The Main Agreement guarantees certainty, stability and peace

In an uncertain economic environment such as ours, businesses often strive to ensure that they maintain stability in as many aspects of their operations as possible. This time last year, employers and labour unions were in the thick of negotiations doing their utmost to construct a deal that would find favour with each-others respective constituencies. Regrettable we were unable to avoid a bruising strike but eventually we signed a three-year wage deal which laid the foundation for a settlement agreement widely known as the Main Agreement.

The Main Agreement is the only agreement that has been signed-off by and continues to enjoy the support of all the trade unions in the Metal and Engineering Industries Bargaining Council (MEIBC). It is unique in that aside from the eighteen SEIFSA affiliated Employer Organisations and the Consolidated Employers Organisation (an independent Employer Organisation representing 671 employers, employing 14 222 employees) who is also a signatory to the Main Agreement - no other employer organisation has an agreement covering the comprehensive terms and conditions of employment within the sector that is signed-off by all the trade unions.

Whilst critics bemoan, criticise and threaten never ending legal action against the Main Agreement and its signatories, over the last two decades they have failed spectacularly to come up with a better deal - blaming SEIFSA, the unions, the bargaining council, fellow employer organisations, who now apparently have stabbed them in the back and a litany of other feeble excuses for nothing short of their own lack of imagination and foresight.

Collective bargaining in South Africa and particularly in our sector, where we deal with some of the largest unions in the country is no easy feat – it’s tough!

Negotiations in the metals and engineering industry is a terrain for deeply contested ideas, creative thinking and eventually the crafting of unique and unparalleled deals not seen anywhere else in SA. In 2020 SEIFSA concluded a one-year wage freeze or stand-still agreement - a feat that remains unmatched in the South African collective bargaining landscape.

SEIFSA for years has pioneered long term agreements, wage modelling, defending to the hilt the right of labour brokers to practice their chosen profession no different to any other employer in our sector and a host of employer friendly terms and conditions of employment. Concluding deals requires a deep commitment to building respect, trust and relationships not only with one’s own constituency but more importantly with ones negotiating partners. Ultimately, collective bargaining is about relationships not power, possibly a lesson lost on our critics.

Any employer conducting business in the iron, steel, engineering and metallurgical industry, whether or not the employer is a member of an employer organisation, is legally obliged to register with the MEIBC.  However, only employers who are members of an employers’ organisation that is a signatory to the collective agreement may make use of the various terms and conditions of employment contained in the Main Agreement.

Critics point to the wage rates contained in the Main Agreement as the key disadvantage of the agreement, but in doing so, they overlook the certainty, stability and peace that is guarantees.

We acknowledge that the wage rates contained in the Main Agreement particularly for employers who have been operating outside of the scope of the agreement for the last ten plus years are high, at least when compared to the national minimum wage of R 23.19 per hour. Last year’s settlement agreement seeks to address this in three ways, namely:

  1. Providing for a special phase-in dispensation to allow employers to gradually move from the national minimum wage to sixty-percent of the 2019/ 2020 minimum Main Agreement rate (i.e., R 29,73 at Rate H) by 30 June 2024;
  2. Reverting to the practice for all affiliated member companies to award wage increases calculated on minimum rates of pay (i.e., on Rands and cents) as opposed to a percentage increase on actual rates of pay - for last year, this year and next year. This is a significant break in practice that we’ve last seen almost 30 years ago; and
  3. Recognising that companies who elect to be covered by the Main Agreement through the special phase-in dispensation, will be permitted to award the rand and cents increases on what they are actually paying on the shop floor.

Wages, leave pay and leave enhancement pay aside, the Main Agreement offers a number of significant advantages for employers, for example:

  • Simple guideline for the job grading of employees.
  • Many terms and conditions of employment that employers take for granted and observe on a daily basis, such as hours of work, intervals and breaks, overtime rates, shift allowances, payment for working on Sunday and Public Holidays, to name a few, are all located in the Main Agreement.
  • The Main Agreement contains three key provisions not found in either the Basic Conditions of Employment Act or the Labour Relations Act that allow employers to immediately respond to dips in their operating cycle caused by circumstances beyond their immediate control and implement short time, lay-off and/or being entitled to send employees home due to, for example, planned and/ or unplanned outages, load shedding and/or service delivery failures.
  • The Main Agreement contains an important peace clause that protects employers from being approached to engage in plant-level bargaining, any form of industrial action during the currency of an agreement related to terms and conditions of employment and once gazetted this protection is extended to cover any trade union who may not be a signatory to the Main Agreement or registered with the bargaining council but has managed to recruit members on an employers’ shop floor.
  • Over and above the special phase-in dispensation referred to above, the Main Agreement also contains a generic exemptions clause that allows any party employers to apply for exemption from any provision of the Main Agreement.
  • The Main Agreement also contains an alternative working time provision that allows employers and their employees to reach agreement on a variety of alternative working time arrangements, ranging from averaging of working hours, working over week-ends at normal rates of pay, banking hours etc. to the extent that this provision refers to any alternative working time arrangement agreed between workers and management.
  • In such instances, any working time agreement would trump the terms and conditions contained in the Main Agreement, with the employer retaining all the rights and protections contained in the Main Agreement.

Last year’s Settlement Agreement provides a unique opportunity for employers who have in the past opted to go it alone to align themselves with the Main Agreement with little disruption.

In an environment where service delivery is increasingly under strain and we are seeing a proliferation of trade unions across our sector compounded by the latest phenomenon of political parties beginning to venture onto the shop floor – the role of employer organisations to provide professional, mature and expert industrial relations advice and assistance is now, more than ever before, of utmost importance.

The choice for employers is whether the expert assistance that is so vital is done against a legal framework built on compliance, regulation and protection or a framework that will need to be negotiated at individual shop floor level in an environment and atmosphere that is becoming increasingly ladened with tension and anxiety. The Main Agreement provides that foundation and legal framework.

Lucio Trentini is the Chief Executive Officer of the Steel and Engineering Industries Federation of Southern Africa (SEIFSA).


Wage and Wage Related Exemptions and Special Phase-in Dispensation for the period 1 July 2022 - 30 June 2023

APPLYING FOR EXEMPTION FROM THE MAIN AGREEMENT WAGE INCREASES AND SPECIAL PHASE-IN DISPENSATION EFFECTIVE 1 JULY 2022

 Introduction

SEIFSA, on behalf of the 18 affiliated Employer Associations, signed an agreement with all the trade unions in our industry on 21 October 2021 on the terms and conditions of employment for a three-year period ending 30 June 2024.

Exemptions Procedure

 SEIFSA is aware that the current economic environment may pose severe constraints on certain member companies’ ability to implement the increases (see Appendix A) and these members are advised that the industry’s current wage exemption procedure continues to apply.

Furthermore, the parties have taken note that there are many employers who for one or other reason have been operating outside of the terms and conditions of the Main Agreement, particularly when it comes to rates of pay. The parties have agreed that encouraging these employers to come on board in one-step may not be feasible nor practical and will not assist in achieving the end-goal of parity on wages across the sector.

The parties have therefore agreed that in order to reach parity, phase-in will need to be approached in a stepped-phased approach and will form part of a broader project aimed at achieving parity with the Main Agreement in a managed manner over agreed time spans. Phase one of the project will focus on moving employers who may elect to be covered by the Main Agreement and/or have been operating outside of the Main Agreement to achieve 60% of the 2019/2020 Main Agreement minimum wage rates (see Appendix B).

The parties have agreed that 60% of the 2019/2020 Main Agreement minimum wage rates will be fixed for the duration of the 2021/ 2024 Main Agreement. Phase one of the project will end on 30 June 2024. The parties have agreed that during the currency of 2021/2024 Main Agreement the parties will agree on the modalities, goals, time-frames, and objectives informing phase two of the project.

Download the full management Brief on the procedure to apply for a Wage Increase Exemption


SEIFSA delegation meets with Eskom

As part of SEIFSA’s lobbying and advocacy initiatives a delegation from SEIFSA comprising Senior Executives, CEOs and the Office (L Trentini and T Chibanguza, SEIFSA CEO and COO respectively), met with the Group Chief Executive Officer of Eskom, Mr Andre de Ruyter on the 25th of April 2022. In attendance from Eskom were Mr Monde Bala: Group Executive Distribution and Nkosana Ntlekeni: Key Accounts Executive Manager.

The objectives for requesting the meeting towards the end of 2021 had been to open a channel of communication and on-going dialogue with Eskom with a view to identifying strategic initiatives that SEIFSA on behalf of its affiliated membership and Eskom, can work on collaboratively in contributing to resolving the challenges experienced in the energy supply industry (ESI).

To this end, the following agenda points were submitted to Eskom in advance of the meeting in order to guide the discussion:

  • Discussion on Eskom’s long term strategic vision and plans on the following:
  • Maintenance (preventative and unplanned outages);
  • Staff costs; and
  • Cost of electricity (price path).
  • Discussion on Eskom’s long-term plans on accelerating alternative energy sources onto the national grid.
  • Discussion on the feasibility of by-passing municipalities and companies paying their electricity bill direct to Eskom.
  • Ongoing and further collaboration between Eskom and SEIFSA

This brief note highlights some of the key aspects that emerged out of the meeting

  • Eskom outlined the precarious state of the national grid and the origins of the current challenges, which include a lack of historic maintenance and delays to building new generation capacity. While building the Medupi and Kusile power stations, the organisation ran its generation capacity very hard, measured by the energy utilisation factor, while simultaneously neglecting maintenance. This, we were advised, has resulted in the long-term deterioration of the existing generation fleet. In addition, Eskom is struggling with on-going technical build problems at Medupi and Kusile, resulting in a situation where the power stations that were meant to relieve supply shortages cannot be fully relied on as yet, to ease the supply deficit.
  • Maintenance is currently at 12%-13%, much lower than what Eskom would want it to be. However, a careful balance needs to be struck between planned maintenance and supplying electricity to the economy, against the backdrop of the poor state of the national grid.
  • The limitations to resolving the challenges include, a lack of:
  • money: to adequately finance the maintenance program to the extent that it is required;
  • time: a lack of head-room from a generation capacity perspective to remove units from production while at the same time supplying electricity to the economy; and
  • skills: which have been lost over the years constraining the ability for Eskom to resolve the challenges facing the organisation.
  • Persistent and endemic corruption, which continues to plagues the organisation. This in itself was framed as one of the key constraints to resolving the challenges of the organisation.

Outlook

  • Greater private sector investment into electricity generation capacity was identified as a key enabler to resolving the electricity supply challenge. Eskom does not see its future role as being one where it will be the primary source of new large scale generation capacity (its balance sheet simply does not permit this).
  • The unbundling of Eskom with a dedicated transmission company that will act as a system market operator, to facilitate buying and selling of electricity between electricity producers and end customers is seen as a key enabler to bringing on private sector investment. Eskom indicated that it is in the process of setting up the electricity trading platform.
  • It was mentioned that the electricity tariffs that could potentially be achieved through this trading platform could be market determined, which would go a long-way towards controlling the pace and extent of tariff increases into the future.
  • Eskom indicated that these unfolding processes will open business opportunities in the economy. Eskom intends to retire 22 GW of coal fired generation capacity by 2035. This, it was stressed, will presents opportunities to convert this capacity to gas, an important enabler toward a just energy transition. Greater solar and wind capacity will also need to be developed to compensate for retired coal capacity. The metals and engineering sector it was mentioned could set to benefit from these developments, along with other sectors of the economy.
  • Eskom will be embarking on an 8000 km build program to strengthen and grow the transmission network to allow independent power producers access to the grid, would again presents opportunities for the sector and the economy.

Areas of collaboration between Eskom and SEIFSA

  • On the opportunities that are unfolding from the developments in the electricity supply industry, a significant amount of effort needs to be invested in policy formulation on how the country can take full advantage of these opportunities. Localisation, local content, industry development incentives, designation, etc., will need to be explored further to determine decisions that are in the best interest of the sector and the greater economy.
  • Eskom indicated a clear willingness to work with SEIFSA, representing its affiliated membership on these and other matters. This is an important development due to the potential cost implications for Eskom, whilst presenting opportunities to develop nascent industries within the sector and the country.
  • Municipal debt was identified as a massive problem for Eskom (currently growing at R 7.3 billion per annum). Eskom has indicated that organised business organisations should be more involved in aspects relating to municipalities. SEIFSA on behalf of its affiliated membership, Eskom stressed, could play an important role in this regard, given the vast geographical spread of its members across the country’s multiple municipalities.
  • Eskom indicated a willingness to further explore models of direct supply and payment between Eskom and end customers, however, Eskom stressed that any considerations in this regard need to take into account the sustainability of the municipalities. Eskom highlighted that every geographical area of the country is covered by a municipality, and therefore it would be ill-advised to pursue decisions that undermine the sustainability of the municipalities.
  • Grid Access Unit (GAU): Eskom has set up a unit that manages aspects relating to accessing the national electricity grid. Regulated bids, which are facilitated through the Renewable Independent Power Producer Programme (REIPPP), we were advised are now much easier to manage. The challenge faced by the GAU is with unregulated bids, where companies build capacity behind the meter or on a bilateral basis between a customer and IPP. Eskom. Indicated its willingness to work with SEIFSA in consolidating the unregulated bids within the metals and engineering sector.
  • Theft and vandalism of Eskom’s infrastructure was highlighted as amounting to a major problematic area that Eskom continues to dealing with. Eskom suggested that SEIFSA and its membership should consider working with Eskom in the following areas:
  • the development of the specifications of electricity cables to make them less attractive to cable theft; and/or
  • advocating for improving scrap metal regulations to eliminate unscrupulous operators while allowing legitimate businesses to continue to operate.

 

In closing, the president has been emphasising the importance of attracting investment to SA to boost economic growth. The crisis at Eskom can only diminish the confidence of potential external investors in our economy if they cannot be guaranteed a stable and predictable supply of power.

The parting impression gleamed from today’s session is that the Eskom Group CEO and his Team appear to have the determination to continue to do what must be done, no matter how unpopular. This will unfortunately result in more not less rotational power cuts in the short term hopefully resulting in noticeable improvements in the medium term.

What is not in dispute is Eskom’s position within the SA economy, it is so pivotal that it cannot be allowed to collapse. Power stations will be taken down and maintained for longer than has been the case in the past, new renewable energy capacity must be brought on stream quicker and those responsible for corruption must be rooted out.

SEIFSA on behalf of the affiliated membership looks forward to playing its part.


Steel Master Plan needs industry’s commitment to take flight

Almost a year after the launch of the Steel Master Plan (SMP), Scaw Metals CEO Doron Barnes acknowledges the frustration many in the industry feel about the Plan, but he also believes it has the potential to rejuvenate upstream and downstream industries.

Much of the criticism of the plan is a result of a misunderstanding of its role, he said.

The Plan — which was launched on June 11 2021 and signed by representatives of Government, Business and Labour — provides a series of practical steps for the steel and engineering industry to follow in order to reinvigorate itself.

The Steel and Engineering Federation of Southern Africa (SEIFSA) will give everyone a chance to discuss their frustration, praise and ask questions about the Plan at the Mainstreaming the Steel Master Plan Conference on May 19 and 20.

Like Barnes, Macsteel CEO Mike Benfield also has strong views about the Plan. “We need to re-energise it, we need to prioritise and we need to get workstreams going around those priorities,” he says. He is concerned that it will not become a reality without a whole-hearted commitment to a list of prioritised infrastructure projects, specifically in the areas of railports and power.

Barnes, in a recent interview with Creamer Media Engineering News & Mining Weekly, is adamant that industry must take the lead. “It is up to industry to take leadership by dedicating time, energy and resources to make it work, rather than sitting back and moaning about all the problems.”

SEIFSA CEO Lucio Trentini agrees with this, saying: “This industry stands ready to make its contribution to translating the government’s vision of reindustrialising the metals and engineering (M&E) sector, and to start translating visions, promises and policy into action and deliverables.”

“We need government to roll-out its promised infrastructure spend, which is absolutely central to the reigniting of industrial capacity in the sector.”

SEIFSA is eager to see many small business owners at the conference. “We urge SMEs to attend the conference so their important voices can also be heard. It is crucial that they too are well represented at the conference” says Trentini.

Large corporates, SMEs, company executives, public servants and anyone keen to find out more can visit the conference website (https://www.seifsa.co.za/product/steel-master-plan-conference/) for all the details of the Mainstreaming the Steel Master Plan conference.

The conference will play host to senior Department of Trade, Industry and Competition officials, representatives from the Steel Oversight Committee, Business and Labour leaders who will analyse the progress of the plans as well as the commitments that will lay the foundations for the development and growth of the M&E sector in the years ahead.

Minister of Trade, Industry and Competition Ebrahim Patel will deliver the keynote address, after an opening address from Elias Monage, SEIFSA President. Other speakers include Irvin Jim, the General Secretary of National Union of Metalworkers of South Africa (NUMSA), and Marius Croukamp, Deputy General Secretary of Solidarity.

There will also be a series of panel discussions looking at supply-side measures, demand-side measures, transformation, resource mobilisation and the African Continental Free Trade Agreement.

Trentini said: “The big gains will be made by moving our infrastructure programme from shallow waters to deep waters and to get it moving on a bigger scale and then introducing a localisation requirement not only on primary steel, but also downstream steel.”

The Mainstreaming the Steel Master Plan conference will be held on May 19 and 20 at Industrial Development Corporation, Sandton. 

The conference will be organised and hosted by SEIFSA in partnership with the Industrial Development Corporation and the Department of Trade, Industry and Competition.

Book now

 


Thought Leadership

Thought Leadership piece by Lucio Trentini, the CEO of the Steel and Engineering Industries Federation of Southern Africa (SEIFSA)

South African businesses in the metals and engineering (M&E) sector have faced enormous challenges over the past few years, with the Covid-19 pandemic compounding an already difficult situation.

A shrinking domestic market, declining production, weak production sales, a smaller contribution to the economy, increasing joblessness, cheap imports and low investment levels are just some of the issues they face.

These challenges do not plague the M&E sector only and their knock-on effects are felt throughout the economy due to its role as supplier and customer into the auto, motor, mining, construction and other manufacturing sub-industries.

Manufacturing companies play an integral part in the supply chain of the South African economy and the sector will struggle to recover without support. The sector already relies heavily on demand from Government projects to boost its production and sales, especially for products such as steel and other downstream products. This is why the Government must speed up the implementation of its infrastructure investment plan and reforms across state-owned enterprises (SOEs) as the lack of progress on these and other projects is delaying the revival of our economy.

Some form of protection against the dominance of imports while promoting domestic manufacturing and suppliers can also make a difference, though in the longer term the international competitiveness of the sector will need to improve before local producers can assume the role of preferred supplier to both domestic and international markets.

There is also help at hand in the form of the African Continental Free Trade Area (AfCFTA) agreement, which offers new opportunities for trade on the continent in the M&E sector.

Costs remain an issue for manufacturers. The unexpected acceleration in producer inflation in December highlighted the effect of higher energy prices globally and global supply chain problems. According to the latest data released by Statistics SA, the producer price index (PPI) for final manufactured goods rose 10.8% year on year in December, up from 9.6% in November. Stats SA said coke, petroleum, chemicals, rubber and plastic products were the main contributors to the higher number; these product categories incorporate petrol and diesel prices, which are close to record highs.

Manufacturers also have to contend with falling prices, which benefit buyers of the M&E sector’s products, but put enormous pressure on manufacturers' profit margins, which in turn leads to job losses as companies look for ways to cut costs.

SA’s official unemployment rate was recorded at 34.9% in the third quarter of 2021 — the highest jobless rate since comparable data began in 2008 — due to, amongst other things, the deplorable looting that took place in July compounded by the stringent lockdown measures.

The jobless data showed that 660,000 jobs were lost between the third and second quarters of 2021. The broader manufacturing sector lost 13,000 jobs. The disheartening lack of employment opportunities affects the economic status of the country and, more importantly, the livelihoods of all its people.

Industry has expressed its concern about the stubbornly high unemployment rate. The Steel and Engineering Industries Federation of Southern Africa (SEIFSA) has called on the Government to address the issue, while finding ways to reduce the cost of electricity, diesel and petrol to help put the economy back on track.

The M&E sector is a strategic industry for South Africa, so plans to reindustrialise the sector, including the primary steel and downstream industries that employ more than 200,000 workers must not be allowed to fail.

SEIFSA has advocated for infrastructure development as a means to promote industrialisation in South Africa, especially in the M&E sector as it feeds into infrastructure projects from an input supplier perspective, but for recovery to take place there is a need for clear purpose and strong support for Government projects.

While it is not possible to state, with a degree of certainty, how the year ahead is likely to pan out, it is probably safe to say that 2022 will be marginally better than 2021. However, a lot hinges on the Government’s planned infrastructure rollout and the trajectory the COVID-19 pandemic takes in the country in the months to come.

We hope that the Government will finally deliver on both the Steel Master Plan and the promised and long-awaited infrastructure plan, which is intended to stimulate the economy, and not be distracted by the political agenda when all focus and energy should be firmly directed at economic growth and recovery.


Eskom Group Chief Executive, André de Ruyter responds in an open letter to SEIFSA CEO

Load shedding and its impact of the metals and engineering sector

Eskom acknowledges your letter dated 23 November 2021.

The contribution of the Steel and Engineering Industries Federation of South Africa (SEIFSA) to the
employment and economy of the country is acknowledged. Eskom has had a good relationship
spanning over many years with the key industrial customers represented by your federation, and
such industries have always complied with the NRS 048-9 agreement to curtail load whenever
Eskom declared a power system emergency.

While Eskom regrets the electricity supply interruptions in the past weeks, it is important for SEIFSA
to understand that load shedding is the last resort in the management of the power system. This is
to protect and prevent the power system from collapsing or even having a black-out.
Eskom forecasts potential load shedding based on the maintenance plan and an assumed amount
of unplanned unavailable generation capacity; 11 000 MW in the winter and 12 000 MW in the
summer months (the base case). Eskom then adds two risk scenarios by adding an additional
1 000 MW and 2 000 MW to this assumption.

For the base case, the current forecast is two days of Stage 2 load shedding for the next year. For
the + 1 000 MW risk case, this rises to 104 days of up to Stage 2 load shedding and for the + 2 000
MW risk case; 252 days of up to Stage 3 load shedding. Eskom, however, endeavours to keep the
unplanned losses to below even the base case. It is essential that, for sustainable performance
improvement, Eskom continues to implement its reliability maintenance programme and to keep in
mind that 4 000 MW to 6 000 MW additional national capacity is required to significantly reduce the
risk of load shedding.

I welcome SEIFSA’s availability to assist Eskom in any way possible, and would therefore like to
propose that together with some of my executive team, we have a meeting with you and your team
to discuss ways to reduce the impact of load shedding on your federation member companies.

My office will be in contact with yours to make this arrangement.

Yours sincerely

André de Ruyter
GROUP CHIEF EXECUTIVE


SEIFSA open letter to Eskom CEO

Load shedding and its impact of the metals and engineering sector

I write to you on behalf of eighteen employer associations, who are federated to SEIFSA, who collectively represent in excess of a thousand employers and who employ close to 170 000 employees, which accounts forty-percent of all employees in the metals and engineering (M&E) sector.

The metals and engineering sector is a key and integral part of the economy. Any disruptions in the sector’s industrial activity feeds through into the rest of the economy. From the end user’s perspective, the M&E sector, made up of 13 sub-sectors, is a crucial supplier of inputs into major sectors such as construction, mining, motor, automotive and other manufacturing sub-industries.

Notwithstanding the COVID-19 pandemic, the economy was already suffering from a shrinking domestic market, declining production, low capacity utilization, weak production sales, declining employment numbers, increasing levels of imports, a weak global trade balance and low investment levels.

In the first six months of 2021, green-shoots began emerging in the sector. Key positives during this period were improvements in production volumes and production sales, capacity utilization, exports improving in value terms, narrowing of the M&E trade deficit and growing exports into the African continent.

The M&E sector, already buckling under the strain of difficult market conditions, state capture, low economic growth, disinvestment and collapsing infrastructure, misguided objectives and parochial interests, is now having to contend with seemingly never-ending load shedding.

Whilst we accept that structural changes, significant investment and a culture or paradigm shift is urgently needed to secure the long-term sustainability of Eskom, in the immediate to medium term, on-going and intermitted load shedding is taking a heavy toll on our membership, the sectors contribution to the fiscus and the M&E sector’s ability to hold onto jobs and more importantly, create additional and much needed employment opportunities.

I have no doubt that you have heard more than your fair share of horror stories about the effect of load shedding on businesses. The sad and tragic reality is that it has gone on for so long that we have become accustomed to wringing our hands in despair and hoping for the best. It is also true that much has been written regarding the negative effect of load shedding on industry, sadly with little effect. Repeated assurances that everything possible is being done is also wearing thin on business.

We continue to hear and read about Eskom blaming its aging fleet on its poor performance. Whilst we may, readily accept this, we are also of the view that this, may, with respect, be an oversimplification of the problem. Moreover, much has been written about the lingering and worrying effects of the deep-rooted networks of corruption within Eskom and your commitment to eradicating this and returning this once great institution to good governance, which endeavours we support. We also support the Presidents call and your commitment to Eskom’s division into three constituent parts (generation, transmission and distribution) each run on sound businesses practices.

In closing, as we continue to struggle with the reality of load shedding, which we reluctantly have no choice but to accept for the foreseeable future, can you provide business with assurances that firstly, the scourge of corruption is being tackled and criminal and/or civil charges against current and past employees have been opened with the South African Police Services and how many of these cases have resulted in convictions; secondly, do you have the political leeway to make the cultural and headcount changes necessary to make Eskom a viable commercial enterprise and finally, are you able to provide businesses with assurances on predictability going forward? It is incredibly difficult for businesses to plan production and/ or give assurances to customers and clients when load shedding schedules themselves are not predictable.

South Africa and for that matter SA Inc., cannot afford for Eskom to fail. All we ask is that, as business continues to grapple with the present-day reality, you and your team are doing everything reasonably possible to address this crisis.

Business needs to know that the sacrifices we make today, will yield the returns that will contribute to putting SA Inc. back on a positive growth trajectory fuelled by a stable and predictable energy supply.

SEIFSA and its constituent membership remain available to assist you in your endeavours in whatever way we can, as you and your team steer Eskom, and for that matter SA Inc., through this crisis.

I look forward to receiving your views herein.

Yours Faithfully

Lucio Trentini
Chief Executive Officer


Industry wage and employment negotiations successfully concluded.

On Thursday, 21 October 2021, SEIFSA on behalf of the affiliated Employer Associations signed an agreement with NUMSA ending a  three-week strike after the deal had already been signed with Solidarity and UASA. MEWUSA and SAEWA signed the deal on 22 October 2021, thereby ensuring a complete representation of all the trade unions as signatories to the new main agreement covering terms and conditions of employment for a three-year period commencing 1 July 2021 and ending 30 June 2024.

This agreement followed a difficult negotiation and dispute-resolution process which comprised many formal, informal and bilateral meetings, commencing in May and ending with NUMSA signing the Settlement Agreement ending a three-week strike.

SEIFSA believes that the agreement contains the following direct benefits to the membership:

The employer negotiating team managed to secure a three-year wage deal. This guarantees industrial relations peace, certainty, and stability for all member companies from now until 30 June 2024.
The wage increases, calculated on the scheduled rates and awarded as a rand and cents amount for next July and again in 2024 are clear and unambiguous – they are not dependent on further negotiations, and strike action on the increases is not possible. Member companies now know precisely what their employment costs will be for the coming three years, and have an opportunity to manage these appropriately.
Notwithstanding considerable pressure brought to bear by the unions (in particular, NUMSA), SEIFSA succeeded in securing a key principle that wage increases must be calculated on the scheduled rates as contained in the agreement and awarded to employees as a rand and cents amount.
Finally, SEIFSA and all the trade unions have, as a fundamental element of the agreement, recommitted themselves to pursuing extension and gazettal of the agreement to all non-party employers and employees in the industry and as part of this commitment, have agreed to a special phase-in dispensation for employers, who have been operating outside of the main agreement collective bargaining arena.

Wages
Wage increases and date of implementation

The agreed wage increases (ranging from 5% at Rate A to 6% at Rates F, G, and H) are detailed in the wage tables. These increases will become effective from 1 July 2021, and member companies are urged to implement these as soon as possible.
Please note: the rand and cents increases to employees are based on the rand and cent amount calculated on the scheduled rate per category (i.e. Rate A, B, C, etc.) of employment, regardless of how much more an employee may be earning above the minim scheduled rate of pay.

Please also note: back pay must be calculated on the normal hourly rate and includes overtime hours, work performed on a Sunday, and shift work.

Effective from 22 October 2021, employees covered by the Main Agreement shall be paid not less than the rate he/she was receiving prior to 22 October plus, as a guaranteed personal increase, an additional rand, and cents increase (calculated on the minimum rate) for his category of work.
Increases awarded prior to 22 October may be offset against the final agreed rand and cents increases.
Employees who received no increases on or after 1 July 2021 shall be entitled to receive the full quantum of the rand and cents increase calculated on the minimum rate with effect from 1 July 2021.
An employer must consult in good faith at the plant level with the representatives of the officials of a trade union and/or elected shop stewards on when the back pay will be paid.
The union officials shall make themselves available to meet with an employer and where not available then the employer must consult directly with the elected shop stewards.
Wage increases on 1 July 2022 and 1 July 2023

SEIFSA and the trade unions have agreed that the wage increases for both 1 July 2022 and 1 July 2023 will be w calculated on the same basis as year one of the agreement.

Download The wage tables for years 1, 2, and 3
Wage Exemptions

The industry's current wage exemption procedure continues to apply. A company that is unable to implement the agreed wage increase, leave enhancement pay, and/or backpay may submit an application to its local regional council for an exemption to implement lesser wage increases than those negotiated.

Please note: any exemption application must be lodged with the Bargaining Council upon 30 days of the signature of the Settlement Agreement.

This exemption questionnaire
 must be used to apply for any exemption.

Secure your seat:The New Main Agreement 2021 - 2024  "A unique new wage deal!"


SEIFSA final offer.

The SEIFSA final offer in this year’s Main Agreement Negotiations amounts to the following:

  1. Duration

A three year deal

2.Wage Increases

A guaranteed personal rands and cents increase for all workers this year; and
Guaranteed rands/ cent increase in 2022 and 2023.

Wage Increases 1 July 2021 to 30 June 2024    

The rate for new workers set out above is the minimum entry level wage rates for new entrants into a company,

Existing workers will receive the guaranteed personal rands/ cents increase to their hourly rate of pay per hour.


Wage Negotations Update Issue 4

SEIFSA recommends implementation of final offer.

With the strike in its tenth day and given that Solidarity and UASA have accepted the final offer, the SEIFSA Council has unanimously endorsed a recommendation that affiliated member companies begin implementing the final offer as from tomorrow.

Whilst we request individual member companies to be guided by this recommendation, we nevertheless implore member companies to be guided by circumstances and the prevailing industrial relations climate on each and every shop floor.

Of the five trade unions that have bargained with SEIFSA, Solidarity and UASA have indicated their acceptance of the offer. SAEWA have confirmed their rejection of the final offer but are not out on strike. NUMSA and MEWUSA remain on strike. Accordingly, a company may be faced with one, some or all of the following scenarios:

  • None of your employees are members of any trade union; 
  • Some of your employees are unionised;
  • If unionised, and your employees belong to NUMSA or MEWUSA, all of your NUMSA and MEWUSA employees are out on strike;
  • Most or some of your employees have continued to work during the strike;
  • Most of your employees, barring NUMSA and MEWUSA members, have wanted to work but were prevented from doing so and/or where unable to report for duty and/or management took a decision, for reasons related to their personal safety and protection and sent employees home.

Should you elect to implement the final offer, the implications of this will be as follows:

  • All scheduled employees, except for NUMSA and MEWUSA members, must receive the increase, as set out in the attached wage schedule, effective from date of implementation;
  • Implementation of the final offer must not be extended to NUMSA and MEWUSA members, as NUMSA and MEWUSA is still on a protected strike and they have not signed the agreement. Therefore employees who are members of NUMSA and MEWUSA whether they are on strike or not, must not receive the final wage increase, unless;
  • An individual NUMSA or MEWUSA member elects to abandon his/her participation in the strike and before being allowed back into the factory, he/she signs the attached undertaking - no other demand/s must be made on the employee.

Implementation of the final offer for all of the above employees implies that they are entitled to back-pay from 1 July 2021. As backpay is a matter for discussion and agreement between management and employees at individual company level, it is recommended that backpay remain a matter for discussion until after the strike has ended.

With regards to implementation, we ask all member companies to please implement the final offer as a guaranteed Rands/ cents amount.

SEIFSA has shared the details around the plan of action emanating from urgent discussions with the National Joint Operational and Intelligence Structure (NATJOINTS), which is the coordinating body of all security and law enforcement agencies throughout the country, including the SA Police Force, SANDF and Metro Police, that took place over the weekend.

Our aim is to see more feet on the ground, visible, active, properly resourced and coordinated resources targeted at acts of violence, intimidation, destruction to plant, equipment and valuable infrastructure and indiscriminate attacks on fellow workers exercising their constitutional right to work. 

As the strike and lock out continues into another week, we have consistently communicated that the longer the posturing and refusal to settle on the part of NUMSA continues, the more jobs will eventually be lost in an industry that should instead be doing everything possible to protect each and every valuable job in the sector.

Again, we kindly remind the membership to ensure that all necessary precautions and contingency plans are in place, reviewed and where necessary revised. Unfortunately, it does look like another week will be lost.

Should you have any queries, questions and/or concerns during this difficult period please contact the Staff of the Industrial Relations Division on (011) 298-9400 who will assist.

As this saga plays out, we are acutely aware of what is at stake. Not just for our members but for the entire industry. We are at a cross roads and the lines in the sand have been drawn. It is regrettable and unfortunate but we have a duty to protect our industry from ever increasing costs of doing business, which do nothing more than make the sector increasingly uncompetitive.

In closing, I again take this opportunity to thank each and every one of our loyal affiliated membership. I can assure you that we remain committed and resolute to settling this round of negotiations, within mandate and with as little destruction to our economic base as possible.

We will continue to keep all members fully informed as developments unfold.

Stay safe and remain vigilant.