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Annual shut down provisions

The date of the annual shutdown is determined by the company's management, and should be as similar as possible to the previous year's annual shutdown dates.

The annual shutdown must in total, amount to three consecutive weeks' paid leave taken over an unbroken period and include four weekends. In addition, the three weeks' leave must be extended with full pay for each public holiday which falls during the annual shutdown period and which would otherwise have been an ordinary working day.

This year, depending on the start of the annual shutdown, the following public holidays fall into this category, where the normal work week is Monday to Friday:

• 16 December (Friday) – Day of Reconciliation;
• 26 December (Monday) – Day of Goodwill;
• 1 January (Sunday and moves to Monday 2 January) – New Year’s Day;

There is pressure from some unions asking the President to also declare 27 December to be a public holiday, but at the time of writing this explanatory brief, this has not occurred.

CALCULATION OF LEAVE PAY (CLAUSE 12) AND LEAVE ENHANCEMENT PAY (CLAUSE 14)

All employees are entitled to their full leave pay and leave enhancement pay (bonus) on completion of 234 shifts worked on a five-day week basis or 283 shifts on a six-day week basis, excluding overtime.

CALCULATING SHIFTS FOR PURPOSES OF LEAVE PAY AND LEAVE ENHANCEMNT PAY

A maximum of 234 shifts (5-day week) or 283 shifts (6-day week) may be worked during a single year and are calculated as follows, however this year:

This year there were 53 Sundays in the year.

This year there were two public holidays falling on a Saturday (1 January and 24 September).

Employees who have not worked all available shifts during the year are entitled to pro-rata leave pay and a pro-rata leave enhancement pay:

An employee who worked all available shifts from the first day after the previous year's annual shutdown up to and including the last shift preceding the current shutdown is entitled to full leave pay and leave enhancement pay (bonus).

An employee qualifies for an additional week's paid leave from his fourth and subsequent consecutive periods of annual leave and, by mutual arrangement between the employer and employee, the annual shutdown may be extended by an extra week or the employee may be paid out the monetary value of this extra week's leave. Alternatively, and again by mutual agreement, the extra week's leave may be accumulated until the employee qualifies for three such weeks' paid leave, after which the leave must be taken or be paid out.

In cases where employees are required to undertake essential work during the shutdown, the relevant MEIBC Regional Office must be advised of the names of these employees, and the reasons thereof, at least one month in advance. Such employees must be given their paid leave within four months of the date of the shutdown.

CALCULATING LEAVE PAY AND LEAVE ENHANCEMENT PAY (BONUS)

Full (or pro-rata) leave pay and leave enhancement pay are calculated as follows:

Workshops:

SEIFSA is conducting Main Agreement Workshops during the month of November and December, please contact Michael Lavender at michaell@seifsa.co.za  or sales@seifsa.co.za to make a booking. The training will be conducted on-line.

Please note that In-house training (face 2 face or on-line) and consultation is available on this topic plus many others.

Queries

Should you have any queries please contact SEIFSA Industrial Relations Services on (011) 298-9400.

by Nuraan Alli

Contextualising R78 per hour

Let’s unpack the constant referencing by our critics to an entry level rate of R78.00 per hour.

On 1 July 2022 Rate H was increased by the second leg of the three-year deal concluded last year by R 3.15 raising Rate H from R 52.52 to R 55.67 per hour.

Compared to the National Minimum Wage (R 23.19), Rate 1(a) Structural Engineering (R 45.91), Grade 1 Five Grade (R 51.41), Gate and Fence Manufacturing Rate H (R 41.80) or the Special Phase-in Dispensation to reach 60% of the 2020 Rate H by 30 June 2024 (R 29.73) there is no denying, it is too high. In 1968 Rate H was 19c per hour. That was 54 years ago.

However, unlike most of our critics we haven’t been sitting on our hands all this time nor have we been negotiating with ourselves. Visit the SEIFSA Boardroom and view the names of SEIFSA Presidents, Captains of Industry, stretching back to 1944 and I would dare anyone to call any one of them weak.

Returning to R 78 per hour. In South Africa if one is not covered by a collective agreement, the Basic Conditions of Employment Act (BCEA) is applicable, in addition to binding statutory levies and contributions affecting all employers in a sector like ours.

So, how does one arrive at a Rate of R78 per hour? Simple, by applying the principle of total cost to employment.

It’s interesting to note that even if one had the freedom to pay National Minimum Wage or any other affordable rate, various cost to employment conditions contained in the BCEA, together with statutory levies and contributions, would still apply.

Unfortunately, the notion of a free market, dictated by the natural laws of demand and supply, given our history and legacy, is just that – a notion. Since 1968 terms and conditions of employment in this sector have been bargained, fought for and begrudgingly agreed. Nothing was given away without difficult contestation.

Let’s examine in a little bit more detail the principle of total cost to employment.

MAIN AGREEMENT TOTAL COST TO EMPLOYMENT: 2022

Importantly, the above excludes: MEIBC Administration Levy, MEIBC Dispute Levy, PPE, COVID Compliance etc. which must be paid whether or not one is covered by the Main Agreement – so, let’s round the CTC to 40% i.e., a 40% add on to the base rate of R 55.67 – which takes you to approx. R 77.93

However, keep in mind that if one were not covered by the Main Agreement all the above items denoted by an asterix would still apply, approx. 30%

The point being that if one is going to blandly throw out a number, give it some context, narrative and explanation. Simply lamenting it’s too high is just not good enough.

No one across all employer ranks is saying the current entry level rate is not too high. But there is context, history and narrative to this reality. In an ideal collective bargaining world this on its own would be enough to rally all employer groupings behind a single cause, a cause that seeks to ensure that if we stand any chance of encouraging entry of new workers into the industry, the entry level rate must be reviewed but alas we would rather spend all our time and energy fighting each other in the Courts, how short sighted.

Should you require any assistance on understanding any aspect of the recently gazetted Main Agreement, contact the SEIFSA Office on (011) 298-9400 and ask for Vuyiswa, Michael, Monica or Lucio - we will be more than happy to assist.

If you would like to find out a little bit more about the benefits of joining an Association federated to SEIFSA fill in the membership form, or send us an email at nuraan@seifsa.co.za

Next week I will address the flexibility benefits contained in the Main Agreement, watch this space!

Lucio Trentini

Chief Executive Officer           

by Lucio Trentini

SEIFSA, Italian-South African Chamber of Trade and Industries and Imbokodo Trust join forces to Empower Young Black Woman

Johannesburg, 21 November 2022 – The Steel and Engineering Industries Federation of Southern Africa (SEIFSA) has partnered with the Italian-South African Chamber of Trade and Industries (ItalCham) and the Imbokodo Trust with the aim of empowering young black woman and assisting companies to improve their B-BBEE compliance.

The three organisations have signed a memorandum of understanding (MOU) with the aim of exchanging information, including newsletters, reports and market analyses, organising events that provide networking opportunities and introducing potential partners to each other.

SEIFSA CEO Lucio Trentini, ItalCham president Virgilio Da Molo and Imbokodo Trust chairman Theo Sibiya were the signatories of the MOU. Trentini said: “We are confident that our exciting partnership with the ItalCham and Imbokodo Trust will afford SEIFSA’s affiliated membership an opportunity to address the many challenges faced by young black woman in the sector and in the process improve their B-BBEE compliance.”

Da Molo said: “This MOU is very important to us as it will allow us to operate the Imbokodo Trust efficiently and effectively, providing simple solutions to our members and ensuring that the ItalCham contributes meaningfully to the country’s transformation agenda.”

The many synergies between SEIFSA, ItalCham and Imbokodo Trust will contribute to the success of the partnership between the three bodies, all of whom are committed to the highest ethical standards and providing benefits to their membership and beneficiaries.

For the three organisations, the MOU is a pathway to addressing the challenges faced by young black woman in the sector, assisting companies to improve their B-BBEE compliance and in the process contributing to a better South Africa.

In terms of the MOU, SEIFSA has pledged to find beneficiaries for the Imbokodo Trust’s many programmes with strict compliance with B-BBEE legislation, while the Trust has committed itself to contributing donor funding to the SEIFSA Training Centre in the achievement of these goals.

SEIFSA supports companies in South Africa’s metals and engineering sector through lobbying, advocacy and collective bargaining. Its members range from giant steel-making corporations to micro-enterprises employing fewer than 50 people.

ItalCham promotes and facilitates trade between Italy and Southern Africa through market intelligence and tailor-made services and events. It is also a member of the EU Chamber of Southern Africa.

by Nuraan Alli

Public sector strike

PUBLIC SECTOR STRIKE

Management may be aware, from recent media reports, that COSATU is preparing its affiliated membership for a national day of protest action in the form of marches and pickets on Friday, 2 December 2022 in support of higher wages.

Protest Action and the Labour Relations Act

The Labour Relations Act (LRA) permits registered trade unions or federations such as COSATU, 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 66 of 1995, as amended.

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.

Consequently, employees participating in any action on 2 December 2022 (between 0:00 and end at 23:59 on 2 Dec) will be protected by the normal rules regarding protected strikes, namely: no work, no pay and no disciplinary action.

Furthermore, please be advised that with NEDLAC pronouncing that the action is protected, any other trade union or for that matter any other employee may elect to piggyback on the protected action.

Consequently, any employees participating in any action on 2 December 2022 will be protected by the normal rules regarding protected strike action, namely: no-work-no-pay and no disciplinary action.

Management Guidelines on Possible Absenteeism on Friday, 2 December 2022 

SEIFSA recommends that management adopt the following course of action in dealing with any stay-away from work on the 2 December:

• Inform all workers that any absences related to the protest action will be treated on the following basis:
• no work, no pay; no disciplinary action;
• a shift for leave pay and leave enhancement pay qualification purposes will be lost in respect of the day’s absence; 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 Friday, 2 December 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.

Download Annexure A

Download LRA form

by Lucio Trentini

Preferential Procurement Regulations and the Public Procurement Bill

Public procurement or sales to the government from the metals and engineering sector constitutes 22.9% of total domestic sales. However, for some sub-sectors, like electrical machinery, sales to state organs is as much as 55% of domestic sales.

Given the importance of public procurement for the sector, SEIFSA has been actively involved in making national representations on behalf of the metals and engineering sector to the Public Procurement Bill and the Preferential Procurement Regulations.

Regarding the former, SEIFSA was part of the Business Unity South Africa (BUSA) business delegation that consulted on the bill at NEDLAC for the last six months. On the draft Preferential Procurement Regulations that were published for public comment on the 10^th of March 2022, SEIFSA prepared a substantial written submission commenting on these regulations. Subsequently, National Treasury published the Preferential Procurement Regulations on the 4^th of November 2022, with an effective date of 16 January 2023.

We have studied the published Preferential Procurement Regulations with grave concerns, particularly over the fact that National Treasury has opted to maintain the position that was contained in the draft regulations that each state organ will be given the responsibility to develop and decide their own procurement policies, particularly as it relates to the socio-economic considerations.

The SEIFSA submission warned that devolving this obligation to each state organ will create an untenable administrative and compliance environment for domestic companies. The administrative and compliance costs for a company supplying the same product to two or more state organs, who may pursue very different socio-economic agendas, will be exorbitant and punitive.

The submission suggested that National Treasury should develop a national guideline for state organs to comply with in the development of their procurement policies. This is important for institutional coordination and alignment across the multiple state organs. It will also make monitoring and enforcement of regulations possible. Coherence and uniformity should be the basis on which national regulations are developed.

The other concern is the fact that National Treasury have indicated that these Preferential Procurement regulations are a stop-gap policy instrument that will be in place until the Public Procurement Bill is promulgated. The Preferential Procurement Regulations will be in effect from 16 January 2023 and National Treasury anticipates the Public Procurement Bill to be presented before Parliament by the end of calendar year 2022 or before the end of this fiscal year (February 2023).

The concern here is that based on historic experience with bills going through the Parliament, National Council of Provinces (NCOP), promulgation and signature by the President (who may also send the bill back through the Parliamentary process for one or other issue) generally takes a long time. One can anticipate that the importance of this bill particularly given the approximately R800 billion to R1 trillion per annum of state spend that it will govern over and all the possible socio-economic considerations that are associated, the parliamentary process will not be a roughshod process. All the while the costly, uncertain and disruptive environment that the Preferential Procurement Regulations potentially create will be the prevailing reality for suppliers to the state.

The unintended consequence of this approach that has been adopted by National Treasury will likely be one where companies may well adopt a wait-and-see approach, which will itself have adverse consequences from the point of view of investment decisions that may be delayed. This again is an example of the own-goals that the country has become accustomed to scoring.

Tafadzwa Chibanguza

Chief Operating Officer

by Tafadzwa Chibanguza

SEIFSA and MEMSA Honour the Brightest and Best in Metals and Engineering Sector Awards for Excellence Annual Event

The Steel and Engineering Industries Federation of South Africa (SEIFSA) on Thursday night paid homage to companies in the Annual Metals and Engineering Sector Awards for Excellence Event in Randburg. This year SEIFSA partnered with the Mining Equipment Manufacturers of South Africa (MEMSA), to celebrate the excellence of the local mining equipment manufacturing sector.

SEIFSA CEO Lucio Trentini, with the help of holographic technology, welcomed guests to the ceremony, saying, “We believed that, notwithstanding the many challenges faced by the sector, there are companies within the metals and engineering (M&E) sector that are doing fantastic, innovative work that must be recognised and celebrated. Companies in the sector have demonstrated that they are capable of innovating, and fostering good relations with their employees, suppliers, customers and the communities around their operations. SEIFSA is not only honoured to be associated with each and every entry but, more importantly, privileged to recognise and acknowledge excellence.”

MEMSA CEO Lehlohonolo Amos Molloyi said he was happy to join SEIFSA in celebrating excellence, adding: “While most of our members form part of the steel value chain, their products and services are specifically aimed at meeting the needs of the mining industry, with its own unique and complex requirements. MEMSA are thankful to SEIFSA for allowing us to share the stage with the SEIFSA Awards for Excellence this year, we regard this event as an excellent context for the launch of our awards.

“The SA mining equipment industry is well respected for its technological and innovation advancement; however, the pandemic and lockdowns presented a test to our ingenuity and resilience. It is in the midst of these challenges that we witnessed some excellence in innovation, structuring of work and manufacturing processes, and we are proud to report that not one MEMSA member company, which was actively manufacturing for the mining industry, permanently closed its doors during or since the pandemic.”

Kobus de Beer was awarded the Lifetime Contribution to the Industry Award. He is the current Chairman of International Steel Fabricators of South Africa and the Structural Steel Export Cluster and a Commissioner on the International Trade Administration Commission of South Africa. SEIFSA CEO Lucio Trentini mentioned his “incredible career and invaluable contribution to the metals and engineering industry” when announcing the award.

De Beer expressed surprise that he had been recognised, adding: "Thank you to SEIFSA and MEMSA. I am very impressed with all the enthusiasm I have seen tonight, and I see huge potential for the future."

Michelle Austin, the group financial director at Keegor South Africa, was named Business Woman of the Year. Trentini made mention of Austin's appreciation for diversity when presenting her award. “Michele has come to realise that diversity inside and outside of the boardroom brings differing perspectives, opinions and insights; and makes for better decision making.”

Austin said she felt very privileged to receive the award. "What we have focused on over the past few years is employee engagement and we have realised that this has helped us achieve what we have."

The pandemic has brought a new appreciation for resilience in business and Vesconite Bearings showed it had the grit and determination to withstand the enormous challenges it brought, winning the Business Resilience of the Year in Responding to Covid-19 Award.

Vesconite CEO Dr Jean-Patrick Leger said: "Pandemics are actually normal, what is not normal is that there was about 100 years since the last one. It will happen again, so let's be prepared for the next one."

Keegor also received the Workplace Health and Safety Award, which was sponsored by Rand Mutual Assurance (RMA). The company has displayed a commitment to health and safety, with not one Occupational Health and Safety Act (OHSA) contravention since COO Marno Jacobs was appointed in 2019.

Jacobs said: “When I started at Keegor I noticed that the leadership team was very engaged with health and safety, and this helped a lot. We know that our biggest asset is our employees, so we invest a lot in training and ensuring they are kept safe, as one injury is too many.”

The MEMSA Member Manufacturer of the Year Award to recognise excellence in local mining equipment manufacturer was awarded to Bell Equipment.

Bell Equipment director Bruce Ndela accepted the award and thanked MEMSA for "recognising the achievements of Bell over the years".

The pandemic left so much loss in its wake, and the industry lost many people to Covid-19. For the first time in the history of the SEIFSA Awards for Excellence an in-memoriam section was included to remember those who passed away.

Other awards that were presented at the ceremony include:

• Best Customer Service Award: Macsteel
• Most Transformed Company of the Year: Pamodzi Engineering.
• Environment Stewardship Award: MSC Technical.
• Corporate Social Responsibility: Electrolux South Africa
• Young Entrepreneur of the year Award: Caleisle Ngwenya, the director at CeeWay Engineering.
• Industry Apprenticeship Award: ArcelorMittal.

Other awards presented by MEMSA include:

• Customised Customer Service: ProProcess Engineering
• Localised Supply Chain: Buraaq Mining Services and Rham Equipment
• Manufacturing Solutions: NTGR Engineering Projects

Trentini also acknowledged the SEIFSA Sponsored Graduate Class of 2021, as well as Bursar of the Year, Karina Sewsunker, who is completing a Bachelor of Science Degree in Mechanical Engineering at the University of KwaZulu-Natal.

by Nuraan Alli

SEIFSA joins RMA in bid to prevent workers’ injuries in metals sector

The view that safe and healthy workers are also more productive workers lies at the heart of RMA's Prevention Programme.

The social and mutual insurer launched the programme in April 2022 and is running a pilot programme with its members in the Metals Class. RMA has partnered with the Steel and Engineering Industries Federation of Southern African (SEIFSA) which represents the Metal and Engineering (M&E) industry.

“The aim of our Prevention Programme is to complement our members existing health and safety systems, and assist them to improve to their legal compliance,” says Dr Jessica Hutchings, head of prevention at RMA.

The planned COID Amendment Bill spurred RMA to action in assisting its members with their health and safety practices to prevent injuries and accidents, thereby reducing the number of incidents and therefore reducing claims.

RMA encourages companies to join the Prevention Programme to ensure that they are less likely to find themselves on the wrong side of the Occupational Health and Safety Act, however, as their health and safety systems will be fully assessed as part of a gap analysis — an audit of the company will show what processes are needed or may require bolstering or reconfiguration in order to ensure full compliance and best practice.

Under the programme, health is extended to include financial health in the form of helping workers to reduce their debt burdens and improve their financial wellness. “Everyone is experiencing financial stress, though many blue-collar workers are under even more pressure. Financial problems can lead to mental health issues, which can also increase the chance of physical injuries at work. The debt counselling provided by RMS can make people feel more empowered about their finances,” says Hutchings.

For Hutchings, the success of the programme lies in engaging stakeholders, such as SEIFSA. “We believe that an effective Prevention Programme requires the involvement of all stakeholders in the occupational health and safety value chain,” she says.

The broad range of the M&E industry — encompassing small, medium and large corporations — was one of the reasons the industry was chosen for the pilot project as the number of incidents in the Metals Class remains high, in comparison to the Mining industry where the severity is greater.

“As SEIFSA, we are happy to partner RMA in their Prevention Programme. The prevention of injuries and diseases in the workplace is crucial because it contributes directly to productivity while also ensuring the safety and wellbeing of workers,” says SEIFSA CEO Lucio Trentini.

The partnership between SEIFSA and RMA goes further than the Prevention Programme, the insurance company is also sponsoring the Health and Safety Awards at the 2022 SEIFSA Awards for Excellence that will be held on November 17 2022. The awards will celebrate companies in the M&E sector that have displayed innovation, competitiveness and excellence.

by Nuraan Alli

Applying for exemption from the Main Agreement

A key provision of the recently gazetted Main Agreement is that it must contain an effective procedure to deal with applications for exemptions and such applications must be dealt with within a period of 30 days. An additional legal requirement is that the collective agreement must make provision for an independent body to her and decide as soon as possible and not later than 30 days after the appeal is lodged, any appeal brought against the bargaining council’s refusal to grant an exemption.

A wage or wage-related exemption (e.g., wage increases, relief from the leave enhancement pay, etc.) will require the submission of audited financial statements, an auditor’s report together with balance sheets and income statements for the last three months. The application will also require a motivation and business plan.

It is important to note that the Bargaining Council is obliged to consider all applications for exemption irrespective of the basis on which they are founded.

This effectively means that financial reasons are not the only criteria which must be considered. Employers may apply for an exemption on any one or more of the following reasons (but not limited to):

• increased competitive threats;
• the inability of the employer to pass on cost increases to final customers;
• technological changes threatening business survival;
• inherently high difference between wage rates actually paid and current affordability of market competitive considerations facing an employer;
• market decline, projections, etc.;
• loss or potential loss of business;
• existing/ current unprofitable contracts the consequences of which are only likely to manifest themselves in future/ current (unreported) accounting periods;
• expansion opportunities (including capital investments) where cheaper labour costs could influence investment decisions; and/ or
• new ventures/ operations which justify retention or creation of job opportunities at reduced wage costs.

Importantly, reaching an agreement with affected staff is not a prerequisite for being granted an exemption. What is important is the financials and accompanying narrative supporting the application.

Should you decide to submit an application, rest assured that the financials are stripped-out and embargoed and are only seen by an independent auditor appointed by the bargaining council. All the Exemptions Committee sees is a report, essentially summarising the financial health of the company and a recommendation on whether or not the financials, motivation, and business plan support the application being sought.

Whilst the deadline date for party employers has passed (i.e., 31 October) non-party employers have until 17 November to submit an application.

For party employers who for one or another reason missed the deadline, all is not lost. If you are in this position and would still wish to submit an exemption application, please contact the SEIFSA Office on (011) 298-9400 and ask for Vuyiswa, Michael, Monica, or Lucio we will be more than happy to assist.

If you would like to find out a little bit more about the benefits of joining an Association federated to SEIFSA fill in the membership form or send us an email at nuraan@seifsa.co.za – we know you won’t be disappointed.

Next week I will cover the ins and outs of the Special Phase-in Dispensation, watch this space!

Lucio Trentini
CEO

by Lucio Trentini