Kumba says last year it had proactively adjusted wages upwards to respond to higher-than-expected inflation and the rising cost of living and it had again built this flexibility into its current offer. File: Bloomberg
Trade union the Solidarity Movement yesterday accused Anglo American’s iron ore producer Kumba Iron Ore of negotiating wage agreements in bad faith, saying the talks have derailed.
It said that salary negotiations between itself, and the mining unions National Union of Mineworkers (NUM) and Association of Mineworkers and Construction Union (Amcu) and Kumba were giving rise to a dispute.
Despite this, Kumba Iron Ore said: “While negotiations with Solidarity, NUM, and Amcu are ongoing, we have made good progress, and we’re committed to reaching an amicable agreement in the best interests of our colleagues and company.”
The group said last year it had proactively adjusted wages upwards to respond to higher-than-expected inflation and the rising cost of living and it had again built this flexibility into its current offer.
“We value our staff and the company’s sustainability when formulating our offers,” it said.
In April the firm reported that its export sales had flattened out in the quarter to the end of March, hampered by below expected rail performance by Transnet.
In February, releasing its results for the year December 31, 2022, lowered its production outlook for the next three years.
However, according to Solidarity, the fifth and final round of negotiations began to derail on June 19 due to Kumba’s inexplicable positioning.
Solidarity said trade unions took a pragmatic stance from the outset given Kumba’s positive financial year results and generous dividends declared, and presented a consumer price inflation (CPI)-related increase as a win-win settlement.
Many employment-related demands were also dropped to speed up the settlement, while Kumba, on the other hand, complicated the negotiations.
Solidarity general secretary Gideon du Plessis said: “Kumba started pleading poverty from the third round and predicted a dark and uncertain future for the mining company over the next three years. The company is not inclined to offer CPI-related increases for their employees".
He said it was also strange that as a final offer for the first year of the agreement, Kumba offered four different percentage increases, which were predominantly lower than the average CPI, to the respective job categories, and also three different percentage increases for the second and third years of the agreement.
“What Kumba offers is not only illogical; it also divides and demotivates its workforce,” Du Plessis said.
According to Du Plessis, Kumba offered a contradictory-worded commitment to the reopening of negotiations if inflation were to rise above a certain percentage.
“The wording of the clause is so weak that it has no binding force. It is a shame that Kumba cannot follow Anglo American Platinum’s (Amplats’s) progressive negotiation model of 2022. Amplats and mining unions reached a five-year agreement in which increases grow upwards towards the end of the agreement, and skilled workers’ increases from year one to five are as follows: 6%, 6%, 6%, 6.5% and 6.5%.
“In contrast, Kumba only offers a three-year agreement with a downward sliding scale where the increases of skilled workers on the upper scales are as follows: 6.5%, 5.5% and 5% with a refusal to link salaries to the prevailing CPI,” said Du Plessis.
Solidarity said it was of the opinion that Kumba was beginning to follow the route of negotiating in bad faith.
“Kumba must commit to CPI-related increases to finalise the negotiations, to ensure labour peace, and to increase their workforce’s motivation. Solidarity and the other unions will take Kumba’s final offer to their members for consideration but expect that rejection of the final offer and a dispute process will likely be the outcome.
“Solidarity appeals to Kumba not to turn away the trade unions’ hand of good faith extended to the company and not to force the parties into a dispute process. It also would be in its interest to look after its workers due to the extremely high cost of living experienced by workers in the Kathu area and low increases that especially skilled workers had agreed to during the Covid-19 period,” Du Plessis said.
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