The decision by the National Union of Metalworkers of South Africa to register a deadlock in response to the Steel and Engineering Industries Federation of Southern Africa’s (SEIFSA’s) conditional wage offer is disappointing given the challenges faced by the Metals and Engineering (M&E) industry, SEIFSA Operations Director Lucio Trentini said today.

SEIFSA, which represents 18 affiliated employer organisations at the Metal and Engineering Industries Bargaining Council, had on 23 July offered a 4.4% (April CPI) increase calculated on the scheduled rates across the board for year one, CPI plus 0,5% in year two and CPI plus 1% in year three. The offer also included a special phase-in dispensation aimed at encouraging small and medium sized employers who over the last 10 years have elected not to be covered by the main agreement to come on board and participate on a 15-year phase in dispensation aimed at achieving parity with the main agreement rates while continuing to enjoy the remaining benefits associated with the agreement.

Mr Trentini said SEIFSA’s offer is aimed at the survival, recovery and growth of the M&E sector, which has been under strain for several years and now faces additional challenges included the COVID-19 pandemic and the recent unrest that took place in KwaZulu-Natal and parts of Gauteng.

Mr Trentini said South Africa is still counting the costs of the looting and destruction that took place, but already initial estimates put the dame at 0.4%-0.85 of GDP, equating to about R50-billionn.

“On the back of what unfolded over the last two weeks, business confidence generally took a huge knock and it is expected that investors and business owners will be even more reluctant to reinvest in the sector,” he said, adding that the instigators and participants of the looting two weeks ago have set the industry back in dealing with the survival and recovery of the sector. “There will be job losses adding to those already lost from the pandemic and unemployment will once again soar in the months to come,” he said.

He said while some businesses may have the balance sheets to rebuild their factories, small businesses and manufacturers that are job centred will struggle to get back on their feet and some may never reopen.

“Outside of KZN and Gauteng, factories across the industry have been significantly affected by supply chains, logistics, rail and port disruptions and the knock-on effects will be felt across the sector for quite some time and continues to negatively impact business confidence,” he said.

Mr Trentini said he remains hopeful that the employers and trade unions will be able to find common ground in reaching an agreement that places the best interests of the industry at its heart. He said he is encouraged that the trade unions, which also include Solidarity, Uasa, the Metal and Electrical Workers’ Union of South Africa and the South African Equity Workers Association, have indicated their willingness and availability to continue negotiations with a view of finding common ground.