Neasa to challenge metal sector agreement
CAPE TOWN — The National Employers Association of SA (Neasa) has vowed to challenge the Department of Labour’s decision to reextend the 2011-2014 main agreement of the Metal and Engineering Industries Bargaining Council to all parties and non-parties in the industry.
The department announced at the weekend it had extended the agreement amid some concerns in the sector that this move could lead to job losses.
Last month, the Pietermaritzburg High Court set aside a decision by Labour Minister Mildred Oliphant to extend the “national main collective agreement” of the national bargaining council to “nonparties” in the clothing industry.
This meant clothing manufacturers that were not part of the council did not have to apply the minimum wage agreements.
Neasa is likely to cite this judgment when challenging the decision to extend the agreement in the metal and engineering industries.
The Southern African Clothing and Textile Workers Union (Sactwu) also announced at the weekend that the controversial bargaining council wage agreement in the clothing industry had been extended, despite the high court ruling.
The extension gazetted by Ms Oliphant made its terms legally binding on all clothing employers and workers in all parts of SA, Sactwu said. It also empowered the bargaining council to prosecute employers who did not comply.
Speaking during a heated Metal and Engineering Industries Bargaining Council breakfast seminar on job creation and the role of bargaining councils yesterday, Neasa CEO Gerhard Papenfus said the association would challenge Ms Oliphant’s decision to extend the agreement of the metal and engineering industries. He said the collective bargaining regime in SA is one of the major threats to job creation and the growth of small businesses.
Mr Papenfus also said that “restrictive” labour legislation and “militant” unions were major obstacles in SA’s drive to tackle the unemployment crisis.
Although Statistics SA figures show that the unemployment rate declined to 24.9% in the fourth quarter of last year, from 25.5% in the previous quarter, there are fears that more jobs could be lost, especially in the agricultural sector after Ms Oliphant announced earlier this year that the new minimum wage for farm workers for the next three years had been pegged at R105 per day. Some farmers have said they cannot afford this and have indicated that they might have to cut back on labour costs.
While the Congress of South African Trade Unions has said it wants collective bargaining to become mandatory in all industries, employers have often blamed it for the failure of smaller business to grow and create jobs.
Neasa argued that small businesses are the hardest hit by collective bargaining. Mr Papenfus said SA’s workforce was becoming more expensive and less reliable. He said it “did not make sense” to ask an employer in the heart of Johannesburg to pay a worker the same amount as an employer in a remote rural area.
He said it was a problem that bargaining council agreements were applied to all employers, even those who were non-party. “Employees are simply negotiating their way to the top instead of working hard to make it to the top,” he said. A direct negotiation between employer and employee was a better system, Mr Papenfus said.
Speaking during the same seminar, Federation of Unions of SA deputy general secretary of operations Gretchen Humphries disagreed with Mr Papenfus that bargaining councils were to blame for unemployment challenges.
Ms Humphries cited a World Bank report to support her point.
The report says that the “latest research suggests the wage premium is in the 10%-20% range”— concluding that “bargaining councils can explain only a small part of SA’s unusually high unemployment rates … SA’s job-creation problems may stem primarily from urban issues”.