BIG WAGE WORRIES

Numsa declares war on firms that want to bargain down pay to the national minimum that is to be introduced next year

The breakdown in wage negotiations in the metals and engineering sector between some employer associations and trade unions suggests that SA could be in for a bumpy ride once the new national minimum wage comes into effect next year.

Having shed 140,000 jobs in the past 10 years, employers in the sector adopted a radical new approach in this year’s wage negotiations in an effort to take back control of the wage bill.

Their initial proposal was that new hires be paid R20/hour at the entry level and that a wage increase of 5.3% (equivalent to about R1/hour) be levied off this new level for everyone. This meant that those earning R40/hour would receive a rise of 2.6%.

R20/hour is equivalent to the new national minimum wage (NMW), which comes into effect in May 2018. However, the metal and engineering sector’s current minimum is R40/hour. So the plan would halve the sector’s minimum wage, but only for new, entry-level workers employed in the future.

The NMW agreement struck between government, business and labour last year is unambiguous, according to Prof Imraan Valodia, who chaired the NMW panel: “R20 is the new floor, and any wage that is above it will stay above it.”

Roughly 2.3m workers are not covered by any existing bargaining council agreements or sectoral minimum wage determinations. Most are in manufacturing, construction and financial services. The NMW was designed primarily to protect them. Where existing wage agreements exceed R20/hour, they will continue to apply to new and existing employees after the NMW comes into effect.

This means that the metal and engineering sector may not halve its entry wage, even for new hires, unless the unions agree to it in a new negotiated settlement.

You can’t blame business for asking, but if the reaction of the

National Union of Metalworkers (Numsa) is anything to go by, the mere request could ignite a furious backlash from labour, plunging SA into a fresh round of industrial-relations strife.

“It is a concern,” agrees Valodia. “There is an imperative for business to act in line with the agreements reached. The objective of the NMW is to lift those below the line up to the line. It is certainly not to drive down the level of wages.”

Neil Coleman, labour’s lead negotiator on the NMW, slams the employer proposal as “an opportunistic abuse of the NMW”. He says care must be taken to ensure the final NMW legislation prohibits any employer from unilaterally reducing wages because of the introduction of the NMW, and that this must also apply retrospectively.

Gerhard Papenfus, who founded the National Employers’ Association of SA (Neasa), which initiated the entry-level wage proposal, sees things very differently.

He points out that over the past year the steel industry alone has lost 25,000 jobs and 500 small and medium-sized enterprises (SMES) in this sector have closed their doors. About 90% of Neasa’s 1,957 members in the metals sector are SMES.

Papenfus, who spent 19 years at the department of labour, where he acted as the registrar of labour and head of labour rela-

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