What does it mean for the Industry?
The following is discussed in this brief:-
- the nature of the Seifsa/Numsa agreement
- the relevance of the agreement
- the likelihood of the agreement being extended to non-parties
- how do we view the terms of the agreement
- the likelihood of strike action in respect of the other 87% of the Industry
- where to from here?
THE NATURE OF THE SEIFSA/NUMSA AGREEMENT
According to Seifsa they are about to reach a three year agreement with Numsa and some of the other trade unions. The wage element thereof being 7 % – year 1, 6.75% – year 2 and 6.5% – year 3, calculated on actuals. Although Seifsa has indicated that final mandates still need to be obtained, it is likely that this will be the terms of ‘their’ eventual agreement.
THE RELEVANCE OF THE AGREEMENT
Only the employers affiliated to Seifsa – that is 13% of employers in the Steel Industry – is affected by this agreement, although Seifsa has indicated that they will attempt to secure, for the purposes of the extension of this agreement to non-parties, the support of the organisations which were not part of the Seifsa/Numsa discussions. What a cheek!
THE LIKELIHOOD OF THE AGREEMENT BEING EXTENDED TO NON-PARTIES
If the organisations, which are not party to the Seifsa/Numsa agreement, do not support it, extension of the agreement, in all likelihood, won’t be secured. An attempt to secure extension through some unlawful act, in the true nature of the Seifsa/Numsa cartel, can never be excluded. Any attempt to this effect will be stopped in Court.
HOW DO WE VIEW THE TERMS OF THE SEIFSA/NUMSA AGREEMENT?
Although a 6.5-7 % increase does not sound entirely unreasonable, we will not support it for the following reasons:-
the increases are given on current actuals, instead of minimums. This will make an Industry, already twice as expensive compared to other industries, even more unaffordable; and
it does not make provision for a new entry level wage for new employees or, as a matter of fact, for any other of the employer parties’ demands. Therefore it does nothing to promote job creation and job retention in the Steel sector.
THE LIKELIHOOD OF STRIKE ACTION IN RESPECT OF THE OTHER 87% OF THE INDUSTRY
Without elaborating at this stage – it is highly unlikely.
WHERE TO FROM HERE?
Since Seifsa is an utter minority, they will find it extremely difficult to extend this agreement to non-parties. In respect of the remaining 87% of the Industry this agreement is completely irrelevant. What is relevant though, is the fact that this agreement is creating expectation and may therefore cause some tension in the Sector.
Notwithstanding the above, it is still not appropriate to advise employers on a course of action at this stage. However, we will do so in due course.