Business
South Africa: Employer body accepts 10pct proposal to end work stoppage
South Africa’s biggest employers’ group in the metals and engineering industries agreed to offer a 10 percent pay increase to low-level earners over three years to end a work stoppage that’s entering its fourth week.
The Steel and Engineering Industries Federation of Southern Africa (SEIFSA), a Johannesburg-based group whose members employ the most workers in the sector, “reluctantly accepted” the proposal from the Labor Ministry at a meeting yesterday, it said in an e-mailed statement today. The offer has been approved by a “slim majority of employer associations,” it said.
More than 220,000 workers had engaged a work stoppage since July 1, affecting about 12,000 companies including Nampak Ltd., Africa’s biggest beverage-can manufacturer, and auto makers such as Toyota Motor Corporation and General Motors Company. The walk-out is being led by the National Union of Metalworkers of South Africa (NUMSA), the country’s biggest labor group.
The country’s inflation rate was 6.6 percent in May.
“SEIFSA is presenting the offer to the unions, including NUMSA today,” Ollie Madlala, a spokeswoman for the group, said by phone. The labor organizations have until the close of business on July 25 to accept the offer. The deal requires that future employment issues be negotiated at national rather than company or plant level.
NUMSA’s National Executive Committee has met today to discuss the new offer, according to union officials NUMSA is willing to accept a two-year wage deal with a 10 percent annual increase.
The country’s Labor Ministry mediated talks for the second time after the first round of negotiations failed as the NUMSA rejected SEIFSA’s three-year offer.
The South African central bank cut on July 17 its forecast for growth in the economy, the continent’s second-biggest, to 1.7 percent this year from 2.1 percent. A protracted stoppage would “potentially have much wider ramifications because of the direct linkages to other sectors of the economy, Reserve Bank Governor Gill Marcus said.
Source: Bloomberg