of gold industry recognition agreements signed with the Association of Mineworkers & Construction Union (AMCU) last year was that they committed the union to centralised bargaining when wage negotiations rolled around.

That’s an important obligation for AMCU to meet because the union has won members in the past by staying outside the status quo.

By flatly refusing to sit down with its rival, the National Union of Mineworkers (NUM), AMCU has been able to publicly demonstrate its distaste for the South African government which it contends has sold out to big business.

“It has acknowledged that centralised bargaining will take place at the chamber [of Mines],’ said Johan Oliver, an partner at attorneys, Webber Wentzel. “AMCU will be forced to participate in the group,’ he said.

That may presage a different strategy within the union ahead of wage talks which are due to kick off in the gold sector in May or June.

Well, maybe.

The other theory is that AMCU may yet attempt to extract itself from central bargaining if it becomes large enough in the gold sector to challenge the recognition agreements, a view that is considered a possibility by Oliver.

The extent of AMCU support among gold miners is something of a thumbsuck at the moment. According to analyst estimates, AMCU could control as much as 30% in the gold sector.

“We think that the rise in AMCU’s membership for the next round of wage negotiations is likely to make it difficult for the courts to extend a collective agreement between rival unions and producers as was done last year,’ said Adrian Hammond of Standard Bank Group Securities.

Officially, AMCU’s gold industry membership is estimated to be about 24% from 13% two years ago with both Neal Froneman, CEO of Sibanye Gold, and Graham Briggs, his opposite number at Harmony Gold believing the union will increase its presence.

“AMCU has definitely been growing, particularly in the West Rand in the Carletonville area,’ said Briggs on the sidelines of the Mining Indaba earlier this month. “I don’t know all the numbers from Sibanye Gold, but at Kusasalethu AMCU is definitely dominating,’ he said of the firm’s West Rand operation.

Said Froneman in an interview with Miningmx: “I wouldn’t say NUM’s members have lost faith, but it’s more a case of they don’t think NUM represents their interests as AMCU does which doesn’t have political connections’.

NUM is certainly feeling the pressure. It’s thought the handing of minority recognition to AMCU at Sibanye Gold’s Beatrix mine in the Free State province was the primary cause of inter-union rivalry which resulted in clashes and injuries to nine employees earlier this month.

Froneman commended both unions for the relatively quick resolution to the violence (although the mine was shutdown for two days at a cost of R23m to revenue), saying it boded well for future dealings.

But a dominant AMCU in a gold industry that cannot support extended strikes in the manner of the platinum sector last year is a potential risk.

“The gold industry can’t afford lengthy drawn-out strikes,’ said Olivier. “There need to be mechanisms to resolve future disputes early,’ he said.

The worry has extended to the government which was demonstrated in the somewhat strange observation by the mines minister, Ngoako Ramatlhodi, this month that powers to foist so-called “interest arbitration’ on a wage dispute should fall to the labour minister.

“That wasn’t made part of the amended Labour Relations Act but it is being talked about,’ said Olivier.