NUMSA commemorates the 100 year anniversary of the Russian Revolution

Numsa memorandum to SEIFSA on the wage dispute.

27 June 2005, Posted in Press Releases

Date : 27/06/2005


(Embargoed until 11:30,27 June)

As we strongly support the COSATU protest action campaign today on job losses in the entire economy: We, the members of the National Union of Metalworkers of South Africa (NUMSA) denounce the manner in which the Steel , Engineering Industry Federation of South Africa (SEIFSA) has awkwardly responded to the union revised bottom line of 10% for the highest grade and 9% for the lowest grade. The employer federation has opportunistically opted for a final wage offer of 5,8% for the lowest paid workers and 4,8% for the paid highest workers. It is also disappointing that the employer federation rejected all other important demands.

We re-iterate that any shameful offer is unacceptable because it further deepens wage disparities and entrenches poverty in South Africa. SEIFSA is obsessed with lower wage increases and always turn a blind eye on the ever declining living standard of workers. Since the inflation targeting policy of the Reserve Bank wage increases have gone from bad to worse. As a result, employers continue to manipulate wages in order to save millions of rands for directors and manager’s bonuses and holidays. The inflation related increases further results in workers being unable to keep up with the increase of the cost of living, as sky rocketing food prices and transport eats into the buying power of workers wages. Effectively, worker’s real wages and low wage increases will not catch-up with socio-economic standards.

The 5,8% will continue to cripple workers and the economy. The price of petrol is continuing to escalate and workers take a heavy burden on their daily lives because they pay more food and taxi fares. Most steel workers spend 45% on food and transport costs. We want change. SEIFSA must stop to be hypocrites and take a stand to address unemployment and poverty. Workers deserve to be paid a social wage in order to support families and give something to the poor and unemployed. Lower wages are a serious indictment to a developing country like South Africa. This reflects in the declining share of wages and salaries in the national income.

SEIFSA is not interested in closing the wage gaps between workers and directors. According to research conducted by P-E Corporate Services, South African executives enjoyed higher salary increases than lower-level employees over the past 12 months, stretching the wage gap to its widest in 15 years. This trend will increase this year if workers are not going to get 10%. There is no equal distribution of income in the steel industry. Sadly, workers are losing out. Employers continue to be fixated on low wages. They have not realised that low wages is a serious impediment to faster growth and enhanced labour productivity.

NUMSA cannot derive any comfort from labour brokering. In the steel and engineering industry, we have many labour brokers who are not registered with government or employer federation. Some do not even have offices to administer the affairs of the workers, and mostly use their private vehicles to pay workers salaries. We also know that some of the labour brokers do not want to register because they escape paying tax.

Employment conditions and safety standards are compromised under a labour broker. There are no permanent jobs under labour brokers. Workers cannot even exercise certain organizational and collective bargaining rights. Workers working under a labour broker get lower wages and sometimes fewer benefits than permanent workers. They often have deductions that are questionable. Labour brokers undermine labour standards and vary down all benefits of workers such as medical aid and pension fund. Labour brokers enjoy non-standard form of employment with greater use of contract, part time, temporary and subcontracted arrangements. Labour brokers are invariably dangerous in the steel industry. We just want labour brokers to be completely outlawed in the industry.

Wages are the most important source of income among the majority of South Africans. However, this source is under increasing pressure as a result of on going large scale retrenchments, increased casualisation, part time employment and contract work and the high rate of poverty. The wages in the industry do not pick-up with the pace of social costs as many workers look after the poor and unemployed. SEIFSA has bended the stick too far by continuing to retrench workers. Employment has slipped by over 30% from 460 000 1985 to a marginal 310 000 in 2005. Between 1999 and 2003 alone employment fell badly, 13 000 workers lost their jobs. This year alone 5 000 workers lost their jobs due to outsourcing and industry restructuring. There is no guarantee that small businesses will create sustainable employment by further relaxing labour protection. It will be economically and politically suicidal to deregulate the labour market. Up to this point SEIFSA has not been concerned. In the context of overwhelming 40% unemployment , and continuing social misery among the majority of the poor. It is very sad to know that over half of the country’s 46 million people are indigent. Regrettably , employers are not helping to better the conditions of the poor. We support the call that SEIFSA should stop retrenching workers.

SEIFSA has been irresponsible and mischievous in the current wage talks. SEIFSA failed to discharge duties in a responsible manner to ensure fair and proper bargaining practices. We want SEIFSA to respond positively within seven working days to the following demands :

1. Wages and Duration of the agreement:

That the wages increases shall be 10% for the lowest paid and 9% for the highest paid.

The wage parameters shall be set at 6 to 10% for the second year.

Backdate wage increases from the 1st July 2005.

Demand a two year wage agreement.

2. Labor Brokers

· The use of labor brokers in direct production processes must be unequivocally outlawed.

3. Grading

Grades should be linked to NQF levels

4. Leave pay

· Gradually increase leave pay to 20 days after completing one year service.

5. Shift Allowance

Increase in afternoon allowance to 10%

6. Integration of house agreement

All house agreement companies must be integrated into the main agreement as a separate schedule.

7. Job losses

Stop retrenching workers as a result of operational requirements and restructuring.

Casual and temporary workers must be employed on permanent basis.

8. Deregulation of the industry.

No blanket wage exemption for small businesses.

SIGNED: DATE: 27/06/2005

SIGNED: DATE: 27/06/2005