NUMSA’S INTENDED PROTEST ACTION ON 30 SEPTEMBER 2015
PROTEST ACTION AND THE LABOUR RELATIONS ACT
The Labour Relations Act (LRA) permits registered trade unions, such as NUMSA to undertake protected protest action to promote the social and economic interests of workers provided that they observe the procedural requirements contained in Section 77 of the LRA.
The primary respondent in the Section 77 application brought by NUMSA is Government, specifically National Treasury. However, Business has also been cited as a respondent.
NEDLAC received a notice of possible protest action on 8 July 2015 from NUMSA. The notice outlined NUMSA’s demands in respect of the increasing levels of corruption in South Africa, and cited the following respondents:
- Government: The Presidency and National Treasury; and
- Business Unity South Africa
The NEDLAC Section 77 Standing Committee met with NUMSA on 20 July 2015, in order to obtain further details on the notice. A revised notice was submitted by NUMSA on 5 August 2015. The Committee subsequently determined the notice to be compliant with the administrative requirements of the LRA.
The Committee convened a meeting, to consider the notice, jointly with NUMSA on 4 September 2015. At this meeting the Committee concluded that this matter could not be deemed as having been sufficiently considered.
The Standing Committee met again with NUMSA on 25 September 2015. At this meeting the Committee confirmed the notice as having been considered in compliance with Section 77 (1)(c) of the LRA.
The Committee further confirmed that should NUMSA wish to engage in any form of protected protest action, the requisite 14 day notice must take place within 14 days or later from today - 25 September 2015.
It is important to note that protest action in terms of Section 77 of the LRA is only protected if the issue in dispute has been considered by NEDLAC and the union concerned has given 14 days’ notice of its intention to proceed with such protest action on NEDLAC. In the absence of these conditions, any protest action would not be protected.
Consequently employees participating in any form of stay-away or protest activity on 30 September will not be protected by the normal rules regarding protected protest action to promote or defend socio-economic interest of workers, namely: no-work-no-pay and no-disciplinary action.
RECOMMENDED MANAGEMENT ACTION
In the absence of an urgent NUMSA review application to the Labour Court seeking to overturn this position, SEIFSA recommends that management adopt the following course of action in dealing with any stay-away and/or protest activity on 30 September 2015:
Inform all workers that any absences related to the protest action will be treated on the following basis:
- ‘No work, no pay’;
- A shift for leave pay and leave enhancement pay qualification purposes will be lost in respect of the day’s absence;
- Any overtime worked during the course of the week will be paid at ordinary rates to make up for the lost ordinary working hours from Wednesday, 30 September 2015; and
- Management reserve the right to take appropriate disciplinary action against employees who absent themselves from work without the proper permission and/or authorisation
SEIFSA will update this management brief if any further information comes to hand on the status of this matter.
The staff of SEIFSA’s Industrial Relations and Legal Services Division are available to provide further advice or assistance to management in this regard.
ADMIN AND DISPUTE LEVY NOTICE 31 JULY 2015
The levies are not retrospective and employers and their employees are only required to make contributions from 31 July 2015.
Please note that contribution amounts remain unchanged:
- The Administration Levy remains at R 1,72c per week or R7,45c per month, payable by each scheduled employee, with a matching contribution paid by the employer per scheduled employee; and
- The Dispute Resolution Levy remains at 62c per week or R2, 68c per month, payable by all employees (including non-scheduled employees), with a matching contribution paid by the employer per employee.
The Administration and Dispute Resolution Levy Agreements remain in force and effect until the period ending 30 June 2016.
GOVERNMENT SHOULD FAST-TRACK THE ROLL OUT OF INFRASTRUCTURE PROJECTS TO STIMULATE ECONOMIC GROWTH
Infrastructure development plays a critical role in job creation and economic performance. To date, the goals of the National Infrastructure Development Plan have appeared to be quite ambitious. The Cabinet and the Presidential Infrastructure Coordinating Commission developed 18 Strategic Integrated Projects (SIPs) to support economic development and to address service delivery on the overall projects. Among these projects are the Spatial Strategic Integrated Projects, the Energy Strategic Integrated Projects and the Social Infrastructure Strategic Integrated Projects. These projects are at the core of improving the living conditions of the disadvantaged communities in South Africa, with the view of addressing the imbalances that currently exist in the South African landscape.
Over the past years service delivery protests have been on the rise in South Africa as a result of people getting impatient with the Government’s lack of implementation of NDP initiatives and its failure to improve the living conditions of the poor. Coupled with these service delivery protests has been the Afrophobic attacks on foreign African nationals over economic participation, among other things. This is nothing less than disadvantaged South Africans who find themselves frustrated due to lack of employment opportunities and ever-increasing costs of living can expect. It is also important to note that much of these protests take place in the townships where there is extensive lack of infrastructure development and service delivery.
If these socio-economic issues are to be addressed, the Government should, as one of the measures aimed at resolving such issues, fast-track the implementation of the strategic projects identified in the NDP. The implementation of these projects will not only contribute towards the eradication of poverty as a result of employment creation, but it will also help stimulate the South African economy and help it rise out of the doldrums.
It goes without saying that infrastructure development plays a fundamental role in accelerating any country’s economic growth. Governments’ spend on infrastructure development not only provides a stimulus to a country’s economic growth, but it can also crowd in private sector and foreign direct investment (FDI).
Countries that boast highly-developed infrastructure tend to do better than their less-developed counterparts when it comes to attracting private sector investment as well as FDI. While South Africa does boast well-developed infrastructure, when compared to its African counterparts, there is no doubt that there is still room for improvement. The improvement of infrastructure – energy, rail and road transport, dams, schools, hospitals, stadiums, etc. – will inject massive new investment in the economy and lay the basis for a strong platform for economic performance.
In addition to providing an environment conducive for economic growth, infrastructure development can also create employment opportunities for, especially, the unemployed youth of South Africa, who are typically at the forefront of service delivery protests and Afrophobic attacks.
According to Statistics South Africa’s Quarterly Employment Statistics for the fourth quarter of 2014, employment in the metals and engineering sector alone:
- dropped from an average of 394 647 (calendar 2014) to 386 910 by the fourth quarter of 2014;
- Employment numbers declined by 1,4% on the 3rd quarter of 2014;
- There was a 2,5% drop from the first to the second half of 2014;
- There was a 3,4% decline when the second half of 2014 is compared with the second half of 2013;
- The full year (2014) saw employment contracting by 2,2% on 2013 or by nearly 9 000 people;
- When the 4th quarter of 2014 is compared to the 4th quarter of 2013, the decline was 3,9% or nearly 16 000 people.
These numbers, which can also be attributed to the red tape implemented through the recent labour legislation amendments, are extremely concerning in a country, such as South Africa, where youth unemployment is at an all-time high.
In addition to fast-tracking the rollout of the infrastructure projects, the Government should, through the various SETAs, also upskill the unemployed youth of South Africa through, among others, artisan training, apprenticeship and learnerships. This will ensure that the unemployed youth is well equipped to take advantage of the opportunities that will be presented when the SIPs are ultimately implemented. The next National Skills Development Strategy should also be more aligned to respond to the NDP imperatives.
It is, therefore, of paramount importance that the Government fast-tracks the implementation of the NDP projects not only to stimulate economic growth, but also to also contribute towards eradication of poverty, and other socioeconomic challenges through employment creation.
Bridgette Mokoetle is the Legal Executive of the Steel and Engineering Industries Federation of Southern Africa.
Seifsa must get recognition it deserves - Business Report
The industry, which is an important pivot between the sectors of manufacturing, mining and construction, will next month – through the auspices of Seifsa – hold its first ever indaba to bring to the fore matters of concern which, if well addressed, would help it to contribute to the growth of the economy.
Seifsa chief executive Kaizer Nyatsumba highlighted to Business Report that it was time the sector was proactive in putting itself in the eye of policymakers, industry, the government and business.
Seifsa is planning an indaba next month, the question is why now, what has brought about the need for an imbizo for the engineering and metals sector?
The manufacturing sector in South Africa, of which the metals and engineering sector is part, has not done very well since we had the economic challenges in 2008 around the world, which manifested in South Africa from 2009 onwards. There have been more challenges economically – we have fewer jobs today than we did in 2009 in the metals and engineering sector and manufacturing generally, we also have a flood of cheap imports that make things more difficult but going even beyond 2008/2009, we had the global recession. We have had a situation where the contribution of the manufacturing sector to the country’s GDP (gross domestic product) has been declining gradually by a percentage point each decade.
This is a concern, and we believe it is critically important for industry players, business leaders, captains of industry, policymakers, the government and labour to come together to talk about what it is that can be done and should be done, to revive manufacturing in South Africa specifically in the metals and engineering sector.
There has not been an opportunity in this sector to bring stakeholders together annually to talk about matters of mutual interest, we are a very strategic sector and it hasn’t had this opportunity, and we thought it important to correct it.
We supply the auto manufacturing sector, mining and construction and whatever happens there, affects us.
Going into the indaba itself, what are the most prominent issues that need to be tackled?
The first is whether in this country there is in fact a future for manufacturing. A very legitimate question given what I have just said about the flood of cheap imports into the country.
There are many things that used to be manufactured entirely in South Africa, not just in the post-apartheid era when there were these high Chinese walls in the form of tariffs, but after that South Africa was doing quite well.
It has, however, lost much of that capability because the tariffs were not just reduced but in most cases eradicated.
South African manufacturers found themselves competing with the rest of the world, where most of whose manufacturers had higher degrees of efficiencies than we don’t and some of whom are at the cutting edge of technology.
A significant number of them, particularly from Asia are also subsidised and we are not, and that saw a number of manufacturers going out of business while struggling to be competitive in the local market.
A significant number of them resorted to importing, where there used to be a manufacturing here, or certainly imported components and assembled them here before selling them.
The situation is that dire, we believe it is important to talk about what we need to to as different stakeholders, policymakers, business and labour to arrest that situation.
So, whether or not manufacturing has a future in South Africa, is the main discussion on the agenda. In this country there is a great deal of industrial instability, among other issues.
When people sit in London, Paris, New York or wherever and look for places to invest in, they must of necessity be concerned of the number of strikes here, which tend to be violent.
Can we find, can we agree as stakeholders and business and labour with the assistance of the government to work together to attract investment, to ensure that the businesses that are currently in existence continue to survive.
Given the extent of the importance of this sector, why does it seem to be more of a victim when a lot hinges on it?
A whole lot of factors, by far the most crucial is the eradication, not gradually but overnight, of import tariffs. Many countries protect their strategies and industries, and manufacturing is one of them. The World Trade Organisation is there to ensure that there is free trade around the world, but it recognises the need for tariffs that it deems acceptable.
So, we have moved from one extreme where there is high tariffs to the other where there are no tariffs at all. And we are extremely vulnerable.
Local companies have been undercut and driven out of the market in valve manufacturing, for example, by Chinese and Indian companies which come from subsidised environments, which is unfair competition.
South Africa has removed tariffs here so there is equal competition, but if there are no tariffs offered here those companies where the cost of labour is much cheaper than it is here and are subsidised, have more of a competitive advantage.
The cost of labour, compared to the countries I have mentioned, its important for us given where we have come from as a country to make sure that people are paid decently, because we had to address the legacy of apartheid. But countries like India and China that are vast and where labour is cheap because of the abundance. We don’t have the labour-cost advantage they have.
Some countries, especially the Western countries, have adopted mechanisation and are much more efficient in terms of their manufacturing. The unit about costs are much lower.
We are a small country, bigger than some neighbouring countries, but in the bigger scheme of things we are a small country and therefore the market here is smaller.
Where factory utilisation capacity is lower, we have to, in order to reduce costs have machines running 24-hours a day so that the unit costs come down. But if you start and stop your machines and your capacity utilisation is therefore 40 to 60 percent, it sometimes means that the unit cost of production is much higher. All these factors affect the degree to which we are able to compete, not just internationally, but also within our markers too.
We haven’t yet fully as a country, especially as a sector, taken advantage of the opportunities that exist on the African continent, because frankly, that is where we can be competitive, where opportunity lies for us.
Infrastructure development in those countries is not where it should be, and we supply to industries that are in infrastructure development and so we need to penetrate the African market, which we are encouraging our members to do.
And regrettably, if I may say that what has been happening in our country, the attacks on fellow Africans by South Africans makes things more difficult for us to penetrate those markets and to be welcomed with open arms. It makes things extremely difficult, it’s unfortunate and deplorable.
What would be Seifsa’s ideal in the regulatory environment?
By lobbying in the interests of business. We keep saying that South Africa wins where business wins. Business and labour and the government are not enemies and should never regard themselves as such, because when business shrinks, when its not doing well, people are laid off and the unions are affected and less taxes are paid to the government.
But if business booms, the converse is true. It is a delicate partnership, and you always have to look at it in that way, and we get the sense that it’s not always done that way.
We have to lobby the respective departments and ministries in government on a number of issues, and we have mutual interests with labour.
It’s in all our interest to make sure there is more investment here, companies here need to do more than survive, they need to thrive, it’s a mutual interest.
Unfortunately when it comes to discussions and negotiations there is this adversarial attitude. Do we have the ear of the government? Yes, we do, in some departments and not in others. You will find that the Department of Trade and Industry is very receptive, but there are ministers who are not available, regrettably.
We also observe the existence of policy incoherence. Sometimes within the same ministry you find the deputy pushes in one direction and the minister in another direction, we have noticed that.
EXPIRY OF THE MEIBC ADMINISTRATION AND EXPENSES LEVY AGREEMENT AND DISPUTE LEVY AGREEMENT 31 MARCH 2015
To date these two Levy Agreements have been duly submitted to the Department of Labour for processing and once the Minister of Labour has complied with the various provisions contained in the Labour Relations Act, it is anticipated that the two Agreements will be Gazetted and be made legally binding on all employers and employees in the industry.
The two Agreement are due to expire at the end of March 2015. Members are advised that due to the late referral of the two Agreements to the Department of Labour and the legal and unavoidable obligation on the part of the Minister of Labour to comply with the new provisions of the amended Labour Relations Act ( i.e. when it comes to Gazetting and extending Collective Agreements to an industry), the Bargaining Council does not anticipate a seamless and uninterrupted continuation of the two levies once the current Agreements expire on 31 March 2015. In this regards we understand that that the Council is doing everything possible within its powers to ensure that the anticipated hiatus period is kept to as short a period as possible.
Notwithstanding this, the Council will be duty bound to inform industry that during the anticipated hiatus period no employer and employee will be legally obliged to make any contributions to the Council for services rendered in respect of the two levies which will lapse on the 31 March 2015.
It is nevertheless expected that during this anticipated hiatus period (or period of interrupted continuity) the bargaining council will not stop in continuing to meet its mandate in servicing both employers and employees in industry for services that would under normal circumstances be funded by the monies collected from these two levies.
We understand that the Council is pressing for the Gazettal of these two Agreements to take place as soon as is legally and practicably possible.
Accordingly it is recommended to members that during this hiatus period the situation with regards to the expiry of the two agreements be communicated to all affected staff, that no further deductions are made in respect of both agreements and that deductions in respect of both agreements only recommence once official confirmations to do so is received from the MEIBC.
Please do not hesitate to contact the staff of the SEIFSA Industrial Relations Division on (011) 298 9400 should you require any further explanation or clarification herein.
HAVE WE REACHED THE INFLECTION POINT?
Ladies and gentlemen, in mathematics an inflection point is the moment where the curvature of a line changes from positive to negative or vice versa. Andy Grove, the co-founder of Intel, described a strategic inflection point as "an event that changes the way we think and act". It is, therefore, a turning point after which a dramatic change can be expected, with either positive or negative results. An inflection point can be the result of action or inaction by actors in the economy, whether they be the Government, public corporations, companies or private individuals.
I know that none of us would like our beautiful country ever to reach a point where perceptions are altered to such a degree that energy’s contribution to the economy is deemed to have become negative. Regrettably, frequent shortages of energy supply, constant uncertainty about the security of supply and constant reports of delays in solving the supply problems are bound to change how South Africa is perceived as an investment destination.
Of course, energy is not the only logistical challenge facing us as a country, but irrefutably reliable energy supply is vital for a thriving economy. On average, energy costs in the metals and engineering sector account for about 8% of intermediary input costs. It stands to reason, therefore, that without reliable energy supply, the sector cannot exist or expand. Indeed, it is unfortunate that even right now the sector cannot operate at full capacity as a result, among other things, of energy constraints.
Actual or realized economic growth in the South African economy has fallen substantially below its potential. While energy provision should support our growth ambitions, there appears to be a real danger of the two gradually drifting apart.
Two definitive studies published in 1984 and 1993 estimated South Africa’s potential economic growth rate to be around 3,5%. In reality, growth only averaged around 1,5% during the nineties, and then accelerated to 3,7% on average during the first decade after 2000. We are now seriously in danger of falling below a 2,5% average in this decade.
Energy provision, measured by the value of electricity production capacity relative to the size of the economy, reached a peak around 1985, and has since halved to around 2007, or fell back to the ratios before 1970! The ebb and flow in electricity generating capacity seemed to have coincided with the super cycles in commodity prices worldwide. Yet, although the economy has grown faster in the past decade (2000/2010) than recorded during the seventies, South Africa missed the last super cycle and completely under-estimated the economy’s accelerated energy demand over this period.
Regrettably, electricity generation has become a significant physical constraint that hampers the economy’s ability to grow at a faster rate. It can be argued that this situation runs counter to the Government’s stated intention to stimulate local manufacturing and value addition.
In fact, manufacturing’s share of the economy has been steadily declining over the last three decades, with investment patterns in the sector far more worrying than the former. Reliable energy supply is absolutely vital to turn the situation around.
Ladies and gentlemen, we should all be concerned about the fact that the size of the manufacturing sector is often confused with its contribution to the economy. According to the South African Reserve Bank, the sector is 29% larger today than 10 years ago, 66% larger than 20 years ago and 71% larger than 30 years ago. However, its share of the economy declined first from 20% in 1983 to 19% in 1993, and then further still to 18% in 2003 and eventually to 16 % in 2013. So, manufacturing has decline by a percentage point each decade in South Africa!
Needless to say, this does not bode well for our economy. Increasingly we have become a country that imports equipments and components that used to be manufactured here at home, in the process leaving many people unemployed.
Many factors determine the health of manufacturing. High capacity utilisation due to strong domestic and/or export demand leads to higher profit margins and higher levels of fixed investment in the sector. Manufacturing exports represent an estimated 35% of production, while imports have captured nearly 45% of the domestic market. On the other hand, the metals and engineering sector exports 60% of its products and competes with imports for 60% of the domestic market.
Reintegration into the global economy has huge benefits due to access to bigger markets, but can develop into a mortal battle for survival between competitors and importers. Higher imports replacing domestic suppliers lead to lower capacity utilisation, lower profit margins and, eventually, lower domestic investment in the sector.
However, the investment patterns within the sector and the size of production capacity show very worrying signs. The value of capital stock in manufacturing relative to output has been declining since the early 1990s. Annual fixed investment, as a percentage of output, has declined by about a third over the last two decades when compared to the 1980s. These patterns are much more profound in the metals and engineering industries where fixed investment relative to output has declined by two thirds of the levels where they were at the beginning of the 1990s.
The key factor is global competitiveness. Without a sufficient and secure supply of energy – and, in this case, electricity – it is not possible for South Africa to be globally competitive. As we all know, electricity supply in the country reached its lowest levels between 2000 and 2008. When investment patterns in manufacturing and metals and engineering are overlaid on electricity supply, the inconsistency of supply and the cost of energy trends, one cannot but conclude that investment is held back by this constraint. Instead, South African manufacturers are importing more and more components for assembly here due to cost advantages and security of supply which their own domestic investments cannot guarantee. The physical value of production capacity in both manufacturing and metals and engineering reached its lowest points after 2000.
Ladies and gentlemen, price escalation of electricity needs special mention. Available data show that similar double-digit price increases for electricity, as we have been experiencing in recent years, also took place in the early 1970s. However, there are some main differences.
Price increases during the seventies were over a short period and were directly attributable to Eskom. They contributed to double-digit inflation after 1973 and were used specifically to expand supply from a shortage to a surplus situation. The current cycle of increases has been going on for several years and has the potential to raise production costs amongst electricity-intensive sectors to the point of rendering them uncompetitive.
Ironically, imported, competitively-priced replacement products may shield domestic customers from feeling the brunt of domestic production costs. The most important additional surcharge on electricity prices exacerbating the price spiral is the cross-subsidization of local authority service delivery ineptitude by the on-selling of electricity. This widespread phenomenon taxes the productive part of the economy to pay for collapsing local authorities.
The argument that higher prices are levied in order to force electricity conservation is not valid since lower demand simply triggers subsequent increases to make up the budget shortfalls in these institutions. Supply interruptions due to lack of maintenance are completely debilitating.
Programme Director, Minister Joemat-Petterson, ladies and gentlemen, energy and logistics are crucial for South Africa to achieve its long-term potential economic growth rate of 3,5% per annum. It is particularly so given the fact that geographically we are so far away from the main export markets and our industrial hub is also a distance away from our ports. These factors should not be allowed to be the weakest links in the chain to unlock the country’s potential.
Several policy documents and institutions are responsible for adequate energy infrastructure. The National Development Plan 2030 vision addresses energy infrastructure in chapter 4. The Medium-Term Strategic Framework takes this further in chapter six, covering the provision of efficient, competitive and responsive economic infrastructure.
Energy provision is a long-term assignment, with 2025 a pivotal year when large portions of current generation capacity will reach the end of their useful life. As a country, we need to tackle this challenge with a single-minded determination as though we were going to war.
It is critically important, therefore, that policy objectives are clear and their implementation decisive. We hear so many comforting things from those in positions of authority in Government and the public sector, and yet often those comforting words are not matched by concrete action on the ground. It is vital that we change course as a country: while talking big is important, doing big is far, far more important.
This conference will be useful if it manages to get both the alleviation of short-term constraints and long-term solutions thrashed out.
Thank you very much.
TRADITIONAL HEALERS MAY NOW ISSUE MEDICAL CERTIFICATES
It has been agreed, in terms of subsection 13 that medical certificates issued by traditional healers will also be accepted if certain criteria were met:
The employer and trade union parties agree that they will recognise traditional healers for paid sick leave purposes, in terms of the Main Agreement, provided that an appropriate regulatory body is created by the Government similar to that of the Health Professionals Council.
The Traditional Health Practitioners Act (Act No. 22 of 2007) has now become effective as from 1 May 2014. This in effect means that medical certificates issued by traditional healers registered with the Interim Health Practitioners Council of South Africa are now acceptable for the purposes of paid sick leave, in terms of the Main Agreement. For further information, please contact the SEIFSA Industrial Relations Division on 011 298 9400.
Click here for Gazette No. 37600
TRADITIONAL HEALERS MAY NOW ISSUE MEDICAL CERTIFICATES
It has been agreed, in terms of subsection 13 that medical certificates issued by traditional healers will also be accepted if certain criteria were met:
The employer and trade union parties agree that they will recognise traditional healers for paid sick leave purposes, in terms of the Main Agreement, provided that an appropriate regulatory body is created by the Government similar to that of the Health Professionals Council.
The Traditional Health Practitioners Act (Act No. 22 of 2007) has now become effective as from 1 May 2014. This in effect means that medical certificates issued by traditional healers registered with the Interim Health Practitioners Council of South Africa are now acceptable for the purposes of paid sick leave, in terms of the Main Agreement. For further information, please contact the SEIFSA Industrial Relations Division on 011 298 9400.
Click here for Gazette No. 37600
Outcome of CCMA Facilitated Matter Between Employer Parties and Trade Unions on Strike and Picketing Rules
The industry picketing rules were finalise between all the parties yesterday at a facilitated session involving the CCMA. All of the issues which are important for employers have been retained in the final version. Click here to download the picketing rules.
Outcome of CCMA Facilitated Matter Between Employer Parties and Trade Unions on Strike and Picketing Rules
The industry picketing rules were finalise between all the parties yesterday at a facilitated session involving the CCMA. All of the issues which are important for employers have been retained in the final version. Click here to download the picketing rules.