Trade union Solidarity, which represents mostly skilled artisans and engineers in the steel sector, has come out against the multi-term, above-inflation wage deal signed by Numsa and the largest employer body dismissing it as a “wage arrangement” between the two parties.
The National Union of Metalworkers of SA (Numsa), which speaks for the majority of workers in the Metals and Engineering Industries Bargaining Council (MEIBC), and the largest employer body, the Steel and Engineering Industries Federation of Southern Africa (Seifsa), signed a pay deal on Monday for increases of 7%, 6% and 6% a year over each of the three years, beating the prevailing consumer inflation rate of 5.3%.
However, the wage deal, effective from July 1 to June 30 2027, is based on the minimum rates of pay and not on actual rates of pay, a move that forced Solidarity to reject it.
In an interview with Business Day on Thursday, Solidarity general secretary Gideon du Plessis said an unskilled employee earned R64 an hour, which translated to a minimum wage of R12,200 per month. The legislated national minimum wage is R27.58. Highly skilled employees earned a minimum wage of about R20,200 per month, he said.
Du Plessis said a 6% increase on the R98 per hour that skilled employees earned translated to a mere increase of R5.88c. “That’s an average increase of 3%. The higher you go [earn] the lower the percentage increase. Highly skilled artisans and engineers will end up getting exceptionally low increases. So, we said you can’t sign an anti-artisan or anti-skilled worker agreement,” said Du Plessis.
He warned skilled workers would end up leaving the sector and the country “because they are getting small increases. And, employers won’t afford high entry-level wages any more. We are now training artisans to clean their own workplace because companies can’t afford cleaners any more. These are some of the reasons why we can’t sign this agreement”.
Numsa, however, hailed the above-inflation wage deal as progressive, with Seifsa CEO Lucio Trentini saying it was reached in record time with no industry disruption and within the mandate.
The wage agreement was endorsed by 57% of the workers in the sector, including 115,000 Numsa members. The deal was seen as raising operational costs for steel companies, potentially affecting the sector’s global competitiveness and employment rates. The steel and engineering sector is a vital component of the economy, contributing about 1.5% to GDP and counting household names such as ArcelorMittal SA.
The steel sector, which provides the automotive, mining, construction, aero and defence, and rail industries with steel, has been a victim of declining prices due to an increase in cheap imports.
Trentini said there was a commitment by parties to “meaningfully address access to housing for industry workers” and that the parties have agreed to request the Engineering and Metal Industries Benefit Fund’s board of trustees, who oversee investments under management of more than R149bn, to develop an institutional framework.
Trentini said this framework would address aspects including eligibility, legal criteria, funding models, subsidy mechanisms and programmes. Substantive policy approaches will be formulated within three months of the signing the agreement.
Du Plessis said Solidarity did not like what had been happening “behind-the-scenes, as there seems to have been a deal between Seifsa and Numsa, outside the bargaining process with regards to the housing issue”.
“This was not a wage negotiation. There was a wage arrangement made outside the plenary between Seifsa and Numsa. We are all uncomfortable,” said Du Plessis.
Du Plessis said Solidarity would hold an industry council meeting to decide on the way forward.
The meeting is set to decide whether to follow an internal dispute resolution process, “or whether we should engage with employers directly, regardless of the wage deal, to see if they can pay our members on the actual rates of pay and not on minimums”, said Du Plessis.
Consultations
He said Solidarity on Thursday commenced with consultations with like-minded employer organisations “who are concerned at the way the negotiations were conducted and the agreement concluded”.
“We will make an effort over the next three years to ensure we don’t have a repeat of a similar way that this deal was concluded. It nearly destroys the credibility of the industry. It’s also destroying collective bargaining and we want to restore collective bargaining to the point where it’s done in an honest, open and transparent manner. The current way is the opposite,” said Du Plessis.
This as Seifsa and Numsa held a joint media briefing on Tuesday to unpack the finer details of the wage agreement.
Numsa general secretary Irvin Jim said: “Numsa has done a deep reflection on the state of the engineering sector and the rest of the economy. When we were negotiating under the auspices of the MEIBC, we knew that we were operating against the context of an economy that is bleeding as a result of the deep structural crisis of capitalism, whose inflationary pressures have been failing to improve the economic outlook, and are worsening the socioeconomic conditions of the working class.”
Jim said the union was also compelled to take into account that the current wage deal coming to an end was the product of a “militant strike that lasted for three weeks, where we ended up settling on a three-year wage agreement of 6% for each year. The increase was based on the minimum rates of pay and not on actuals”.
The industrial action in 2021 resulted in employees forfeiting about R300m in wages and cost the sector R600m in lost output.
“We were very resolute when approaching these negotiations that as part of our bargaining strategy, we would ensure that we improve our members’ wages by pushing employers to make a wage offer that is above inflation,” Jim said.
The Reserve Bank and some economists expect inflation to average about 5% for the year, down from 6% in 2023.
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