The National Union of Metalworkers of SA (Numsa), the country’s largest union with more than 400,000 members, has joined other workers, including public servants, in demanding above-inflation wage increases, which employers say are unsustainable.
Numsa said it would embark on a wage strike at ArcelorMittal SA — Africa’s largest steel producer — in support of a 10% wage demand from Wednesday after serving the company with a 48-hour strike notice.
The company is offering 5%, in line with the 5.8% headline inflation the Reserve Bank has forecast for 2022, saying its offer is higher than the 5.5% average that has been implemented in the steel sector, where importers face a 10% import duty.
The industry, which contributes about 1.5% of GDP and employs close to 200,000 people, has been on the ropes in recent years, with the broader metals and engineering industry shedding about 49,000 jobs over the past decade.
In 2020, the industry entered into a wage-freeze agreement with unions due to Covid-19.
Numsa is not alone in demanding a 10% pay hike. The Association of Mineworkers and Construction Union (Amcu) and the National Union of Mineworkers (NUM) are on a near three-month strike demanding a R1,000 per month wage increase for three years at Sibanye-Stillwater’s gold operations. The two unions’ demand amounts to a 9.8% rise in year one, 8.8% in year two and 8.2% in year three for entry-level workers, including surface and underground mineworkers.
On Tuesday, ArcelorMittal raised concern over the “unsustainable increases” Numsa is demanding, saying they could lead to cost pressures that will “weaken our competitiveness”.
On top of the 5% across-the-board wage increase, it has offered Numsa a 2% cash equivalent based on all “remuneration elements to be paid monthly”.
CEO Kobus Verster said the offer is fair and takes into account both the “current economic conditions and the future sustainability of the business”.
“Our industry remains very cost-sensitive, challenging and volatile. To survive and be sustainable, we need to ensure that our cost base remains competitive so that we can manage through the downturns,” he said.
Numsa Sedibeng regional secretary Kabelo Ramokhathali said on top of the 10% wage demand, workers want a housing allowance, the scrapping of labour brokers, insourcing of temporary workers and that employers contribute 80% of fees for workers’ medical aid.
On its website, the ArcelorMittal Group said it employed more than 160,000 people and produced 70-million tonnes of crude steel per year.
The group’s SA operations employ more than 10,000 people and produce 3.1-million tonnes of finished primary steel in 2021.
In its financial results for the year ended December 2021, it reported R6.8bn in headline earnings from a loss of R2.032bn previously, and slashed its net debt from R3.5bn to R1.3bn.
Verster lashed out at Numsa for “disingenuously” suggesting that employees earn R7,000 per month: “The current average total remuneration of the lowest grade of employees at [ArcelorMittal] is R21,423 per month, excluding overtime. The offer tabled by the company will result in an average positive adjustment of R2,246 per month for bargaining unit employees.”
Verster said communication channels between parties remain open in the interest of speedily reaching agreement. “We encourage all parties to behave responsibly in finding agreement so that the business can move forward.”
With Numsa members downing tools at plants in Tshwane, Vanderbijlpark and Newcastle from Wednesday, ArcelorMittal spokesperson Tami Didiza said there are “contingency plans in place”.
Update: May 11 2022
This article has been updated to reflect ArcelorMittal's employment statistics
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.