After three formal engagements, the Steel and Engineering Industries Federation of Southern Africa (Seifsa) and trade union the National Union of Metalworkers of South Africa (Numsa) have concluded the terms of a three-year wage agreement for the metals and engineering sector.

The agreement is for the period from July 1 to June 30, 2027.

Following wage negotiations in 2021, which peaked in a three-week strike costing the industry in excess of R600-million a day in lost revenue, this year’s agreement was reached in record time, with no industry disruption and within mandate, Seifsa says.

This year’s 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.

Rate A in year one will receive an increase of 6% and Rate H 7%. In years two and three of the agreement, Rate A will receive an increase of 5% and Rate H 6%.

Apart from wage increases and this year’s agreement being reached almost two months before the expiry of the current agreement, the deal contains no additional and/or immediate cost to employment concessions, Seifsa points out.

However, the exemption and special phase-in exemption dispensation for employers who feel that a degree of relief from the agreement is required is retained. This is in direct response and a clear acknowledgement by the parties to also cater for small, medium-sized and microenterprises, their challenges, dynamics and sustainability, Seifsa avers.

The Seifsa-affiliated membership, which accounts for 57% of all employees employed by all the employer organisations on the bargaining council, and Numsa, representing in excess of 115 000 members, signed the agreement on May 13 at the Birchwood Conference Centre, in Boksburg, Seifsa says.

“This agreement is a testament to the commitment by the social partners to seek a settlement as soon as possible and with minimal disruption,” says Seifsa CEO Lucio Trentini.

The agreement was reached on the foundation laid by the signing of a process agreement by all the parties prior to the start of the negotiations, Seifsa informs.

“Of historical importance is the commitment by the parties to meaningfully address access to housing for industry workers,” Trentini says.  

The parties have agreed to request the Board of Trustees of the Metals and Engineering Industries Benefit Funds, who oversee investments under management in excess of R149-billion, to develop an institutional framework, covering amongst other, eligibility and legal criteria, funding model/s, subsidy mechanisms and/or programmes and substantive policy approaches within three months of the signing this agreement.

“Stakeholders have agreed to convene and jointly formulate an industrial policy framework focused on re-building and repairing public infrastructure, alleviating bottlenecks constraining economic growth while ensuring the long-term sustainability of the metals and engineering sector,” adds Trentini.

Also, several outstanding issues have been identified and referred to various working groups and committees for further investigation, discussion and processing, Seifsa says.

Meanwhile, in a separate statement, National Employers’ Association of South Africa (Neasa) CE Gerhard Papenfus says Neasa is not a signatory to the agreement between Seifsa and Numsa.

He argues that Seifsa represents “a mere 10% of employers in the industry”.

Papenfus says that owing to de-industrialisation, the industry is at least 37% smaller than what it was 15 years ago, and that the agreement does not address this, which it believes will drive the continued decline of the industry.

He points out that Neasa retained only one demand as a condition to become a party to the agreement – business growth-orientated criteria in the exemption policy.

“However, the trade union parties rejected that outright, and for Seifsa, it was not a priority,” Papenfus emphasises.

He avers that the steel industry’s current wage agreement is by far the highest of all industries governed by collective bargaining agreements in South Africa, and that its wage demands are too high to allow for any prospect of job creation.

“As a result of a bizarre and entirely undemocratic legislative arrangement, provided for in the Labour Relations Act, this agreement can be extended to non-signatories – the remaining 90% of the industry.

“Quite incredulously, this extension is possible with the help of the Plastic Convertors’ Association of South Africa, an employer body that has no employees in this sector and consequently will not be affected by the outcome of these negotiations,” Papenfus says.