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…the organisation which ‘negotiated’ the Steel Industry to the brink of destruction.

There is no counterweight in society if you have cowards in business.
You don’t have to keel over every time someone stands up
and says ‘I disagree’.
Trevor Manuel

The Steel Industry – already in a deep crisis – finds itself in another round of Industry negotiations. Since it is again becoming apparent that SEIFSA simply does not learn from their past mistakes, that they persist with their contempt of SMMEs, this serves to remind them, and the Steel Industry, of their role in the demise of the Industry.

It is common cause that the Steel Industry’s wage rates, on all levels, are currently on average 50 percent higher compared to that of other Industries covered by collective bargaining agreements. Of special note is the fact that the entry level wage in the Motor Industry is just less than half the entry level wage in the Steel Industry.

Over the last years, as these developments unfolded, the National Employers’ Association of South Africa (NEASA) tried, to the best we could, to keep the Industry informed. The questions are: Did SEIFSA inform their support base about this? Did SEIFSA inform their members that even they (SEIFSA affiliated members) were not bound by the unlawful and unethical SEIFSA-NUMSA agreements?

The role of SEIFSA even before 2010 – when their contribution in the overall unlawful practises of the Metal and Engineering Industry Bargaining Council (MEIBC) were exposed – to where we find ourselves today, is simply shocking!

The challenge of the unlawful MEIBC dispensation commenced in 2010. Until then, SEIFSA dominated employer affairs in the MEIBC. They played that role, claiming to negotiate for employers in the Industry, reached agreements and with the help of their cartel-partners (NUMSA and the Department of Labour) wrongfully extended those agreements to the rest of the Industry. All of this while the MEIBC was in no respect constituted in terms of their own constitution – therefore technically did not even ‘exist’.

The Steel Industry, completely oblivious of this ‘sham’, had to comply with these unlawful agreements. Employers who lived in fear for inspections by MEIBC inspectors, were forced to go ‘underground’ in order to make a living, unable to comply with these devious and unlawfully obtained agreements.

In 2011 NEASA challenged the unconstitutionality of the MEIBC and the matter was referred for arbitration.

During the 2011-Industry negotiations, while this arbitration was pending, SEIFSA entered into an agreement with NUMSA and then proceeded to request the Minister of Labour to extend that agreement to non-signatories (non-parties) – notwithstanding the fact that the MEIBC found itself in a legal vacuum – although they created the pretence of everything being above board. However, SEIFSA was well aware of the unlawful state of affairs.

In 2011, when NEASA brought an urgent application in the Labour Court to stop the Minister from extending the 2011-14 agreement, SEIFSA, under oath – well knowing that it was false – denied any wrongdoing. This contributed to NEASA losing the urgent application on the basis of urgency.

Still in 2011, two days after the judgement in the urgent application, the aforementioned arbitration commenced. On the very first day of the arbitration SEIFSA completely surrendered and admitted all the facts which they denied – under oath – only a few days earlier in the Labour Court. This amounts to a form of perjury.

The result of the arbitration was that, by means of a 2011-consent arbitration award, the MEIBC was properly constituted and SEIFSA, then through its affiliated employer organisations, only occupied 50 percent of employer seats on the Management Committee of the MEIBC. Before the award SEIFSA was guilty of misrepresentation by representing employers directly, which, in terms of the LRA, they could not do. Since then SEIFSA has accepted that it is only an ‘agent’, but somehow, through proxy, still finds its way into the MEIBC.

In the meantime, the case which NEASA lost in the urgent application was heard in the Labour Court in ‘review’ proceedings. On this occasion, in 2012, the Court had the opportunity to consider all the facts – and the Court found in favour of NEASA. However, the Court gave the respondents (perpetrators) another opportunity to correct their wrongdoings and re-submit an application for extension to the Minister.

In resubmitting this application, SEIFSA was then forced to operate within a properly constituted MEIBC. Since SEIFSA realised that it no longer had the required support – with its drastically reduced numbers on the Management Committee – it simply went ‘underground’ and a paid official of SEIFSA, with or without the knowledge of his superiors, in a ‘dark room’ somewhere, signed an agreement with an official of NUMSA. The MEIBC proceeded to present this fabrication to the Minister as an Industry agreement and the Minister (again) in 2012, extended this misrepresentation (fraud) to non-parties.

NEASA again challenged this fraudulently obtained agreement and the extension thereof to non-parties in the Labour Court. The Court again found in NEASA’s favour and referred to the whole scheme as a ‘sham’. In terms of the Court’s finding, not a single employer in the Industry was ever bound by this ‘sham’, an agreement which, according to the Court, was not a collective agreement at all. The question is: Did SEIFSA inform their affiliated members of this?

SEIFSA’s 50 percent representativity in the Management Committee of the MEIBC clearly frustrated SEIFSA – they no longer had the Industry control they so desperately needed. As a result they referred a dispute against NEASA for arbitration – with the aim to increase their 50 percent representativity on the MEIBC Management Committee – from where control of the Industry takes place. The outcome of that arbitration, which lasted three years, left them with only 20 percent representativity.

In 2014 SEIFSA and NUMSA (they are always the main perpetrators) again signed a three year agreement and again requested the Minister to extend it to non-parties. In extending the SEIFSA-NUMSA agreement (SEIFSA still acting on behalf what was left of its affiliated organisations on the MEIBC), they again had to manipulate affairs. SEIFSA no longer had the required employer support. This extension was again set aside following a review application by NEASA. A question by the presiding judge in this matter, ‘Don’t they learn?’ is worth noting. The fact that SEIFSA just don’t learn, is the reason for this brief.

It is also worth noting that during the 2014 negotiations NEASA came to a much more beneficial agreement, for employers, with NUMSA. The Minister, however, in deciding to extend the SEIFSA-NUMSA agreement, opted to completely disregard that agreement. Because of this, employers (non-signatories) to the SEIFSA-NUMSA agreement, paid wages which they never should have paid.

Again, in 2016, SEIFSA was party to an attempt to unlawfully extend a levies agreement to non-parties. This time, however, NEASA was successful, on the basis of a number of illegalities, to prevent the agreement to even reach the Minister – in other words preventing her to make another ill-considered, Industry hostile, decision.

Although SEIFSA was a signatory to each of these unlawful agreements, they never paid any legal costs to defend it. For that they relied on their cartel-partners – NUMSA and the Department of Labour – and off course the MEIBC, who fought NEASA with NEASA’s own levy contributions to the MEIBC.

While all of this played out, thousands of businesses, not only SMMEs, closed their doors – with the forced payment of unaffordable wages being a main contributor. In excess of a hundred thousand employees lost their jobs over this period. Each and every action by SEIFSA exacerbated the vulnerable situation of the Industry. Although NEASA was successful in challenging each of these illegal agreements and/or extension applications in which SEIFSA participated, it was unable to stop the carnage caused by it.

SEIFSA must accept that, not only have they lost their prominent role in the Industry, but that they have become a liability. All that is left for them in order to remain relevant is through cooperation with their cartel-partners, NUMSA and the Department of Labour. The hottest topic in South Africa currently is ‘state capture’ – all of this amount to ‘Steel Industry’ capture.

SEIFSA no longer has a place in this Industry. They have caused untold hardship – in terms of business closures and job losses. They sometimes succeed in convincing the ignorant that they are acting in their interest, but they very seldom do.

The SEIFSA leadership who caused this carnage should all resign immediately; that is if they understand the severity of their actions. I doubt if they do.

However, the Industry and South Africa can no longer afford this. There rests a responsibility on SEIFSA affiliated employers to act immediately – now that they are informed.

Nelson Mandela once said: ‘Fools multiply when wise men are silent’.

According to news reports, SEIFSA is currently engaged in bilateral discussions with NUMSA. Once again, history is repeating itself. When the weak and devious SEIFSA talks to NUMSA, the Industry is in grave danger.

To view NEASA’s position on these negotiations, click here.

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