In an attempt to limit the impact of business rescue on employees, Evraz Highveld Steel and Vanadium has inked a deal with trade unions and the Department of Labour (DoL) that would see 600 staff placed on a six-month skills improvement programme.
Funded by the Unemployment Insurance Fund (UIF), the Manufacturing, Engineering and Related Services Sector Education and Training Authority and the National Skills Fund (NSF), the selected employees would, effective November 26, receive a percentage of their remuneration while improving their skills under the DoL’s Training Layoff Scheme (TLS) instead of facing retrenchment.
Highveld would continue to assist employees through contributions to certain social benefits, said Highveld CEO Johan Burger.
This followed proposed plans to implement a “curtailed operating mode”, which would have seen up to 1 089 workers retrenched.
During consultations following Highveld’s Section 189 notice in July, the group increased the number of positions in the new operating structure to to 1 182, with voluntary separation packages and early retirement offers helping reduce the number of affected employees to 658, many of whom now fell under the TLS.
The agreement was considered the best alternative for employees following the Commission for Conciliation, Mediation and Arbitration-facilitated consultations with the National Union of Metalworkers of South Africa (Numsa), Solidarity and the DoL.
“We are delighted to have signed this historic agreement with Numsa and Solidarity as the largest TLS scheme that has ever been registered with the DoL,” Burger commented.
The employees would receive a stipend from the UIF of 75% of their basic remuneration, with a ceiling payment of R9 358 a month.
Highveld filed for voluntary business rescue in April and temporarily ceased production of steelmaking at its steelworks in July.
“It is now imperative to allow the company and the employees to benefit from the scheme’s funds in the next few weeks while we resume operations for Highveld,” Burger said.