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Johannesburg - An urgent court application to prevent the widening of the wage agreement reached in July between Numsa and the Steel and Engineering Industries Federation of South Africa, Seifsa, the country’s largest employer federation, was submitted to the Johannesburg labour court on Friday.
This comes hot on the heels of the sensational clothing industry wage agreement concluded last week, which makes provision for appointing new workers in the industry at a wage 30% below the current minimum for clothing workers.
These two developments are the first real indications in years that the system of collective bargaining, which is seriously biased towards cumbersome central bargaining, could unravel and become more conducive to job creation.
On Friday the National Employers Association of SA (Neasa), which has 1 250 employers and about 25 000 employees as members, and the Plastic Converters Association, another employer organisation in the steel and engineering industry, lodged court documents related to this sweeping action with the Johannesburg labour court against Labour Minister Mildred Oliphant and the country’s largest bargaining council, the Metal and Engineering Industry Bargaining Council (MEIBC).
Negotiations around the wages of more than 200 000 workers in the industry take place with the MEIBC. Another 39 parties who are members of the bargaining council are also defendants in the matter.
On September 26, in a proclamation in the Government Gazette, Oliphant extended the wage agreement to parties who had not signed it and who fall under the jurisdiction of the bargaining council.
The wage agreement, involving increases of 8% and 10%, thereby became law and companies that do not comply will be prosecuted by the bargaining council – probably the most controversial part of the country's collective bargaining system.
During the strike in July this year Neasa demanded that minimum wages in the steel and engineering industry be cut by 50% to make employment of inexperienced workers possible – much like the clothing industry agreement. But this was never considered by Seifsa or the largest union in the industry, Numsa.
In its court application Neasa is now contesting the status of Seifsa, a federation of employer organisations that has for years dominated the employer role in the bargaining council and basically negotiated on behalf of employers in the steel and engineering industry on loans and conditions of service.
Neasa director Gerhard Papenfus said in the court application that various members of Seifsa were not bona fide employer organisations. The registrar labour is investigating the status of these organisations. Seifsa behaves as though it is a party to the bargaining council while, according to Papenfus, this is in conflict with the council's constitution.
The management committee of the bargaining council, which must comprise an equal number of employer and union representatives, was last constituted five years ago, whereas the council's constitution requires that this should be done every year, said Papenfus.
The management committee is in effect the council’s negotiating forum on wages and service conditions.
According to the negotiating council's constitution members of the management committee should be nominated at the council's annual general meeting.
In his affidavit Papenfus notes examples of where the bargaining council's management committee has itself appointed new members. On other occasions the chief executive, Alistair Smith, has appointed new members.
Last week Smith was appointed an executive director of Nedlac.
These irregularities, as well as a number of other requirements not observed, mean that Oliphant did not have the power to extend the wage agreement to parties who had not signed it.
The wage agreement makes provision, inter alia, for minimum personnel costs of R6 500 a month for a cleaner – the lowest paid position in the steel and engineering industry.
Out of this R6 500 the worker however receives only R4 500 a month – the rest is fees levied by the bargaining council and payments to a provident fund, Papenfus told Sake24.
There are therefore serious irregularities within the decision-making bodies of the bargaining council.
“The validity of decision-making by the bargaining council is obviously crucial in determining whether the minister’s decision to extend it to non-participating parties was valid,” said Papenfus in his statement.
Oliphant may extend a loan agreement only if she is certain the agreement has been accepted by the unions representing the majority of workers in the bargaining council, as well as the employer organisations whose members comprise the majority of workers in the bargaining council.
Between July 18 and July 20 voting on the agreement took place – but, according to Papenfus, the ballot papers were not numbered. The bargaining council has to date refused to disclose the voting procedure, despite several requests from Neasa.
“We still do not know how many ballot papers were issued, how many ballots were returned and how many votes there were in favour of or against the agreement,” said Papenfus.
There is currently large-scale uncertainty in the steel in the engineering industry as to the validity of the agreement, especially on the part of employers who cannot afford the terms of the agreements or are unsure whether they should apply for exemption from them.
“The threat of labour unrest in this regard cannot be over-emphasised. There is urgent need for clarity on the extension,” said Papenfus.
- For more business news in Afrikaans, visit www.sake24.com
This comes hot on the heels of the sensational clothing industry wage agreement concluded last week, which makes provision for appointing new workers in the industry at a wage 30% below the current minimum for clothing workers.
These two developments are the first real indications in years that the system of collective bargaining, which is seriously biased towards cumbersome central bargaining, could unravel and become more conducive to job creation.
On Friday the National Employers Association of SA (Neasa), which has 1 250 employers and about 25 000 employees as members, and the Plastic Converters Association, another employer organisation in the steel and engineering industry, lodged court documents related to this sweeping action with the Johannesburg labour court against Labour Minister Mildred Oliphant and the country’s largest bargaining council, the Metal and Engineering Industry Bargaining Council (MEIBC).
Negotiations around the wages of more than 200 000 workers in the industry take place with the MEIBC. Another 39 parties who are members of the bargaining council are also defendants in the matter.
On September 26, in a proclamation in the Government Gazette, Oliphant extended the wage agreement to parties who had not signed it and who fall under the jurisdiction of the bargaining council.
The wage agreement, involving increases of 8% and 10%, thereby became law and companies that do not comply will be prosecuted by the bargaining council – probably the most controversial part of the country's collective bargaining system.
During the strike in July this year Neasa demanded that minimum wages in the steel and engineering industry be cut by 50% to make employment of inexperienced workers possible – much like the clothing industry agreement. But this was never considered by Seifsa or the largest union in the industry, Numsa.
In its court application Neasa is now contesting the status of Seifsa, a federation of employer organisations that has for years dominated the employer role in the bargaining council and basically negotiated on behalf of employers in the steel and engineering industry on loans and conditions of service.
Neasa director Gerhard Papenfus said in the court application that various members of Seifsa were not bona fide employer organisations. The registrar labour is investigating the status of these organisations. Seifsa behaves as though it is a party to the bargaining council while, according to Papenfus, this is in conflict with the council's constitution.
The management committee of the bargaining council, which must comprise an equal number of employer and union representatives, was last constituted five years ago, whereas the council's constitution requires that this should be done every year, said Papenfus.
The management committee is in effect the council’s negotiating forum on wages and service conditions.
According to the negotiating council's constitution members of the management committee should be nominated at the council's annual general meeting.
In his affidavit Papenfus notes examples of where the bargaining council's management committee has itself appointed new members. On other occasions the chief executive, Alistair Smith, has appointed new members.
Last week Smith was appointed an executive director of Nedlac.
These irregularities, as well as a number of other requirements not observed, mean that Oliphant did not have the power to extend the wage agreement to parties who had not signed it.
The wage agreement makes provision, inter alia, for minimum personnel costs of R6 500 a month for a cleaner – the lowest paid position in the steel and engineering industry.
Out of this R6 500 the worker however receives only R4 500 a month – the rest is fees levied by the bargaining council and payments to a provident fund, Papenfus told Sake24.
There are therefore serious irregularities within the decision-making bodies of the bargaining council.
“The validity of decision-making by the bargaining council is obviously crucial in determining whether the minister’s decision to extend it to non-participating parties was valid,” said Papenfus in his statement.
Oliphant may extend a loan agreement only if she is certain the agreement has been accepted by the unions representing the majority of workers in the bargaining council, as well as the employer organisations whose members comprise the majority of workers in the bargaining council.
Between July 18 and July 20 voting on the agreement took place – but, according to Papenfus, the ballot papers were not numbered. The bargaining council has to date refused to disclose the voting procedure, despite several requests from Neasa.
“We still do not know how many ballot papers were issued, how many ballots were returned and how many votes there were in favour of or against the agreement,” said Papenfus.
There is currently large-scale uncertainty in the steel in the engineering industry as to the validity of the agreement, especially on the part of employers who cannot afford the terms of the agreements or are unsure whether they should apply for exemption from them.
“The threat of labour unrest in this regard cannot be over-emphasised. There is urgent need for clarity on the extension,” said Papenfus.
- For more business news in Afrikaans, visit www.sake24.com
