Gold miner Harmony Gold has concluded a landmark five-year wage agreement in respect of increases to wages and other conditions of service with its five labour unions, being the coalition which comprises the National Union of Mineworkers (NUM), UASA; Solidarity; the Association of Mineworkers and Construction Union (AMCU) and the National Union of Metalworkers of South Africa (Numsa).

The agreement is effective from July 1, 2024, to June 30, 2029.

“The settlement was reached three months before the implementation date . . . without having deadlocked or without having reached a dispute process. It has also been the first time that a five-year agreement has been reached in the gold sector. Furthermore, it is also the first time that the five mining unions, namely Solidarity, the NUM, UASA, Amcu and Numsa, negotiated jointly under the banner of an alliance – a victory for trade union unity and for every employee,” Solidarity general secretary Gideon du Plessis said on April 4.

Harmony CEO Peter Steenkamp added that it reflected well on the state of the company’s labour relations.

“For the first time in our 73-year history, we have concluded a five-year wage agreement with all of our labour unions. This . . . ensures stability and continued certainty on our fixed labour costs for the next five years,” Steenkamp said.

He said the agreement was fair and balanced, considering the impact that increases in the cost of living were likely to have on employees over the next five years.

“We are pleased that the wage negotiations were carried out in good faith and commend all parties for demonstrating good leadership by engaging constructively,” Steenkamp said.

The agreement allows for a series of increases to monthly wages.

Category 4 to 8 employees will receive a wage increase of R1 200 in year one; R1 250 in year two; R1 300 in year three; R1 450 in year four; and R1 500 in year five.

B-lower employees will receive a wage increase of R1 200, 6.2% (whichever is greater) in year one; R1 250, 6.2% or consumer price index (CPI) in year two; R1 300, 6.2% or CPI in year three; R1 450, 6.35% or CPI in year four; and R1 500, 6.5% or CPI in year five.

Miners, artisans and officials will receive a wage increase of 6.2% in year one; 6.2% or CPI in year two; 6.2% or CPI in year three; 6.35% or CPI in year four; and 6.5% or CPI in year five.

In addition to the basic wage increases, the parties agreed to current monthly housing allowance increases of R3 360 in year one, R3 480 in year two, R3 660 in year three, R3 840 in year four, and R4 020 in year five.

The current monthly living-out allowance will increase by R100 to R2 800 in year one, R100 to R2 900 in year two, R150 to R3 050 in year three, R150 to R3 200 in year four, R150 to R3 350 in year five.

Employees not making use of available accommodation provided by the company will be eligible for either a housing allowance or a living-out allowance, but not both, Harmony explained.

“To ensure that miners benefit from an employee share ownership plan (ESOP) the agreement also makes provision for the fact that the company and trade unions should have a new and improved ESOP in place within three months,” Du Plessis added.

In addition to matters of remuneration, several non-wage-related and process issues have also been agreed to, including increasing the current guaranteed minimum severance and medical incapacity payments, medical aid co-contributory benefits, as well as maternity and paternity leave.

Harmony said that the agreement would result in an increase of about 6% a year over the five-year period, which was within the company’s planning parameters.

Du Plessis said focus would likely now shift to diversified miner Sibanye-Stillwater’s gold sector negotiations, which were due to take place soon. 

“Sibanye will have to take a lesson from Harmony on how to follow a progressive approach to salary negotiations to achieve a win-win settlement that does not only lead to long-term labour peace and a motivated workforce, but also pleases shareholders and attracts investors,” he contended.