Business Maverick

Business Maverick

The steel industry strike is over but at a painful cost to workers

Seifsa has confirmed that an improved wage increase for workers in 2021 has been presented to Numsa officials. (Photo: Gallo Images / Sharon Seretlo)

Steel industry workers have lost more than R200m in wages since the strike started on 5 October. The strike could have ended a week ago if Numsa accepted an improved wage offer of 6% from workers. Instead, the trade union insisted on an 8% adjustment. 

The crippling strike in the steel and engineering industry is over, with more than 100,000 workers being immediately called back to shop floors at factories across SA that have been abandoned for nearly three weeks. 

Arguably, the strike was prolonged unnecessarily and could have ended sooner (in fact, a week earlier), limiting the harm caused to striking steelworkers who have lost more than R200-million in wages since the industrial action started on 5 October. This is because employers implemented a “no work, no pay” policy for striking workers in the steel and engineering industries that are affiliated with the National Union of Metalworkers of SA (Numsa). 

On Thursday 21 October, Numsa accepted an above-inflation wage increase offer of 6% from employers — a markedly lower-wage adjustment than the 8% that the trade union tabled and doggedly defended.  

Employers — represented by the Steel and Engineering Industries Federation of Southern Africa (Seifsa) — improved their offer from 4.4% to 6% a week ago, in a bid to end the strike that has cost the steel industry more than R500-million in revenue. But Numsa rejected the improved offer from employers and took its chances by pushing for an 8% adjustment.  

Realising that employers were not willing to further sweeten their offer, Numsa embraced compromise by accepting the 6% offer. This offer could have been accepted a week ago, saving workers from another week of a strike and the painful reality of more lost wages. In the end, workers didn’t get the 8% that Numsa insisted on and it will take a long time for the 6% adjustment to compensate for their lost wages.

Inflation-busting wage increase

Numsa general secretary Irvin Jim doesn’t believe that steelworkers have emerged as the biggest losers from the strike because they will still walk away with an inflation-busting wage increase. “This is a victory for workers.  Negotiations are about give and take. And in a situation of give and take, you take whatever can get to put it in the pockets of workers. We are not cowards because we have taken a compromise,” said Jim during a Numsa press briefing on Thursday.

The trade union’s acceptance of the improved offer from employers means that the steel industry strike is over and workers will have to report to work on Friday, or else Monday next week.

Numsa has signed a three-year wage deal with Seifsa, the steel industry’s largest employer body which represents 18 organisations employing about 170,000 workers. In 2021, workers will receive a 6% wage increase, the payment of which will be backdated to July 2021. Then in 2022 and 2023, workers will get increases for each year that are equivalent to 5%. 

Seifsa’s operations director Lucio Trentini said the improved offer means that a general labourer’s total guaranteed pay will move to a minimum of R12.734 per month from R12.500. On an hourly basis, Rate A workers (including artisans) will receive a pay increase in years one, two, and three of R4.24, R4.45, R4.67 respectively. Meanwhile, the hourly pay of Rate H workers (including general labourers) will increase by R 2.97, R3.15, and R3.34 over a three-year period.

Divisions among employer bodies

But Seifsa’s offer to Numsa has not been endorsed by other employer bodies in the steel industry. The steel industry strike has exposed tensions among employer bodies including Seifsa, the National Employers’ Association of SA (Neasa), and the SA Engineers and Founders Association (Saefa). The employer bodies have each taken different approaches in negotiating with workers and have tabled different/competing wage adjustments. 

The next challenge after the strike is to convince all employer bodies to accept Seifsa’s three-year wage offer as a standard for the broader steel industry. This will enable Employment and Labour Minister Thulas Nxesi to issue a gazette to formalise the wage offer as a standard for industry employers to follow and implement.

But it doesn’t seem like other employer bodies are willing to endorse or be a party to Seifsa’s wage offer.  

Neasa CEO Gerhard Papenfus told Business Maverick that it won’t endorse Seifsa’s wage offer and is standing by its recommendation that employers implement a wage increase of 5%.  “We represent a majority of small and medium-sized steel businesses that are struggling in this current macroeconomic environment. If a business cannot afford to pay the 5%, we urge them to pay less than 5%. If they can afford more, then they should,” he said.

Saefa has also not endorsed Seifsa’s agreement with Numsa. 

Saefa had concluded a wage deal in the industry with Solidarity on 1 October for an increase of 6% on the minimum wage scale on all rankings for the next three years up to and including 2024. “This agreement provides for far more affordable rates of pay, which apply to new entrant workers only. All existing employees continue to enjoy their current wages and also receive a wage increase, with effect from 1 September 2021,” Saefa executive director Gordon Angus told Business Maverick. DM/BM



Comments - Please in order to comment.

  • Bruce Watney says:

    “A general labourer’s pay will move to R12,734.00 pm.” Therein lies our inability to remain competitive, in any of our industries, Including Chicken, meat, citrus, etc, levies put on imported items, to protect these uncompetitive industries, asking year on year for unsustainable increases, pushing the prices up for everybody. Don’t bitch then when you have to pay more, for food, electricity, gas, fuel, etc. The Unions, & The workers are responsible for outa control prices. Its a vicious circle ⭕️

  • Love JHB South says:

    Absolutely have to agree. The wages are too high and production does not correlate with the high wages. My opinion, there will be lots more unemployed within the next few years. This salary hike is not sustainable for small businesses, Sometimes the owners are lucky to pay themselves that wage every month.

  • Carsten Rasch says:

    I’m all for a fair wage, but I must say R12.5k per month for semi-skilled labor is too high. Then again, what does management earn? And the executive? Has to be balance on every level.

  • Robert Mckay says:

    So an extra R234 a month which is $15.75. For perspective a McDonald’s worker earns that in an hour in WA State. A US steel worker earns about $50 000 a year…about 5x the salary of a South African steel worker. But the average salary of a teacher is $60 000. In SA its about $ 20 000 so only a discrepancy of 3x. I wonder why there is a difference? And are SA steelworkers wages really that non competitive.

  • Charles Parr says:

    These settlements with the unions always only cover increased wages and nothing is said about increasing productivity.

  • John Weinkove says:

    The pay difference is R234 a month. That is the kind of money you give to the beggar at the robot. Will it end the steel industry? Now when the executives get 6% increase you are talking. Wage increases should be across the board increases.

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