GENERIC:Evraz Highveld Steel Confirms Temporarary Closure of Steelworks.Photo Supplied

Johannesburg - The Solidarity trade union alleges all 1 800 steel manufacturing workers at Evraz Highveld Steel and Vanadium will not be paid their salaries this month.

This, it alleges, is because the Unemployment Insurance Fund failed to fulfil its promises.

Evraz placed its staff in a reskilling programme after it went under business rescue last year. The aim was to equip staff with skills to allow them to enter the market place again. The Department of Labour in December said a government intervention had helped secure continued employment for 650 workers at Highveld Steel who had been facing possible retrenchment.

The Department of Labour said in a statement it had worked together with the Department of Economic Development to give Evraz Highveld Steel access to the Department of Labour's Training Layoff Scheme, part of government's broader response to problems experienced in the steel sector.

“The company had placed workers on a training layoff scheme and paid for their training in hopes that the Unemployment Insurance Fund would refund the money spent and the company would then continue to operate,” said Solidarity Deputy General Secretary for the Metal Industry, Marius Croucamp.

According to Solidarity, the company approached the UIF for funding to pay for the training and, after the fund did not pay out, Evraz had a cash crunch and was not able to pay salaries. It is not clear why it did not make use of the Skills Development Levy.

The steel manufacturing company is based in eMalahleni and, in 2007, was one of the 15 leading crude steel producers in the world.

Also read: State 'steps in to save 650 steel sector jobs'

Evraz went into a retrenchment process in the middle of last year after halting steel production. It is 90-years-old and considered to be a stalwart of SA’s flagging steel industry.

Solidarity alleges the Unemployment Insurance Fund went back on an agreement signed with the company in early February, as part of its training layoff scheme.

When workers arrived for work on Wednesday, they were told to go back home. Last year it had a workforce of 2 200, which decreased through natural attrition as workers resigned.

Solidarity argues the reason for the UIF’s about-turn is because a deal with Chinese Company, International Resource, fell through.

Staff will now have to wait until a management meeting on February 23 when the company’s future will be discussed.

Also read: Evraz to fight court action

Evraz Highveld Steel and Vanadium and the UIF were not able to immediately comment.