The second round of wage negotiations between South Africa’s vehicle manufacturers and the National Union of Metalworkers of South Africa (Numsa) is scheduled to take place this week, with the parties still poles apart in their offers and demands.
Phakamile Hlubi-Majola, national spokesperson for Numsa, confirmed that the union would be meeting the Automobile Manufacturers Employers Organisation (Ameo) in Port Elizabeth from Monday until Wednesday in an attempt to thrash out a new three-year wage and conditions of service agreement for the industry.
Hlubi-Majola said the previous three-year agreement had expired at the end of last month and Numsa had compromised from its initial demand in the current negotiations for a one-year agreement to a three-year agreement.
She said Ameo had also agreed that any agreement struck during these negotiations would be effective retrospectively from July 1.
Hlubi-Majola said Numsa was demanding a 20% wage increase in each year of the three-year agreement.
Ameo had offered a wage increase in line with the Consumer Price Index (CPI) plus 1% in the first year of a three-year agreement, and wage increases of CPI in years two and three of the wage agreement, she said.
Andile Dlamini, a spokesperson for Ameo, declined to confirm or deny the details of the wage offer made to Numsa by Ameo or that the three-year agreement, once signed, would be effective from July 1.
Dlamini said Ameo had decided not to discuss the outcomes of negotiations in the media until the final agreement has been signed.
Hoping for a repeat of the previous negotiations
The signing of the previous National Bargaining Forum (NBF) three-year wage agreement in 2016 was significant in that it marked the first time since 2007 and only the fifth time in the history of the sector’s collective bargaining process that it had been successfully negotiated without any disruption or work stoppages.
However, it has now become more difficult for unions to take their members out of strike because unions are required to first conduct a secret ballot and obtain the consent of the majority of their members before they are able to declare a deadlock and give employers 48 hours notice of strike action.
Hlubi-Majola said one of the most important demands being made by Numsa in these negotiations was for an industry medical aid.
“Currently medical aid is negotiated at plant level. We want one medical aid which will cover the entire auto industry,” she said.
Hlubi-Majola said another important demand by Numsa is that all workers at level 4 must be moved to level 5 because there is a problem with workers spending many years on one level.
“This is a sore point for our members who feel that it is unfair, especially as most of them have received the necessary training and work experience to be moved to the next level. This has a negative impact on their earning potential,” she said.
The automotive industry is vital to South Africa’s economy.
Mike Mabasa, executive director of the National Association of Automobile Manufacturers of South Africa (Naamsa), said last month the industry contributes 6.9% to South Africa’s GDP and makes an extraordinary contribution to the country’s prosperity.
Mabasa said the industry directly employs 468 502 people in formal and informal jobs, with the auto sector accounting for 2.9% of the 16.2 million people employed in South Africa.
He added that total export earnings by the industry increased by 8.43% to R178.8 billion last year from R164.9 billion in the previous year and accounted for 13.9% of South Africa’s total exports.