A MUST READ: Why the so-called "consolidated main agreement" should not be extended to non-parties - 90% of employers in the Steel Industry.

Dear Steel Industry employer
 
What follows is a letter by a Steel Industry employer to the Minister of Employment and Labour.
 
It is a must-read for all employers in the Steel Industry, even those who are signatories to this agreement (notwithstanding the fact that they are also unable to comply with it).  

Regards

Letter by employer: 

We appreciate the request made by the Minister of Employment and Labour to comment on the MEIBC’s request for the extension of the Consolidated Main Agreement (referred to as CMA in what follows) of the MEIBC. We comment as follows.

Background

XXXXXXX has been in business for 21 years, and have built up a proven track record in developing the capabilities to train unskilled individuals and provide them with jobs and renumeration packages that can be associated with skilled labour. Our two top welders were a forklift driver and a security guard. We are far advanced in our training of a road freight assistant to become a skilled welder too. Suffice to say, their current wages are several orders of magnitude higher than when we originally employed them.

Also, their current wage rates are on par with the highest rates currently paid by companies operating in the Food and Wine Industry in which we are role players. Their wages are to a large extent determined by market forces and the economic realities within which we operate. Over all the years that we have been in business, the wages of skilled employees have never been an issue.

This brings me to the real issue at stake. The current proposals for a minimum wage of R78 cost to company will ruin the future, not only of SMME’s, but especially job seekers with no experience. We explain as follows:

• Based on the Motor Industry and Road Freight Industry’s minimum wages, the CMA can simply not be referred to as a minimum wage.
• On the contrary, it acts as a final barrier to enter the workforce for workers with no experience.
• The operational realities and deterioration of the macro economic environment, in conjunction with the serious and negative knock-on effects that the lock down regulations had on the wine and alcohol beverage industry (to which our business is intricately linked), inevitably brought many SMME’s and larger businesses in the metal industry to a breaking point. We have not been able to make a profit for the past 30 months, barely surviving from month to month.
• Despite the difficulties, and due to the current minimum wage being affordable, we have been able to employ unskilled individuals. Thus, they were provided with an opportunity to learn, be trained and become accustomed to a work environment. Not only has this saved them from dire poverty, but also provided them with hope for the future, enabling them to take control of their own lives.
• It is inevitable, that with an increase in skill, income also increases. I cannot over emphasise the important role that an affordable minimum wage plays to accomplish proper job creation.
• This is the junction where we as industry players find ourselves now. Should the proposal of the CMA be extended to all role players in the metal industry, the potential of job creation, will not only be lost, but thousands of people will inevitably remain in poverty without any hope for a better future. The fact that Seifsa, in conjunction with the MEIBC have proposed an extension of the CMA, is beyond comprehension. Their concept of a minimum wage is not in agreement with the meaning and purpose of a minimum wage.
• For all the benefits to society, following the introduction of a minimum wage, to be realised, it must pass several tests, i.e. being a minimum wage, affordable within the economic environment, taking into account the varied circumstances and micro environments where employment is possible (the realities of rural areas and industrialised cities cannot be compared), offer protection against exploitation, etc. The current proposals do not pass any of these critical tests.
• Should the extension be granted by the Minister, due to reasons outlined above, several negative consequences will inevitably follow. In fact, there is not a single positive to be realised by the proposal, should it be implemented.
• For any large and integrated economic system to function properly, several unseen but important threads must be maintained. One is the mutuality of trust and being able to work together for a better outcome. Both Seifsa and the MEIBC have displayed their animosity to role players other than themselves, opting to rather bring destruction to an entire industry, instead of playing a supporting role to the wider industry. Once the “threads” referred to above are broken, the objectives of Seifsa and the MEIBC will be met and have devastating consequences. It is inevitable that this will be the outcome of their proposals.

We trust that the reasons outlined above to not extend the agreement, will be favourably considered by yourselves and all individuals that have been entrusted to create an environment that is both conducive for proper labour relations and the creation of a policy environment that favours the flourishing of all stakeholders in our important industry.

For more information:
NEASA Media Department
media@neasa.co.za