Labour court dismisses NEASA and SAEFA challenge against extension of the Main Agreement with costs

Let’s be clear. Our constitution guarantees NEASA, and for that matter SAEFA, the freedom to challenge collective bargaining any way they see fit. The constitution guarantees NEASA and SAEFA the right to pick and choose and interpret as they wish. What is deeply disappointing, however, is that NEASA and SAEFA are hell-bent on favouring their narrow agendas above the big-picture consequences of their actions.

Thanks principally to the efforts of NEASA (and SAEFA lately), all efforts since about 2011 to extend the main agreement of the MEIBC to non-parties has been scuppered. This has left the untenable situation that non-parties to the metal and engineering industry, being the industry over which the MEIBC presides, are not bound by what had been negotiated and agreed to at industry level for the whole industry.

This not only makes proper enforcement of minimum conditions of employment for the industry virtually impossible, but leads to a disparity of conditions of employment in the industry. It makes it possible for individual employers to gain a competitive advantage over others in the same industry off the back of the remuneration and conditions of employment of employees, which is not acceptable. This in part explains the extensive efforts since 2011 to finally get a binding main agreement in place for the whole industry.

It is simply irrefutable that employee parties to the MEIBC stand to suffer a whole lot more than any prejudice NEASA and SAEFA members stand to suffer. As NEASA and

SAEFA are the only parties out of 19 parties to the Main Agreement, it is only their members that would benefit. This is unduly prejudicial and unfair to the industry as a whole and in particular the objectives all bargaining councils are designed to achieve.

The Court unequivocally concluded that NEASA and the SAEFA simply failed to make out a proper case and accordingly Judge Snyman had no hesitation but to find the awarding of cost against NEASA and SAEFA wholly appropriate and justified.

In the eyes of the Court, this application should never have been brought in the first place. This matter, the Court concluded, was nothing more than an ill-fated attempt at an artificial construct to get out of the Main Agreement.

The most stinging remarks appear in the closing paragraphs of the Judgment where Judge Snyman concludes that “this kind of conduct is not in the interest of an orderly and effective bargaining council whose very purpose it is to take care of an industry. It is tantamount to eroding the MEIBC from within.”

The matter was dismissed in its entirety, and NEASA and SAEFA are ordered to pay the costs of the respondents.

To read the full judgment click here

SAFTU’S intended protest action on 23 & 24 August 2022


As member companies may be aware from recent media reports, the South African Federation of Trade Unions (SAFTU), of which NUMSA is a member, is preparing for a national day of action in the form of a general national strike commencing on 23rd August until midnight on the 24th August 2022 in protest against the rising cost of living, unemployment, budget cuts, crime, blackouts and a push back against privatisation.

This Management Brief provides some basic background to the issue and guidance to Management in dealing with the intended protest action.

Protest Action and the Labour Relations Act

The Labour Relations Act (LRA) permits registered trade unions or federations such as SAFTU 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.

It is important to note that this application was duly considered by NEDLAC and the NEDLAC Section 77 Standing Committee has determined the notice to be compliant with the administrative requirements of the LRA.

As SAFTU is a federation of trade unions, this opens the way for all SAFTU affiliated trade unions, for example NUMSA, to piggyback on the protected action.

Please note that once NEDLAC deems the notice of action as being compliant with the provisions of Section 77 of the LRA, every employee who is not engaged in an essential service has the right to take part in the protest action.

Consequently, all employees even employees who are not members of a trade union affiliated to SAFTU may participate in any action on 23rd and/or 24th August 2022.

Such action will be protected by the normal rules regarding protected strikes, namely: no-work, no-pay and no disciplinary action.

Management Guidelines on Possible Absenteeism on 23rd and 24th August 2022

SEIFSA recommends that Management adopt the following course of action in dealing with any stay-away from work on 23rd and/or 24th August 2022:

  • Inform all workers that any absences related to the protest action will be treated on the following basis:
  • no work, no pay, and no disciplinary action;
  • a shift for leave pay and leave enhancement pay qualification purposes will be forfeited in respect of a day’s absence on either the 23rd and/or 24th August; and
  • 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 Tuesday, 23rd August and/or Wednesday, 24th August 2022.

The Staff of the SEIFSA Industrial Relations Division are available on (011) 298-9400 to provide any further advice and/ or assistance to Management on the contents of this Management Brief.

SEIFSA sees significant headwinds for the steel sector

It’s been a challenging time for the metals and engineering industries recovering from the effects of the COVID-19 pandemic, unprecedented inflation, rising fuel prices, devasting floods and persistent loadshedding. All businesses have been impacted by these events. The global economic outlook has deteriorated significantly since Russia invaded Ukraine. Growth forecasts have been revised lower with each iteration while inflation has been revised upwards.

During Q1 2022, inflationary pressures were already building in the global economy, however, this was initially driven by aggregate demand increasing faster than supply chains could respond. The invasion of Ukraine by Russia in February 2022 set the proverbial cat amongst the pigeons in economic and inflation terms.

In the spectrum of leading, coinciding and lagging economic indicators, the metals and engineering sector is classified as coinciding. That is, its performance is indicative of the prevailing economic fundamentals. It is also extremely sensitive to these prevailing global and domestic economic events. To this end, our estimates already point to production in the sector contracting by between -1.1% to -1.3% in Q2 2022, with notable downside risks for the full year’s outlook.

This view is informed by a number themes that are shaping the global and domestic economic fundamentals. These include the aggressive monetary policy tightening in the US, in response to multi-year record inflation outcomes recorded in that country. The on-going Russia-Ukraine war and its implications for the European Union. A concerning development is the weaponizing of gas supply by Russia to Germany, which will have recessionary consequences for Germany, the largest economy in the EU and South Africa’s second largest trading partner. The dominance of Russia and Ukraine in the food inputs and commodity complex is driving inflationary pressure globally, reinforcing the need for central banks around the world to increase interest rates. China’s aggressive zero-covid policy, in which the last round of lockdowns has affected the economic hubs of Shanghai and Beijing have contributed to a slowing global economy.

These themes will continue to dominate the global economic narrative and the slowing of global economic growth. Steel production is highly correlated with economic growth and the early warnings signs of a slowing growth rate are evident in the reduction of iron ore prices, a key ingredient in steel production.

In dollar terms iron ore price have decreased 28.6% year to date 2022 and down 49.3% year-on-year to July 2022. This is despite a reduction in sea-borne supply from Ukraine. Domestically basic iron and steel sales declined by 8.1% year to date, other fabricated metals declined 8.5% and structural steel products declined 1% over the same period.

Compounding the global headwinds are weak domestic fundamentals that are also feeding into the outlook. The energy crisis, which was the worst on record in Q2 2022, is a major constraint and risk to the outlook. Electricity availability is an essential input into the metals and engineering sector. The sector is comprised of energy intensive users of electricity who have to cut production due to electricity curtailment. Whilst the sector also comprises producers that are less energy intensive, load-shedding causes a complete halt to operations.

The state of local government and the lack of service delivery is another major constraint. Companies in the metals and engineering sector are spread across the length and breadth of the country and are adversely affected by service delivery failure at local government level. The inefficiencies of local government breed costs for producers eroding their competitiveness.  It goes without saying that, now, more than ever before a national strategy on industrialisation is needed to stabilise and reignite the metals and engineering sector, which must include an aggressive infrastructure programme and a dedicated focus on economic reform rolled-out in partnership with the private sector.

To borrow the adage that a rising tide lifts all boats, means that the inverse is also true. In a less supportive global economic environment with headwinds intensifying, domestic economic policy and reform has to do a lot more heavier lifting to support the economy. With a fragile global environment, a sluggish local economy, an outlook for the remainder of the year and into 2023 remaining uncertain and the prospects of things getting worse before improving now would be a good time to adopt a more frugal outlook.