Employers in the metal and engineering sector on Wednesday made labour unions in the sector an offer of a 6.1% increase on the cost of employment for the financial year beginning in July, saying this was linked to the consumer price index (CPI) over a three-year period.

The unions were expected to respond to the wage offer when negotiations resumed on Friday.

Employer representative body Steel and Engineering Industries Federation of Southern Africa (Seifsa) CEO Kaizer Nyatsumba said the offer was consistent with employers’ view that preserving existing jobs and creating further employment should be the sector’s priority.

The offer, which was tabled by Seifsa, noted that wage increases for existing employees across the board would be indexed against the April CPI released by Statistics South Africa for each of the three years.

The offer also proposed a reduction of 50% on all existing minimum scheduled wage rates, which would be introduced and applied to all new entrants at any level of work to stimulate employment in the sector.

Seifsa stressed that the offer was made on a total cost-of-employment basis, with no other substantive changes to employment conditions.

However, employers would be prepared to consider reviewing and/or varying the terms and conditions of employment contained in the Metal and Engineering Industries Bargaining Council’s Main Agreement in exchange for increasing the wage offer, provided that the total cost of employment did not exceed CPI.

Nyatsumba noted that, although the signing of a peace accord that would regulate workers’ conduct in the event of a strike was no longer a precondition, Seifsa nevertheless remained determined that such an agreement needed to be reached in the course of the negotiations.

“Moreover, employer associations federated to Seifsa will not sign any agreement that is concluded if the threat posed to collective bargaining by recent Labour Court judgment is not removed,” he commented.

Meanwhile, at a media breakfast on Thursday, Nyatsumba outlined the organisation’s strategic objectives for the coming financial year, saying it would focus on introducing new, demand-driven products and services across all                            divisions; registering Seifsa in Botswana, Mozambique and Zambia; and commissioning in-depth research from its research partner and leveraging it optimally to generate profit.

Seifsa would also look to launch a two-day metals and engineering conference, a 24-hour helpline and an industrial-relations insurance plan for its members.

“We will pursue these goals in an environment where, despite our lackluster economic performance to date as a country, there appears to be a single-minded determination by government to stimulate manufacturing and grow the economy over the next five years.

“We welcome this nascent commitment to manufacturing and stand ready to partner with government. At this stage, we can only hope that whoever is appointed Trade and Industry Minister will continue with the good work that has hitherto been done by that Ministry and department,” Nyatsumba said.

The Seifsa head added that he was “heartened” by what appeared to be recognition “at last” by government that only the business community could create lasting jobs, with government’s responsibility being the creation of an environment conducive to job creation.

“The creation of an environment conductive to job creation also includes ensuring that government has a constructive relationship with the business community, with the latter viewed as the strategic stakeholder it is and not as an enemy,” Nyatsumba remarked.

To ensure this, he elaborated, President Jacob Zuma would have to strongly communicate that, without the business community, government would have no money of its own.

“After all, it is as a result of an intrepid entrepreneur taking risks to start a business – and, in the process, employing others – that government stands to make money through corporate and personal taxes.

“Business and government are natural allies; when business succeeds and makes profits, so, too, does government succeed, as it makes more money from corporate and personal taxes to spend on its projects,” Nyatsumba noted, adding that government would find business ready to engage.