Friday, 22 June 2007

Wage talks, negotiating tactics and closing gaps

The public sector wage negotiations bring to mind my own experience in wage negotiations in recent years, when I worked at the Post Office on a contract post in the Human Resources Division.

Recall that some years before I had been part of COSATU, working in the head office of the labour giant. Is this an anomaly? No, because I see no contradiction in the fact that I have been employed on both sides of the fence. In my perspective on social change, one can work for just outcomes wherever one happens to be located.

What was interesting during my brush with labour-management consultations then, was the discourse employed by the unions. Although it was about 5 to 6 years after the birth of the new democratic order, the COSATU union in particular viewed management in the same way that the federation’s affiliates viewed apartheid-order bosses. Unions in each meeting referred to management as "Damagement", reminded us from the outset that management could never be trusted and dismissed as "management's problem" any requests that labour should help curb postal theft in the international division.

At one stage in talks with unions, when I had finished an input on a proposal, the unions’ leader commented that, given what I had said, I could not have been genuine when I was active in COSATU. That barb had less to do with what I had said (I had given technical information about the state of the company), and more to do with trying to disorientate the discussion as part of those old-style negotiating tactics.

This vignette raises questions such as: Who will mediate the new (healthy) tensions under a democracy? Is it better for the unions to face the hardegat "baas" of old or to have discussions with former comrades? Would some (in management and unions) prefer out-and-out conflict rather than discussions that are characterised by some shared visions – would this be in line with their inherited strengths?

In the course of negotiations, there was:
- Baiting and name calling (unions referred to management as Damagement).
- Some areas of co-operation and isolated instances of mutual respect.
- A frequent going-back on consensus points reached
- Delaying tactics
- Regular denials that written communication had been received.

At one stage, the unions arrived at a hotel for a two-day consultation and all was well until – at the coffee session before the start - one of the unionists spotted a cockroach in the old Pretoria hotel venue that management had managed to secure. The unions began the discussion by questioning the quality of the venue and accusing management of undermining them by hosting them in such a place. They suspended the meeting – and asked management to call them back on their cell phones when the former had found another venue.

In the negotiations of that year, the unions began the talks with a demand for wage increase of between 18% and 20%, if I can recall. This at a time when the Post Office had posted a loss of about R300m. Asked about the basis of their demand, the union responded that “it was for 300 years of oppression”. Such a demand is of course not unreasonable (given what black people in the country have lost over the decades). At the same time such a demand fits better in reparations talks than in wage negotiations. It would struggle to find traction in a context of a company that was then a sinking ship requiring tax payers to fork out millions to keep it afloat each year.

I cannot say more about those negotiations, except that I hope and pray that the colleagues and comrades on both sides at the Post Office have since found ways to negotiate in a better spirit. How did those talks end? The unions would not go on strike, nor would they sign off on management’s final offer. In the end, based partly on employee pressure from below (a significant number of workers desperately needed the wage increases as most of what they went earned straight to “loan sharks”), management simply effected the increase.

Here are some tips for conducting wage negotiations:
1.Negotiations should be based on information and facts. In this regard, management should share information about the financial position of the company or institution.
2. There should be some discussion of wider issues. These will include matters such as inflation and cost of living. Each party also should have an opportunity to report on wider impacts as they see them.
3. Parties should punctuate the talks with proposals that aim to progress the discussions, with each side taking turns to make proposals. Such proposals are an opportunity for one side to show that it has heard the other side, and is thus making adjustments while continuing to strongly assert its core case.
4.At the final point, parties should be open to some form of mediation. Mediation is critical when the process gets stale, and as table-thumping takes precedence and sides are not listening anymore.

In addition, in the South African situation, management should know that it also has an interest in a reasonable (rather than a stingy) wage settlement. If, for example, for a number of successive years (as has happened in the case of the public sector) management gets away with sub-inflation and below cost-of-living increases, it will ultimately be a pyrrhic victory for them. It is also far better to constantly give regular reasonable increases so that workers’ lives improve, rather than allow a deterioration (in real terms) of employees wages – the result, at some point, will be wage talks that begin with a huge (unbridgeable?) gulf between what management has budgeted to pay in terms of a wage rise and what unions and workers demand. In either case, the tension and anger will build up – and explode.

Also in countries with a rich-poor gap such as ours, serious consideration should be given to a sliding scale approach to wage increases. A sliding scale approach, where higher paid workers get a lower percentage increase and lower paid workers get the highest percentage, closes the income gap but also helps to close social and political gaps.

This is a dilemma for management in present day South Africa. Management must strive to close the wage gap and, at the same time, ensure retention of senior qualified staff (in a context of skills shortages, to boot). However, if companies and other organizations don’t work at closing the wage gap, the country will (continue to) have to deal with millions of angry people who feel that they have not benefited from the economic boom of recent years.

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