National Union of Metalworkers of SA (Numsa) said on Wednesday night that it had signed a one-year 6.5% across-the-board wage agreement with ArcelorMittal SA (Amsa), Africa’s largest steel producer.
This after union members downed tools on May 11 at all Amsa plants in the country in support of their demands for an inflation-beating increase of 10%, while the employer initially proposed a 5% increase, and a 2% cash equivalent based on all “remuneration elements to be paid monthly”.
The company said the offer was higher than the 5.5% average that has been implemented in the steel sector, which contributes about 1.5% of GDP and employs almost 200,000 people.
Numsa general secretary Irvin Jim said in a statement that the union, which is the country’s largest with a membership of more than 400,000, met Amsa executives on Wednesday to negotiate an end to the industrial action.
The wage agreement will see Numsa and trade union Solidarity members getting a 6.5% wage increase across the board.
“The increase means that allowances will also increase by 6.5%. This means the acting allowance, housing allowance, retention allowance, compulsory overtime allowance, pension allowance, shift allowance, standby allowance and Proto Team allowance will also increase,” Jim said.
He said workers will receive an ex gratia one-off cash payment of R5,000. The wage agreement is effective from April 1 and expires in March 2023.
The increase in wages and allowances will be backdated to April 1 and paid in June. The company has said the current average total remuneration of the lowest grade of employees at Amsa is R21,423/month, excluding overtime.
Jim said the employer started by proposing a wage freeze and that compromises had to be made to reach a settlement.
“This agreement is a victory for all Numsa members who made the ultimate sacrifice to fight for improved wages and conditions. They did not do this only for themselves, but also for future generations of workers as well. To achieve an above-inflation increase during the Covid-19 pandemic is a major achievement and it would not have been possible without them,” he said. The Reserve Bank has forecast a 5.9% headline inflation rate for 2022.
Amsa CEO Kobus Verster said in a statement on Thursday: “We are serious about working with our stakeholders to create mutually beneficial outcomes, and the agreement that has been reached with the unions is testament to the commitment of all parties to move the business forward rather than getting stuck in an unfortunate wage dispute that does not serve anybody, especially our employees.
“We will continue to build on the progress we have made in the past few years to revive and strengthen the business, which includes continuously improving our cost competitiveness in the market and maintaining stable and reliable operations.”
Amsa said it would speak about the pay hike deal’s impact on its wage bill when it presents its half-year results in July. In its financial results for the year to end-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.
The steel sector 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 a wage-freeze agreement with unions due to Covid-19.
Amsa previously said Numsa’s wage demands were unsustainable and could lead to cost pressures that will “weaken our competitiveness”. Amsa’s operations in Tshwane, Vanderbijlpark and Newcastle employ more than 10,000 people and produced 3.1-million tonnes of finished primary steel in 2021.
Update: May 26 2022
This article has been updated with comment by Amsa CEO Kobus Verster.
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