Presentation to the 2nd Annual

A Philosophical look at Collective Bargaining &

Change Management

Presented by Piet du Plooy piet@consawu.co.za

Has Collective bargaining Failed the working Class

This presentation uses a number of studies to show that collective bargaining, if we understand collective bargaining to be positional, bargaining has not delivered for the workers.

We will first look at the definition then at some ideas on how society are locked into a particular way of thinking

Collective bargainingCollective bargaining is a process of negotiations between employers and a group of employees aimed at reaching agreements to regulate working conditions.

In June 2007 the Supreme Court of Canada extensively reviewed the rationale for regarding collective bargaining as a human right. In the case of Facilities Subsector Bargaining Association v. British Columbia, the Court made the following observations:

Collective bargaining The right to bargain collectively with an employer enhances the human dignity, liberty and autonomy of workers by giving them the opportunity to influence the establishment of workplace rules and thereby gain some control over a major aspect of their lives  namely their work... Collective bargaining is not simply an instrument for pursuing external ends…rather [it] is intrinsically valuable as an experience in self-government...

Collective Bargaining

There is also a view that says collective bargaining is at worst a mere façade behind which the employer continues to dictate terms, at best a means by which organised employees can get marginally to grips with their masters on some issues although still leaving the latter with the real reserves of power.

In the light of the above consider the following:

Rising Inequality in the world

Unprecedented interest in income inequality has sent a complex book by economist Thomas Piketty to the top of the charts on Amason.com.

Following a few charts from the book Capital in the Twenty First Century by Thomas Piketty

Rising Inequality in the World

Wages as a percentage of the economy has dropped to all time low

Wage Growth v/s Productivity

Corporate Profits as % of GDP

Growth of hourly productivity,

The average CEO earns as much as 331 workers, up from a 24:1 ratio in the

1960s.

The Rich are

The

                                                                              

South Africa’s two richest people have wealth equal to the poorest 26.5-millionSouth Africa is a country of breath-taking wealth and life stealing poverty, according to an Oxfam report on extreme inequality.

The Rich are getting Richer and the Poor Poorer

The central claim of Piketty’s book is that; The free-market system has a natural tendency towards increasing the concentration of wealth, because the rate of return on property and investments has consistently been higher than the rate of economic growth.

What is more there are few economic forces that counteract its natural tendency to become concentrated, as greater wealth brings greater opportunity to save and invest.

The Rich are getting Richer and the Poor Poorer

The book analyses hundreds of years of tax records from France, the UK, the US, Germany and Japan to prove a simple idea: the rich really are getting richer. And their wealth doesn’t trickle down. It trickles up.

According to trickle-down economics, the first thing businesses do with extra money is hire workers. These workers spend their wages, driving demand. The net result is a faster growing economy.

Free-market Equilibrium The Laissez-faire capitalist free-market system will always seek an equilibrium, in other words with a situation where there is not full employment the equilibrium will always be found where the market self- adjust to full employment.

The same applies to wages where there is over-supply the market will self adjust, and the poor worker will perpetually be under-paid

GDP as seen by big Business

Consumption is the sole end and purpose of all production,’ wrote Adam Smith in 1776 in The Wealth of Nations. South Africa is dominated by a specific corporate point of view, a point of view in the debate about economic policy and wage levels from which vantage point South Africa’s gross domestic product (GDP) is thought of as ‘gross domestic profits’. When the economy is viewed through the eye of the corporate beholder, wages and benefits paid to the mass of employees are ‘costs to companies’, and therefore, through ideological slippage, costs to the nation. Dick Forslund

Yes but surely South Africa is different

Prof. Sampie Terreblanche in the book A History of Inequality in South Africa:Parallel with the negotiations on constitutional issues at Kempton Park during the early 1990s, representatives of the corporate sector and core ANC leaders also negotiated informally on economic issues. Sampie Terreblanche 2002 p95

In 1993 the corporate sector and core ANC leaders reached a hugely important elite compromise. This happened before the transitional executive council (TEC) accepted a secret $850 million loan from the IMF

Yes but surely South Africa is different

to help tide the country over balance of payments difficulties in November 1993. Before the TEC signed the loan agreement, the corporate sector and the NP government on the one hand and the ANC leaders on the other signed a secret protocol on economic policy. In the statement on economic policies agreed with the IMF, the TEC committed itself to a neo-liberal, export-oriented economic policy, and a redistribution through growth strategy.Sampie Terreblanche 2002 p95

The Matter between NUPSAW and the Lotteries Board

But not only wages and conditions of employment are looked at through the prism of the Bourgeoisie also consider the following to illustrate the point:

The matter between: National Union of Public Service & allied Workers obo Mani and nine others. v/s National Lotteries Board.

The employees were dismissed for insubordination and brining the organisation in disrepute. They advise through a petition that the CEO be given a separation package in return for his resignation.

The Matter between NUPSAW and the Lotteries Board

The 9 employees were dismissed for insubordination and disrespectful behaviour, bringing the name of the CEO into disrepute.

Dismissal was upheld in the labour Court and also the Supreme Court of Appeal, it then went to the Constitutional Court where the majority judgments were in favour of the employees.

There were three different judgments by the Constitutional Court, our concern here is with the judgments of Judge Froneman (Minority) and Judge Zondo (Majority)

The Matter between NUPSAW and the Lotteries Board

The point one wish to explore here is how your thinking is influenced by the prism you see through.

In this case different people came to different conclusion even though they were presented with the same facts within the same frame of reference:

Judge Froneman establish the issue of principle as follow: This case concerns the interpretation and application of the provisions of the Act that deals with the nature and extent of the lawful union activities and the right of employees to take part in them

The Matter between NUPSAW and the Lotteries Board

The matter revolve around a petition that stated:

In the light of the above, we urge the Board to request Prof Vevek Ram to resign and further look at a suitable settlement for him as deemed fit by the Board. Failing which, Prof Ram must be relieved of his duties due to reasons stated in Appendix A

We further urge the Board to take the matter seriously as we are no longer prepared to spend a day with Prof Ram in the same building with him at the helm of this organisation. We further urge the Board to ensure that June 30th 2008 is the last day of his employment.

The Matter between NUPSAW and the Lotteries Board

In essence what the union claimed was that the actions taken were normal union activities and therefore the dismissal has been automatically unfair

Judge Froneman held that the demand for the dismissal of Prof Ram was unlawful

Section 4(2)(a) Right to participate in the lawful activities of the union, the essence here is the activities might be lawful under the Act but it does not mean they are protected; unprotected strike is a good example

The Matter between NUPSAW and the Lotteries Board

Judge Zondo used the same petition but his understanding of the petition is that the union earnestly encourage or strongly advise the employer through the petition, as oppose to a demand as is the understanding of Judge Froneman

Judge Zondo had a different understanding of the petition and therefore analysed the meaning of the word urge and since the union did not demand the dismissal of Prof Ram their action was not unlawful and thus protected, which made the dismissal an automatically unfair dismissal

What is the solution

In a globalised world trade unions will have to have a fresh look at traditional positional bargaining, it makes very little sense to engage local management while the company are run on a global basis

Introductory Orientation

• In general terms power is been described as: “The ability to influence the behaviour of others – with or without resistance.”

• MacMillan also refers to power as: “the capacity to restructure actual situations” and in some extremes even transform situations.

Change can be presented as the moving from the current dispensation (status quo) to a future dispensation however defined

FUTURE STATE

CURRENT STATE

CHANGE

Toffler (1998) connects power and change with each other and present it thus as: “For this is the dawn of the Power Shift Era. We live at a moment when the entire structure of power that held the world together is now disintegrating. A radically different structure of power is taking form. And this is happening at every level of human society.”

“In the office, in the supermarket, at the bank, in the executive suite, in our churches, hospitals, schools and homes, old patterns of power are fracturing along new lines. Campuses are stirring from Berkeley to Rome and Taipei, preparing to explode. Ethnic and racial clashes are multiplying... Power is shifting at so astonishing a rate that world leaders are being swept along by events, rather than imposing order on them... There is strong reason to believe that the forces now shaking power at every level of the human system will become more intense and persuasive in the years immediately ahead... A ‘power shift’ does not merely transfer power. It transforms it.”

As for the context the execution of power could mean: The exercise of influence Management and controlWithin the bigger political framework in mind the execution of power could meanThe exercise of forceForce through the exercise of authority

(institutional in nature) Collective decision making The awarding of value (worth) and scares

resources Practices of avoidance and manipulation

“Politics can therfore be seen as a struggle over scarce resources, and power can be seen as the means through which the struggle is conducted.”

Heywood, 1997

The origin of power is complex and all sources of power cannot necessarily be directly reduce to a political context

Gailbraith In his “An anatomy of power” identify the following sources of power

CONDIGN

COMPENSATORY

CONDITIONED

PERSONALITY

PROPERTY

ORGANISATIONAL

Power related; for instance military force; delegated power, frightening & threatening

Allocation of resources

Persuasion; Diplomacy etc.

Charisma; Status

Knowledge and Skills; Culture and Tradition

Social Relationship Structures

Three faces of Power:

Power of decision making

Power of setting the agenda

Power of thinking Control; [ideological]

Thank youPlease think about that