Social%20Partnership

1
Social Partnership

• Daimler-Chrysler in South Africa

2
What is a social partnership?

• ILO view
• social partnership all types of negotiation,
  consultation or simply exchange of information
  between, or among, representatives of
  governments, employers and workers, on issues of
  common interest relating to economic and social
  policy
• In general
• An agreement
• between two or more parties
• that attempts to benefit all parties
• by creating a win-win situation

3
Situation

• Mid 2001
• Daimler-Chrysler South Africa (DCSA) reached a
  partnership agreement with the National Union
  of Metalworkers of South Africa (NUMSA)
• Aug 2, 2001
• NUMSA starts a general auto strike for 12 wage
  increase (instead of industry-wide 6.3)

4
Positions

• DCSA
• The strike is a violation of the spirit of the
  partnership agreement.
• NUMSA
• The partnership agreement is a limited trade-off
  and did not free DCSA from their obligation to
  pay Living wages
• WHO IS RIGHT?

5
Effect

• Base salary
• Social partnership
• Salary increase

• NUMSA
• Annual
• 12,000
• 6,000
• 1,440
• 19,440
• 3.65

DCSA Annual 12,000 6,000 756 18,756
6
DCSA View

• NUMSA took advantage of DCSA in making the
  agreement before the strike.
• DCSA might have based its incentive scheme on the
  current wages of employees.
• After the salary increase, the agreement might
  not make economic sense for DCSA.

7
Goals

• DCSA (initiating agreement)
• Ensuring high quality and timely deliveries for
  major export contracts won by DCSA through paying
  special incentives to employees
• NUMSA (Strike)
• Salary increase of 12 to employees from all the
  auto manufacturers

8
Dilemmas

• DCSA Right vs wrong?
• Was this a social partnership?
• NO, was an incentive program
• Focus on profitability and achieving DCSA goals
• not considering social impact on employees
• NUMSA Short-term vs Long-term
• Short term incentive program vs long term salary
  increase

9
Effect of partnership

• Designed to balance increasing profitability and
  providing benefits to employees (or stakeholders)
• Not in this case DCSA had a purely financial
  focus

10
Ethical view of social partnerships

• Considers all ethical principles
• Utilitarian benefits the greatest number
• Rules based highest standards apply
• Care based look after employees
• Balanced against profitability

Still potential for conflict due to differing
priorities of stakeholders