Issue 14 - 2017 Wage Negotiations Update

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Today SEIFSA and all five trade unions registered with the Metals and Engineering Industries Bargaining Council (MEIBC) signed an important Settlement Agreement that concludes this year’s negotiations, averts any possibility of industrial action and lays the groundwork for industrial peace and stability for the next three years. A copy of the comments that I delivered at the signing ceremony this morning is attached hereto for your information.

The Agreement comprises the following key elements:

  • A three-year agreement effective from 1 July 2017 to 30 June 2020;
  • A collective undertaking by all the parties to seek the extension of a new, consolidated Main Agreement to all non-party employers and employees in the industry;
  • An undertaking by all the parties to ensure that the application to extend the Agreement is not legally defective and that it is fully compliant and aligned with the relevant provisions of the Labour Relations Act 66 of 1995, as amended;
  • The retention of Clause 37 (the protection clause against a compulsion to bargain at plant level), coupled to a full and final settlement clause locking in all the terms and conditions of employment contained in the Main Agreement and this Settlement Agreement – including those matters highlighted for on-going discussion during the currency of this Agreement (e.g. medical aid, housing, etc.) to a no-strike clause for the duration of this Agreement (i.e. until 30 June 2020);
  • Wage increases on actual rates of pay across the board (i.e. from Rate A to H) of 7% in 2017, 6,75% in 2018 and 6,5% in 2019;
  • An exemption provision entitling companies which are members of one of the employer parties to this Agreement to apply for exemption from the 2017 wage increases within thirty (30) days of the signing of the Settlement Agreement (i.e. by no later than 22 September 2017) and on or before 31 July 2018 and 31 July 2019 in years two and three  respectively of this Agreement; andAn undertaking to back-date the increases to 1 July 2017 in return for the trade unions having honoured a commitment not to issue a strike notice, whilst negotiations were still continuing in good faith, in an endeavour to reach an agreement.

The opportunity to apply for an exemption is not available to companies which are not members of employer parties (Associations) which are not party to this Agreement.

The wage tables for 2017, effective from 1 July 2017, have been posted together with this Update issue.

A member company wishing to apply for a wage exemption should refer to the SEIFSA Management Brief Wage Increase Exemptions available on www.seifsa.co.za, which provides valuable guidance and assistance to members in making successful wage exemption applications. The brief also contains the requisite Bargaining Council exemption application questionnaire.

Member companies requiring any assistance in completing the necessary documentation are invited to contact the staff of the Industrial Relations and Legal Services Division, on (011) 298-9400, for advice and assistance.

We at SEIFSA thank each and every employer representative nominated by their respective Associations who gave unstintingly of their time to assist and play a crucially important role in the negotiations process.

We remain clear in our minds about our roles: member Associations, through the SEIFSA Council, developed the negotiating mandate. Working with representatives from the respective Associations, the SEIFSA Negotiating Team implemented that mandate to the letter and did everything in its power to arrive at the best possible deal under the circumstances.

We are immensely grateful to the SEIFSA Board, the SEIFSA Council, our member Associations and every member appointed to be part of the SEIFSA Negotiating Team that was so ably led by our Operations Director, Lucio Trentini.

The three-year (2017 to 2020) Settlement Agreement is the fruit of their collective labour.

PDF versions of the tables and the Wage Increase Exemptions are attached below.

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Kaizer M. Nyatsumba
Chief Executive Officer

For Information:

Lucio Trentini
Operations Director
Direct | Tel: 011 298 9414 | Fax: 011 298 9514 | Cell: 082 449 6270
E-mail: lucio@seifsa.co.za


SADC NEEDS POLITICAL WILL TO STIMULATE REGIONAL TRADE

Johannesburg, 20 August 2017 – Southern African countries must align their priorities in order to set the region’s manufacturing sector on a sustainable growth path, Steel and Engineering Federated Industries of Southern Africa (SEIFSA) CEO Kaizer Nyatsumba said today.

Speaking at a time when the SADC Head of State summit is taking place in South Africa, Mr Nyatsumba said it was crucial that countries in the region facilitated easier trade with one another in order to ensure that the SADC region was much more commercially integrated and offered a bigger market for its products and services. With companies in SADC countries producing for the entire region and not only for their respective domestic markets, unit production costs are likely to be lower and capacity utilization higher, Mr Nyatsumba said.

He said that was likely to improve these companies’ international competitiveness.

“Ensuring that manufacturing in Southern Africa is internationally competitive” is one of the topics at the third Southern African Metals and Engineering Indaba to be held from 14-15 September 2017 at the IDC Conference Centre in Sandton.

Speakers in that session include Metals, Engineering and Related Industries Sector Education and Training Authority (merSETA) CEO Dr Raymond Patel, Manufacturing Circle CEO Ms Phillipa Rodseth, Africa House Director of Projects and Development Finance Paul Runge and Aurik Business Accelerator CEO Pavlo Phitidis.

Mr Nyatsumba said regional economies continued to battle against limited cross-border industrial linkages, over-reliance on primary products with limited scope for value adding and beneficiation, as well a low intra-regional trade.

“The Southern African Development Community (SADC) must come up with policies that are in line with the continent’s ambition to transform from natural resources to value-adding and industrialised economies. This calls for the development of coherent and implementable industrial policies by the respective regional economies,” Mr Nyatsumba said.

He added: “It is a matter of concern that, despite various efforts to stimulate trade among SADC countries, intra-regional trade is still relatively low. SADC countries must  boost intra-regional trade in order to expand their respective Gross Domestic Products, while stimulating the competitiveness of their manufacturing industries.”

Lack of political will has often been blamed for the low levels of regional trade because political leaders have failed to address a number of critical factors hindering cross-border trade and economic integration, he said. The barriers included slow and costly custom procedures and high transport costs.

“An ambitious regional integration agenda must be driven at a political level because political will is key if we are to quicken the pace of the regional trade harmonisation in SADC and Africa as a whole. There must be a collective political willingness to move in the same direction. Unfortunately, notwithstanding various efforts, large-scale regional trade and economic integration remain elusive,” Mr Nyatsumba said.

Now in its third year, the annual Southern African Metals and Engineering Indaba will also feature sessions focusing on:

  • Political Leadership in Southern Africa: Does it Advance or Hamper Economic Growth?
  • The Continental Free Trade Area: A Reality Before The End of 2017?
  • Winning Together: Can Government, Business and Labour Conclude a Social Compact in the interest of Labour Stability and         Foreign Investment?
  • The Automotive Production and Development Programme and the South African Metals and Engineering Sector
  • The Future of Collective Bargaining
  • Do Steel Import Tariffs Benefit or Hurt the South African Economy?

More information on the multi-stakeholder conference which brings together captains of industry, labour leaders and policy makers can be found on www.meindaba.co.za.


Issue 13 - 2017 Wage Negotiations Update

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The Trade Unions and SEIFSA today agreed to request the Bargaining Council to convene a Signing Ceremony on Wednesday, 23 August 2017 at the Offices of the Bargaining Council in order to reconvene formally and officially to endorse and finalize the Settlement Agreement covering the period 1 July 2017 to 30 June 2020.

Delays which have taken place in this process, which have been frustrating to many who have been following the negotiations with keen interest, are regrettable. As previously indicated, we have to guard against rushing matters in these crucial, closing stages and, in the process, putting at risk all the hard work that has been undertaken to date.

All Parties have communicated the proposed deal to their respective constituencies and the overwhelming majority remain firmly on track to close negotiations on the parameters of the proposed deal set out in Issue 11 of this Update.

Once all the Parties have officially ratified the Settlement Agreement, the SEIFSA Office will immediately post the Wage Tables on our website (www.seifsa.co.za). A comprehensive Management Circular will follow immediately thereafter.

We will continue to keep you and the SEIFSA Council informed of any new developments, should there be any, in this process.

Kaizer M. Nyatsumba
Chief Executive Officer

For Information:
Lucio Trentini
Operations Director
Direct | Tel: 011 298 9414 | Fax: 011 298 9514 | Cell: 082 449 6270
E-mail: lucio@seifsa.co.za

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Regional political leadership’s impact on the economy to come under scrutiny at metals and engineering indaba

Johannesburg, 17 August 2017 – Political leadership in Southern African can either advance or hinder economic growth in the region, according to Steel and Engineering Industries Federation of Southern Africa (SEIFSA) CEO Kaizer Nyatsumba.

Mr Nyatsumba said well-led countries with clear, business-friendly policies, with leaders who forged a strong partnership among government, business and labour tended to perform much better economically and to be magnets for foreign direct investment.

He said that given the crucial role played by inspirational political leadership, the Southern African Metals and Engineering Indaba 2017 will critically review the degree to which political leadership in South Africa and the rest of the region advances or hinders growth. The conference will be held at the IDC Conference Centre in Sandton from 14-15 September.

“The role of political leadership in economic growth is an important topic because, in order to attract foreign direct investment and to ensure strong economic growth, governments in the region must be at the forefront of efforts to increase market sizes, boost intra-regional trade and enhance the competitiveness of industries. Our view is simple: countries in the region are not owed a favour by anyone. Instead, they are in direct competition with many others around the world for investment, tourism and many other opportunities,” Mr Nyatsumba said.

He said that, compared to other regions in the world, trade within Africa remained at relatively low levels, despite various commitments by political leaders to improve the situation. This did not bode well for sustainable economic growth in the continent.

Mr Nyatsumba pointed out that Africa was by far the biggest export destination for South Africa’s metals and engineering sector. Regional integration has been at the centre of the Southern African Development Community’s (SADC’s) economic development agenda, which is in line with the ambitions of the African Union (AU) which is now championing the Continental Free Trade Area. The AU counts regional integration among its flagship projects. In addition, the New Partnership for Africa’s Development encourages the harmonization of regional and national policies on infrastructure, market development and trade.

Mr Nyatsumba said the simplification of customs procedures and the development of regional infrastructure were some of the initiatives governments in the region could embark upon in order to accelerate intra-regional trade.

Speakers lined up to answer the question, at the conference, whether political leadership in the region advanced or hindered economic growth include Zimbabwean academic and commentator Dr Ibbo Mandaza, businesswoman Dr Mamphela Ramphela and ANC National Executive Committee member and Mapungubwe Institute for Strategic Reflection (MISTRA) CEO Mr Joel Netshitenzhe.

 

ENDS

Issued by:

Siseko Njobeni

Communications Manager

Tel: (011) 298 9411 and 082 602 1725

Email: siseko@seifsa.co.za

Web: www.seifsa.co.za


Issue 12 - 2017 Wage Negotiations Update

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Feedback received following requests from the five trade unions and the SEFSA-affiliated Associations for time to communicate the proposed deal to their respective constituencies confirms that the overwhelming majority of parties remain firmly on track to close negotiations on the parameters of the proposed deal set out in Issue 11 of this Update.

Regrettably, finalising mandating and constitutional requirements takes time, but we expect that, by the end of this week, we will be in a position to confirm a date for all the Parties to reconvene formally and officially to endorse and sign the Settlement Agreement.

We apologise for the delays, which we know are frustrating to many who have been following the negotiations process with keen interest. However, we cannot rush matters in these crucial closing stages and put at risk all the hard work that has been undertaken to date.

Once all the Parties have officially ratified the Settlement Agreement, the SEIFSA Office will immediately post the Wage Tables on our website (www.seifsa.co.za). A comprehensive Management Circular will follow immediately thereafter.

We will continue to keep you and the SEIFSA Council informed of any developments, should there be any, in the closing stages of this process.

Kaizer M. Nyatsumba
Chief Executive Officer

For Information:
Lucio Trentini
Operations Director
Direct | Tel: 011 298 9414 | Fax: 011 298 9514 | Cell: 082 449 6270
E-mail: lucio@seifsa.co.za

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Government must do more to protect manufacturers from cheap imports

Johannesburg, 13 August 2017 - THE Government should consider additional measures to protect local metals and engineering manufacturers from cheaper and subsidized imports, according to Steel and Engineering Industries Federation of Southern Africa (SEIFSA) CEO Kaizer Nyatsumba.

The influx of cheaper imports has eroded the competitiveness of local businesses, bringing key sub-sectors within manufacturing on the brink of collapse.

“The Government must do more to support fragile sectors from the unfair competition posed by subsidized imports,” Mr Nyatsumba said.

He said the sector had not fully recovered from the 2008 global financial crisis. “Instead, circumstances in the sector have deteriorated, with a number of our members either downscaling their operations or closing down. We need an urgent intervention to protect the sector and create jobs,” he added.

Recent economic data paints a picture of subdued conditions in the sector. The seasonally adjusted ABSA Purchasing Managers Index (PMI) declined by 3.8 points to 42.9 in July, a level last seen in the second half of 2009. All the major sub-indices declined.

Manufacturing is considered the engine of growth and employment. It is one of the largest contributors to South Africa’s Gross Domestic Product (GDP). Nyatsumba said the South African economy needed a vibrant and competitive manufacturing sector. “That is because, other than supporting other key sectors of the economy, manufacturing has more potential to create jobs and should be  on the cutting edge of research and development as well as innovation,” he added.

The global competitiveness of manufacturers is one of the topics in next month’s Southern African Metals and Engineering Indaba 2017, which will be held at the Industrial Development Corporation (IDC) Conference Centre from 14-15 September. The conference is in its third year.

This year’s conference has attracted key industry players, policy makers and trade union leaders. Highlights of this year’s conference will include addresses by Minister of Labour Mildred Oliphant, Minister of Small Businesses Development Lindiwe Zulu and Cosatu General Secretary Bheki Ntshalintshali. ANC National Executive Committee member and the former Chairperson of the African Union (AU), Dr Nkosazana Dlamini-Zuma, will deliver the closing address.

Other speakers will include Zimbabwean academic and political commentator Dr Ibbo Mandaza, businesswoman Dr Mamphela Ramphele, CEO of the of Mapungubwe Institute for Strategic Reflection Joel Netshitenzhe, CEO of the Manufacturing, Engineering and Related Services Sector Education and Training Authority Dr Raymond Patel, Massmart Chairman Kuseni Dlamini,Chief Commissioner of the International Trade and Administration Commission Siyabulela Tsengiwe and the CEO of the Manufacturing Circle, Phillipa Rodseth.

ENDS

Issued by:
Siseko Njobeni
Communications Manager
Tel: (011) 298 9411 and 082 602 1725
Email: siseko@seifsa.co.za

Web: www.seifsa.co.za

 


Export competitiveness in the metals and engineering sector is pivotal for economic growth and synchronised upswing in the world economy, argues Michael Ade.

Our review of the State of the Metals and Engineering sector in the first quarter of 2017 reaffirmed the low-growth scenario, which saw a second consecutive contraction in GDP technically catapulting the South African economy into a recession. However, the latest prediction by the Steel and Engineering Industries Federation of Southern Africa (SEIFSA) captures an adjusted annual economic growth trajectory, highlighting a moderate turnaround in GDP growth this year of 0.8%, which is generally congruent with a global positive outlook.

The recovery – albeit slowly – of some economic fundamentals provides some comfort and basis to argue that the South African economy is gradually weathering the depression. Indications are that the trough in the current business cycle may have finally been reached and a rebound is eminent.

There is optimism that second-quarter GDP figures will provide a mild impetus for slightly robust growth from the second half of 2017 onwards. This is possible given the generally improving international economic environment, underpinned by moderate recovery of investment and exports.

Moreover, developments in key external markets – such as the SADC, the rest of the African continent, Europe, Asia (particularly China) and the USA – for locally-manufactured products are important in gradually improving demand conditions regionally and globally. These should be beneficial to local exporters over the medium to long term.

Also, it is expected that an improvement in the current socio-political environment (including a clearer government economic policy stance) and international commodity prices will translate into better business opportunities and improve the financial positions and performances of local companies. This is potentially good news for the manufacturing industry at large and the metals and engineering (M&E) sub-industries in particular.

SEIFSA’s first-quarter revised growth outlook for 2017 specifically simulates the M&E sub-sectors benefiting from these developments and expanding by 0.9% in the second quarter, thereby contributing to a revised predicted annual outlook of 1.2%. This figure was revised downward from 1.4% due to then weaker-than-anticipated first-quarter results and deterioration of the outlook in 60% of the sub-industries.

Although there is confidence for medium-to-long-term economic activities in the M&E sub-sectors, the short-term figures are cause for concern. SEIFSA is of the view that increasing pessimism about current business conditions and poor performance of key economic indicators does not presently bode well for production activity. Both the ABSA Purchasing Managers Index (PMI) and the Producer Price Index (PPI) reduced by 4.8% and 1% respectively from May 2017 to June 2017. This was accompanied by a reduction in the Unit Value Index for exported commodities from 2.2% in April to -2.8% in May 2017.

Additionally, an oscillating rand does not provide confidence to businesses. A weak rand translates to high cost of exchanging currencies, resulting in increasing import costs (including costs of inputs). Input costs are a fundamental component of manufacturing input cost inflation and a trade-off between rising input cost inflation and the reducing PPI (including the PPI of stage of processing) impacts negatively on the margins of companies. SEIFSA closely monitors these indicators as their performance at the moment is cause for concern to the M&E sub-sectors.

A consistently poor performance may dampen the outlook and present a basis for further revision of our estimates. Contemporaneous to the need for improved economic indicators towards economic growth is exports competitiveness in the M&E industry. SEIFSA strongly believes that export competitiveness will ensure that output growth is consistent and sustainable, generally translating to better employment opportunities as companies rally to boost productive capacity in anticipation of higher-than-expected demand for their products.

Indeed, an imperative need exists for all companies in the M&E sub-sectors to be both inward looking (that is, sell within SA, in addition to intra-company transactions to upstream local companies) and outward looking (that is, sell beyond our borders and reduce dependence on the local economy) in order to benefit from an expectant economically buoyant aura.  

In our first-quarter review of the State of the Metals and Engineering sector, we noted that the M&E production capacity expanded by 0.5% in Q1 2017, against our forecast of 1.3%. Total exports decreased by 8.4% in real terms. Despite a stronger rand in Q1, imports also decreased by 7.9% (real), which is indicative of a weak domestic economic environment. The table of export-to-output ratios of the metals and engineering sub-industries shows that 87% of demand for plastics, 77.5% of demand for electrical machinery and 67% of demand for metal products is derived domestically.

An interesting observation is that those sub-industries with the most significant exposure to the domestic economy experienced the most severe contraction in output, while the opposite mostly held for the sub-industries with higher export-to-output ratios. In addition, the sub-industries contracted the most in Q1 2017, confirming a cyclical output pattern to that of the domestic economy.

A paradigm shift and new strategy is needed in doing business in the M&E sub-industries. Rather than conducting business as usual, a focus on improving export competitiveness is needed in order to enhance profits and act as a buffer during difficult times and sustained economic down-swings.

Indeed, export competitiveness is pivotal if M&E companies want to benefit from expected domestic green shoots (given the current expansionary monetary policy stance) and increasingly optimistic global outlook. It is necessary to ignite and sustain economic growth as South Africa seeks to benefit from the broadest synchronised upswing the world economy has experienced in the last decade.  

Dr Michael Ade is the Chief Economist of the Steel and Engineering Industries Federation of Southern Africa (SEIFSA).


Issue 11 - 2017 Wage Negotiations Update

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The SEIFSA Council today received a report that the industry is inching closer to approving a Settlement Agreement that is likely to see all the trade unions agreeing to a Settlement Framework that will bring this year’s negotiations to a successful conclusion, avert industrial action and lay the groundwork for industrial peace and stability up to 30 June 2020.

All the trade unions and the SEIFSA-affiliated Associations have requested time to communicate the proposed deal to their respective constituencies and will revert with their respective positions in the course of this week. The Settlement Framework comprises:​

  • A three-year Agreement effective from 1 July 2017 to 30 June 2020;
  • A collective undertaking by all signatories to seek the extension of a Consolidated Main Agreement to all non-party employers and employees;
  • The retention of Clause 37 and the Full and Final Settlement Clause locking in all terms and conditions of  employment contained in the Main Agreement for the duration of this Agreement;
  • A wage model that introduces wage increases, on actuals, across the board (i.e. from Rate A to H) of 7% in 2017, 6,75% in 2018 and 6,5% in 2019; and
  • A joint commitment to continue discussions, during the currency of this Agreement, on a range of strategic and vitally important industry issues.

We expect the formalities relating to the ratification of the Settlement Agreement to be concluded in the course of the next week to ten days.

Once all parties have ratified the Settlement Agreement, the SEIFSA Office will immediately circulate the Wage Tables and post them on our website (www.seifsa.co.za). A comprehensive Management Circular will follow thereafter.

We will continue to keep you and the SEIFSA Council informed of  any developments, should there be any, in these engagements.

Kaizer M. Nyatsumba
Chief Executive Officer
For Information:
Lucio Trentini
Operations Director
Direct | Tel: 011 298 9414 | Fax: 011 298 9514 | Cell: 082 449 6270 I

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The Metals and Engineering sector is worried about job losses

JOHANNESBURG, 6 August 2017 – The Southern African Metals and Engineering Indaba 2017 is an opportunity for stakeholders to come up with workable solutions to stop the jobs bloodbath in the metals and engineering sector, according to Steel and Engineering Industries Federation of Southern Africa (SEIFSA) CEO Kaizer Nyatsumba.

The metals and engineering is among the sectors shedding jobs in thousands. In the period between July 2014 and 30 June 2017, 25 000 people lost jobs in the sector.

“The loss of jobs in this sector is a worrying trend and should be of great concern to all of us. The sector currently faces pressures from different fronts, including weak economic growth, low business and consumer confidence, increased competition from imports, low productivity and falling export figures,” Mr Nyatsumba said.

In the first quarter of 2017, metals and engineering exports declined by 8.3%, compared to the fourth quarter of 2016.

“The unfavourable market conditions have forced a number of companies, many of which are our members, either to scale down or to close completely. When this happens, the social and economic consequences are dire.

"Therefore, it becomes imperative for Government, industry, labour and other interested parties to seek common solutions to these problems,” he added.

Mr Nyatsumba said that, in addition to the job losses, South Africans should lament the opportunity cost of thousands of jobs not created because of low business confidence as a result of unfavourable political or economic circumstances.

These and other related matters will be discussed at the third Southern African Metals and Engineering Indaba, which will take place at the Industrial Development Corporation (IDC) Conference Centre in Sandton, from 14-15 September.

Highlights of this year’s conference will include addresses by Minister of Labour Mildred Oliphant, Minister of Small Businesses Development Lindiwe Zulu and Cosatu General Secretary Bheki Ntshalintshali. ANC National Executive Committee member and former Chairperson of the African Union (AU), Dr Nkosazana Dlamini-Zuma, will deliver the closing address.

Other speakers will include Zimbabwean academic and political commentator Dr Ibbo Mandaza, businesswoman Dr Mamphela Ramphele, CEO of the of Mapungubwe Institute for Strategic Reflection Joel Netshitenzhe, CEO of the Manufacturing, Engineering and Related Services Sector Education and Training Authority Dr Raymond Patel, Massmart Chairman Kuseni Dlamini, Chief Commissioner of the International Trade and Administration Commission Siyabulela Tsengiwe and the CEO of the Manufacturing Circle, Phillipa Rodseth.

Mr Nyatsumba said the 2017 Indaba would build on the resounding successes of the two previous conferences. Last year’s conference included speeches by former President Kgalema Motlanthe, former Business Unity South Africa CEO Khanyisile Kweyama and Department of Trade and Industry Deputy Director-General Garth Strachan.

“We hope that, as in previous years, delegates at this year’s conference will engage in vigorous debate on matters affecting the sector and the economy at large. The speakers are experts in their areas of focus. The sessions have been carefully structured to tackle the key challenges facing manufacturers,” Mr Nyatsumba said.


Issue 10 - 2017 Wage Negotiations Update

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A sub-committee of the Negotiating Team appointed by the SEIFSA Council met with all five trade unions today in an effort to bring this year’s negotiations to a successful conclusion and avert the prospect of industrial action.

Details of the meeting will be shared with the SEIFSA Council at its meeting on Monday, 7 August 2017.

We will continue to keep you and the SEIFSA Council informed of developments in these engagements. No agreement will be concluded with labour in such engagements unless it has the prior approval of the SEIFSA Council.

Kaizer M. Nyatsumba
Chief Executive Officer

For Information:

Lucio Trentini
Operations Director
Direct | Tel: 011 298 9414 | Fax: 011 298 9514 | Cell: 082 449 6270 I
E-mail: lucio@seifsa.co.za

[image_with_animation image_url="15387" alignment="" animation="Fade In" img_link_target="_blank" box_shadow="none" max_width="100%" img_link="http://offer.seifsa.co.za/2017-wage-increase-table/"]