Workers in steel sector to benefit from 7% wage increase

Johannesburg – Following four months of negotiations, union members working in the steel industry will benefit from a 7% wage increase.

The settlement agreement was signed on Wednesday by unions Solidarity and the National Union of Metalworkers of South Africa (Numsa), among others, and the federation of employers, the Steel and Engineering Industries Federation of South Africa (Seifsa).

The increase covers all hours worked and related allowances. The agreement comes into effect from July 1 2017 and June 30 2018. An increase of 6.75% will come into effect for the following period and a 6.5% increase is agreed to for the period between July 2019 and June 2020.

This agreement creates “hope, security and certainty” in an environment with a weak economy, said Solidarity’s deputy general secretary for the metal and engineering industry Marius Croucamp.

The agreement could bring stability to the industry. “We want to appeal to other employers’ organisation to come to the table as well to ensure that the steel industry survives,” he said.  

Numsa general secretary Irvin Jim said the agreement follows challenging engagements with employers. “The settlement we reached today constituted a compromise, in that we would have taken a strike as Numsa … that strike would not have settled unless we got 10%.”

But this would have resulted in a number of employers not agreeing. The 7% agreement ensures that an agreement has been secured with the bulk of employers.

He said the agreement sends a message to employers in other sectors, particularly the plastic industry, that no less than 7% will be accepted by the union. 

Failure to reach an agreement would have seen employers institute an entry-level wage based on the National Minimum Wage (NMW) of R20 per hour, City Press reported.

SUBSCRIBE FOR FREE UPDATE: Get Fin24's top morning business news and opinions in your inbox.

Read Fin24's top stories trending on Twitter: