Numsa and ArcelorMittal wage negotiations reach deadlock

Numsa rejects company’s offer of a 5% increase and plans ‘indefinite strike’ from Wednesday.
The steel producer says its final wage increase offer includes a 2% cash-back equivalent from gross payments. Image: Vladimir Weiss/Bloomberg

Wage negotiations between African steel producer ArcelorMittal South Africa (Amsa) and the National Union of Metalworkers of South Africa (Numsa) have reached a deadlock. This comes after Numsa served the steel producer with a 48-hour notice to strike on May 9.

“We have been engaging in wage talks under the auspices of the Metals and Engineering Industries Bargaining Council (MEIBC) since March and we have deadlocked with the employer,” says a statement issued by Numsa.

ArcelorMittal on Tuesday responded by acknowledging Numsa’s disapproval of its revised offer.

The steel producer confirmed that it tabled a final wage increase offer of 5% across the board on all remuneration elements and a 2% cash-back equivalent from gross payments.

It’s a good offer, says the company

According to Amsa its offer is higher than that implemented in the steel sector. The company says this indicates a substantially higher salary scale at Amsa in comparison to the rest of the industry.

“We believe the company’s offer is fair and takes into account both the current economic conditions and the future sustainability of the business,” says Amsa CEO Kobus Verster.

Numsa spokesperson Phakamile Hlubi says “this offer is simply not good enough”.

“Our frustration is that ArcelorMittal is determined to not put serious offers on the table.”

Numsa, which initially demanded a 15% wage increase, is now demanding a 10% increase across the board. Its core demands include a housing allowance, 80% medical aid contribution from the employer and the discontinuation of labour brokers. The union also demands that temporary employees be insourced and paid a salary with benefits.

Not a fair offer, says union

Hlubi says the steel producer is not being truthful by positioning its offer as fair. This follows Amsa’s announcement of a significant boom in profits in 2021.

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The company last recorded an annual profit of this significance in 2008.

Commenting on the record increase in profits, Hlubi says: “It happened because our members worked extremely hard and made the necessary sacrifices by carrying the company on their backs so they could make this massive profit … 5% is not giving back to workers.”

Hlubi says the profit is also due to Amsa’s exploitation of its workforce, of which approximately 40% is outsourced.

“We are representing workers who are earning R7 000,” she adds.

Amsa says Numsa is disingenuous in claiming there are employees who earn R7 000 per month. According to the company “the current average total remuneration of the lowest grade of employees at the company is R21 423 per month excluding overtime”.

The company says its offer would result in an average increase of R2 245 per month for bargaining unit employees.

The business sustainability factor

“The company is concerned that unsustainable increases in base pay will lead to cost pressures which will weaken our competitiveness,” says Verster.

According to Numsa’s statement, workers at Amsa have not had meaningful increases in two years.

“For 2020 and 2021 workers were given a two percent increase and this was imposed on them in 2021. Amsa [is] claiming in their propaganda that they have the best pay scales in the sector … Our members are struggling to make ends meet, whilst the greedy bosses rake in obscene profits.”

Hlubi says the union is open to compromising with a 10% increase and that until then its members will take to the streets.

The strike is expected to commence at 8am on Wednesday (May 11) at ArcelorMittal’s plants in Pretoria, Saldanha and Vanderbijlpark.

Verster maintains that communication channels between the parties remain open in the interest of reaching an agreement in the negotiation process.

Numsa confirmed on Tuesday that it has signed a wage agreement with employers for workers in the bus passenger sector – a 6% wage increase across the board, extending to all allowances and benefits.

Nondumiso Lehutso is a Moneyweb intern.

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