David vs Goliath battle in metal sector

SMALL businesses in the metals and engineering sector will continue with their lockouts of workers until attention is paid to their concerns over the affordability of wages.

The National Employers’ Association (Neasa), which represents small businesses in the sector, said no attention was paid to its demands. These demands include a lower wage increase for small businesses, an improved exemption policy and a lower minimum wage for workers entering the industry.

“Our members cannot afford the 10%, and this concern has simply been ignored,” said Sya van der Walt, Neasa spokesman.

Neasa is a rival of the Steel and Engineering Industries Federation (Seifsa), which represents mainly large companies in the sector.

Seifsa this week agreed to annual wage increases of 10% over the next three years, ending a one-month strike by unions including Numsa.

The lockout of Neasa employees illustrates the frustrations many small businesses face with inflexible bargaining councils where large businesses dominate negotiations and can crowd out rivals by agreeing to wage increases that are unaffordable to small competitors.

“It is baffling that while all agree that this current agreement will do nothing to stem the job losses in the metal and engineering sector, it is still being welcomed as a good result,” said Herman Mashaba, entrepreneur and driver behind a court battle by the Free Market Foundation to have the extension of bargaining council agreements to nonmembers declared unconstitutional.

Rod Harper, senior partner at Cowan-Harper Attorneys, said the metals and engineering sector had to ask whether small employers should be required to pay the same increases as major players.

Many bargaining councils allow for more flexibility, for example granting different increases to businesses in rural and urban areas, or based on company size.

“The system allows for flexibility,” said Harper.

“It is not in the interests of the industry to close down small businesses, and it certainly isn’t the intention of the LRA [Labour Relations Act] for central bargaining to lead to companies closing down.”

While the Metals and Engineering Industries Bargaining Council does not allow a two-tier system, it allows 15 large Seifsa members, including ArcelorMittal, to negotiate wages at company level.

While companies can apply for exemptions, they have to be on the verge of closing down to qualify, and it takes them months to get answers from the exemption committee of the council.