Employers bypass collective bargaining

Employer organisations in the metal and engineering sector are negotiating directly with workers after failing to reach agreement with unions on wages, while trade unions have threatened industrial action.

Wage negotiations started on June 7, but have collapsed and parties have declared disputes at the Metal and Engineering Industries Bargaining Council. Unions reject a 5.4% wage offer and have instead demanded increases of 10%-12%.

Employer bodies will engage workers in a bid to halt industrial action that they all agree would be detrimental to the distressed steel sector.

The sector shed 25.000 jobs in 2016 and has experienced the closure of 500 businesses.

The decision not to continue negotiating collectively exposes the disjuncture between big businesses and small, medium and micro enterprises (SMMEs) — a problem that has persisted in the industry for years.

The National Employers’ Association of SA (Neasa), which represents SMMEs, has in the past successfully challenged wage settlements it regarded as too costly for its affiliates.

Through court action, Neasa also managed to set aside two multi-term agreements.

Neasa had warned prior to the start of talks that it saw no ending to negotiations other than industrial action, saying the National Union of Metalworkers of SA (Numsa), the majority union in the sector, was negotiating in bad faith and “hellbent” on a strike.

The Steel and Engineering Industries Federation of Southern Africa (Seifsa), whose members include some of the country’s biggest steel and engineering firms, said it would hold bilateral meetings with unions to do “everything possible” to avoid

a strike. The employer federation’s CEO Kaizer Nyatsumba said employers had failed to reach consensus on a number of issues, making it difficult to continue working together.

“There are issues on which there is no longer the possibility of consensus among the employer bodies,” he said, declining to detail the nature of disagreements.

Business Day understands that one of the most contentious issues that led to the fallout are the ideological differences between Seifsa and Neasa, which are said to have clashed over the best approach to the negotiations.

Trade union the United Association of SA (Uasa) confirmed it had reached agreement with some companies that had approached labour individually, outside of employer bodies.

Although the agreements would be valid only after the bargaining council had reconvened and settled, Uasa’s Johan van Niekerk said the union was prepared to keep negotiating as its members had no appetite for a strike.

“The individual companies approached us saying they are not prepared for a strike, they would rather enter into an agreement with us. It’s a winwin for our members and company because they will not be affected if industrial action happens,” Van Niekerk said.

Uasa, Numsa and other unions have strongly objected to a proposal in council that entrylevel workers earn a rate 50% lower than other workers.

The offer could also be interpreted as the metal and engineering sector’s attempt to introduce R20 per hour national minimum wage in the industry.