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).