SA in for more strikes, weaker rand

Analysts warn strikes will continue to increase while the exchange rate will see further drops.

FILE: South African Transport and Allied Workers Union (Satawu) during their strike near at OR Tambo International Airport on 26 August 2013. Picture: Govan Whittles/EWN

SANDTON - On a day that's seen the rand plummet to its lowest level against the dollar in four years, labour relations in major industries continue to be strained with analysts predicting that worse is yet to come.

The topic has led the agenda on Wednesday at the Mining Lekgotla while trade unions consult members on whether to strike in a number of industries.

Unions including the National Union of Mineworkers (NUM), Association of Mineworkers and Construction Union (Amcu) and Solidarity are seeking a mandate from workers after refusing to accept a final offer made by employers.

Many labour analysts say nation-wide protests now appear almost inevitable.

The looming strikes are expected to further impact the economy which is already under tremendous strain.

STRUGGLING CURRENCY

Earlier, the rand passed the 10.50 to the dollar mark though it has since strengthened to around 10.35.

Economists say other currencies like the Indian rupee have also been affected by fears that the US Federal Reserve will stop pumping money through the financial system while the crisis in Syria has also had an impact.

FNB Chief Economist Sizwe Nxedlana says he believes the rand may fall further, saying that there are many factors that could affect the exchange rate.

"[This suggests] that the rand is in for a period of volatility with a tendency to decrease further."

Meanwhile, labour analyst Terry Bell says low-paid workers are battling to keep up with inflation, saying, "Their rand buys less than it did five years ago."

He adds, "Effectively, people at that level have suffered a wage cut - a drop in their standard of living."

But the Chamber of Mines (CoM) Chief Negotiator Elize Strydom says the demands for double-figure wage hikes are impossible to meet.

"We are ready [but] it's not what we want. We always think a strike should be the last option because, you know, everyone loses."

She says they have not yet received any formal notice of strikes.

STRIKES INCREASING ANNUALLY

Meanwhile, an expert agency on South Africa's labour relations says strike action has grown bigger and longer over the past five years and shows no sign of slowing down.

Andrew Levy of Andrew Levy Employment has told delegates at the Mining Lekgotla in Sandton that strikes will continue to limit the country's productivity.

Levy said SA remained relatively strike-free for the first 10 years after 1994 but since then labour relations have deteriorated.

"You'll see that, generally speaking, it goes down from the passage of the New Labour Relations Act but round about 2003/2004, it begins to increase."

Levy says his agency expects more strikes this year and doesn't think the trend will slow down.

"The forecast shows a strong and steady, steep rise."

He's warned that unless labour reform is implemented, the industry's landscape won't improve and the strikes will have an even worse effect.