JOHANNESBURG, 22 JULY 2014 – The Steel and Engineering Industries Federation of Southern Africa (SEIFSA) has reluctantly accepted Labour Minister Mildred Oliphant's proposal to offer wage increases of 10% to low-level employees in the metals and engineering sector over three years, but insisted overwhelmingly on the need for Section 37 of the Main Agreement of the Metal and Engineering Industries Bargaining Council (MEIBC) to be tightened up in order to protect employers from double dipping.

At a SEIFSA Special Council meeting yesterday afternoon to discuss a Ministerial Proposal which, was shared with all employers' organisations and trade unions on Saturday, a slim majority of employer Associations affiliated to the Federation agreed to a 10% wage increase for low-level employees over the next three years, on condition that the offer is accepted by the unions not later than Friday, 25 July. An overriding condition for the proposal's acceptance was that the unions agreed to an inclusion of a clause in the Main Agreement which indicated that matters that would materially impact on the cost of employment would not be raised for negotiation at company level.

The conditionally-approved wage offer is 10% for rates F, G and H in 2014, for rates G and H in 2015 and for rate H in 2016, and 8% in 2014, 7,5% in 2015 and 7% in 2016 respectively for rate A.

SEIFSA Chief Executive Officer Kaizer Nyatsumba said that members of the Federation overwhelmingly reiterated their position that they would not sign any settlement agreement until their concerns about recent Labour Court judgments regarding Section 37 were addressed. He said that they wanted the section amended to confirm its original intention, when the clause was introduced into the Main Agreement in 1992, that all matters which could materially add to the cost of employment would be negotiated collectively in the Bargaining Council.

"Our members are bitterly disappointed about the fact that they have made numerous concessions, including offering unaffordable increases that are considerably above inflation and threaten their businesses, but have got absolutely nothing in return. Not only will they not go beyond the wage offer brokered by the Minister and her team, but they will also simply not budge on Section 37," Mr Nyatsumba said.

He said that the high wage increases proposed by the Minister in order to end the current strike in the sector would inevitably lead to “massive job losses” as companies sought to reduce their costs since they could not pass the increases on to their customers.

Mr Nyatsumba said that all that SEIFSA and its members wanted was for the retention of the dispensation that had existed in the past 22 years, since the inclusion of Section 37 into the Main Agreement in 1992 when increases started being offered on the actual wages earned by employees and not on the minimums. Following Judge van Niekerk’s ruling a few months ago that Section 37 covered only those matters that were contained in the Main agreement, SEIFSA wanted the relevant clause amended to make plain its original intention.

Mr Nyatsumba said that the words that SEIFSA wanted added into the clause were the ones in bold: " The Council is the sole forum for negotiating matters contained in the Main Agreement and those related to the cost of employment. During the currency of the agreement, no matter contained in the agreement or which may impact on the cost of employment may be an issue in dispute for the purposes of a strike or lock-out or any conduct in contemplation of a strike or lock-out.”

“SEIFSA and its member Associations are proponents of collective bargaining and remain implacably opposed to double dipping through two-tier bargaining. We believe that the challenge posed by the Van Niekerk judgments require all of us to reconfirm our commitment to collective bargaining by strengthening the original intentions of Section 37,” Mr Nyatsumba said.

He added that SEIFSA members were very disappointed with the violence that accompanied the strike and called on the police to apprehend all those involved in violence and vandalism.

Mr Nyatsumba said SEIFSA, the majority of whose members were small companies employing fewer than 50 people, was deeply concerned about the damage done on the economy by the current industrial action, and found the unions’ reluctance to compromise very disappointing.