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How low can they go in setting steel wages?

Jul 16 2017 06:00
Dewald Van Rensburg

Johannesburg - Some employer groups in the metals and engineering sectors think they have an iron-clad bargaining chip to get unions to sign up for an almost unprecedented lowering of prescribed entry-level wages.

That chip is the prospect of dropping wages to an even lower point, on a widespread scale, if no deal is reached.

Should that happen, it could spell the collapse of the Metal and Engineering Industries Bargaining Council (MEIBC), the largest private sector bargaining council in South Africa.

Long-standing demands that the sector’s wages differentiate between large and small employers seem to have a fighting chance this year – for the same reason.

The difference between this year and past years is that the employer side of the MEIBC has fragmented, with only four employer groups now seated at the table.

Historically, wage talks in the MEIBC were largely determined by the National Union of Metalworkers of SA (Numsa) striking deals with the Steel and Engineering Industries Federation of SA (Seifsa), a federation of employer associations.

The National Employers’ Association of SA, a minority employer group, has spent the past few years fighting against these deals and their extension to the whole sector, which requires the assent of employers representing half the sector.

But Seifsa’s largest member, the SA Engineers’ and Founders’ Association (Saefa), has broken away.

Another group, the Consolidated Employers’ Organisation, grew large enough to claim its own seat at the table, changing the balance of negotiating power.

A new deal will almost certainly require all the groups’ assent to be extended to the whole sector.

“If there is no deal, it all devolves to nothing. Numsa has a lot to lose,” said Ross Williams, chairperson of Saefa.

“If there is no deal extended, what will people pay?”

If there is no extended deal, all the non-parties would very likely set their entry-level wage at R20 an hour, being the imminent new national minimum wage, said Williams.

However, the employers hold out the promise of a lowered entry-level wage that could be R30 an hour.

“We want a staggered wage schedule in a single agreement,” said Williams.

“We have to average the wages down over time.” The deal that employers want would explicitly not permit lowering the wages of any existing workers, he added.

Employers are offering increases of less than 6%, while the unions are at between 10% and 15%.

Wage talks are currently deadlocked while a facilitator mediates.

“We have not yet announced a decision to go on strike,” said Numsa spokesperson Phakamile Hlubi.

“Once we have received the strike certificate it will be easier to map a way forward and we will also be able to say when the strike will take place.”

A certificate would allow all the roughly 300 000 workers in the sector to strike. In the previous round of talks in 2014, the sector saw a month-long strike.

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steel industry  |  minimum wage  |  wages

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