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Dear Steel Industry employer


NEASA became aware of an article MEIBC changes welcome, but should take employer into consideration published in Engineering News on 23 January 2018.

The article is written in a somewhat confusing manner as it, to some extent, implies that the MEIBC Main Agreement has been extended to non-parties.

NEASA wishes to categorically place on record that the Main Agreement has not been extended to non-parties.

Apart from the confusing nature of the article, the article claims that ‘fairness’ dictates that the agreement must be extended in order to afford all workers equal benefits and remuneration irrespective of whom they are employed by. However, it is clear that the concept of ‘fairness’ in this article is completely misplaced.

All but ‘fairness’ prevails in the Steel Industry. How can it be fair:

• that big business, where the cost of labour as a percentage of turnover can be as low as 5 percent, extend an agreement to a small business, where the cost of labour as a percentage to turnover, can be as high as 60 percent;
• that businesses situated in the economic hubs of South Africa, mainly in Gauteng, extend agreements to small businesses in rural areas where completely diffirent economic circumstances prevail;
• where big and small business is held to the same standard, while completely diffirent economic realities apply; even the Steel sector comprises of a myriad of industries and it is simply foolish to believe that a ‘one size fits all’ approach can be utilised in these circumstances;
• that big business, represented by Seifsa, representing 12 percent of the Steel Industry, might attempt to extend their agreement to the remaining 88 percent of the Industry, against their wishes;
• where these unaffordable extensions lead to the downsizing and the closure of businesses, resulting in job losses;
• where these agreements are forced upon SMMEs in the Steel Industry, in circumstances where wages are already double that of all other industries;
• to continue these unaffordable extension arrangements in circumstances where the Steel Industry is contuniously shedding jobs, to the extent that the Industry now employs the same number of employees than 40 years ago, whereas the population grew from 20 to 55 million people;
• if this bizarre extension arrangement keeps hundreds of thousands of job seekers out of work, leaving them in poverty;
• to sustain this undemocratic unconstitutional arrangement which caused the devastating process of de-industrialisation in the Industry;
• where a dispensation exists where labour legislation has been crafted in such a way that big business can enforce its will on SMMEs, thereby eradicating any potential competition while protecting monopolies?

The fact that the Competition Act expressly excludes bargaining councils from its jurisdiction is indicative of the fact that the bargaining council system is nothing less than government sanction collusion and price fixing by big business to the detriment of smaller players in the market. Is this ‘fairness’?

The author, not surprisingly, presents exemptions to be the elixir to cure all ills. The fact of the matter is that exemptions are difficult to obtain as there are no clear criteria which an employer needs to comply with to ensure a successful application. The exemption process requires an employer to be on his last legs before an exemption will be granted, by which time it is already to late to save the business and the jobs associated with it.

Furthermore, on the issue of exemptions, the author does not recognise the fact that it is extremely difficult for any employer to compile any sort of meaningful business plan based on a possibility that an exemption may be granted, for a short period, as it does not allow for any medium to long term planning.

Exemptions, therefore, are clearly not the answer.

The article goes on to state that NEASA will challenge any extension on technical grounds as it has done successfully since 2011. Although there may be technical grounds which may form part of a review application, these possible technical grounds, if any, are not known currently and will only be revealed once extension of the Main Agreement has been attempted

However, what is known, is that the organisations affiliated to SEIFSA represents an extreme minority (only approximately 12 percent of employers in the Industry) and those SEIFSA affiliated associations with seats on the Management Committee of the MEIBC, and who can vote, do not employ a sufficient number of employees to carry the vote as required by the Labour Relations Act.

This is not a technical issue, but a matter of fact and law.

We challenge Engineering News to place this article in its entirety. Should Engineering News disagree with any of the statements above, we challenge them to engage in debate on the issue.


Kind regards