This circular serves to inform all members that the Drafting and Negotiating Committee the NEC Engineering Iron and Steel Industry reached an agreement on wages for the period 2017 – 2017 as follows;
- It was agreed that the issue of Housing and Transport allowances be left to be negotiated at Works Council level.
- It was agreed that minimum wages as at February 2017 be frozen for the period March 2017 to Feb 2018.
- It was agreed that the agreement be effective from 22 August 2017.
The Drafting and Negotiating Committee had a series of negotiation meetings since expiry of the Wage agreement for the period 2016 to 2017 in February 2017. The trade union (NEWU) was bargaining for a 20% increase on minimum wages, housing allowance $50.00 per month, transport allowance $66.00 per month, service increment of 2.5% for every year served and introduction of an industrial pension fund.
On the other hand, EISAZ was negotiating for a cut of the existing minimum wages by 25% across the board and a proposal that the minimum wage structure starts at US$150.00 across the board for new entrants to enable the industry to become competitive.
Interpretation of the new Wage Agreement effective 22 August 2017
- Housing and Transport Allowances
In as much as NEWU wanted a realistic settlement that enforces the payment of housing and transport allowances in the Engineering, Iron and Steel Industry, the EISAZ negotiating team ensured that the status quo remains. Currently, 1% of the industry is paying housing and transport allowances (NEC Survey – 2017) and surely this cannot be generalised to the entire industry. The agreement`s legal effect is that nothing has been agreed regarding the subject matter at NEC level and consequently individual companies that can afford to pay housing and transport allowances may do so through works council negotiations. Whatever the works council decides will apply to such individual companies. Companies that cannot afford to do so due to negative performance of business are advised to accordingly inform their respective employees through works council consultations if the matter becomes a matter for discussion in any of their future works council meetings.
The spirit behind the agreement is to encourage individual companies to engage respective employees in works council meetings and update them on performance of business. Where business is performing well, Section 74 (4) of the Labour Act reads; “The existence of a collective bargaining agreement shall not preclude an employer and his employees from agreeing to the introduction of higher rates of pay or other more favourable conditions of employment before the expiry of such collective bargaining agreement, so however that the rights and interests of the employees are not thereby diminished or adversely affected”
- Minimum wages for the period March 2017 to February 2018
The essence of the agreement on minimum wages for all the NEC Graded Job Categories of Employees is that there shall be no increase on the minimum wages that were agreed for the period 2016 to Feb 2017. In other words the parties agreed on a zero percent increase.
May I take this opportunity on behalf of the National Executive Council to thank our team which took part in the collective bargaining meetings for effectively representing the interests of EISAZ members. I am made to believe that this agreement is a third consecutive agreement where no wage increase has been awarded in our industry. Other sectors have awarded an average of 1.5% for this year alone.
The agreement by the Drafting and Negotiating Committee is subject to ratification by the General Engineering Committee in terms of the NEC`s constitution. Accordingly you will receive communication from EISAZ and the NEC following ratification of the WAGE AGREEMENT by the General Engineering Committee.