Initiating negotiations for the amendment of an existing agreement in terms of clause 10 and annexure E of the MEIBC Constitution: The Main Agreement

2021 Wage Negotiations Update

SEIFSA, acting in accordance with the mandate of the affiliated Employer Associations listed hereunder, has, in accordance with Clause 10 and Annexure E (2) of the MEIBC Constitution, formally triggered the commencement of Main Agreement wages and conditions of employment negotiations for the period post 30 June 2021. 

In the space of a year, the dynamics of the traditional Main Agreement Negotiations have changed radically. The ongoing restrictions matched against a fragile economy and spiking unemployment will as was the case last year, again impact on the forthcoming round of Main Agreement negotiations. 

Fourth-quarter economic growth data, which showed that the economy grew at a seasonally adjusted and annualised 6.3%, was not enough to offset the expected slump in full-year GDP, which contracted by a massive 7% in 2020 – the biggest contraction since official records began in 1946 – that’s the worst slump in 75 years. 

The negative growth figure for 2020 as a whole demonstrates how much economic ground was lost last year in terms of widespread business failures and huge job losses – MIBFA alone recorded 16 623 jobs lost in the period between April and December 2020 with a further 4 957 jobs being lost between January and end March 2021. The economy, which is battling record unemployment and continued business failures, is only projected to recover from the negative effects of the global COVID-19 pandemic at best from 2022 and realistically from 2023 and 2024 onwards.

The pandemic and the lockdowns introduced by the Government to help contain its spread have had a devastating effect on the economy, adding to job losses and leading a spike in the unemployment rate that now stands at a record 32,5% – or, if one uses the expanded definition of unemployment (i.e., those eligible to work but who have given up looking for job opportunities), the number would be in excess of 40% of the economically active population. The consensus view amongst economists is that jobs numbers will only return to 2019 levels by 2024, which presents a massive gap to make up in the years ahead.

Negotiations this year will be taking place against a very difficult economic background. The sector is still in the throes of deep distress, compounded by the fact that the economy was already in the doldrums when the pandemic hit due to the then already high unemployment rate and the technical recession. The country has been downgraded to sub-investment or junk status and inequality has increased. 

Consequently, the Employer Associations which are party to the Main Agreement are firmly of the view that a Metals and Engineering Industries National State of Disaster Recovery and Support Plan is desperately needed to afford the industry (specifically our membership) an opportunity to re-set, reposition and prepare the groundwork for business survival, stability, certainty and industrial peace.

Central to this narrative, which will be elaborated upon during the formal negotiation process, is reaching agreement on the duration of the plan and the details accompanying the envisaged agreement. As was the case with last year’s Standstill Agreement, it is our view that all remaining terms and conditions of employment, as currently contained in the Main Agreement, must remain unchanged. 

We wish to stress at the outset that it is not the intention of our member Associations to vary downwards current terms and condition of employment.  Equally important to this approach is the non-negotiable position of the membership to retain, safeguard and protect Section 37 of the Main Agreement. 

Under the prevailing circumstances, it is worth remembering that the conclusion of last year’s historic Standstill Agreement was the first of its kind in traditional industry collective bargaining arrangements. It marked a watershed moment when business and labour together recognised the devastating impact which the COVID-19 pandemic has had on companies and employees alike across the sector. With the possibility of a third COVID-19 wave impacting on our sector as we inch towards winter, and with economic conditions set to possibly worsen before they get better, it is imperative for all of us to do everything possible to save our industry, to keep companies from closing and to preserve jobs. 

Registered Employer Organisations’ Federated to SEIFSA and Party to the MEIBC 

  • Association of Electrical Cable Manufacturers of South Africa
  • Association of Metal Service Centre of South Africa
  • Cape Engineers’ and Founders’ Association
  • Constructional Engineering Association (South Africa)
  • Electrical Engineering and Allied Industries’ Association
  • Electrical Manufacturers’ Association of South Africa
  • Gate and Fence Association
  • Hand Tool Manufacturers’ Association
  • Kwa-Zulu Natal Engineering Industries’ Association 
  • Iron and Steel Producers’ Association of South Africa
  • Lift Engineering Association of South Africa
  • Light Engineering Industries’ Association of South Africa
  • Non-Ferrous Metal Industries’ Association of South Africa
  • Eastern Cape Engineering and Allied Industries Association
  • Refrigeration and Air Conditioning Manufacturers’ and Suppliers’ Association
  • S.A. Electro-Plating Industries’ Association
  • S.A. Refrigeration and Air Conditioning Contractors’ Association
  • S.A. Pump Manufacturers’ Association
  • S.A. Valve and Actuator Manufacturers’ Association

Kaizer M. Nyatsumba
Chief Executive Officer

Copy: L Trentini, Operations Director: SEIFSA

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