Struck by a strike

Struck by a strike

South Africa is rocked annually by labour strikes across many sectors of industry. SHEQ MANAGEMENT explores what to look out for come 2014 and how companies can protect themselves.

Each year, many sectors of local industry fall victim to dozens of legal and illegal strikes. In August 2012, the miners’ strike at the Lomin mine in Marikana had wide-ranging effects on the industry, the company, the South African Police Service, the miners and the affected families – which are still being felt.

More recently, strikes in the automotive and related industries were perhaps the worst of 2013 – and cost the South African economy billions of rand. The affected manufacturers alone suffered production revenue losses of R20 billion.

Unfortunately, it does not seem as though 2014 will be any better.

Says labour economist Andrew Levy: “In the light of recent changes and additions made to key labour acts, 2014 is going to be even more challenging and complex.” This will stem from changes and additions to the Labour Relations Act, the Basic Conditions of Employment Act and the Employment Equity Act.

Thankfully, strikes – particularly their often violent nature – are addressed in that, under certain circumstances, unions and all their members may be sued for the damages resulting from any strike action. In current legislation, where the strike is procedural, the liability for damages is placed fairly and squarely on the union and the employees. However, in the case of a protected strike, the strikers and the union have indemnity from being sued.

The proposed changes would ensure a protected strike loses its protected status if the behaviour of employees and/or their union gets out of hand. The amendment provides that the court may suspend a particular strike, whereby the continuation would be unlawful and therefore unprotected, with the indemnities against dismissal and against having to pay damages presumably falling away.

Whether or not such amendments are passed, Grant Marshbank, chief operations officer of supply chain consultants VSc Solutions, offers some advice on mitigating risk during labour strikes.

“Every year, labour strikes cost the economy billions of rand in lost business and hampered productivity, not to mention reputational risk as investors lose their appetite for doing business in South Africa,” he says. “Yet, as damaging as a strike can be, there’s no reason that it should be …”

Marshbank suggests the following steps be taken:

1. Use inventory management and forecasting tools to plan inventory needs based on actual constraints. These tools enable businesses to improve forecast accuracy and provide early warnings of potential stock outs or surplus orders. “Such tools allow one to continuously monitor all the risks inherent in your inventory, and set optimal safety stocks to mitigate risks while still delivering on targets,” he says.

2. Planning and distribution tools can help where a company is affected by striking drivers. These produce routes and optimised schedules for stand-in drivers, as well as the ability to tell exactly where a particular delivery is at any given time, and when drivers make unscheduled stops.

3. During a strike, business process automation can help redeploy staff, to provide support in an area of the business that is severely affected, without neglecting their own responsibilities. Process automation further supports administrators, enabling them to become more efficient as they have more time to follow up in person on key tasks and queries.

While legislation will go a long way in protecting businesses and other areas of society from the ill-effects of strike action, it is the responsibility of businesses to take the necessary proactive steps to reduce their risk, should a strike be unavoidable.

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