The main agreement and productivity

Many would argue that productivity and referencing the Main Agreement hardly belong in the same sentence. Productivity in the context of centralized collective bargaining has been an extremely difficult nut to crack. Centralized collective bargaining by its very nature makes it near impossible to reward stellar performers. Year-in and year-out increases are negotiated and awarded on an across-the-board basis effectively rewarding workers for attendance.

The concept of productivity is simple: it measures the rate of output per unit of input employed. More productive processes yield more output at the same level of input. Whether productivity is viewed from an economic, company or country standpoint, being able to measure and track productivity is undeniably crucial to long-term success.

Notwithstanding the difficulties encountered at national level in attempting to onboard productivity into the Main Agreement, many companies have invested heavily in interventions aimed at improving productivity in the workplace e.g., investment in plant and equipment, innovation, improvements in supply chain logistics, incentive schemes, compensation, improving the work environment, investing in training and development, focusing on career development, wellness, diversity, increased responsibility and improving management quality.

Twenty-four years ago, the SEIFSA negotiating team during the 1998/ 1999 round of Main Agreement negotiations, took an unprecedented step to make productivity a non-negotiable employer demand but without compromising the protections afforded by clause 37 of the Main Agreement. Clause 37 is the protection enjoyed by employers against two-tier or plant level bargaining.

Whilst we realized it would be near impossible to define productivity for the entire sector, we were convinced we could structure a framework that could facilitate a conversation between workers their representatives and management on linking individual effort to reward. The trick was to ensure the protections built into clause 37 were not watered down, any such conversation would take place on an entirely voluntary basis and neither party could force the other to the table.

The preamble to the agreed Productivity Agreement introduces the notion of productivity in the Main Agreement by highlighting the following objective: Subject to the provisions of section 37 of the Main Agreement, an employer, his employees, any employee representative body and any trade union representing the affected employees may, by mutual agreement, enter into voluntary negotiations to conclude a productivity agreement with the objective of achieving measurable improvements in productivity performance and work life at company level, in terms of the principles and guidelines contained in this section.

Among the Productivity Guidelines is the following key clause: An opportunity exists… to negotiate an agreement at company level, with the objective of achieving measurable improvements in productive performance, increased productivity, efficiency, effective utilisation of all resources, flexibility and other related objectives – hardly wording one would expect in a collective agreement covering an entire sector!

Importantly, the Agreement expressly points-out, that the decision whether or not to negotiate and introduce productivity and efficiency improvement agreements at company level should be a voluntary one on both sides.

With industry moving back to the practice of granting Rand/cents increases calculated on the minimum gazetted rates of pay for each category of work, as opposed to awarding increases as a percentage on actual rates of pay and the five-grade job and wage structure looking a lot more interesting –
revisiting productivity in pursuit of achieving real gains in productivity, efficiency, effective utilization of all resources, flexibility and other related objectives – without compromising on rights and protections enshrined in clause 37 – just might be worth a second look.