JOHANNESBURG, 14 May 2014 – Employers in the metals and engineering sector – most of whom have struggled economically in recent years – are “very deeply concerned” about the threat to centralised collective bargaining posed by recent judgements of the Labour Court, Steel and Engineering Industries Federation of Southern Africa (SEIFSA) Chief Executive Officer Kaizer Nyatsumba said today.


Speaking on behalf of employers involved in the current negotiations with labour representatives on wages and conditions of employment in the sector, Mr Nyatsumba said that although it had its own challenges, historically centralised collective bargaining offered employers the comfort that, once negotiations were concluded, they would not be confronted at company level with similar demands that would have the effect of increasing the cost of employment.

“We are extremely disappointed and very deeply concerned about the implications of Judge van Niekerk’s recent rulings on these matters in the Labour Court,” Mr Nyatsumba said. “The judgements open the door to two-tier bargaining, which leaves employers vulnerable and at the mercy of trade unions. In the process, these rulings pose a threat to jobs – at a time when our country desperately wants more jobs to be created.

“This places the whole time-intensive process of collective bargaining, which has served the industry well over the years, into jeopardy and goes against the Government’s stated preference for collective bargaining.”

Mr Nyatsumba’s comments follow two judgements by Judge van Niekerk in the Labour Court in recent weeks, in which he ruled that unions could raise at company level and strike over matters not specifically mentioned in Section 37 of the Main Agreement
concluded within the Metal and Engineering Industries Council (MEIBC), even if theyhad the effect of increasing the cost of employment. The matters in question were a housing allowance at one company and a risk allowance, among others, at another.

Section 37 (1) states that the MEIBC is the “sole forum for negotiating [on] matters contained in the Main Agreement”, and Judge van Niekerk ruled that matters not contained in the Agreement could be taken up at company level.

The National Union of Metalworkers of South Africa wants Section 37 repealed altogether, while employers want it strengthened to indicate that all matters which will increase the cost of employment should be negotiated within the Bargaining Council.

Section 37 was introduced into the Main Agreement in 1992 following a month-long industry strike and lock-out. The 1992 Settlement Agreement contains the parties’ agreement to the incorporation of this clause protecting companies against a compulsion – through strike action, court proceedings or any other means – to bargain at plant level on matters contained in the Agreement.

Since then “matters contained in the Main Agreement” has been accepted as meaning those matters expressly detailed in the Main Agreement and all other matters which are wage demands in different guises.

Mr Nyatsumba said while employers understood the context of the Van Niekerk judgement, they believed that it was imperative for the current gap to be closed, through an appropriate amendment to Section 37 of a new Main Agreement resulting from the current negotiations, in order to protect employers from unfair, two-tier negotiations.

“We hope for a mutually-acceptable resolution to this untenable situation that threatens the collective bargaining process. SEIFSA and all employer representatives in the current negotiations have made it clear that they will not sign any agreement flowing from the current negotiations unless the gap that has led to the van Niekerk judgements has been closed effectively,” Mr Nyatsumba said.

He added that employers in the negotiations had also called on labour – so far without success – to commit to lawful conduct, through the signing of a Peace Accord, in the event of a strike if negotiations should reach a deadlock.