The Steel and Engineering Industries Federation of Southern Africa (Seifsa) has tabled a revised conditional wage increase of 4.4% across the board for the first year, which falls short of trade union demands.
The offer made on Monday also includes a consumer price index (CPI) plus 0.5% increase in year two and CPI plus 1% in year three. This is a far cry from the demand by the National Union of Metalworkers of SA (Numsa) — the country’s largest metalworkers’ union with 360,000 members — of a 15% salary hike across the board in a one-year agreement. Another union in the sector, Solidarity, is demanding an increase of CPI 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. Employers say the trade union demands are unaffordable given the blow suffered by the sector in 2020 as a result of the Covid-19 pandemic that saw the economy contract by 7%. Seifsa has 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.
The three-year wage agreement signed by unions and Seifsa at the Metal and Engineering Industries Bargaining Council in 2017 expired on June 30 2020, but the parties agreed to extend it until June 30 2021 because they could not meet for wage talks due to stringent lockdown regulations at the time.
Numsa spokesperson Phakamile Hlubi-Majola said Seifsa’s wage offer was subject to unions accepting the “special dispensation” that it did not believe was necessary.
According to Seifsa, which represents 21 independent employer organisations with a combined membership of 1,223 companies employing about 167,000 people, the special phase-in dispensation is aimed at encouraging small and medium-sized employers not covered by the main agreement because they cannot pay its wage rates to come on board and participate in a 10- or 15-year phase-in dispensation aimed at achieving parity with the main agreement rates.
Hlubi-Majola said the special dispensation presented a challenge for Numsa “because it means that we must agree to the down-varying of the basic conditions of employment. Our members complain about the fact that there is no uniformity in the application of the minimum rate already and this has resulted in a system where some workers are paid the rate in full while others are exploited and paid far less than they are entitled to. In some cases, employers pay below the national minimum wage rate of R21 per hour.”
She said Seifsa claimed that small and medium companies cannot afford to pay the rate in full, but Numsa believed there were avenues to cater for this through the exemptions process.
“Companies must demonstrate that they genuinely cannot afford to pay the full rate. A blanket dispensation would disadvantage workers in engineering hugely because it would justify the super-exploitation of workers, which is currently rife in the sector. In all likelihood employers who pay more will want to reduce the rate because other companies are being allowed to do so. We do not see the necessity of a special dispensation,” she said.
She said Numsa wants to continue engagement with Seifsa in a bid to find common ground. “We are consulting members on the way forward and on the latest proposal from Seifsa.”
Seifsa operations director Lucio Trentini said the offer was aimed at awarding increases on schedule rates in the agreement as opposed to the past practice of implementing increases on actual rates of pay that are in many cases higher. This was aimed at addressing the current state of the sector in which companies were “continuing to find it difficult to stabilise their businesses in the face of ongoing challenges” and was an attempt to slow down the haemorrhaging of job losses.
The unions and the employer associations affiliated to Seifsa have undertaken to revert to their respective constituencies and all sides will return to the negotiating table on July 28.
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