As the South African government continues with its ongoing retirement reform process, the country’s largest trade union federation, Cosatu, remains extremely vocal in its disapproval of certain elements, vowing to implement strike action to protect what it deems to be its workers’ rights.

Cosatu said in a statement: “Our opposition to this law remains unwavering and we remain determined to implement our federation’s congress resolution, of fighting the National Treasury’s unilateral decision to control and manage workers’ deferred wages.”

In terms of labour relations, South Africa was recently ranked 107th out of a total of 140 countries surveyed. This is according to the World Economic Forum (WEF) Global Competitiveness Ranking 2015/2016, which describes the labour market as ‘inflexible’ and something that needs to be addressed. As we look at the unfolding Cosatu versus government issue of pension reform, this would certainly seem to be an apt description.

The issues

Cosatu threw down the gauntlet in the wake of President Zuma's signing of new tax incentives into law in January this year.

From the government’s perspective, its retirement reform process, which was first introduced in the Finance Minister’s Budget Speech of 2011, is part of its ongoing efforts to bring more workers into the regulated long-term retirement savings fold and ultimately help a growing number of South Africans to become more financially secure during their retirement years.

However, Cosatu believes that the issue centres on the rights of workers to be able to access money that has been saved and invested in their names by both employees as well as employers. The matter is complicated by the fact that Cosatu is both South Africa’s biggest trade union federation and an alliance partner of the governing ANC.

Almost since the beginning of the retirement reform process, local trade unions have been particularly outspoken about the compulsory preservation of retirement fund monies when members leave an employer-sponsored retirement fund, as well as a change in the tax treatment of provident funds that will essentially bring the operation of these funds in line with pension funds as a long-term savings vehicle.

Cosatu states that, "These savings are part of workers' hard-earned salaries and should be accessible to the workers, as and when they need them, especially in the absence of a comprehensive social security…. Workers will fight any attempts to impose the compulsory preservation of our hard-earned deferred wages." In other words, Cosatu is against the principle that workers belonging to an employer-sponsored retirement fund will lose their existing option to withdraw their retirement savings in one go, either upon retirement or when changing jobs.

Cosatu added that the signing into law will ‘complicate’ its support of the ANC in the local government elections due later this year. And therein lies the proverbial rub.

Trade unions and politics

While trade unions exist fundamentally to help better people’s lives and fight for the rights of those who are otherwise potentially disempowered, there tends to be an intrinsic link to the political landscape in doing so.

One of the most famous examples comes from Poland in the 1980s, with the formation of the famous Polish union Solidarity in 1980 after 17 000 workers had seized control of the Lenin Shipyard in Gdansk to protest, among other things, against a recent rise in food prices. At the time Poland was part of the Communist Bloc and under the ultimate control of Russia. Over the next 15 months, the union's membership grew from one to nine million people, representing a quarter of the country’s population.

However, it didn’t take long before union leader Lech Walesa was imprisoned for nearly a year by the Polish military leaders, with the associated outlawing of Solidarity. Nonetheless, the union constantly preached a policy of non-violence. The Polish authorities eventually agreed to talks with Solidarity in early 1989, resulting in a comprehensive agreement on sweeping political and economic reforms for Poland that also officially recognised Solidarity.

South African unions also have a proud history within the political landscape. The role played by local unions in helping to dismantle apartheid legislation and improving practices in the workplace remains one of the union movement’s major achievements. Trade unions are recognised in our Constitution, which provides for the right of workers to join trade unions, and for unions to collectively bargain and strike. The Labour Relations Act has given workers and their unions redress through mediation, conciliation and arbitration.

The issue of militancy

However, unlike the example of Solidarity in Poland, South African trade unions are not always known for adhering to a policy of nonviolence. Perhaps the worst possible example of the result of violence during a local strike comes from the 2016 wildcat strike by the Association of Mineworkers and Construction Union (Amcu) at Lonmin platinum mine.

The Marikana massacre, as it has come to be known, was the culmination of three years of labour unrest on the country’s platinum mining belt. In August 2012 the strike degenerated into incidents of violence between workers, security forces and policemen. Finally, on 16 August, in scenes that played out around the globe, 34 miners tragically lost their lives in a single day when police opened fire on a large crowd of miners. The massacre resulted in a commission of inquiry by retired judge Ian Farlam.

The Marikana massacre is an extreme example but the fact remains that South Africa’s work force is known to be militant, as borne out by the latest WEF 2015 Global Competitiveness Ranking.

Going forward…?

However, while we wait to see how the battle over pension reform between Cosatu and the government plays out in the near future, we are also seeing a decrease in the membership of trade union membership in South Africa over the past ten years. At the same time we are also seeing an increase in the number of new trade unions.

According to The Economist, with just a few exceptions, the membership numbers of trade unions have dropped dramatically in the rich world over the last three decades. This seems to be reflected in South Africa also and it would appear that many members are disillusioned with what was a once-respected movement.

The question must be asked: do we still need trade unions in South Africa? On the surface, the need has not disappeared but the issue of militancy during labour action is becoming increasingly important. In addition, unions also offer a number of products. Do trade Unions need to remain relevant by offering more benefits to their members?

As the middle class grows in South Africa we are also seeing a move away from the collectivism of the past. More employees today are now better off and therefore better able to look after their own interests in the workplace.

The labour unions in South Africa were previously at the forefront in the march to democracy. In today’s changing scenario, what role can trade unions play now that the country’s citizen rights are established, and how will they adapt?