The steel sector has committed to a wage agreement which its signatories, the Steel and Engineering Industries Federation of Southern Africa (Seifsa) and the National Union of Metalworkers of South Africa (Numsa), have hailed as “smooth and historic” as it involves a housing consideration for workers.
This is as Seifsa’s nemesis, the National Employers’ Association of South Africa (Neasa), scoffed at the wage agreement “as another nail in the coffin of an already collapsing industry”.
Seifsa and Numsa yesterday agreed to prompt the Board of Trustees of the Metals Industries Benefit Funds Administrators (MIBFA) to develop a model for providing workers with a housing benefit.
MIBFA oversees investments of more than R149 billion on behalf of workers in the steel industry.
The wage agreement – as was the case in 2021 – prescribes wage increases to be calculated on the scheduled or gazetted minimum rates of pay per grade over the next three years.
It covers the next three years to June 30, 2027.
Rate A in year 1 will receive 6%; rate H will receive 7%, and in years two and three of the agreement, rate A will receive 5% and rate H 6%, respectively.
Seifsa CEO Lucio Trentini said the agreement was of historical importance and was the commitment by the parties to meaningfully address access to housing for industry workers.
Trentini said the importance of the agreement was the exemption and special phase-in exemption dispensation for employers who felt that a degree of relief from the agreement was required is retained.
“This agreement is a testament to the commitment by the social partners to seek a settlement as soon as possible and with minimal disruption,” Trentini said.
‘’The process agreement set the road map to settlement, a pledge to negotiate in good faith, outlined the context, tone and architecture of the negotiations.”
The negotiations were haunted by the ghost of the preceding term, which in 2021 peaked in a three-week strike costing the industry in excess of R600 million per day in lost revenue.
The Seifsa-affiliated membership accounts for 57% of all workers employed by all the employer organisations on the bargaining council, while Numsa represents more than 115 000 members.
Numsa’s general secretary, Irvin Jim, said the union received an overwhelming mandate from all the nine regions who took a decision not to go the traditional collective bargaining route, but instead demanded that employers improve on the current agreement.
“We are happy that we secured an above-inflation agreement because the base is higher at 7% and also the confirmation that workers will access housing. This is the role of unions,” Jim said.
“To fight to improve the lives of workers and their families and we are happy that Numsa continues to do so.”
The agreement comes in the wake of trade union Uasa also signing a similar agreement with Seifsa, in which employees will receive a 6% to 7% increase from July 1, 2024.
Uasa’s agreement will be for the first year, and will serve as an important increase on the baseline for future increases.
The National Union of Mineworkers (NUM) announced they were still busy with their mandating process.
Neasa, which broke away from the collective bargaining forum with Seifsa and Numsa in the Metal and Engineering Industries Bargaining Council (MEIBC), said the current wage agreement was 90% higher than that of the motor industry, and 60% higher than the road freight Industry.
Neasa is critical of the two other unions as it upholds that they reached the legislative threshold by incorporating the Plastic Convertors Association of South Africa (PCASA), which has no employees in this sector, and consequently will not be affected by the outcome of these negotiations.
“Due to de-industrialisation this industry is at least 37% smaller than what it was 15 years ago. Not only does this agreement do nothing to address this downwards spiral, but it also ensures that it is to continue on this devastating trajectory,” said Neasa’s CEO, Gerhard Papenfus.
Neasa said another severely detrimental provision in this agreement was that for many negotiation cycles in the steel industry in order to appease the demands of Numsa (which mainly represents entry-level employees), the wage increases for artisans were lower compared with wage increases of less-skilled workers.
“This practice is perpetuated by this new agreement. This is extremely short-sighted in a country where skilled employees are a scarcity and are lured abroad with lucrative offers. It severely contributes to the South African ‘brain drain’ which has a detrimental effect on all levels of employment,” Papenfus said.
Neasa said it saw the current structural dispensation of collective bargaining, which favours big business to the detriment of the downstream, as inappropriate for the South African economy, and damaging to business investment, growth, and survival.
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