Wage increases must be based on actual pay rates, says Solidarity

Trade union Solidarity has lashed out at steel sector bosses’ proposal to base wage increases on minimum rates of pay and not on actual wages, saying this would disadvantage skilled and experienced artisans. 

Unions including Solidarity and the National Union of Metalworkers of SA (Numsa) met industry bosses for a second round of wage talks at the Metal and Engineering Industries Bargaining Council (MEIBC) in Boksburg, east of Johannesburg, on Wednesday. 

They have called on employer bodies such as the Consolidated Employers Organisation, National Employers Association of SA (Neasa), SA Engineers and Founders Association (Saefa), employer organisation SAUEO, and the Steel and Engineering Industries Federation of Southern Africa (Seifsa) to table a meaningful wage offer based on the actual rates of pay — not on the minimum rate of pay — in the steel and engineering sector, where the lowest-paid employee earns R59.10 per hour. 

“The deceptive wage offer presented by the various employer organisations ranges between 6% for the lowest level (Grade H) employees and 5% for skilled (Grade A) employees, but the offer is tied to the minimum rates of pay per job category, and not based on the actual wages earned by employees, a stance that Solidarity has rejected outright,” said Solidarity general secretary Gideon du Plessis. 

Solidarity is demanding a 6% wage increase each year for three years: “But we want the increases to be based on the actual rate of pay,” stressed Du Plessis. 

Numsa, SA’s largest trade union with more than 450,000 members, is demanding increases of 7% in the first year and 6% for the second and third years.  

Stats SA reported recently that consumer prices eased for the first time in 2024 to 5.3% in March, down from 5.6% in February.  The SA Reserve Bank and some economists expect inflation to average about 5% for the year, down from 6% in 2023. 

Du Plessis said to base increases on minimum rates of pay would result in skilled and experienced employees receiving an increase well below the consumer price index (CPI), “whereas entry level employees would receive above CPI increases, an offer which does not only have ethical implications, but places the industry at risk of exacerbating a talent drain of scarce skills”. 

“To illustrate the implications of this scenario, one can refer to the fact that the actual pay rate for a Grade A (highly skilled) artisan is on average R200 per hour, while the prevailing collective agreement mandates a minimum pay rate of R98.11 for entry level (Grade H) artisans.  

“The 5% increase is then based on the minimum rates, and as a result, the entry level artisan will receive the 5% increase that relates to an increase of R4.91 per hour, while the top-level artisan’s real wage increase amounts to only 2.4% based on the R4.91 per hour increase. The compounding effect of this arrangement is unsustainable both at an individual level and at an industry level,” Du Plessis said. 

“Solidarity, therefore, firmly opposes the continuation of basing increases on the minimum wage rates to the detriment of employees possessing scarce skills.” 

Du Plessis called on employer organisations to review their wage increase offer and “base it on the actual wage rates as was the case until 2021, and to not further disadvantage skilled employees”. 

The steel sector, which has been a victim of declining prices due to an increase in cheap imports, accounts for about 1.5% of GDP and employs about 190,000 people. 

Lucio Trentini, CEO of Seifsa, the sector’s largest employer body, could not immediately be reached for comment. 

The final round of talks is set to be held on May 8. 

mkentanel@businesslive.co.za