As the metal and engineering industry sector braced for a possible strike from July, with wage talks remaining deadlocked a week before the expiry of the current agreement, the National Employers Association of South Africa (Neasa) embarked on a nationwide roadshow to get a mandate from its members.
Neasa planned to host workshops in Durban, Port Elizabeth, East London, Cape Town, George, Gauteng, Polokwane and Bloemfontein this week as the last week of negotiations, prior to expiration of the current three-year wage agreement on June 30, gets under way.
Three months of talks between unions and employers in the metal and engineering industry stalled earlier this month, with all six industry trade unions declaring a dispute against the employer parties, with the Steel and Engineering Industries Federation of Southern Africa (Seifsa), on behalf of the employer associations, countering with its own dispute.
This allowed employees and employers to implement 48-hour-notice strike or lockout action respectively after 30 days from the date of the dispute.
“If further attempts to reach consensus fail, it is likely that a national strike will commence in July this year,” Neasa CEO Gerhard Papenfus warned.
Seifsa CEO Kaizer Nyatsumba stated last week that three months of bargaining led to little to no progress.
“Three weeks ago we reached a deadlock in the negotiations and, since then, we still do not have much to show for our respective efforts,” he said in a statement.
The last week of negotiations would determine “how close the negotiating partners will get” to closing the deal and avoiding the prospect of protracted strike action.
Neasa said employers were offering 6.5%, while Seifsa last week tabled a three-year wage settlement, with a 7% all-inclusive, cost-of-employment increase in 2014 and a consumer price index (CPI) aligned increase in 2015 and 2016 for Rate A, and a 8% all-inclusive, cost-of-employment increase in 2014 and a CPI plus 1% increase in 2015 and 2016 for Rate H.
The Chemical, Energy, Paper, Printing, Wood and Allied Workers Union, the National Union of Metalworkers of South Africa (Numsa), the South African Equity Workers Association, Uasa, Solidarity and the Metal and Electrical Workers Union of South Africa had opened negotiations with demands of 15% to 20% wage hikes, later reduced to 15% across the board.
“The metal and engineering industry is already at least 30% more expensive than other industries in which collective bargaining arrangements exist, and up to 60% more expensive than industries covered by sectoral determinations issued by the Labour Minister,” Neasa said.
South Africa could ill-afford another strike and the possibility of major labour unrest in the metal and engineering sector had sparked fears of further erosion in South Africa’s already constrained manufacturing industry.
“Our economy is seriously underperforming, and we have a flood of cheap imports to contend with, not only in the metals and engineering industries, but generally throughout the manufacturing sector,” Nyatsumba stated.
He pointed out that the depressed economy and other hampering factors meant that companies in South Africa were increasingly faced with having to downsize or be liquidated as they fail to compete given their high fixed costs.
“It makes absolutely no sense … to get a hefty salary increase today and to be retrenched two months later. Instead, it is far more prudent to accept a realistic salary increase that acknowledges your worth and the contribution that you make to a business’s performance, and to continue indefinitely to be employed.”
Neasa agreed that unaffordable wage demands would simply lead to job losses.
“The metal and engineering industry has become completely uncompetitive resulting in the loss of more than 250 000 jobs over just the last five years.
“We are competing in a global environment and unless we drastically adapt the cost structure of the metal and engineering industry, manufacturers in this industry will eventually become extinct.
“Unless this industry is totally revamped, employers in this industry, or what remains of them, will become distributors of goods manufactured abroad,” stressed Papenfus.
He concluded that negotiating employers would “do everything in their power” to reach a common position with the unions, without further compromising the sustainability of the industry.
Edited by: Chanel de Bruyn