WAGE AND OTHER LABOUR NEGOTIATIONS

Agreement in metals and engineering sector

The Trade Unions (five are recognised amongst them Numsa) and SEIFSA signed agreement for the period 1 July 2017 to 30 June 2020 (3 years). The Agreement provides for 7% increases in 2017, 6,75% in 2018 and 6,5% in 2019.

Employers represented by Nearsa and the other employer bodies are outside of the agreement and could therefore face strike action.

Agreement in the Chemicals sector

Although not yet signed in all the sub-sectors of the National Bargaining Council for the Chemical Industry (NBCCI), it appears that agreement is imminent as follows (it is an historic event in that it is the first time that a multi-year – two-year – agreement could be achieved):

  • Industrial Chemicals Sector:

Signing of the agreement is imminent with increases of 7,5% in 2017 and increases equal to CPI plus 1,9% in 2018. The minimum wage will increase to R6,671.25 in 2017.

  • Glass Sector:

Agreement has been signed with increases of 7,5% in 2017 and CPI plus 1,5% or 7,5% (whichever is the greater) in 2018.

  • FMCG:

Agreement is imminent with increases of 7,5% in 2017 and increases of CPI plus 1,5% or 6,5% (whichever is the greater) in 2018.

  • Pharmaceuticals:

Agreement is still somewhat difficult with CEPPWAWU still requiring changes to wording on an increase of 7,5% in 2017 and CPI plus 1% or 7,5% in 2018.

The unions involved are SACWA, Solidarity, CEPPWAWU and GIWUSA.

Agreement at Kumba Iron Ore

Kumba Iron Ore, a unit of Anglo American, and the National Union of Mineworkers (NUM) have signed a three-year agreement giving workers an increase of much as a 10% a year.  The NUM, which is the majority union at all of Kumba’s operations, said on Friday that workers would get an annual pay rise ranging between 7% and 10%.  The parties also agreed to a once-off payment of R25,065 for all employees covered by the agreement.  In May, the NUM tabled wage increase demands of 12.5% to 16% with Kumba.

EMPLOYMENT AND LABOUR ECONOMICS MATTERS

Lily Gold Mine merger talks collapse

Lily Gold Mine business rescue practitioner Rob Devereux announced the collapse of talks to merge Vantage Goldfields and Canadian-based Galane Gold and revive production at the Mpumalanga operation.  Galane, which owns the Galaxy mine, also in Mpumalanga, officially withdrew from the merger on 9 August.  Devereux indicated that there had been an urgent meeting with the Deputy Minister of Mineral Resources, Godfrey Oliphant, this week to find solutions.  As a way forward, it was agreed to engage with the Industrial Development Corporation (IDC).  Vantage-owned Lily, and also its nearby Barbrook mine, were placed in business rescue after running into financial difficulties.

Consumer inflation slows to 4.6%

Statistics SA reported that consumer inflation slowed in July, with the consumer price index (CPI) rising 4.6% from a year earlier.  The increase in June had been 5.1%.  The data showed that food prices in July rose 6.8% from a year earlier, after a 7% increase in June.  Fuel prices fell 3.6% in July compared with a year earlier.  Prices are expected to rise again in August, by roughly the same amount as July’s reduction.

Group Five’s rightsizing

Group Five is continuing to shed jobs as the construction and engineering group attempts to rightsize and realign its engineering and construction (E&C) business cluster to current market activity levels.  The total number of employees in the group, including limited duration contract workers, declined by 9% to 8,472 at end-June this year from 9,313 last year – and from 13,659 employees at end-June 2013.  This followed Group Five slashing its number of employees by 23.5% or 2,841 people between June 2015 and June last year.  Of the decline in the year to June this year, 255 jobs were lost due to retrenchments.  Themba Mosai, the chief executive of Group Five, on Tuesday indicated the restructuring and retrenchment process was not yet completed.

REMUNERATION AND EMPLOYEE BENEFITS

Allan Gray and Naspers executive pay

Bloomberg reports that Naspers shareholder Allan Gray voted against the company’s remuneration policy because it is not aligned to the performance of the business outside a stake in Chinese media giant Tencent Holdings.  Naspers paid CEO Bob van Dijk $2.2m in the year to end-March, an increase of 32%, and awarded him $10.4m in long-term share options.  That corresponded with a period in which the Cape Town-based company reported a trading profit of $2.75bn — but a loss of $379m when Tencent was stripped out.  The pay plan “is not aligned with shareholders’ interests, the disclosure is poor, and the performance targets appear to be very easy to achieve.  On top of that, they are now also proposing to shorten the vesting periods for the long-term incentives,” Pieter Koornhof of Allan Gray said.  Allan Gray owns about 2.3% of Naspers stock.  But, Naspers’ board believes its remuneration policy and practice are “fit for purpose and compare well to those of many of our global peers”.

UCT report: New legislation needed to govern national minimum wage

A report published by the University of Cape Town’s (UCT’s) labour and enterprise policy research group argues that new legislation will have to be drafted to ensure that the national minimum wage (NMW) is effectively implemented.  The NMW will be implemented from May 2018 and it has been under discussion at the National Economic Development and Labour Council (Nedlac) for the past 18 months under the guidance of Deputy President Cyril Ramaphosa.  The UCT report explored three options for introducing the NMW into the existing legislative framework.  Sectoral determinations and the Basic Conditions of Employment Act (BCEA) currently govern working conditions and the regulation of wages.  The researchers examined a dedicated statute for the NMW.  The BCEA “would continue to provide a floor for all other employment conditions and mechanisms for enforcement”, they said.  But a new wage commission would have to be established to deal with the setting of wages and conditions of employment in all sectors and to review the NMW.

LEGAL AND COMPLIANCE

Employment equity breaches

The Department of Labour announced that it was taking six companies to court over breaches of the Employment Equity Act (EEA).  The department’s Inspection and Enforcement Services (IES) branch is taking the companies to court for prosecution for failure to prepare employment equity plans as per the provisions of s20 (1) of the (EEA).  In addition, the department alleges that Gooderson, Clientele Legal, Clientele Life, Mazor Aluminium, Mazor Steel and Spanjaard Limited reported to the director-general on “plans that do not exist which amounts to misrepresentation”.  The companies will be taken to the Labour Court for prosecution in relation to the employment equity breaches and the matter of “misrepresentation” will be heard at a magistrate court.  Letters of intention to prosecute have been sent to affected companies.

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