Northam’s response to memorandum from the National Union of Mineworkers (NUM)

Johannesburg, 28 November 2013. Text of a letter delivered to Messrs. F Baleni, E Tantsi and J Moloko of the NUM on 28 November 2013.

The management of Northam is in receipt of your memorandum ‘Grievances to Northam Platinum Limited’ dated 26 November 2013.

Prior to dealing with the contents of the memorandum, may we compliment the NUM and its members on their conduct during the march on Tuesday, 26 November.

In respect of the memorandum, we have scrutinised all of the issues raised and respond below. We remind you that the dispute is in respect of wages and conditions of service, and will therefore limit our response to these matters only.

There are five main issues raised in your memorandum:

  • Wage increases and housing/living-out allowance
  • Negotiating in good faith
  • Hydro-power
  • Maternity leave
  • Communication with employees.

We will deal with each issue in turn below.

Wage increases:

Your demand for an across-the-board wage increases of R2,100 per month for core employees and R2,000 per month for non-core employees in category 2-8 amounts to increases of between 22% to 43%. A further increase in the housing/living-out allowance from R2,200 per month to R3,718 per month equates to a 69% increase. Thus, you are seeking an entry level wage increase of around 61%.

The company cannot afford the proposed wage increase or the increase in housing/living-out allowance, not even in a staggered manner in the short term.

Further, any rise in the settlement would inform the affordability of any other issues still in dispute. You are reminded that some demands had been agreed to in principle, providing an amicable settlement in regard to the above is reached.

Management has been mandated to ensure an affordable and sustainable outcome to the wage negotiations, in order to ensure the future sustainability of the mine. The offer of 8.5% (9% inclusive of Service Increment) for core employees and 7.5% (8% inclusive of Service Increment) for non-core employees, and an increase of 8% per year in the living-out allowance for categories 2-8 employees, for the next two years, is a very responsible and fair offer. It must be noted that this is the highest in the mining industry agreed this year, and above that of the gold sector in which the NUM is the dominant union. Given the settlements elsewhere in the industry, to which NUM is party, we are unable to understand NUM’s current position and its refusal to make concessions.

Considering the mine’s financial position, the current economic climate and the depreciating basket price we receive for our metals which has been below the gold price for several years, management must and will continue to act in the best interest of all stakeholders. The company therefore is unable to countenance acceding to NUM’s demands.

Negotiating in good faith:

We take issue with the NUM’s allegation that the company has not bargained in good faith. Good faith bargaining has been a guiding principle of the company’s approach to these and all other negotiations. This is clearly evidenced by the moves and concessions that the company has made.

Negotiation, as you are well aware, is, by definition, a process of give and take. Making concessions is evidence of this.

During the private mediation processes NUM did not alter its demands at all, while the company made two consecutive improvements in its offer. Although the NUM referred the dispute to the CCMA for mediation, the NUM continued to make no concessions during this process. The commissioner declared the dispute unresolved, stating that the parties were too far apart.

At the request of Messrs Tantsi and Moloko, Northam tabled its final offer on 5 November. This was the company’s third revision. Further mediatory processes ensued, but still there was no movement in the demand made by the NUM. It is simply not possible to ‘negotiate’ if only one party ever moves, and the other party maintains its position. We therefore call on NUM to show good faith in its approach to these negotiations.


There is no scientific evidence of any ill-effects of hydro-power. The benefits of hydro-power are significant in terms of occupational health – cooler conditions, reduced noise, and reduced dust in underground environments.

Northam has been operating on hydro-power for more than 20 years. Other mines in the industry also use hydro-power. That said, should the union wish to raise specific and well-founded concerns, then the company would address them.

We must also take issue with the principle embedded herein. It would be unconscionable for the company to condone employees working in harmful working conditions or compensate employees for working in such harmful working conditions. Should harmful working conditions exist, those conditions need to be addressed.

Maternity leave

There is no industry policy relating to paid maternity leave. Different companies have different policies in place. The Basic Conditions of Employment Act provides for four months unpaid leave. Northam goes further than that, and pays one month of paid leave as well. It should also be noted that Northam bears the cost of pregnant employees not being able to work underground during and immediately after their pregnancy.

Communication with employees

It is management’s right and indeed responsibility, to communicate with employees. We will continue to do so. We will also continue to communicate with the company’s many and varied stakeholders who are affected by the strike action. Again, it is our responsibility to do so.

Now more than ever, it is of critical importance that information is shared in a transparent fashion. The very future of our mine and livelihoods of our employees, their dependents and many, many other interested parties are at stake.

In conclusion

The continued strike brings the affordability of the current offer into question. Similarly, it threatens our ability to consider other non-wage related demands, or our ability to avoid job losses.

May I remind you of one of the basic tenets of the Framework Agreement for a Sustainable Mining Industry, forged under the auspices of the Deputy President and to which the NUM is a signatory, “Workers, the unemployed and vulnerable groups are the biggest losers in unstable economic conditions. Our experience from the 2008 global financial crisis highlights that job losses are often difficult to reverse and that regaining market share is not easy for firms given the high levels of global competition.”

It goes on to say that in order to ‘succeed’, the framework agreement requires stakeholders to dedicate “... the necessary capacity and time; accept that economic realities constrain our decisions; and communicate their commitments as well as progress in implementation consistently and strongly to their members”.

The management of Northam remains willing to engage with NUM leadership, to reach and finalise an amicable settlement. We urge the NUM to reconsider its substantive position with regard to wages and to communicate openly and honestly with all affected parties.

Issued by
Russell & Associates
Tel +27 (0)11 880 3924