Stakeholders in the steel and engineering industry have called on labour & employment minister Thulas Nxesi to gazette and extend a multiterm pay hike deal signed in 2021 to nonparties, after a crippling strike that cost the sector R600m in lost output.
The Steel and Engineering Industries Federation of Southern Africa (Seifsa) and the National Union of Metalworkers of SA (Numsa), among other unions, signed a three-year wage agreement in October 2021 for workers to get annual increases of 6% until end-2024. The Reserve Bank has forecast an inflation rate of 6.5% for 2022.
When the deal was inked after three weeks of industrial action in which employees forfeited about R300m in wages, Seifsa described the offer as fair, equitable and sustainable. As the sector’s largest employer body it represents 19 organisations with about 170,000 workers.
The signatories to the three-year wage deal now want it extended to nonparties in the sector. These account for about 1.5% of GDP and employ about 190,000 people.
In August, the National Employers Association of SA (Neasa) and the SA Engineers’ and Founders’ Association (Saefa) approached the labour court to interdict the Metals and Engineering Industries Bargaining Council from submitting a request to Nxesi to gazette and extend the pay deal to nonparty employers and employees in the industry.
The court ruled that Neasa and Saefa had not established the requirements for urgency and had failed to make a case for interim relief.
In a joint media briefing on Monday, Irvin Jim, general secretary of Numsa, SA’s largest union with about 432,000 members, called on Nxesi to move with speed and “quickly gazette” the wage agreement and extend it to nonparties so that all workers in the sector could benefit from wage increases.
“This is a watershed moment [and is] in the best interest of workers. It’s not about politicking. It will give increases to workers who have not received an increase for … years. This victory belongs to workers,” Jim said.
He called on Neasa and Saefa to work with other employer organisations in a constructive manner for the good of the industry, which has been a victim of declining steel prices due to an increase in cheap imported steel. The sector needs to put pressure on the government to do away with austerity measures and set aside a stimulus package to reignite the industry to tackle unemployment, poverty and inequality, he said.
Harmonise
Seifsa president and board chair Elias Monage described the labour court ruling as a “landmark judgment”, saying extension of the agreement to nonparties would help harmonise conditions of employment and empower the bargaining council to deal with enforcement and compliance.
Daniel van der Merwe of the Consolidated Employers Organisation, which represents small to medium enterprises with a workforce of about 40,000, said: “This is a watershed moment for organised labour … It’s a one-of-a-kind agreement and shows what can be done when parties co-operate.”
Seifsa CEO Lucio Trentini said the labour ruling effectively means signatories to the pay deal are “well within their right to process the collective main agreement and make it legally binding [to] all employees in the iron, steel and engineering sector”.
“For the first time in 30 years, increases will be awarded on a rand and cent amount, calculated on minimum rates to be published by the department of [employment &] labour soon … [this will] create a level playing field for everyone,” he said.
Trentini lashed out at Neasa and Saefa, saying their legal challenge flew in the face of labour legislation and democratic processes. “We all have to do whatever we can to rebuild this industry … We need to rise above petty squabbles and fights among employer organisations.”
But Neasa CEO Gerhard Papenfus told Business Day: “They call it petty issues, but I call it devastating issues. Seifsa represents only 10% of employers in the industry and what made them powerful is that many of them are large businesses employing a huge workforce.
“They want to implement a R77 per hour cost to company for entry-level, unskilled employees. Now, if you want to destroy business, you do that.”
Papenfus said the two organisations remain “very solid”. “We will deal with this matter very soon. They [signatories to the wage agreement] have won round one of 15.”
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