The upcoming wage talks in the steel and engineering sector are expected to be difficult given the negative economic climate spawned by the Covid-19 pandemic.
So says the Steel and Engineering Industries Federation of Southern Africa (Seifsa), which represents 19 employer organisations employing about 190,000 people.
The salary negotiations will be held in the Metals and Engineering Industries Bargaining Council (MEIBC) on June 3 and 4. The National Union of Metalworkers of SA (Numsa), the country’s largest metalworkers’ union with 360,000 members, is demanding a one-year, 15% salary increase across the board.
In an interview with Business Day, Lucio Trentini, Seifsa’s operations director, who will act as a spokesperson and chief negotiator during the wage talks, said it expects a “tough round” of negotiations.
“We don’t expect unions to roll over and understand where we are coming from. We don’t expect anything less from unions,” Trentini said.
Seifsa said the sector is still very much “in the throes of deep distress” made worse by declining steel prices due to an increase in cheap imported steel.
“With the possibility of a third Covid-19 wave affecting our sector as we inch towards winter, and with economic conditions set to possibly worsen before they get better, it is imperative for all of us to do everything possible to save our industry, to keep companies from closing and to preserve jobs,” Seifsa said in a recent note on the upcoming wage talks.
The employer body said the negative growth trajectory in 2020, when the economy contracted 7%, “demonstrates how much economic ground was lost in terms of widespread business failures and huge job losses”.
The Metal Industries Benefit Funds Administrators (Mibfa) “recorded 16,623 jobs lost in the period between April and December 2020, with a further 4,957 jobs being lost between January and end-March 2021”, Seifsa said.
“The economy, which is battling record unemployment and continued business failures, is only projected to recover from the negative effects of the global Covid-19 pandemic at best from 2022 and realistically from 2023 and 2024 onwards.”
Watershed moment
The three-year wage agreement signed by unions and Seifsa at the MEIBC in 2017, in terms of which employees receive almost R50 an hour, expired on June 30 2020. The parties agreed to extend it until June 30 2021 because they could not meet in the bargaining council for wage talks due to stringent lockdown regulations at the time.
Seifsa said in its note that the conclusion of last year’s historic “standstill agreement” was the first of its kind in traditional industry collective bargaining arrangements.
“It marked a watershed moment when business and labour together recognised the devastating impact that the Covid-19 pandemic has had on companies and employees alike across the sector,” Seifsa said.
Trentini told Business Day that Seifsa is “expecting a tough round of negotiations because last year Seifsa completed a wage freeze agreement, so there’s no doubt that unions will come to the table with a mindset that they want to recoup what they sacrificed last year.
“Employees are quite well aware that the economy is not in a good space, so we will ask unions to understand that.” ”
Trentini said they hope the parties will find common ground to “save jobs and keep businesses going”.
Gerhard Papenfus, CEO of the National Employers’ Association of SA (Neasa), whose members employ about 57,000 workers, has said Numsa’s wage demands are unrealistic and any proposal by employers “will not even come close” to the 15% wage increase the union is demanding.
He said implementing the 15% demand would be akin to employers destroying their businesses.
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