Metal industry strike continues
The strike in the metal and engineering industry (predominantly by members of the Numsa) is continuing and a number of companies in the industry are reporting worker participation in the strike, although it is clear that not all the Numsa membership has observed the call to strike. Reports received by SEIFSA indicate that the larger employers in the industry have been targeted, with some member companies reporting almost total absences from the workplace. Medium to smaller companies are reporting varying degrees of worker participation in the strike, with some companies reporting full attendance yesterday and today.
A large number of member companies across the industry have exercised their right to implement lockout action in response to the strike and it is anticipated that this number may grow as the strike continues. Of serious concern to SEIFSA is the report from the membership of incidences of violence and intimidation experienced in respect of striking workers - ranging from workers being prevented from accessing factory premises, the stoning of factory property and the blockading of factory entrances – this notwithstanding agreement on specific strike and picketing rules between SEIFSA and Numsa.
Background to the industry dispute
The wage negotiations in the metal and engineering industry, covering 9,000 companies employing over 348,000 workers, have been underway since early May – with eight separate formal negotiating sessions having taken place (under the auspices of the Metal and Engineering Industries’ Bargaining Council) between SEIFSA, representing the majority of organised business in the industry, and the sector’s six representative trade unions (of which, Numsa is the largest).
A dispute was declared by the trade unions early in June and a committee comprising representatives from SEIFSA and the trade unions was appointed to explore possible settlement options. This committee, working under the direct guidance of two appointed facilitators, met on a number of occasions during June and again late last week but was unsuccessful in its attempts to avert an industry strike on terms acceptable to the employer and trade union parties. There are no planned further meetings of the committee or the disputing parties at this stage.
Operating Conditions in the Metal Industry
For SEIFSA, the employer approach to the ongoing negotiations has comprised a focus on a number of key industry challenges, including the following:
1. The survival of the industry: The Federation has focused on the heavy toll and devastating effects of the global recession on the membership, coupled to escalating domestic input costs, the high costs of employment in the sector, limited available capital, a weak skills base, unreliable and expensive logistics and the high price of power. The industry finds itself in an environment where a large section of the employer membership has not yet weathered the recessionary storm – with the devastating effects of the most severe global economic meltdown since the formation of SEIFSA in 1943 still having an effect on many of the member companies.
It is clear that many production facilities have closed down and many others are contemplating similar action with the extensive import substitution that has now become commonplace in respect of the types of goods, services and products generated by the metal industry. According to data supplied to the industry’s bargaining council, the number of employees affected by retrenchments in the sector has increased sharply since February. The industry is losing jobs and factories to international competitors and is facing a struggle for survival.
In addition, metal industry employers are faced with the rising cost of doing business in South Africa and an uncompetitive cost of employment. This all compounded by the impact of the strong rand, which has played a large part in making metal industry export potential highly uncompetitive – and has made the importation of engineering and manufactured goods and products an attractive proposition - taking away local markets.
Crucially, there is now a growing tendency for a large number of local companies and manufacturers to increasingly abandon manufacturing and import the products they used to manufacture. Compounding this is the fact that the entry level wage rate in the metal industry is, with very few exceptions, amongst the highest of all other sectors engaged in centralised collective bargaining. Industry employers are faced with an ever escalating and increasingly unaffordable cost of employment.
2. Dealing with the aftermath of the recession:
In February 2009, employment in the metal industry peaked at 399,000 jobs. However, by a year later and at the end of the global economic recession, just on 78,000 metal industry jobs had been lost.
SEIFSA is concerned, that in the midst of the current strike action aimed at securing a 13% wage increase (and other substantive changes to employment conditions) of these 78,000 retrenched workers, only 27,000 have been re-employed in the sector - leaving just on 51,000 former metal industry employees without jobs or income as many of the SEIFSA member companies continue to struggle to overcome the aftermath of the recession on their businesses. In the view of the SEIFSA membership, the current unaffordable wage increase demands should be put aside and the focus of the employer and trade union parties should be on how best to secure the return of these 51,000 former employees to the workplace.
3. Support for national job creation initiatives:
SEIFSA has said to the unions that the sector’s social partners cannot rely on economic growth alone to create jobs, but will have to find their own unique mechanisms to create additional sustainable jobs within the metal industry in support of the government’s stated job creation objective to create 5 million jobs and to reduce unemployment from 25% to 15% over the next 10 years.
THE SEIFSA OFFER
The employer offer on the bargaining table, following a process of intensive negotiations (and in the face of the difficult trading conditions and financial challenges facing the sector), comprises the following broad elements:
- A 7% wage increase for all industry workers effective from date of final agreement.
- A three-year wage deal, with the wage increases for 1 July 2012 and 2012 to be calculated on the basis of the prevailing CPI plus 1%.
- A commitment to introduce a new job grading system and an associated wage structure into the industry.
- An offer to provide an employer obligation in respect of the transportation of nightshift workers.
- Changes to the industry’s current medical certificate requirements for purposes of paid sick leave, including the recognition of sick notes issued by hospitals and clinics.
- Changes to the sector’s short-time working provisions.
- An agreement to consider the extension of the sector’s agreement to cover certain unscheduled jobs and occupations.
- A commitment to further enforce the sector’s employment and social security conditions on all labour brokers – including an accreditation, registration and recognition process for compliant brokers.
In response, the trade unions are demanding wage increases ranging from between 10% to 13% (Numsa) and a variety of amendments to current employment conditions – all of a nature unaffordable by the SEIFSA membership.
Should you require further information on the negotiation process, please contact David Carson, SEIFSA Executive Director. Tel: (011) 298-9417