The fight for the heart and survival of the steel industry is of a protracted nature; it is literally a war of attrition. 

In a recent article that appeared in Business Day, Seifsa accuses NEASA of employing “Stalingrad tactics” in order to obtain recourse it is not entitled to. The article purports to suggest that NEASA is simply power hungry and selfish and does not consider what is, supposedly, good for the sector.

These salacious allegations are indicative of the fact that Seifsa either does not understand the issues at stake in the industry, or simply does not care about the needs of the industry’s SMMEs. It is probably both.

NEASA passionately defends the rights of its employer members in all sectors, including the steel sector. NEASA is a proponent of a free market dispensation, as all employer bodies should be, and unapologetically promotes this dispensation for the benefit of its members.

However, a free market approach sticks in the craw of proponents of the diabolical dispensation where collective agreements, by means of a fiendish arrangement which favours big business and trade unions, are extended to employers who do not agree to the terms of conditions contained therein or who simply cannot afford to comply therewith. 

The reason that these self-serving role-players find the free market so reprehensible, where conditions of employment are determined by market powers, based on the principles of affordability and sustainability, is that it removes the competitive edge that the ‘extension of agreement to non-parties’ provides them with. 

They hide behind the concept of “levelling the playing field” for all employers, subjecting SMMEs to the same conditions of employment as that of big businesses. However, the inherent factors determining the cost of doing business between small and big business are not the same, and they therefore cannot be treated the same. A ‘one-size-fits-all’ as is currently applied, is entirely inappropriate. The arrangement that Seifsa and the trade union accomplices want to enforce on SMMEs, only results in the levelling of the playing field for a number of large employers, but that creates a very uneven and uncompetitive playing field for SMMEs and the downstream.

The so-called Main Agreement, which is the Agreement currently being challenged by NEASA in the Constitutional Court, prescribes a minimum wage rate of R55,67 per hour for an entry level, unskilled employee. This is accompanied by approximately 40% in on-costs comprising of additional benefits and statutory payments. The minimum cost-to-company wage for an entry level employee in this sector therefore amounts to approximately R13 500 per month for a 40-hour workweek.

This is simply unaffordable for the majority of employers in the Industry. In fact, Seifsa themselves has admitted that it is extremely high. The fact that many employers, including a large number of Seifsa-affiliated employers, continuously apply to be exempted from the agreement, is a clear indication that the wage rate and other conditions of employment are simply inappropriate for the sector. 

It is doubtful that any employer party would have signed the agreement if it had not contained an exemption clause which allows them to escape the consequences of their own actions, which they then impose on others. This is simply disingenuous and in bad faith.

In pursuing all legal options, NEASA is simply protecting and advancing the legal and constitutional rights of its members in order to give them a fair chance for survival and growth.

The types of agreements that are currently being challenged, are not only destructive for business, but also cause unemployment, which is already at record highs, and prevents new entrants into the market. It contributes to increased socio-economic instability in the country.

We will continue our fight to advance the plight of the steel industry’s SMMEs, unabashedly and undeterred.

bY Gerhard Papenfus, Chief Executive of the National Employers' Association of South Africa (NEASA).