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South African Court to Rule on Strike Threat to Gold Mines

Jan. 21 (Bloomberg) -- A South African court will tomorrow rule on a request by gold producers to halt a strike for higher pay called by the Association of Mineworkers and Construction.

The Chamber of Mines, representing the biggest producers like AngloGold Ashanti Ltd., Sibanye Gold Ltd. and Harmony Gold Mining Co., asked the Johannesburg Labour Court to halt a strike due to start Jan. 23, Charmane Russell, a chamber spokeswoman at Russell and Associates, said by phone. The hearing is at 9 a.m.

“The order of the court will be followed,” AMCU President Joseph Mathunjwa said by phone. “If the court rules in our favor, then the gold companies should respect that as well.”

While the union represents about 19 percent of workers in the local gold industry, it’s the biggest at some of the largest mines including Harmony’s Kusasalethu, Sibanye’s Driefontein and AngloGold’s Mponeng. The decision may hinge on the definition of a workplace and whether a two-year pay deal reached between the companies and National Union of Mineworkers, the industry’s main labor representative, extends to mines where AMCU is dominant.

The chamber sees companies rather than their individual operations as workplaces, according to Elize Strydom, the industry group’s chief wage negotiator.

“The fact that you’re the majority at Mponeng at AngloGold does not help you,” Strydom said by phone. “In the workplace, which is the whole of AngloGold, you are the minority. Now it will be in the hands of the presiding judge to decide.” A strike “would amount to serious misconduct, which means there is the possibility of dismissal” if the chamber wins, she said.

Legal Basis

The law doesn’t suggest an NUM deal would necessarily apply to AMCU members where the holdout union represents a majority of the workers at a mine or operation, according to John Brand, a labor lawyer at Johannesburg-based Bowman Gilfillan Inc. Brand said he isn’t aware of the legal basis for the Chambers’ claim.

The Labour Relations Act “seems to only contemplate single employer workplaces and the extension of agreements to non-union members in such workplaces,” he said today by e-mail. “In the absence of a bargaining council, it would be extraordinary for the gold agreement to be extended to AMCU members at employer workplaces where AMCU is in the majority.”

AngloGold fell for the first time in four days, losing 2.5 percent to 147.50 rand by 2:49 p.m. in Johannesburg. Harmony lost 4 percent to 29.69 rand and Sibanye slid 2.3 percent.

To contact the reporters on this story: Andre Janse van Vuuren in Johannesburg at ajansevanvuu@bloomberg.net; Kevin Crowley in Johannesburg at kcrowley1@bloomberg.net

To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net

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