Numsa and automakers break deadlock, reach 3-year wage agreement

A three-year wage agreement has been reached in the auto manufacturing sector, with workers set to to gain an increase of up to 9%.

The Automotive Manufacturers Employers' Association (AMEO) and the National Union of Metalworkers South Africa (Numsa) on Friday each issued statements on the wage agreement, following a deadlock in negotiations.

Numsa had demanded a 12% wage increase across the board, and transport allowances for petrol station workers that work late hours and earn low wages, Fin24 previously reported. The union then declared a dispute.

With threats of a strike looming, parties agreed to resume negotiations on September 23, said National Employer's Association of South Africa bargaining coordinator Gerald Leith.

But it appears by September 12, the parties found middle ground. According to AMEO - which represents seven automotive manufacturers, namely BMW, Ford, Isuzu, Mercedes Benz, Nissan, Toyota and Volkswagen - the agreement will see hourly associates receive a 9% increase in the first year, and in the second and third years they will receive an increase in line with consumer inflation or 7% - depending on which is greater.

The agreement is effective retrospectively, from July 1, 2019. It will expire on June 30, 2022.

"The successful conclusion of wage and conditions-of-employment negotiations for the next three years creates a platform for much-needed stability and policy certainty in the motor industry.

"The agreement will help the South African based OEMs (Original Equipment Manufacturers) conduct long-term planning, model allocation and volume planning," AMEO said.

In its statement, Numsa outlined that the agreement includes an increase in the transport allowance, from R1 540 to R2 500. For the second and third year of the agreement, the allowance will increase by consumer inflation or 7% - depending on whichever is greater.

Numsa said it also negotiated an increase in the amount to be paid to workers during times of temporary layoff, as well as other benefits related to leave.

The parties agreed to establish two focus groups for developing and finalising recommendations and proposals for implementing industry medical aid and a skills-based grading framework to establish an appropriate progression of employees to different skills levels. Progress on the focus group will be reported at a plenary to be held in October, according to Numsa.

"We remain hopeful that the issue of the industry medical aid and the skills-based grading framework will be resolved soon, to the benefit of both parties," Numsa general secretary Irvin Jim said.