South Africa: NUMSA offers 2 year deal in bid to end work stoppage

The National Union of Metalworkers of South Africa (NUMSA) said it would relax its demands and agree on a two-year pay deal with employers as the government oversees renewed talks to end a 17-day manufacturing work stoppage.

The labor union has previously asked for a 10 percent wage increase as part of a one-year deal, while the Steel and Engineering Industries Federation of Southern Africa (SEIFSA) has offered a three-year package including a 10 percent raise in the first year, 9.5 percent in the second and 9 percent in the third. NUMSA will now accept a 10 percent increase in each of the two years, according to General Secretary Irvin Jim.

South Africa’s inflation accelerated to 6.6 percent in May, the highest in almost 5 years.

“We are not far from each other,” Jim said in an interview with reporters in Johannesburg. “It’s only 0.5 percent” difference in the second year. “We are very flexible.” Talks could continue about what to agree for the third year, he said.

The country’s Labor Minister Mildred Oliphant is mediating talks with SEISFSA, as the employers’ lobby is known, and the union after an initial effort to resolve the stoppage failed last week. The walkout, which started on July 1, is costing the metals industry about 300 million rand (US$28.1 million) a day, according to the SEIFSA. About 12,000 companies are affected, including auto makers Toyota Motor Corporation, Ford Motor Corporation and General Motors.

The stoppage led by NUMSA, the country’s biggest union, is threatening an economy still reeling from a 5-month stoppage by platinum mineworkers that ended in June. Africa’s second-biggest economy contracted 0.6 percent in the first quarter compared with a 3.8 percent expansion in the final three months of last year.

Source: Bloomberg