Johannesburg, 6 April 2018 – An increase in the price of electricity will deal South Africa’s metals and engineering (M&E) sector – which is just beginning to come out of the doldrums – a serious blow and potentially lead to job losses, Steel and Engineering Industries Federation of Southern Africa (SEIFSA) Chief Economist Michael Ade cautioned this morning.

“SEIFSA agrees that it is entirely within ESKOM’s right to apply for the third Multi-Year Price Determination (MYPD) Regulatory Clearing Account (RCA) Year 2 (2014/15), Year 3 (2015/16) and year 4 (2016/17) and contends that, if accepted, the proposed applications total of R66.6 billion will result in roughly a 35 percent hike in tariffs by ESKOM. Against this backdrop, SEIFSA has today made a submission to the National Energy Regulator of South Africa (NERSA), opposing the granting of a hike,” Dr Ade said.

He said constrained electricity supply and increasing electricity costs will invariably have a negative knock-on effect on the country’s ability to export, reduce competitiveness and foreign earnings and also adversely affect GDP growth over time. He said thisespecially so given the fact that the electricity-intensive sub-industries in the M&E sector are also the most robust exporters and earners of foreign exchange.

Dr Ade said the Federation believed  that the contributory impact of increasing electricity costs on the sector would include a slowdown in production and growth, an increase in product prices, a decline in exports and poor export competitiveness, under-utilisation of production capacity, low import substitution industrialisation due to reduced domestic production, substitution of locally manufactured inputs with cheap imported components, and disruption in fixed investment.

“The proposed hike in tariffs will no doubt impact negatively on production volumes. Most energy-intensive users in the economy are still consuming below their 2008 levels where production was relatively higher, when compared to the current period. The latest production index in the M&E cluster at the end of 2017 is currently below its 18-year average (spanning 2000 to 2017) of 101.8 index points and the performance at the end of 2017 was roughly 20% below the peak before the crises gained momentum,” said Dr Ade.

He said SEIFSA understands the current challenging situation faced by Eskom, particularly the need to ensure the utility’s financial sustainability. However, he warned that Eskom’s financial sustainability is inextricably linked to the financial sustainability of its customers, which need an affordable tariff to maintain sustainability and, thus, remain Eskom’s customers. He said there was  no doubt that the proposed increase in tariff would have a negative impact on both the individual companies in the M&E cluster and the economy in general.

“Electricity is an absolutely essential input for the metals and engineering sector. If the tariff applications go through, it will be a critical setback for the sector’s efficiency and competitiveness and act as a constraint to the possibility of the sector maximising its long-run production function.

“The tariff hike can increase production costs in some sectors and further dampen productivity and competitiveness. In fact, high energy costs have regularly been cited as a crucial variable in the basket of causal factors towards high costs of production in both the basic non-ferrous metals products and basic iron and steel products sub-industries,” he said.

In conclusion, Dr Ade said although SEIFSA is not in favour of any increases at all to the current electricity price, if such an increase should be found to be absolutely necessary, then the Federation believes that a much lower percentage increase than requested should be considered.

“It is essential that any tariff increase should be based on reasonableness, with directives for Eskom to improve on efficiencies, as a further inevitable consequence will be more loss of jobs in the M&E cluster,” Dr Ade said.

Issued by:

Ollie Madlala

Communications Consultant

Tel: (011) 298 9411 / 082 602 1725

Email: ollie@seifsa.co.za

Web: www.seifsa.co.za

SEIFSA is a National Federation representing 23 independent employers. Associations in the metals and engineering industries, with a combined membership of 1600 companies employing around 200 000 employees. The Federation was formed in 1943 and its member companies range from giant steel-making corporations to formed in 1943 and its member companies range from giant steel-making corporations to micro-enterprises employing few than 50 people.

Johannesburg, 4 April 2018 – The Steel and Engineering Industries Federation of Southern Africa (SEIFSA) notes with concern that the Absa Purchasing Managers’ Index (PMI) released today indicates  that the data is still unresponsive to a slowly improving business and investor confidence.

SEIFSA Economist Marique Kruger said the Federation is disappointed with the data as the expectation was for a continuous improvement in the composite PMI index in the forthcoming periods, thereby replicating last year’s encouraging performance from July 2017 to November 2017, before rebounding in December 2017.

“The latest seasonally-adjusted preliminary PMI data shows that the composite PMI dropped back to below 50. The data shows the lead indicator reducing from the 50.8 recorded in February 2018 to 46.9 in March 2018, highlighting its variability to businesses. The volatility is a cause for concern, especially given the poor performance of both the business activity and new sales orders sub-indices, which decreased significantly,” Ms Kruger said.

She said the performance of the lead indicators highlighted the inability of businesses to secure more new deals against the backdrop of an improving domestic demand and easing political tensions, complemented by the latest pronouncements by Moody Investors Services. She said Moody’s unexpected upgrade of the outlook on South Africa’s rating to stable from negative, and its decision to keep its investment-grade rating on SA augurs well for the economy.

However, Ms Kruger said it appeared that  businesses were still playing catch up, judging by  the performance of the lead indicator, which acts as a gauge for the month ahead.

Ms Kruger said SEIFSA expects the data to climb back above the 50-neutral level in April 2018, as the lag effect of businesses taking advantage of an improving socio-political and economic climate starts trickling in.

“Also, given the current economic environment, business can plan production processes ahead with some degree of certainty, without having to worry much about rising domestic costs of doing business,” she said.

Issued by:

Ollie Madlala

Communications Consultant

Tel: (011) 298 9411 / 082 602 1725

Email: ollie@seifsa.co.za

Web: www.seifsa.co.za

SEIFSA is a National Federation representing 23 independent employers. Associations in the metals and engineering industries, with a combined membership of 1600 companies employing around 200 000 employees. The Federation was formed in 1943 and its member companies range from giant steel-making corporations to formed in 1943 and its member companies range from giant steel-making corporations to micro-enterprises employing few than 50 people.

Johannesburg, 2 April 2018 – South Africa has identified re-industrialisation as one of the key initiatives with the potential to unlock the country’s economic growth potential. When it takes off, South Africa’s re-industrialisation will demand technical skills, such as those offered by artisans, among others, Steel and Engineering Industries Federation of Southern Africa (SEIFSA) Chief Executive Officer Kaizer Nyatsumba said today.

South Africa, however, does not produce a sufficient number of artisan skills on an annual basis, compared to the skills produced by universities, universities of technology and private colleges. Chief among the reasons for this is that South Africans, generally, associate “good jobs” with university qualifications, with skills produced by Technical and Vacational Education and Training (TVET) colleges often regarded as inferior.

“Generally, as South Africans, we tend to place too great an emphasis on sending children to universities to improve their chances of getting employed, notwithstanding the fact that every year thousands of university graduates struggle to find employment. We need to start taking TVET colleges more seriously. Artisan skills produced by TVET colleges are often in demand but, as a country, we aren’t producing enough of them. Therefore, we need to start seeing TVET colleges as significant contributors of skills required by the economy,” Mr Nyatsumba said.

He said that it was for this reason, among others, that SEIFSA introduced the SEIFSA Awards for Excellence in 2015to celebrate companies that have embarked on the continuous journey of developing a pool of artisans that South Africa can count on.

Mr Nyatsumba said that SEIFSA will present the Decade of the Artisan Award to a company that trained the highest number of artisans in 2017.

Other awards that form the seven categories of the SEIFSA Awards for Excellence are:

• The Environment Stewardship Award of the Year will be awarded to an organization that has successfully implemented greening initiatives in its day-to-day business operations in 2017.
• The Most Innovative Company of the Year, which will be awarded to a company that showed the best level of innovation in research and development or production in 2017.
• The Most Transformed Company of the Year Award will be received by a company that showed the highest transformation level in the composition of its Board of Directors, Executive Management and Managerial Team in 2017. This award category pits companies employing fewer than 100 people against those of similar size, and companies employing more than 100 companies against others of similar size.
• The Best CSI Award will be presented to a company whose corporate social investment programme/s in 2017 had a major impact on the lives of its beneficiaries.
• The Customer Service Award will be presented to a company rated the highest in customer service performance in 2017.
• The Health and Safety Award of the Year will be awarded to a company with the best legal compliance record in Health and Safety or the lowest Lost-Time Injury Frequency rate in 2017.

Mr Nyatsumba encouraged manufacturers operating in the metals and engineering sector to submit their entries for the seven categories before the deadline on Friday, 20 April March 2018. SEIFSA awards entrants will be assessed on their performance in the period 1 January 2017 to 31 December 2017. Participants can enter by visiting the SEIFSA Awards website (www.seifsaawards.co.za).

The Awards are open to all companies in the metals and engineering sector, and not only those that are members of Associations affiliated to SEIFSA.

Awards winners will be honoured at a ceremony that will take place at the IDC Conference Centre in Sandton on 24 May 2018.

Issued by:

Ollie Madlala

Communications Consultant

Tel: (011) 298 9411 / 082 602 1725

Email: ollie@seifsa.co.za

Web: www.seifsa.co.za

SEIFSA is a National Federation representing 23 independent employers. Associations in the metals and engineering industries, with a combined membership of 1600 companies employing around 200 000 employees. The Federation was formed in 1943 and its member companies range from giant steel-making corporations to formed in 1943 and its member companies range from giant steel-making corporations to micro-enterprises employing few than 50 people.

JOHANNESBURG, 29 MARCH 2018 – The Steel and Engineering Industries Federation of Southern Africa (SEIFSA) is concerned about the latest Producer Price Index (PPI) figures released by Statistics South Africa (Stats SA) today given the importance of the indicator, the Federation’s Chief Economist, Michael Ade, said today.

“The PPI trend provides insight into costs of raw material and labour employed by businesses, including other production costs. However, despite the role of the PPI in capturing production costs, most companies still incur additional costs such as transportation costs, or value-added costs at various stages of production in the value chain,” Dr Ade said.

The annual percentage change in the PPI for final intermediate manufactured goods was 0,4% in February 2018, compared with 1,5% in January 2018.

“The decreasing trend is worrisome because if there is not enough lee-way for companies to pass on these additional costs in the form of higher prices into the market, it becomes problematic. This is because the PPI basically forestalls the direction of prices of goods and services sold to consumers in the up-coming months and also reflects prices of manufactured goods at the level of the first significant commercial transaction.

“For instance, prices of imported goods are measured at the point of entry into the country, and not at the point of sale to consumers. Similarly, prices of goods are priced at factory gate prices when they leave the factory, and not when they are sold to consumers,” said Dr Ade.

He said the declining trend in PPI for intermediate manufactured goods is generally of concern to producers in the M&E sector since the PPI for intermediate manufactured goods measures selling price inflation. While falling prices are beneficial to buyers of the M&E sector’s products, the same cannot be said of mainstream businesses in the cluster that are struggling to improve on declining operational surpluses and profit margins.

Dr Ade said the majority of companies in the M&E sector were price takers, as small companies, hence they have little or no influence over the prices at which they can sell the products they make. He said these companies were too small to be able to step out of the norms of the official PPI pronouncements and demand that customers pay more for the products they sell as a result of a rise in  their input costs.

“The declining trend is uncomfortable to businesses and has the potential to render business conditions difficult,” he said.

He added that the expectation was that the improving domestic sentiments and a stronger rand would help to mitigate business costs in the medium to long term, boost production and provide a basis for companies to increase selling prices towards better growing margins. He also hoped that the lag effects of low inflation, improving consumer demand and business and consumer confidence would start to filter through, and ultimately improving companies’ bottom lines..

Issued by:

Ollie Madlala

Communications Consultant

Tel: (011) 298 9411 / 082 602 1725

Email: ollie@seifsa.co.za

Web: www.seifsa.co.za

SEIFSA is a National Federation representing 23 independent employers. Associations in the metals and engineering industries, with a combined membership of 1600 companies employing around 200 000 employees. The Federation was formed in 1943 and its member companies range from giant steel-making corporations to formed in 1943 and its member companies range from giant steel-making corporations to micro-enterprises employing few than 50 people.

Johannesburg – 29 March 2018, The Steel and Engineering Industries Federation of Southern Africa (SEIFSA) welcomes the South African Reserve Bank’s decision to reduce the repo rate by 25 basis points, providing another boost to the rebounding conomy, the Federation’s Chief Economist, Michael Ade, said this morning.

Dr Ade is of the view that the current socio-political and economic situation, characterised by improving business and investor sentiments, has led to the rand appreciating. He said this situation, coupled with the prevailing low inflation and general consumer buoyancy, has given the Reserve Bank room to ease monetary policy.

“The verdict is welcomed as it has the propensity to further stimulate domestic demand in the medium term and provide more impetus to an ever-improving domestic outlook. Although overdue, the decision also highlights the need to use monetary policy sparingly as part of a stabilisation policy to stimulate growth at the macro level,” said Dr Ade.

He said the decision by the Reserve Bank’s Monetary Policy Committee augured well for local firms at the micro level, which still face increasing input costs amid slowly improving demand and volatile margins. He said the announcement will boost local demand for intermediate manufactured goods, against the backdrop of a variable producer price inflation.

The Producer Price Index (PPI) for intermediate manufactured goods had exhibited a declining trend in 2017, averaging at 4.8%, also over-lapping into 2018, and Dr Ade said it appeared that the volatility would continue.

“The lowered interest rate will contribute towards reducing borrowing costs in companies within the metals and engineering (M&E) sector and in other industrial sectors, towards better production levels. This is imperative, given the significant contribution of these sectors to economic growth and the enhanced level of existing inter-linkages,” said Dr Ade.

He added that the reduced repurchase rate will also complement a well-received 2018 budget and build on an upheld credit rating by Moody Investors Service. He said these factors, together with the lower-trending inflation rate and a stable outlook prognostic, could spur struggling companies to minimise costs and maximise benefits from the ever-fluctuating selling price inflation.

Issued by:

Ollie Madlala

Communications Consultant

Tel: (011) 298 9411 / 082 602 1725

Email: ollie@seifsa.co.za

Web: www.seifsa.co.za

SEIFSA is a National Federation representing 23 independent employers. Associations in the metals and engineering industries, with a combined membership of 1600 companies employing around 200 000 employees. The Federation was formed in 1943 and its member companies range from giant steel-making corporations to formed in 1943 and its member companies range from giant steel-making corporations to micro-enterprises employing few than 50 people.

In 2017 the industry wage negotiations took place and the challenge is to ensure that the Main Agreement is implemented consistently within our industry. Your knowledge is vital to this equation.

We need to protect and grow this valuable industry which we are a part of; that also means helping individual companies with difficulties that may arise. We will endeavour to best represent your interests during this process, based upon the mandate from SEIFSA’s 23 Employer Associations. In addition, we will keep you up to date with the latest and relevant happenings on industrial relations matters, including the negotiations, which will also include workshops to ensure that companies are prepared for any eventuality, such as managing industrial action.

We also want to clear up common misunderstandings such as the MAIN AGREEMENT AND THE BASIC CONDITIONS OF EMPLOYMENT ACT.

• How do they differ?
• Which employees are covered by which legislation?
• What takes precedence, the Main Agreement or the Basic Conditions of Employment Act?
• What are the key components of each?

Another area that companies battle to manage effectively is Authorised vs Unauthorised Absenteeism. Here one needs to identify what is authorised absenteeism and what is not. What is the appropriate action to take in instances where leave is unauthorised and the employee does not have permission to be off? In addition and importantly, how does one correctly manage various types of leave, such as:

• Sick Leave: when should an employee bring a sick note, what is a valid sick note and what about traditional healers?
• Family responsibility leave: when is it applicable, how many days FRL do employees get and what proof can the company demand?
• Maternity leave and the requirements there of?
• What does the law say about other types of leave, compassionate leave, study leave, shop steward leave and annual leave?
• Dealing with poor timekeeping and strategies to minimise poor timekeeping?
• What should you do if an employee deserts (doing nothing leaves you vulnerable to an accusation of unfair dismissals)?
• How do absenteeism and various types of leave taking during the year affect an employee’s annual leave calculation?

CHAIRING A DISCIPLINARY HEARING

Turning our attention to matters of exercising discipline in a fair and effective manner, including chairing disciplinary hearings, SEIFSA is involved with many companies where we not only advise on disciplinary matters, but also chair disciplinary hearings for companies.

Companies use SEIFSA for various reasons, such as:

• Ensuring the hearing is done correctly (you need to ensure procedural and substantive fairness);
• Dismissing people is often a function most would rather not do, and so the option to use SEIFSA is an attractive one;
• It ensures that the chairperson is impartial, with no vested interest in the matter, besides it being done properly.

Ensuring that discipline is handled properly can be tricky.  There are many things to consider, such as:

• Is it necessary to have a disciplinary policy and code and should employees be aware of these before one starts disciplining?
• What is admissible evidence?
• If a conversation or meeting is recorded without the knowledge of one of the parties that it is being recorded, (1) is it illegal to record without the consent of the other party? (2) Can the party that did the recording be charged criminally if found out? (3) And can this recording or a transcript thereof be used or permitted to be used as evidence at the CCMA?
• In obtaining evidence from witnesses, how best can one ensure that the witness does not change his/her evidence in the hearing?
• May an employee use legal representation or the union official from the union office?
• What does one do if an employee does not appear for his/her hearing, when simply carrying on without them could lead to successful allegations of unfairness.
• How does a plea of guilty impact upon the hearing?
• How formal must a formal hearing be?
• Can you follow a different procedure when issuing warnings and can the employee exercise the same rights as they would for a potential dismissal hearing?

An employee’s duty of good faith is put to a tough test when a fellow employee perpetrates misconduct. What does an employee do if he or she witnesses, or becomes aware of, such misconduct? May he or she remain silent? Not reporting the wrongdoer could be a breach of the duty of good faith. And what if the employer specifically asks witnesses to come forward? In that case, could a refusal or failure to assist the employer cause serious damage to the relationship of trust?

How far does “the right to remain silent” extend? It may be raised by a defendant in criminal law, but does it mean anything in the employment relationship? How does it weigh up against the employee’s duty of good faith?

JOB GRADING

Looking at Job Grades, pay rates and the industry grading system, are you grading your employees correctly? It’s obviously important because if you don’t, you could be underpaying employees, and we know what issues that can cause. The Main Agreement has a grading system that is complex to the untrained. Besides being a difficult exercise, it is also a tedious one for most.

To assist in this area, SEIFSA has grading experts that can do the tedious work for you –  and do it correctly. On 24 March 2017, SEIFSA is offering a Training Course on Grading, where you will get input, an overview and clarity on these matters and meet SEIFSA’s grading expert, whom you will be able to question endlessly.

Let SEIFSA Guide You

Can employers apply for an exemption from the upcoming wage increases?

In these difficult economic and trading times, some companies may be battling to survive or be competitive. They are often forced to cut costs where they can. To achieve these objectives, companies look at various options to cut costs – and one of the options is labour.

When considering labour costs, companies often look at the following:

• Retrenchments – this can include up to two months of difficult and time-consuming consultations and the company is often faced with exorbitant severance payments.
• Lay-offs – the Main Agreement allows companies to implement lay-offs after a two-week consultation process. A lay-off is an unpaid temporary suspension from work.
• Short time – the Main Agreement allows companies to implement short time after five calendar days’ consultation process. The employees pay will then be reduced, based upon the reduced time that they work each week.
• Exemptions to the wage increases – the Main Agreement allows companies to apply for an exemption to any provision in the Main Agreement, and many companies have made use of this provision in the Main Agreement to apply for an exemption to the wage increases.

As a brief background, it is useful to give consideration to the following:

The Labour Relations Act (LRA) 1995/66 (S 31) states that parties to the MEIBC are bound by the collective agreements concluded in the bargaining council. Once a collective agreement has been concluded in the bargaining council, the parties to the bargaining council may apply to the Minister of Labour, in terms of the Labour Relations Act 95/66 (S 32), to extend the agreement to non-parties, namely, employers and employees who work in the sector or industry in the Bargaining Council’s registered scope, but who are not party to the agreement. The Minister will only extend the agreement to non-parties if:

• The majority of all the employees who, upon extension of the collective agreement, will fall within the scope of the agreement, are members of the trade unions that are parties to the bargaining council;
• The members of the employers’ organisations that are parties to the bargaining council will, upon the extension of the collective agreement, be found to employ the majority of all the employees who fall within the scope of the collective agreement.

However, the LRA (S)32 (5) further provides that the Minister may extend a collective agreement even if the parties to the bargaining council are only sufficiently representative within the registered scope of the bargaining council and the Minister is satisfied that failure to extend the agreement my undermine collective bargaining at sectoral level or the public service as a whole.

The Minister of Labour, when considering whether or not to extend a collective agreement concluded in a bargaining council to non-parties, must be satisfied that the parties meet the requirements of the Labour Relations Act 66 of 1995, which include the following:

• Adequate provision must be made for an exemption procedure in respect of non-parties to the bargaining council;
• Provision in the collective agreement for an independent body to hear and decide on any appeal brought against the council’s refusal of an application for exemption or the withdrawal of an exemption by the Council;
• The criteria for granting exemptions must be set out in a collective agreement; and
• The collective agreement does not discriminate against non-parties.

Once a bargaining council agreement has been extended to cover non-parties, the provisions of the collective agreement bind all employers and employees falling within the registered scope of the bargaining council. These employers and employees may apply for exemption from certain provisions of the collective agreement.

Fundamental Principles

All applications must be in writing and fully motivated, and sent to the MEIBC’s regional office in the area in which the applicant is located. Applicants must complete an application form which is available from the employer’s nearest regional MEIBC office or from the SEIFSA office. The application will include a motivation, a business plan and financial information, including audited financial statements.

In scrutinising the application, the MEIBC will consider the views expressed by the employer and the workforce, together with any other representations received in relation to that application.

The employer must consult with the workforce, through a trade union representative or, where no trade union is involved, with the workforce itself, and must include the views expressed by the workforce in the application:

1. Where the views of the workforce differ from that of the employer, the reasons for the views expressed must be submitted with the application;
2. Where an agreement between the employer and the workforce is reached, the signed written agreement must accompany the application;
3. In the event of an appeal against a decision of the council, the council will, upon receipt of the appeal by an employer/workforce/union, submit it to the Independent Exemptions Appeal Board for consideration and finalisation; and
4. Applications for exemptions involving monetary issues may not be granted retrospectively and exemption is only granted for the duration of the agreement, which is normally for a period of one year (from 1 July to 30 June of the next year).

Can employers apply for an exemption to the Leave Enhancement Pay (LEP), (Leave Bonus)?

The answer is yes.

However, please note that because in the past the council has experienced considerable difficulties with firms which submit late applications for exemption for the payment of LEP, which meant that employees only heard just before they went on leave that they will not be getting their expected leave bonus, , which would negatively impact on their holiday plans. Therefore, the parties agreed that all applications for exemption from the payment of LEP must be submitted to regional council offices by no later than 31 October each year.

The procedures for submitting an application for exemption are clearly set out in Clause 23 of the Main Agreement and must be in accordance with the administrative procedures of the Regional Council Office. Applicants must complete an application form which is available from the employer’s nearest regional MEIBC office or from the SEIFSA office. The application will include a motivation, a business plan and financial information including audited financial statements.

In addition it is important to take note of the following:

• Clause 14(4) of the Agreement which reads:
• “Every employer in the industry is required to make an adequate monthly financial provision for the payment of employees LEP. The parties to this Agreement regard full compliance with this provision as being of particular importance”.
• Clause 14(6)(m) of the Agreement, which reads:
• “The Council shall deem employers who do not wish to participate in the Council’s LEP monthly contribution scheme as financially capable of meeting their obligations in this regard. The Main Agreement provides for a monthly contribution scheme as set out at clause 14(6). This scheme allows employers to pay the monthly LEP amounts to the Council (by way of the monthly contribution returns) and the full bonus is then available at the annual shutdown date”.

The SEIFSA office provides assistance on nearly all company-related matters and problems, including the ones mentioned in this article, such as:

• Retrenchments,
• Lay-offs,
• Short-time, and
• Exemptions to the wage increases.

Please do not hesitate to contact the SEIFSA Industrial Relations and Legal Services team if you need any assistance on these matters or any other Industrial Relations matter, such as

• the chairing of disciplinary hearings,
• representation at dispute meetings,
• retrenchment meetings, and
• any Main Agreement-related matters.

Peaceful Striking for Pressure

The right to strike is entrenched in section 17 of the Constitution – and it is provided for in the Labour Relations Act (the LRA). The purpose of strike action is to exert pressure on an employer to concede to employee demands in the collective bargaining process. The demand must be one of “mutual interest” and the strike must be called by a representative union. The striking employees will be protected from dismissal if proper procedures were followed before the strike begins.

When the strike begins, so, too, does a test of relative economic strength. How much business value and financial losses can the employer endure? How long can the employees survive without pay? Who will blink first? It is this test of relative economic pressure which lies at the heart of the right to strike. It is a legally legitimate weapon to balance the bargaining power between employers and employees when they negotiate the price of labour.

Peaceful Picketing for Extra Pressure

Labour laws also allow strikers to exert extra pressure on employers by giving them the opportunity to conduct picketing activities connected with their demands. This enables them to articulate their demands not just to the employer,  but also to the general public and others associated with the business, such as customers, suppliers, admin staff etc. Scenes of strikers dancing and chanting with placards of written demands and statements are all too familiar.

The LRA recognises the value of picketing as a legitimate activity to supplement the primary strike action of withholding labour, and  it enables strikers to ventilate and “publish” their demands to others who may be able to help persuade the employer to make concessions. Informing the public and getting their moral support can be a powerful strategy to influence the employer’s decisions. It also helps strikers to “let off steam”.

As with strike action, there are well defined legal and practical rules to regulate picketing activities to ensure that they’re conducted peacefully, and that they don’t result in damage to property or interfere with the employer’s right to protect and to continue its business during the strike.

Violence in Strikes

It is obvious that violence associated with strikes breaks all the rules of law and acceptable labour relations practices, and that it’s morally repugnant and severely damaging to our country’s image as a safe and desirable investment destination. Yet, we’ve seen so many strikes over the years in which violence seems to “go with the territory” in wage negotiations. Destruction of property, burning of cars, assaults, mob violence and even killings are all too familiar images of strike action. Unions have typically condemned the violence and exempted themselves from any blame. Management provocation, worker anger and frustration –  and even “third forces” are commonly blamed or used as justification for violence.

The Labour Relations Act  

Chapter IV of the LRA creates the rules which unions, employees and employers must comply with to qualify for protected strike or lock-out action as envisaged by the Constitution.  Section 68 (1) (b) gives the Labour Court the power:

“…to order the payment of just compensation and equitable compensation for any loss attributable to the strike or lock-out, or conduct, having regards to -…”.

“Conduct” would include violence associated with a strike. For various reasons, employers have either not used the right to claim compensation  or they have tried but not succeeded. This is likely to change since the Labour Court’s latest pronouncement on the issue.

CASE STUDY: In2FOOD (Pty) ltd v FAWU, Madisha, RS and 470 others (LC J350/13), 1 March 2013

Employees embarked on an unprotected strike for two weeks at the company’s premises in February 2013. On the first day of the strike, the company secured an urgent interdict from the Labour Court against FAWU and certain employees. The Order restrained the union and employees from continuing the unprotected strike, from harassing and intimidating non-striking employees, from carrying weapons and from coming anywhere within 300m of the company’s premises.

The union did not challenge the Order. The unprotected strike continued – and there were numerous acts of violent conduct. Strikers brandished weapons, stoned vehicles and buildings, set fire to a delivery vehicle and blocked vehicles from entering the property. The violence caused damage to the value of R16m for the company.

The company went back to the Labour Court to ask it to hold the union and certain employees guilty of contempt of court for their failure to comply with the original interdict Order. It included a claim for the court to fine the union R500 000 and to order a prison sentence of 180 days for the named employees. The Court fully agreed with the company. It found that the violent conduct was totally unacceptable and that the union should be held accountable. It ordered FAWU to pay a fine of R500 000 to the company as compensation, but did not impose a prison sentence on the named employees. The value of the fine was much less than the actual damage suffered – but it sends a clear message.

The Court found that the union and its officials failed to take sufficient steps to dissuade and prevent its members from continuing with their violent and unlawful actions. The union’s organiser merely stated in a communication to the company that the unprotected strike was

“…as a result of your refusal to bargain. We will not be held responsible nor our members           held liable for such action.”

The Court rejected this statement as a defence in the strongest possible terms. It said the following:

“The time has come in our labour relations history that trade unions should be held accountable for the actions of their members. For too long trade unions have glibly washed their hands of the violent actions of their members. This is in a context where the Labour Relations Act of 1995, which has now been in existence for 17 years and of which trade unions, their office bearers and the members are well aware, makes it extremely easy to go on a protected strike, as it should be in a context in which the right to strike is a Constitutionally protected right.”

The Court has made it abundantly clear that it will no longer tolerate violence and lawlessness in the workplace. Unions and employees will in future be held to a much higher standard of accountability when they embark on a strike action. The same will apply to employers who initiate industrial action – or who respond to protected and otherwise peaceful strikes inappropriately. Hopefully, the effect of the Court’s tougher approach will be to encourage parties to work harder to settle their disputes before resorting to strike actionand, if they can’t and do embark on strike action,to ensure that the action is conducted peacefully. There is every reason to believe that a protected and peaceful strike would be just as effective, if not more so, than a violent strike. There is certainly no need for violence.

Johannesburg, 25 March 2018 – Doing business in a manner that focuses on creating a positive experience for the customer is one of the key ingredients required for succeeding in commerce, with businesses that ensure that customers are at the heart of their strategies, operations and innovation tending to do better than which who don’t do so, Steel and Engineering Industries Federation of Southern Africa (SEIFSA) Chief Executive Officer Kaizer Nyatsumba said today.

“We live in an age where customers dictate the products and services they want business to provide for them. Long gone are the days when companies used to dictate to the customer. This is why customer-centricity should always be at the heart of businesses if companies are to succeed and thrive in an environment where both arkets and customer preferences are changing,” Mr Nyatsumba.

He said it was for this reason, among others, that SEIFSA introduced the SEIFSA Awards for Excellence in 2015. To celebrate companies that have gone out of their ways to ensure that their customers are at the centre of their business, SEIFSA will present the Customer Service Award of the Year to a company rated the highest in customer service performance in 2017.

Other awards that form the seven categories of the SEIFSA Awards for Excellence are:

• The Environment Stewardship Award of the Year will be awarded to an organization that has successfully implemented greening initiatives in its day-to-day business operations in 2017.
• The Most Innovative Company of the Year, which will be awarded to a company that showed the best level of innovation in research and development or production in 2017.
• The Most Transformed Company of the Year Award will be received by a company that showed the highest transformation level in the composition of its Board of Directors, Executive Management and Managerial Team in 2017. This award category pits companies employing fewer than 100 people against those of similar size, and companies employing more than 100 companies against others of similar size.
• The Best CSI Award will be presented to a company whose corporate social investment programme/s in 2017 had a major impact on the lives of its beneficiaries.
• This is the Decade of the Artisan, and an award will be made to the company that trained the highest number of artisans in 2017;
• The Health and Safety Award of the Year will be awarded to a company with the best legal compliance record in Health and Safety or the lowest Lost-Time Injury Frequency rate in 2017.

Mr Nyatsumba encouraged manufacturers operating in the metals and engineering sector to submit their entries for the seven categories before the deadline on Friday, 20 April March 2018. SEIFSA awards entrants will be assessed on their performance in the period 1 January 2017 to 31 December 2017. Participants can enter by visiting the SEIFSA Awards website (www.seifsaawards.co.za).

The Awards are open to all companies in the metals and engineering sector, and not only those that are members of Associations affiliated to SEIFSA.

Awards winners will be honoured at a ceremony that will take place at the IDC Conference Centre in Sandton on 24 May 2018.

Issued by:

Ollie Madlala

Communications Consultant

Tel: (011) 298 9411 / 082 602 1725

Email: ollie@seifsa.co.za

Web: www.seifsa.co.za

SEIFSA is a National Federation representing 23 independent employers. Associations in the metals and engineering industries, with a combined membership of 1600 companies employing around 200 000 employees. The Federation was formed in 1943 and its member companies range from giant steel-making corporations to formed in 1943 and its member companies range from giant steel-making corporations to micro-enterprises employing few than 50 people.

Johannesburg, 23 March 2018 – The broader South African steel industry appears to be caught in the middle of what is playing out to be a nasty bilateral squabble between the United States (US) and China over trade, Steel and Engineering Industries Federation of Southern Africa (SEIFSA) said today.

In what appears to be a prelude to enhanced trade wars, the US President Donald Trump yesterday signed a proclamation that will implement new trade tariffs on China, under the 301-trade action plan. The section 301 action plan complements the previously triggered section 232 action plan instrument and gives substantial power to the US president to correct unfair practices or trade against the US.

“Based on the utterings of the US President last night, it is now becoming very clear that South Africa and other developing countries are just pawns in a proxy trade war between the US and China. Given the President’s strong view that a group of countries have been put together to take advantage of the US, there is no doubt that the Americans are using protectionism as a weapon to threaten and intimidate certain countries or a bloc of countries to dance to their tune. The import tariffs of 25% on steel and 10% on aluminum products initiated under section 232 action plan on the basis of safeguarding US national security, are due to come into effect today.  Early indications are that the European Union, Argentina, Australia, Brazil, Canada, Mexico and South Korea, will be temporarily exempted,” SEIFSA Chief Economist Dr Michael Ade said.

The potential exemption of these countries considered as either friends, allies or key US trade partners, from the steel and aluminum import tariffs, with the exception of Japan, is regarded as a strategic move by the US to isolate China. The decision seems to be largely driven by personal incentive, non-altruistic norms and geo-political motivation between the US and China. In the initial list of 12 countries including Brazil, China, Costa Rica, Egypt, India, Malaysia, Russia, South Korea, South Africa, Thailand, Turkey and Vietnam, that were identified, only Brazil has been explicitly mentioned as the country to be possibly granted an exemption. African countries like South Africa and Egypt comprising part of the original list of 12 countries have not been earmarked for a possible exemption. The South African government is still locked in negotiations with the US government for a possible exemption and is also actively involved in finding solutions through the Steel Working Group of the G20 group of industrialised nations.

Dr Ade cautioned that the situation may even be dire for China once the import tariffs on steel products also become effective. China has resolutely opposed what it terms the US unilateralism and protectionism. It’s ambassador to the US yesterday promised a Chinese retaliation on US agricultural products including soya bean, should the route of bilateral discussions prove to be unsuccessful. The tension between the world’s two massive economies may well lead into a trade war with negative knock-on effects on the global economy, also negatively affecting employment and growth. The world economy and commodity prices have just shown signs of obvious recovery and a trade war will further compress prices and harm the global economy.

“While the world anxiously awaits China’s response to the US trade restrictions within the next 15 days before the proclamation becomes effective, there is no denying the fact that the ripple effect of a belligerent tit-for-tat response from China will be huge on the global economy,” concluded Dr Ade.

Issued by:

Ollie Madlala

Communications Consultant

Tel: (011) 298 9411 / 082 602 1725

Email: ollie@seifsa.co.za

Web: www.seifsa.co.za

SEIFSA is a National Federation representing 23 independent employers. Associations in the metals and engineering industries, with a combined membership of 1600 companies employing around 200 000 employees. The Federation was formed in 1943 and its member companies range from giant steel-making corporations to formed in 1943 and its member companies range from giant steel-making corporations to micro-enterprises employing few than 50 people.