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The National Employers’ Association of South Africa  – NEASA lodges proceedings in Labour Court to scrap the July 2014 Metal Industry Agreement

09 February 2015

The National Employers’ Association of South Africa (NEASA) has lodged a review application in the Labour Court in Johannesburg to set aside the decision by the Minister of Labour to extend the 2014-2017 Agreement between the Steel Engineering Industry Federation of South Africa (Seifsa) and trade unions to the rest of the Metal Industry. Minister Mildred Oliphant recently extended the Seifsa/trade union agreement to the rest of the Metal Industry for the period January 2015 to June 2017.

The Minister of Labour has extended an agreement between trade unions, representing 34% of employees in the Metal Industry, and Seifsa, who represents approximately 15% of employers in the Metal Industry. The Minister has done this without considering any input as to the negative impact this decision will have on business and employment,’ says Gerhard Papenfus, NEASA Chief Executive.

In November 2014, former Governor of the Reserve Bank, Gill Marcus, criticised wage agreements of around 8% citing it to be unsustainable and a threat to jobs. Seifsa agreed to wage increases of 10%, at the time admitting that they ‘reluctantly‘ agreed to it and that it would ‘inevitably lead to massive job losses’. Seifsa subsequently admitted that their negotiating strategy in the 2014-Metal Industry negotiations was a dismal failure.

Notwithstanding admitting that they have failed in the negotiations, they convinced the Minister to extend this agreement. The Minister complied with this request, disregarding the poor levels of representativity of the parties to this agreement and also ignoring the damage it will cause the Industry. This is an irresponsible act that illustrates how the cooperation between monopoly capitalism and socialism, with the support of government, can work against the interests of SMME’s. This is an obscure and undemocratic arrangement,’ Papenfus said.

In December 2014, after a 6 month long lock-out by NEASA, NUMSA nationally and unconditionally agreed to NEASA’s core demands, inter alia an across the board wage increase of 7%, a 50% reduction in the entry level wage for new employees and a blanket exemption for companies  employing fifty or less employees from the Metal Industry Bargaining Council agreements.

The extension of this agreement is also unconstitutional and not compliant with the rules of administrative justice. We will bring this case before the Labour Court in due course,’ Papenfus said.