The first round of wage talks in the metals and engineering sector got under way on Thursday amid concerns from employers that the unions’ demands for above-inflation increases are unaffordable due to stalled economic growth spawned by Covid-19.
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, while Solidarity is demanding the consumer price index plus 5%.
The unions’ wage demands are above the 4.4% inflation rate recorded in April and the 4.3% average the Reserve Bank expects for the year.
The Steel and Engineering Industries Federation of Southern Africa (Seifsa), which represents 19 employer organisations employing about 190,000 people, has said it expects the negotiations to be difficult given the negative economic climate as a result of the coronavirus pandemic.
The employer body has said the economy’s 7% contraction in 2020 “demonstrates how much economic ground was lost in terms of widespread business failures and huge job losses”.
The sector, which has been a victim of declining steel prices due to an increase in cheap imported steel, represents an estimated 1.5% of GDP and is responsible for 190,000 jobs. The sector grew in the years leading up to the 2010 Soccer World Cup as steel was a main component in the building of new stadiums and other infrastructure.
In his supplementary budget speech in June 2020, finance minister Tito Mboweni said building a bridge to a post‐lockdown future will require that we build “high-quality physical bridges, roads, railways, ports and other infrastructures”.
Steelmaker ArcelorMittal SA said in June 2020 that jobs were on the line as it struggled from the effect of Covid-19 on the economy, stressing that it contemplated “large-scale restructuring” to stay afloat. It also anticipated that it will take some time for crude steel production levels to “return to historical levels or planned levels of 2020".
Lucio Trentini, Seifsa’s operations director, will act as a spokesperson and chief negotiator during the wage talks, which are being held at the Metals and Engineering Industries Bargaining Council (MEIBC).
Trentini told Business Day on Thursday: “The mood is very cordial so far. We are listening to the unions tabling their demands and motivating for them.”
He would not reveal much, saying employers would hold a caucus on Friday after which “we will give our response to every demand raised”.
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 in June last year. The parties agreed to extend it until June 2021 because they could not meet in the bargaining council for wage talks due to stringent lockdown regulations at the time.
Numsa general secretary Irvin Jim said on Thursday: “Our members in this sector have suffered a great deal and this has been made worse by the Covid-19 lockdown. We should have held negotiations last year but ... we agreed to sign a standstill agreement.”
The standstill agreement meant that “we were at least able to ensure that conditions remained unchanged”.
“At the time, because we were unable to negotiate because we [were] still under the hard lockdown, employers were threatening to cut wages and benefits because there was no agreement in place. Our members sacrificed their increases for the sake of the sector and they are suffering as a result.”
Jim accused employers of reducing the minimum rate “from R40 to R20”, adding, “leave enhancement pay has been taken away; [and] hours of work have been increased from 40 hours to 45 hours per week without overtime [pay]”, among other changes to worker benefits.
“We condemn this backward broad daylight robbery from the producers of wealth, the workers,” said Jim.
“What is even more disturbing is that this is happening under a democratically elected ANC-led government which has failed to end the apartheid super-exploitation strategy, which is that of building an SA economy off the back of cheap, black and African labour.”
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