'Not gonna happen': Employer groups rail against Numsa's plan to extend steel deal

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Numsa called on all engineering workers across the country to down tools and fight for a living wage.
Numsa called on all engineering workers across the country to down tools and fight for a living wage.
Sharon Seretlo/Gallo Images via Getty Images
  • The National Union of Metalworkers is expected to request an extension to their 6% wage deal in steel and engineering.
  • Two steel and engineering employer associations said Numsa cannot force employers into the deal.
  • Labour and Employment spokesperson Musa Zondo said Minister Nxesi had not yet received any request from the bargaining council to extend Numsa's deal.

Employer federations in the steel and engineering sector said the chances of the National Union of Metalworkers of South Africa (Numsa) extending their deal with the Steel and Engineering Industry Federation of South Africa (Seifsa) in the sector to other employers and workers were slim, and any attempt to do so would be met with resistance.

On Friday Numsa announced that it had ended its two-week strike in the steel and engineering sector and would ink a deal for a 6% increase with Seifsa, after which the union indicated that it would look to have this agreement extended to all businesses in the sector.

During the initial negotiations at the Metal and Engineering Bargaining Council (Meibc), Seifa offered labour a 4.4% increase for the first year, 0.5% plus CPI in the second, and 1% plus CPI in the third year.

Numsa slammed this offer, demanding 8% across the board in the first year, 2% plus CPI improvement factor in the second year and an opportunity to reopen negotiations if 2% plus CPI does not cover inflation in the third year.

At the end of the strike, Numsa accepted 6% from Seifsa, which is also the largest employer federation in the steel and engineering sector. The fragmentation in the sector's wage talks means various federations negotiate with an array of unions, leading to different wage agreements.

In order to have the deal extended, Numsa must approach the Meibc, which will make a formal request to Minister of Labour and Employment Thulas Nxesi who will apply his discretion to make a determination.

'We will block it'

National Employer Association of South Africa (Neasa) CEO Gerhard Papenfus told Fin24 flatly that Numsa would not succeed in getting their agreement with Seifsa extended to other employers in the sector, including those represented by him.

"It won't happen. That's not gonna happen. We will block it. I have blocked it for ten years now. I blocked it in 2011 and we will block it again. They simply don't have the representation required to do it. They can try but they will fail," said Papenfus.

Papenfus said he was aware of Numsa's plan to approach Nxesi to make a determination regarding their deal, but said Neasa was prepared to table its own request to the minister against any extension of the deal.

"They might approach the minister of labour to do that. If they do that, the minister has certain obligations to inform the market. Once that happens, we will go to the minister and tell him the basis on which he cannot extend it.

"If he continues to extend it, we will bring and urgent application to stop him. I hope it is not what is necessary, but we will engage that fight. We can't tell businesses regardless of size and circumstance to pay a certain wage. Many can and many can't. That is the principle of this whole thing," Papenfus said.

He said Neasa is not in favour of abusing workers and we know good wages make businesses perform well, but that smaller businesses that might not belong to a federation like Seifsa should not be strong-armed into wage deals that they cannot afford.

"I'm not aware of any industrial action at businesses. We sent a letter to membership where we recommended a 5% increase, with  provisions. If business cannot pay it, they don't have to and if a business would like to pay more, they may," he said.

South African Engineers and Founders Association (Saefa) director Gordon Angus said Numsa officials at the association's member businesses had approached employers saying they could unilaterally impose an extension, but he said they could not do so.

"I understand that they have committed to extend that agreement. They have spoken about a supposed loopholes in the regulations that allow them to do this. None of this is true. Numsa officials are approaching us at our companies and saying this," said Angus.

Angus said without Saefa support the agreement could not be extended to other associations. He claimed that Numsa officials were resorting to intimidation in order to impose their will on businesses that were not party to their deal.

"In one instance, they demanded that the company resign from Saefa and join Seifsa. I shudder to think what the implication of this would be. There would be an absolute outcry, but when the shoe is on the other foot, we are expected to accept it," Angus said.

Numsa general secretary Irvin Jim previously said Numsa does not condone intimidation.

Angus added that he did not see a strong chance of Numsa extending their deal in a way that was legally and constitutionally consistent.

"If the agreement is extended, assuming it's done legally, the consequences will be severe. We have companies under tremendous stress. Up to 90% of the employers who are not paying the rates of pay in the agreements and have not done so for a decade," he said.

Angus added that if employers were suddenly required to pay as much as R50 an hour it would place great pressure on their finances in the midst of an underperforming economy and lockdown restrictions

Companies will retrench huge amounts of staff or close down, Angus warned.

"Many companies have implemented the Solidarity agreement. All staff have seen this, and employees have readily accepted it and are all too happy to return to work. It's important to understand that our agreement with Solidarity allows for an increase," said Angus.

Saefa successfully concluded a wage deal in the sector with Solidarity earlier this month for an increase of 6% on the minimum wage scale on all rankings for the next three years up to and including 2024.

Numsa spokesperson Phakamile Hlubi-Majola said there were still a few steps in the process before Numsa could approach Nxesi for a formal determination that would extend the agreement.

"We have not done that as yet. At the moment the disagreement must be gazetted and extended. We are trying to discuss with the companies that want to get into the agreement but are not necessarily in the deal," said Hlubi-Majola.

Hlubi-Majola said Numsa intends to approach employers one-by-one to get the agreement to extend the deal and that the union was confident that it achieve this by approaching businesses in the sector to that end.

"We will have to see about that [federations rejecting Numsa's plans for an extension]. We do not agree with that, which is why we are taking this course of action. I can tell you that certain companies in the Northern Cape and KZN who are aligned with Neasa and approached us to negotiate at much higher rates that Neasa is offering," Hlubi-Majola said.

In a statement released on Monday, Numsa said it signed a settlement with Macsteel, a steel manufacturing company with 62 branches that is not aligned with Seifsa. This meant Macsteel would settle with Numsa and implement the 6% wage increase signed as part of the agreement Seifsa.

Labour and Employment spokesperson Musa Zondo said Minister Nxesi had not received any request from the Meibc to extend Numsa's deal. Meibc could not be reached to comment on whether it would consider an extension.

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