UNIONISED STRIKES’ DYNAMICS AND ECONOMIC PERFORMANCE: AN EXPLORATORY STUDY

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Abstract

Legally, the freedom of association and the formation of trade and worker unions are part of the fundamental human rights bestowed on the citizens in the Constitution of South Africa, as clearly spelt out in Section 23 and 77(1) of the Labour Relations Act (1995) for employees who are not engaged in essential services. Under the Labour Relations Act (1995), trade unions are granted the right to strike in order to seek better conditions of service. However, there is an increasing concern that the rate of industrial actions or unionised strikes are getting out of hand, especially in recent times. Theoretically and empirically, the direct costs of incessant unionised strikes are well known. In this paper, we explored the economic implications of the ever-growing rate of unionised strikes in post-apartheid South Africa. In particular, we assessed its impact on the most important economic variable, namely, real gross domestic product (GDP). We brought to light the sector that is affected most by unionised strikes in the country, the root causes and the implications for policy. Overall our assessment shows that within the space of five years (i.e. from 2009 to 2013), unionised strikes have led to approximately 10,264,775 days lost, and consequently a fall in GDP by 3.2% in 2014 compared to 3.8% in 2013. The sectors heavily affected by unionised strikes are mainly the mining and the manufacturing sectors. Low wages, unhealthy working conditions, and deficiencies in the bargaining system often emerged as the root causes of unionised strikes. The policymaker should pursue effective initiatives seriously to moderate the rate of unionised strikes in South Africa. Institutionalised means of dispute resolution should be embraced and enhanced. These should include but not be limited to ballot requirements, proper regulation of the use of replacement workers, and compulsory arbitration. Policies that spell out employer-employee mandates should be binding such that no party exploits labour contracts to the detriment of the other.

Keywords: Strikes/Industrial Actions, Trade Unions, Economic Performance, South Africa

Received: 08.11.2016

Accepted: 05.04.2017

How to cite this paper: Mzangwa, S. T. (2017). Unionised strikes’ dynamics and economic performance: An exploratory study. Corporate Ownership & Control, 14(3-2), 354-363. https://doi.org/10.22495/cocv14i3c2art10