SA's 'strike season' bodes ill for investor confidence and for the country's post-pandemic recovery. Picture: WERNER HILLS
SA's 'strike season' bodes ill for investor confidence and for the country's post-pandemic recovery. Picture: WERNER HILLS

With businesses and the economy caught in a whirlwind of strikes, protests, lock-outs and retrenchments — on top of trying to recover from Covid-19 losses — Business Day law and tax editor Evan Pickworth interviews Audrey Johnson from ENSafrica’s employment department on what the future holds from a labour perspective.

Here is what you need to know: 

The context

Protracted strikes have an immediate detrimental effect on businesses, employees and their families, and eventually, also on the growth of the economy.

Economic growth is directly linked to consumer spending.  Protracted strikes not only affect consumer spending while they are ongoing but also for some time thereafter.  This is because the principle of no work, no pay applies while employees are on strike. As a consequence employees that are on a protracted strike lose a substantial amount of income. More often than not, these are low-earning employees that have a number of relatives that depend on their salaries. The strike affects their cash flow drastically resulting in more debt and poverty in the long run and affecting consumer spending. 

Strikes also affect the foreign investment required for economic growth since stable labour relations are a key factor that potential investors consider.

Business Day law and tax editor Evan Pickworth. Picture: REBECCA HEARFIELD
Business Day law and tax editor Evan Pickworth. Picture: REBECCA HEARFIELD

If the economy is not showing signs of growth, employment opportunities are shed, unemployment increases and poverty also becomes the end result. The rapid growth in the economy that is required to enable it to deal with the high levels of unemployment and poverty we face are unlikely to be achieved .

As to whether the prevalence of strikes will improve any time soon, unfortunately this does not appear to be likely. 

At the same time, we have also seen employers that are using the Covid-19 pandemic as a convenient excuse for not being in a position to pay bonuses or give increases or make any sort of compromise in response to employee demands in regard to these issues. 

In many instances, employers genuinely are in a very difficult financial position and there simply isn’t room for compromise.  But there are some instances where employers are also not being reasonable or showing any appreciation for the desperate financial position employees are in. 

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