A DISPUTE over salary increases for workers in South Africa’s steel and engineering industry has been called by the National Union of Metalworkers of South Africa.
The NUMSA union is threatening a strike in an industry that has taken a R50-billion hit during recent social unrest.
A general strike in the public sector, which could have shut down state hospitals, schools, and police stations, has been averted – but possible industrial action might be in the offing in SA’s engineering and steel industry.
A strike in the engineering and steel industry, which contributes about 10% to SA’s overall economic activity, could further harm an economy that is still reeling from Covid-19 a recent week of anarchy.
In the public sector, salary negotiations were concluded in July after a majority of trade unions that represent 1.3 million public servants accepted the government’s offer of a 1.5% salary increase for 2021.
The National Union of Metalworkers of SA (Numsa), which claims to have more than 339,000 members, has trashed the government’s offer for public servants, calling it an ‘insult’ because public sector unions were pushing for an increase of at least 8%.
Numsa is also seeing red in the engineering and steel industry, as the union has threatened to go on a ‘mother of all strikes’ for higher pay. Numsa has demanded an 8% increase for workers in the engineering and steel industry for one year (2021), then an adjustment of consumer inflation plus 2% for the following two years.
This works out to salary increases of just over 6%, because the SA Reserve Bank expects inflation to average 4.2% and 4.5% in 2022 and 2023 respectively.
In a media statement, Irvin Jim, the Numsa general secretary, said workers were willing to not accept salary increases in 2020 when Covid-19 burrowed its way into SA, forcing the economy to shut down and the profitability of engineering and steel companies to be impacted.
‘We allowed employers, on the back of the sweat and toil of our members, not to give increases, and to strengthen their balance sheets and recover what was lost in a year both in our country and the world … Many businesses have broken even and some have made profits.
‘We made such compromises being very clear that such preservation of companies should translate to job security,’ said Jim. But employers in the engineering and steel industry are not entertaining Numsa’s salary adjustment demands as they have tabled a 4.4% increase for 2021, an inflation plus 0.5% increase in 2022, and an inflation plus 1% increase in 2023.
‘Using the Reserve Bank’s inflation forecast, the offer of employers works out to salary increases of about 4.7% in 2022 and 5.5% in 2023. The employers are represented by industry bodies including the Steel and Engineering Industries Federation of SA (Seifsa), the South African Engineers’ and Founders’ Association, and others.
‘Numsa has rejected the offer by the employers and declared a dispute on Thursday 29 July at the Metals and Engineering Industries Bargaining Council, where conditions of employment in the industry are discussed.
‘Numsa wants the employers to reconsider their salary adjustment offer, failing that, the union will serve employers with a 48-hour notice for an indefinite national strike.’
The union has implored other workers in the automotive industry, component supplies, tyre sector, mining, aviation and all ports, to join the possible strike in solidarity.
Then on Monday 2 August, Seifsa, a body that represents organisations that employ about 190,000 workers in the engineering and steel industry, declared a counter-dispute against Numsa at the bargaining council over the union’s refusal to accept the offer by employers.
The counter-dispute will ensure that employers have the right to implement a lockout of workers if they were to go on a strike. In other words, workers represented by Numsa could be excluded from their workplaces until the dispute is resolved.
Seifsa CEO Lucio Trentini said the bargaining council has scheduled a special meeting tomorrow between ‘all the negotiating parties in order to decide on how best to progress the deadlock’.
- Meanwhile, trade unions have accused South Africa’s government of ‘strong-arm’ tactics, claiming it is withholding bridging finance to stricken Mango Airlines (JE, Johannesburg O.R. Tambo) unless unions drop an application that the airline is placed in bankruptcy protection.
The application by the South African Cabin Crew Association (SACCA), the Mango Pilots Association (MPA), and the National Union of Metalworkers South Africa (NUMSA), was first set to be heard in the South Gauteng High Court in Johannesburg last Tuesday, August 3rd.
The unions represent the majority of Mango’s 750 employees who have not been paid for at least two months, while the airline awaits ZAR819 million rands (USD56 million) in state aid that was due to be released to the carrier following the passing of a Special Appropriations Act more than a month ago.
In a joint statement, the three unions claimed government had bridging finance available to pay salaries, but demanded the unions withdraw their application before paying it out. They also claimed that the shareholder representative, the Department of Public Enterprises (DPE), was unwilling to join them in the bankruptcy application, despite an official announcement earlier this week that there was stakeholder agreement that Mango should enter bankruptcy protection.
‘The shareholder is insistent that they be the sole applicant and appoint their own sole business rescue practitioner. One can only assume ulterior motives are at play, given that there is no further direction given. Why do they not want to work with us?’ asked SACCA president, Zazi Nsibanyoni-Mugambi.
DPE spokesperson Richard Mantu declined to comment on the unions’ allegations. NUMSA spokesperson Phakamile Hlubi-Majola pointed out the Mango board and DPE had known since May 2020 that the airline was in trouble, but had ignored the union’s pleas that it should be placed in administration along with its parent, South African Airways (SA, Johannesburg O.R. Tambo).
‘This was also true for the hardships endured by Mango staff, who for months had continued working despite partial or non-payment of wages.
‘The shareholder is clearly not interested in saving the airline,’ she charged. ‘DPE must be clear what agenda they are serving!’ As reported previously, it took 14 months of prevarication, frustration, and pressure from the unions before the boards of Mango and SAA finally decided, on April 16 2021, to put the airline into administration.
Hlubi-Majola said DPE had not been able to explain why the pay-out of the ZAR819 million was delayed. ‘We’ve asked that question a million times,’ she told ch-aviation. She also pointed out that SAA’s other subsidiaries, maintenance arm SAA Technical (SAAT) and caterers Air Chefs, were in the same dire straits as Mango – awaiting ZAR1.663 billion (USD115.8 million) and ZAR218 million (USD15.1 million) respectively in state aid.
‘DPE could have saved everybody a lot of pain if they had taken the right decision last year and had placed everyone in business rescue,’ she said. ‘To date, DPE cannot give a logical explanation why this decision was not taken.’
She also pointed out that, should the business rescue application fail, Mango was likely to be liquidated as there was an existing application filed on April 28, 2021, by lessor Aergen over ZAR93.9 million (USD6.3 million) in unpaid lease payments.
This forms part of Mango’s ZAR2.5 billion (USD168.4 million) debt, including ZAR717.7 million (USD49 million) in outstanding aircraft lease payments to various lessors; and ZAR1.8 billion (USD124 million) in unpaid bills to MROs Lufthansa Technik and SAAT.
Meanwhile, South African corruption watchdog OUTA (Organisation Undoing Tax Abuse) has pointed out the conflict of interest in the government saving Mango, while Takatso Consortium, its preferred strategic equity partner, has an interest in fellow budget carrier Lift Airlines (GE, Johannesburg O.R. Tambo).
The startup brand is owned and operated by Global Aviation Operations (GE, Johannesburg O.R. Tambo), one of the two partners that make up the Takatso Consortium, the other being state-funded asset firm Harith General Partners.
‘Some might argue,’ OUTA says, ‘that it would be in both the new SAA and Takatso’s interests if Mango folds, leaving them with more space for SAA and Lift to grow their share of the market. This development might suggest that Mango is being set up as the sacrificial lamb for the Takatso deal, with Mango’s creditors (including their staff) being compromised and the ZAR819 million will be used as post-commencement funding to clean out Mango and set it up for a possible merger with Lift.
‘Should this take place, one might very well argue that the parliamentary process to approve the Special Appropriation Act has been abused, in order to facilitate a private transaction, which would be seen as a creative and immoral use of taxpayers’ funds in a highly dubious, if not a corrupt transaction,’ OUTA argued.
- COSATU has released a statement on President Cyril Ramaphosa’s Cabinet reshuffle on Thursday.
‘The Congress of South African Trade Unions (COSATU) notes President Ramaphosa’s announcement of changes to his Cabinet. We wish all the new appointees well in their new positions.
‘We are disappointed that the President recycled the same old guard that has proven itself incapable of fixing our many problems. We are also disappointed that not enough was done to reduce the size of the Cabinet, and to realign the government departments to improve their cooperation and levels of efficiency.
‘This reshuffle takes place against the background of the Covid-19 crisis, which continues to impinge upon our country’s economy. The economy is in a deep recession, municipalities are collapsing, Covid-19 continues to ravage the economy and the health system, and State-Owned Enterprises are in varying stages of collapse.
‘We will give all the new appointees a chance to prove themselves in their new positions. We hope to see signs of a paradigm shift in how government sees the role of the state in the economy. This requires an effective and activist state that is led by man and women of integrity.’
