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Definition

The process whereby employers negotiate with organised labour on issues such as wages, conditions of employment and other benefits. Both parties have a direct interest in settling negotiations without resorting to a stand-off - which normally takes the form of a protracted strike. A strike is bad for the business because without its employees it usually cannot function optimally. It is also bad for the employees because they will not be paid while they are on strike. The strike in 2014 by the Association of Mineworkers and Construction Union (AMCU) in 2014 lasted for five months and nearly crippled the South African platinum industry. Subsequently the strike by AMCU at Sibanye's gold division resulted in a humiliating defeat for AMCU. The side which caves in during a strike will usually be the one which has insufficient resources to continue the stand-off. In South Africa labour legislation is generally skewed in favour of the employee. As a private investor it is important to assess how exposed a prospective investment is to union action. Companies that employ semi-skilled or unskilled staff, in large numbers, tend to be highly unionised. They are vulnerable to strike action.

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