Members of both organisations are reeling from the impact of the higher wage rates, Photographer: Nadine Hutton/Bloomberg
Steel sector organisations, the National Employer Association of South Africa (Neasa) and the South African Engineering and Founders Association (Saefa), have filed a petition at the Constitutional Court for leave to appeal the judgement of the Labour Court last year, which dismissed their contention of an agreement setting standard wages for the industry.
The associations want a fresh hearing of the review dismissed by the labour court to interdict the extension of the Metal and Engineering Industries Bargaining Council (Meibc) consolidated main agreement, pending the review of the Council’s decision to request the minister to extend the agreement to non-parties.
This is as members of both organisations are reeling from the impact of the higher wage rates, the higher load shedding stages contributing to production disruptions and the pending higher electricity tariffs after the National Energy Regulator of South Africa (Nersa) granted Eskom a 18.64% increase from April this year.
“The Meibec proscribed wages are almost double the most expensive industry in South Africa. There is no growth, only a constant decline. The industry is already in a survival battle and the constitutional court is part of the whole thing,” said Neasa executive director Gerhard Papenfus.
The petition to the Constitutional Court is based on the grounds that the Labour Court was only required to determine the application for an interim interdict, pending the determination of a review.
“However, the court dismissed the related review application as well. The review application was neither ripe for hearing, nor set down for hearing by any party, nor allocated to the judge for hearing, nor argued before the judge and also that the judgements or rulings by the Labour Court and Labour Appeal Court constitute a fundamental breach of Neasa’s right of access to courts,” Neasa said in a statement.
The organisations said they believed that the judgement of the Labour Court was a grave miscarriage of justice, which should be corrected.
The Main Agreement allows for companies to apply for a phase-in exemption, which involves them paying 60% of the 2020 rate, which amounts to R29.73 an hour, or about R5 000 a month, to all general labourers by June 30, 2024.
This exemption, however, is not a blanket exemption and companies need to prove financial difficulties on a yearly basis to apply for the exemption which may then be granted by the relevant regional council.
Judge Sean Snyman has on two occasions struck down Neasa’s applications in its entirety citing, in the initial agreement Neasa’s consistent efforts since 2014 to scupper any attempt to extend the Main Agreement of the Meibc to non-parties, which the judge believes has led to constant destabilisation of the industry.
Saefsa’s executive director, Gordon Angus, said on Tuesday the collective agreement was unfair and devastating and that the constitutional court was an essential step to address the imbalance likely to drive some steel and engineering firms out of business.
“We have just come out of the pandemic and lockdown, now there is load shedding. We will fight as hard as we can to have this decision overturned,” Angus said.
He said the collective agreement’s impact on members was still under review as the judgement was made late last year, but that firms had to contemplate retrenchments to reduce their costs and stay in business or face insolvency.
“A lot of companies are not looking at retrenchments in that way, they have to adapt. Some are looking at outsourcing some functions, for example security because if a security guard is employed by the company, then they are covered by the collective agreement. Logistics and warehousing are some of the functions companies might find cheaper to outsource to a third party,” he said.
Papenfus said firms faced an uphill battle with load shedding as it was difficult to stop production processes in sync with Eskom’s schedule.
“In manufacturing you cannot just shut down an hour before the load shedding, companies now have to consider if there is enough time to start processes before load shedding or they risk losing costly inputs. It is also expensive to start up processes after load shedding because machines have to warm up, if it takes two hours to do that and there is load shedding every four hours, it is just hard,” he said.
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