The US has warned that continued labour volatility could have negative impacts on future investment in South Africa.

If employers continued to insist that unions must give up their negotiation rights at local level in order to end the metal and engineering industry strike, it would result in the collapse of the sector’s national bargaining council, the National Union of Metalworkers of SA (Numsa) has warned.

“Employers are pushing for a situation which could be described as anarchical,” Numsa general secretary Irvin Jim said yesterday.

While Numsa and business are not far from each other on wage increases, a major obstacle to ending the three-week mass action is an insistence by companies that section 37 of the main agreement for the sector be tightened up.

This will effectively render unions irrelevant as they will have to wait three years until the national bargaining council sits again to raise any issues. It will also make it difficult for Numsa to make deals on future retrenchments and its members will not be allowed to down tools for three years.

Companies have already warned that job cuts are imminent as the wage increases on offer are too high for smaller enterprises.

The current offer, which was negotiated by the Labour Department, will see increases on a sliding scale, with the lowest-paid workers receiving 10 percent annual wage hikes for the next three years.

One of the main employer bodies, the Steel and Engineering Industries Federation of Southern Africa (Seifsa), has “reluctantly” agreed to the facilitated proposal, but on condition that Numsa agrees by today to the section 37 changes. However, Jim was adamant that it was unlikely that Numsa members would agree to render the union powerless for three years.

He said if employers refused to budge, the metal and engineering industries bargaining council would collapse.

“We are very close to each other and it is not Numsa who is delaying the process. I think the greatest damage could be the collapse of collective bargaining,” Jim said.

If there is no longer central bargaining, it will mean that each of the 10 000 companies in the sector will have to hold separate wage negotiations with unions.

“They [employers] are running the risk of being followed by Numsa on plant by plant negotiations. If you don’t have centralised bargaining, you will also see more strikes.”

The National Employers’ Association of SA (Neasa), which represents thousands of small businesses in the sector, disagrees that there will be a spike in industrial action, and believes that central bargaining has served its time.

“You can quote me on this – so be it,” Neasa chief executive Gerhard Papenfus said when approached for comment on the threat of the national bargaining council collapsing.

“You lose jobs in centralised bargaining. It is a nuisance and the sectors that have centralised bargaining attract the most violent strikes,” he said.

Neasa is even less willing to play ball than Seifsa, and turned down the Labour Department’s proposal earlier this week.

It is refusing to move from an 8 percent wage hike offer, saying its members cannot afford to pay anything more.

Seifsa said yesterday that while it remained committed to collective bargaining, section 37 had to be tightened up to prevent what it called double dipping, in terms of which a two-tier bargaining system is in place.

Seifsa chief executive Kaizer Nyatsumba said the employer body would not backtrack on the section.

Numsa is currently getting feedback from its members on the latest offer and whether to continue with the industrial action, which employers say is costing the country R300 million a day. - Business Report