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During a recent Metals and Engineering Indaba, numerous reasons were advanced why collective bargaining in South Africa is in trouble. One of the narratives advanced is the so-called ‘post-Marikana syndrome’, another is the endeavour to entrench super exploitation of workers. In the case of the Metal Industry, some talk about the rivalry among employer organisations for control of the bargaining council (MEIBC).

The defenders of the current troubled dispensation are all pining for the days of collegiality and unity of the ‘old boys club’ which once existed. It may still exist in some or other format, but has become powerless. However, they are all, deliberately, denying the underlying cause for the turmoil in the MEIBC, the extension of agreements to non-parties, and more so the unlawful extension of these agreements – with the Metal and Engineering Industry Bargaining Council (MEIBC) being the main destructive force.

Although collective bargaining in South Africa has many shortcomings, they are not the issues that are about to cause the imminent downfall of the MEIBC; it is the unlawful extension of agreements between Seifsa and primarily Numsa; it’s about enforcing a self-serving arrangement on the rest of the Industry, with devastating consequences. The SMMEs in the Metal Industry are not opposed to collective bargaining: they are, however opposed to being bullied by the Seifsa/Numsa/Department of Labour cartel; they are protesting against being put out of business by role players with absolutely no sensitivity for the plight of SMMEs.

As resources are depleting in a declining economy, as the competition for limited resources intensify, the bargaining council dispensation – and not necessarily collective bargaining as such – will be subject to ever increasing scrutiny, to the point where the system will gradually collapse. The collapse of bargaining councils is however not imminent in all industries. This is, however, indeed the case in the Metal Industry, where wages are on average double those which exist in other industries and where a jobs- and business closure massacre is occurring.

The current labour relations dispensation in South Africa enables larger businesses, situated in the economic hubs and with a wage component, as a percentage of production, below 5 percent, to extend their agreements to small businesses, outside of the economic dense areas and with a wage component, as a percentage of production, as high as 50 percent.

In the case of a larger businesses, which in all likelihood are very sensitive to strike action, a high percentage increase may in reality have very little effect on production and profitability. To the contrary however, SMMEs are less sensitive to strike action, but in turn are extremely prejudiced by high increases forced upon them. Against this background, it is nonsensical to have a collective bargaining dispensation where larger businesses can easily be coerced into wage deals, out of fear for a strike, and then to have these deals extended to SMMEs.

In the Metal Industry, all agreements, since 2011, have either been set aside by the courts or, as a result of administrative non-compliance, prevented from even reaching the Minister of Labour for purposes of extension. The unlawful extension of agreements probably even occurred before 2011, but the perpetrators were only brought to book in 2011. To suggest that legal challenges were merely on technical and procedural grounds, is disingenuous. The reasons for the successful court challenges were primarily the lack of representatively, the misleading of the Minister of Labour, even fraud, and serious administrative oversights.

Notwithstanding their past failures, Seifsa and Numsa have made their intentions to have their recent agreement extended to non-parties clear. Should they go ahead with their plans, they will do so notwithstanding the following:-

  • that Seifsa-affiliated organisations only occupy 4 out of 21 seats on the management committee of the MEIBC (MANCO), where any decision for the purposes of extension is taken. Seifsa as such has no role whatsoever to play in the affairs of the Council and the rest of the Seifsa employer membership does not qualify for a seat on MANCO or the AGM;
  • these 4 Seifsa affiliates collectively have as their employer membership less than 10 percent of employers in the Industry, employing approximately 25 percent of employees in the Industry;
  • the non-signatories to this agreement currently occupy 17 seats on MANCO, collectively having approximately 4000 employers as members, which collectively employ close to 50 percent of employees in the Industry.

If the Seifsa/Numsa/Department of Labour cartel continue with their attempts to extend their agreements by unlawful means, since they no longer have the representativity to do it legally, it will cause the downfall of the MEIBC – it is simply a matter of time. The Industry has recently witnessed the gradual decline of the Council. Its sudden demise might be imminent.

Even government’s envisaged changes to labour legislation, if it is intended to counter NEASA’s approach of challenging the current SMME hostile dispensation and therefore greasing the wheels of the cartel, won’t save the MEIBC. The ground swell among SMMEs will eventually completely overwhelm it.

The perpetrators suggest that the collapse of the current model will result in instability, uncertainty and industrial relations chaos. The opposite is true; suppressing business and consequently increasing unemployment will have all of these consequences. Also, protecting the current dispensation will ensure its complete downfall. There is simply no scenario under which this dispensation, which bullies employers in each and every way imaginable, will be tolerated by employers who have no alternative but to make a living in this Industry.


This press release is by Gerhard Papenfus, Chief Executive of the National Employers’ Association of South Africa (NEASA).