South Africa's Steel Sector Secures Historic 3-Year Wage Deal

SEIFSA and NUMSA conclude a historic three-year wage agreement for South Africa's steel industry, effective from July 1, 2024, to June 30, 2027. The deal includes wage increases and a commitment to address housing access for industry workers.

author-image
Trim Correspondents
New Update
South Africa's Steel Sector Secures Historic 3-Year Wage Deal

South Africa's Steel Sector Secures Historic 3-Year Wage Deal

In a significant development for South Africa's steel industry, the Steel and Engineering Industries Federation of Southern Africa (SEIFSA) and the National Union of Metalworkers of South Africa (NUMSA) have concluded a historic three-year wage agreement. The deal, effective from July 1, 2024, to June 30, 2027, was reached in record time with no industry disruption and within mandate.

Why this matters: This wage deal has broader implications for South Africa's economy, as it sets a precedent for future labor negotiations and may influence wage agreements in other industries. The agreement's focus on addressing housing access for industry workers also highlights the need for policymakers to prioritize affordable housing and infrastructure development.

The agreement prescribes wage increases to be calculated on the scheduled or gazetted minimum rates of pay per grade over the next three years. Workers in Rate H will receive a 7% increase in the first year, followed by 6% in both the second and third years. Those in Rate A will see a 6% increase in the first year, with 5% increases in the subsequent two years.

Notably, the deal contains no additional or immediate cost to employment concessions. The exemption and special phase-in exemption dispensation for employers who feel that a degree of relief from the agreement is required has been retained.

Beyond the wage increases, the agreement marks a historic commitment by the parties to meaningfully address access to housing for industry workers. The Metals and Engineering Industries Benefit Funds will develop an institutional framework to support housing for industry workers within three months of the signing of this agreement.

SEIFSA CEO Lucio Trentini praised the agreement, stating, "This agreement is a testament to the commitment by the social partners to seek a settlement as soon as possible and with minimal disruption." He further applauded the trade unions for "staying the course and living the bold, courageous, and ambitious goals and objectives embodied in the process agreement."

Trentini emphasized the significance of the housing commitment, noting, "Of historical importance is the commitment by the parties to meaningfully address access to housing for industry workers." Stakeholders have also agreed to convene and jointly formulate an industrial policy framework focused on rebuilding and repairing public infrastructure, alleviating bottlenecks constraining economic growth, and ensuring the long-term sustainability of the metals and engineering sector.

The agreement was signed on May 13, 2024, at the Birchwood Conference Centre in Boksburg. SEIFSA affiliated membership accounts for 57% of all employees employed by all the employer organisations on the bargaining council, while NUMSA represents over 115,000 members in the sector.

This landmark wage deal secures above-inflation increases for workers in South Africa's steel sector over the next three years. The commitment to addressing housing access for industry workers and formulating an industrial policy framework demonstrates a collaborative effort by stakeholders to support the sector's long-term growth and sustainability. As Trentini remarked, "Three decades into our democracy, it is indeed possible for negotiating partners, in the heat of robust and adversarial collective bargaining, to put the interests of the metals and engineering sector – and, indeed, the interests of our country first."

Key Takeaways

  • SEIFSA and NUMSA conclude 3-year wage agreement for South Africa's steel industry.
  • Wage increases: 7%-6%-6% for Rate H, 6%-5%-5% for Rate A over 3 years.
  • No additional cost to employment concessions, exemption dispensation retained.
  • Historic commitment to address housing access for industry workers.
  • Parties to formulate industrial policy framework for sector's long-term growth.