Strike ends as Numsa seals wage deal

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IOL pic july21 rand banknotes 100 200 in hand Associated Press File picture: Denis Farrell

Johannesburg - South Africa's largest union agreed on Monday to end a four-week strike in the metals sector after accepting a wage increase offer from employers, welcome relief to the continent's most advanced economy which has been battered this year by stoppages.

But confusingly, one of the employers' associations involved in the talks said it did not accept the deal and would lock out workers who had been on strike. Another employers' group said it was happy that the stoppage was over.

Analysts said the contrasting responses of different employers' groups could stoke fresh tensions on the ground.

More than 200 000 members of the National Union of Metalworkers of South Africa (Numsa) downed tools on July 2 to demand higher wages, halting production at automakers including General Motors and hitting work at new power plants.

The union said its members would return to work on Tuesday after it accepted a 10 percent annual pay rise fixed for three years for its lowest-paid workers, considerably higher than inflation, which is currently running at 6.6 percent.

The National Employers' Association of South Africa (Neasa), which represents about 3 000 employers in the metals sector, said after the deal was announced that it regarded the wage increase as excessive.

“We are not happy with the (pay) deal that has been done and will lock out the striking workers from Tuesday,” Neasa spokeswoman Sya van der Walt-Potgieter told Reuters.

“Neasa is not a signatory to this agreement because of the unsustainable level of the wage increase being agreed upon.”

Neasa represents about 3 000 employers in the metals sector and so tens of thousands of Numsa members expecting to return to work on Tuesday may find they are unable to do so or discover they do not have a wage agreement.

Another employer grouping, the Steel and Engineering Industries Federation of Southern Africa, which represents about 2 000 employers, said it welcomed the end of the strike.

“(The conflicting responses could) exacerbate tensions on the ground in localised areas as some employers accept returning workers and others don't,” said Nomura emerging markets analyst Peter Attard Montalto.

The rand currency rose 0.33 percent against the dollar on news of the pay deal but later yielded those gains to trade near 10.58/dollar.

“The settlement offer has been overwhelmingly and unanimously accepted by members,” Numsa General Secretary Irvin Jim told reporters.

General Motors and Toyota both said they would resume full production at their South African operations on Tuesday following the end of the strike, which hit the manufacturers of parts used on their assembly lines.

A smaller union, the 20 000-strong United Association of South Africa (Uasa), also earlier said it had accepted the wage increase offer.

The metals and engineering strike came on the heels of a five-month walkout in the platinum sector, the longest and costliest strike in South Africa's history which triggered a contraction in the economy in the first quarter.

Numsa, which represents mostly urban and skilled black workers, has been pressing a more militant agenda in the wake of a falling out with South Africa's ruling African National Congress over issues of economic and labour policy.

The union plans to help form a left-wing political party to represent what it says is the “leaderless” working class which could contest the next general election due in 2019. - Reuters



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