Metal industry bargaining council warns of closure

THE biggest bargaining council in the private sector, the Metal and Engineering Industries Bargaining Council, will shut its doors if companies and unions do not agree to an 18% levy increase.

The council, which services about 300 000 employees and more than 10 000 employers, has not had a levy increase since 2011 and now has a R14-million deficit. It is unable to pay some service providers and has temporarily halted dispute resolution services due to lack of funds.

Thulani Mthiyane, the council’s general secretary, said this week that the bargaining council had been asking for an increase in levies almost every year since 2011, but this had been rejected by employers because of slow economic growth and the contraction in the steel industry.

He said there was no company necessarily against the increase, but they did not see the importance or the urgency attached to the levy increase.

The levy collection was also affected by a four-month strike in the industry in 2014 as well as a four-month delay in the renewal of the levy last year. The Department of Labour is responsible for renewing the levy.

The bargaining council is a statutory body set up to provide for the co-regulation of stable and productive employment relations in the metal and engi- neering industries.

Its members include ArcelorMittal South Africa, Dorbyl Heavy Engineering, Defy, Siemens and Nampak.

The Steel and Engineering Industries Federation of Southern Africa (Seifsa), which represents employers, acknowledged the importance of the levy increase and was talking to its members.

Speaking on behalf of the steel and engineering industry, Lucio Trentini, an operating director at the federation, said it was important to keep the doors of the bargaining council open.

Seifsa was encouraging employers to look at the big picture, he said.

“We are also cognisant that the metal industry is going through a hard time.

“However, an institution like SERIOUS: Numsa‘s general secretary, Irvin Jim the bargaining council, which is the biggest and oldest bargaining council in the country and is responsible for the facilitation of institutionalised dialogue between organised business and labour, should not be closed.”

He said the bargaining council had been at the forefront of introducing social security benefits such as a pension fund, provident fund, and maternity leave for workers.

Mthiyane said there was a concern that should the bargaining council close or cut its 150 staff members, the industry would deteriorate into a noncomplying and deregulated one.

Some employers have suggested that the council should cut staff numbers.

But Mthiyane said this would lead to further disruptions in the industry as already workers’ grievance cases against employers had been temporarily suspended.

If staff numbers were cut, there would be no way to monitor companies’ compliance, he said, adding that “even those who pay their levies would stop because no one is going to hold them accountable. This will be one way of introducing deregulation in the industry.”

Irvin Jim, general secretary of the National Union of Metalworkers of South Africa, said: “The unfair thing about this . . . is that employers are benefiting and workers will become victims of unresolved grievances.”

He said the unions involved were taking the matter very seriously.

Jim said the reason the bargaining council had not received any increase on levies was that there was a level of hostility from employers who are against collective bargaining.

The bargaining council will meet with employers and unions on May 11 to ask for the 18% increase in the levy.

Employers pay R7.45 for each employee for an administration levy and R2.68 for a dispute levy. Staff members contribute the same amount. Should the 18% increase be applied, the employers’ share of the administration levy would increase to R8.79 and the dispute levy to R3.16.

Mthiyane said that should the employers and trade unions agree on an 18% hike, “we will be able to meet our debt obligation and close the R14-million gap”.

The council’s woes have been exacerbated by the continual retrenchments and company closures in the steel industry. The industry has lost about 150 000 workers in the past 10 years, according to Mthiyane.

Henk Langenhoven, chief economist at Seifsa, said the steel industry was in a dire state and had not recovered after the financial crisis in 2008 when output dropped 30%.

“The reasons are the domestic economy is not showing signs of growth, especially in industries that we depend on such as the motor industry and the construction sector, as well as the mining sector, which has suffered because of the commodity cycle and the strikes the industry has had in the past.”

Internationally, Langenhoven said, demand for steel was flat.

The council has asked for an increase almost every year since 2011 The unfair thing is workers will become victims of unresolved grievances